risk management

How to Manage Third-Party HIPAA Risks: A Comprehensive Guide

When third-party entities, such as business associates, have access to protected health information (PHI), they are legally liable for ensuring its safety and integrity. The thing is, there are risks associated with sharing sensitive patient health data. A covered entity must understand how to manage these third-party HIPAA risks efficiently to avoid severe violations and fines.

Read on to learn more about the importance of third-party HIPAA risk management and what you can do to ensure compliance.

managing third-party hipaa risks

Understanding the Importance of Third-Party HIPAA Risk Management

Managing third-party risks that could compromise patient privacy and safety is something covered entities should prioritize. After all, the aftermath of these risks can have severe consequences beyond monetary and legal repercussions. Organizations will face reputational damages, and patients may even lose trust in the healthcare system.

Proper risk management makes collaborating with third-party entities more secure and seamless. Besides reducing the possibility of unauthorized data access, it also helps identify and resolve gaps so you can be sure to meet the requirements set by HIPAA.

Patient safety

Without implementing robust data security procedures, your patient’s PHI becomes a vulnerable target of exploitation. Cybercriminals can quickly gain unauthorized access to sensitive patient details using undetected malware or ransomware. Third-party risk management can protect your patients from cyber threats like extortion, phishing, and theft.

Data protection

HIPAA prohibits organizations from using or disclosing a patient’s confidential information without prior consent or authorization. With third-party HIPAA risk management, data protection goes beyond securing your patient’s PHI. It now involves a thorough assessment and review of your third-party vendors, their data security technology, and whether they follow strict protocols to ensure HIPAA compliance.

How to Manage Third-Party HIPAA Risks: A Comprehensive Guide

Identifying Third-Party HIPAA Risk Factors

When sharing PHI with third-party services or businesses, it pays to be aware of the risks and the steps you can take to prevent the adverse outcomes that may stem from them.

Below are some risk factors that could increase the probability of unauthorized access and breaches:

Lack of comprehensive inventory of third-party vendors 

Many organizations operate without a complete list or inventory of the third-party businesses or vendors they’re associated with. The lack of a comprehensive list of business associates poses a risk to data privacy and security, making it difficult to monitor and mitigate potential vulnerabilities.

Insufficient employee training

Third-party employees who lack knowledge and understanding of HIPAA guidelines are more likely to commit errors leading to data breaches and improper PHI disclosure. Many organizations experience data breaches from third-party vendors whose staff are not properly trained to handle PHI.

Weak privacy and security controls

External vendors who connect to your network can serve as an entryway for hackers to access and exploit your system, especially when no robust user access controls are in place. Smaller third-party vendors often become the primary targets, for they have weaker security controls compared to more prominent corporations and enterprises.

third-party hipaa risk management

Managing Third-Party HIPAA Risks: Best Practices

There are certain steps covered entities can take to manage third-party HIPAA risks effectively and cost-efficiently. Some of these include:

Set up a third-party vendor database

The first step to managing your third-party vendors is creating a comprehensive inventory. Make sure to classify them through technologies, services, and level of access to your organization’s data. Your database must include updated contracts, service level agreements (SLAs), business associate agreements (BAAs), and follow-up assessments.

Establish a robust risk assessment process

After setting up your database, you must begin a thorough risk assessment. When conducting evaluations, your inventory comes in handy. It will make it easier for you to track every third-party vendor that can access your data. Analyze both your internal and external information systems to identify potential risks.

Evaluate security controls and safeguards

Implementing administrative safeguards is crucial for organizations to meet HIPAA’s strict requirements. Third-party vendors must also apply the same protection measures to mitigate risks. Examples of administrative safeguards business associates can implement include contingency plans, disaster recovery plans, and information access management.

Implement risk mitigation strategies

The HIPAA federal law requires covered entities and their business associates to implement diverse and effective strategies for risk mitigation. These strategies help reduce the possibilities of unauthorized PHI access and disclosure. 

Some common examples of risk mitigation strategies are as follows:

  • End-to-end encryption
  • Role-based user access controls
  • Secure fax and email communications
  • Mobile device security
  • Incident response plans

Business associate agreements (BAAs)

HIPAA requires hospitals and other covered entities to obtain a BAA from their third-party vendors. The agreement must include detailed commitments to staying HIPAA-compliant and safeguarding PHI. It is also crucial for covered entities to only disclose sensitive patient details with a third party that already signed a BAA. 

The Role of Automation and Technology in Third-Party Risk Management

As cyberattacks continue to threaten and bring significant damage to the healthcare industry, the need to implement secure data infrastructure becomes paramount. Organizations can leverage automation and other advanced security measures to enhance and streamline their third-party risk management processes. These technologies help strengthen an organization’s defenses against evolving cyber threats while ensuring compliance with HIPAA guidelines.

Kent Cañas

Kent is a content strategist currently specializing in HIPAA-compliant online fax. Her expertise in this field allows her to provide valuable insights to clients seeking a secure and efficient online fax solution.

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