protected health information - featured image

Protected Health Information: What Is and Its Importance?

As a business owner or company, you are obligated to protect your customers’ sensitive and confidential data. Protected Health Information (PHI) is one aspect you must handle with special care since it can reveal detailed personal health information.

Whether your business deals with medical services, insurance claims plans, or financial transactions involving healthcare records, understanding PHI is essential to ensure regulatory compliance. On top of that, you can successfully manage risks associated with protecting this highly sensitive information.

In this blog post, we will explain what PHI is and how businesses can ensure its protection every step of the way.

What Is Protected Health Information (PHI)?

Protected Health Information (PHI) plays a vital role in healthcare. PHI refers to any type of information related to an individual’s:

  • Health status
  • Physical and mental health conditions
  • Medical history
  • Treatments received

This information is protected by law to ensure that patient privacy is maintained. The Health Insurance Portability and Accountability Act (HIPAA) defines the legal framework for PHI protection in the United States.

All healthcare providers, as well as their business associates, must handle PHI securely and confidentially. For instance, medical research involving PHI must obtain patients’ consent to use their data in studies. . Furthermore, healthcare providers and business associates must have a business associate agreement (BAA) in place to ensure the proper handling and confidentiality of PHI.

protected health information - image 1The Importance of PHI in Healthcare

PHI plays a crucial role in healthcare and medical practices. Here are the reasons why.

  • Ensuring privacy and confidentiality – Patients have the right to privacy and confidentiality regarding their medical information. PHI enables healthcare providers to keep this information confidential. It ensures that health data is only shared with individuals who have authorization.
  • Promoting high-quality care – Access to PHI helps healthcare providers deliver high-quality patient care. They can take a comprehensive and personalized approach to treatment based on the patient’s unique medical history and needs.
  • Supporting medical research – PHI is essential in medical research, where it helps researchers to identify patterns and trends in health outcomes. Such information is vital in developing new treatments, technologies, and therapies that can improve patient outcomes.
  • Streamlining healthcare operations – PHI is a critical component of electronic health records (EHRs), revolutionizing the healthcare industry. EHRs enable healthcare providers to access patient information efficiently. It improves the speed and accuracy of diagnosis and treatment.

Who Has Access to PHI?

HIPAA regulations outline who has access to PHI and under what circumstances.

  • Covered entities provide healthcare services and require access to PHI, including healthcare providers, health plans, and healthcare clearinghouses. They must comply with HIPAA regulations to protect PHI and prevent unauthorized access.
  • Business associates are third-party entities that work with covered entities and require access to PHI to perform their duties. Examples of business associates include billing companies, IT service providers, and medical transcriptionists.

Signed BAAs between covered entities and business associates are requisite for PHI security and HIPAA compliance.

When accessing PHI, covered entities and business associates must adhere to the principle of least privilege. It means that they should only access the minimum amount of PHI required to perform their duties.

Access to PHI should be restricted to only authorized personnel. Access logs must be kept to monitor PHI access and activity tracking.

How Protected Information Is Used

PHI is essential for ensuring quality healthcare for patients. It is used in various ways, including:

Treatment, Payment, and Healthcare Operations

When it comes to treatment, healthcare providers use PHI to assess, diagnose, and treat patients. It allows medical professionals to develop a patient’s treatment plan, evaluate their progress, and make informed decisions about their care.

For example, physicians use electronic health records to view a patient’s medical history, medications, allergies, and lab results to provide the best possible treatment.

PHI is also valuable for payment and healthcare operations. Insurers and other healthcare payers use PHI to determine the following:

  • Coverage and benefits
  • Process claims
  • Facilitate payment

Healthcare operations include administrative and quality improvement activities, such as appointment scheduling, patient satisfaction surveys, and medical record audits.


Research is another important use of PHI. Medical researchers use PHI to study various health conditions, develop new treatments, and improve patient outcomes.

For example, clinical trials rely on PHI from participants to evaluate the safety and effectiveness of new therapies.

Public Health

PHI is also critical in public health efforts. Government agencies use PHI to monitor and prevent the spread of diseases, track outbreaks, and develop public health policies.

For instance, public health officials rely on PHI to identify and investigate new disease outbreaks and develop appropriate interventions.

Law Enforcement

Lastly, PHI is used in law enforcement to investigate crimes, including those related to healthcare fraud and patient abuse.

In most cases, law enforcement officials must comply with HIPAA regulations when accessing PHI and obtain a valid subpoena or court order.

HIPAA Regulations for Protected Health Information

The Health Insurance Portability and Accountability Act (HIPAA) was passed in 1996 to protect patient privacy and security. HIPAA regulations consist of the Privacy Rule and the Security Rule.

  • The Privacy Rule dictates how healthcare providers, insurers, and businesses handle and safeguard patients’ protected health information (PHI).
  • The Security Rule outlines physical, technical, and administrative safeguards that must be in place to secure electronic PHI (ePHI).

Healthcare providers, insurers, and businesses must ensure compliance with these regulations. It means they must follow strict guidelines for handling and safeguarding PHI, including:

  • Obtaining patient consent for using their information
  • Limiting access to their information
  • Properly disposing of any paper or electronic PHI when it is no longer needed

How does the HIPAA Privacy Rule work in real life?

  • For instance, a doctor treating a patient for a serious illness must protect the patient’s PHI and not share it with anyone outside the treatment team.
  • With the patient’s permission, an insurance company must disclose PHI to the designated representative.
  • A hospital must ensure that patients have full control over their PHI and know when, where, and how it’s being used.

The Security Rule requires healthcare providers and insurers, as well as other businesses, to take adequate measures, prohibiting unauthorized access to ePHI. This includes the use of strong passwords, data encryption, and regular data backup.

How does HIPAA Security Rule work in real life?

  • For instance, a hospital must have a secured and encrypted electronic health record system that can only be accessed by authorized personnel.
  • A physician’s office must follow strict password-protected protocols to keep the ePHI of their patients confidential.
  • A healthcare provider must ensure their network is secure so that hackers cannot access ePHI illegally.

Noncompliance with HIPAA regulations can result in hefty fines of up to $50,000. In some cases, legal action. To ensure compliance, healthcare providers, insurers, and businesses should:

  • Invest in proper training for their staff
  • Conduct regular security assessments, and
  • Implement policies and procedures that safeguard PHI.

In conclusion, HIPAA regulations are crucial for protecting patient privacy and security in healthcare. Through the proactive implementation of policies and procedures, healthcare providers, insurers, and businesses can safeguard PHI while adhering to HIPAA regulations.

Best Practices When Handling Protected Health Data

Follow these best practices to avoid penalties and legal actions that negatively affect your brand.

1. Implementing access controls and authentication

Access controls play a critical role in safeguarding PHI. They regulate who has access to PHI, how it is accessed, and what users can do.

Authentication is verifying a user’s or device’s identity before granting access to PHI. Together, these mechanisms help to ensure that only authorized parties can access PHI.

One way to apply access controls and authentication is to utilize role-based access controls (RBACs). RBACs provide role-based access to PHI based on the user’s job function.

For example, a nurse may access patient records, while a receptionist may only control the appointment scheduling system. Authentication can be achieved through strong passwords or biometric authentication such as fingerprint or facial recognition.

2. Secure data storage and encryption

Healthcare organizations must ensure that PHI is stored in secure locations and devices that unauthorized parties cannot easily access.

Encryption transforms data into a code that you can only decipher with a key, making it unreadable to unauthorized parties.

One way to apply secure data storage and encryption is to use encrypted cloud storage systems that allow healthcare organizations to store PHI securely, offsite.

This technology ensures that unauthorized parties cannot access the data in the event of physical damage or theft.

3. Staff training on PHI and HIPAA compliance

Training should cover how to handle PHI, recognize potential breaches, and report them promptly. Staff should also understand HIPAA regulations and the consequences of non-compliance.

One way to apply staff training on PHI and HIPAA compliance is to provide:

  • Regular workshops
  • Webinars
  • Refresher courses on HIPAA regulations and PHI handling

These sessions can cover password management, workstation security, and incident reporting. It is also essential to have a clear policy on PHI handling and provide employees with a copy of the policy.

protected health information - image 2In conclusion

Healthcare organizations must protect Protected Health Information (PHI) to avoid financial loss and criminal prosecution for HIPAA violations.

A multi-layered approach ensures PHI security, including access controls, authentication protocols, encryption strategies, and updated staff training.

Protecting patients’ data and privacy rights is essential, so safeguarding confidential health information is crucial for individuals and organizations.

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