HIPAA Compliance Software Development – What Healthcare Companies Need to Know, Before Development?

Thinking of getting software developed for your healthcare brand. Well, it is a great move considering healthcare trends are pushing the digital envelope. However, since you are here, we can safely assume that your idea deals with PHIs. And trying to figure out the tropes around HIPAA compliance software development. 

Well, your thought isn’t wrong, since OCR (Office for Civil Rights) has imposed a penalty of $144 million so far in 152 cases. In fact, in a year, the highest penalty paid for HIPAA non-compliance is close to $2.13 million. And, since we as an outsourcing partner have worked on a plethora of healthcare projects that have required HIPAA compliance in the past. We have developed this article to help you through.

So, let’s begin!

What Is HIPAA? (What Developers & Founders Need to Know)

The HIPAA, or Health Insurance Portability and Accountability Act, governs PHI (Protected Health Information). The law dictates how this information is stored, accessed, transmitted, and secured.

So for software teams, HIPAA compliance software development is a mandate, and it directly impacts any applications’ architecture, infrastructure, and development practices used.

Now, there are two primary stakeholders covered in HIPAA software requirements. Let’s discuss them:

Covered Entities vs. Business Associates

• Covered Entities: These include bodies like healthcare providers, insurers, and clearinghouses that handle PHI as part of their jobs.
• Business Associates: These are third parties that create, process, or store PHI on behalf of covered entities.

Why Software Vendors Are Legally Accountable?

We have been in the outsourcing business for the last 25+ years. And, have been providing healthcare software development services for quite a while. So, we have already navigated the terrain.

For better understanding, suppose you decide to hire us for any healthcare project that involves interaction with PHI. Now, as a vendor, we will be designing, creating access controls, and whatnot for the software. So, we will be considered a business associate, and to ensure that the PHI is secure, Business Associate Agreements (BAAs) will be used. 

As a result, this legally binds us to follow HIPAA compliance for software development and integrate it into the product lifecycle, ranging from architecture to coding, deployment, and ongoing maintenance.

Also Read: Healthcare Compliance Guide: Key Steps & Best Practices

Which HIPAA Rules Apply to Software Development?

Whether you are getting aided by healthcare app development services or app services, not all HIPAA rules affect you the same way. However, for most dev teams, two rules matter the most. The reason: they directly shape how your application is built, deployed, or maintained.

HIPAA Privacy Rule (From a Software Perspective)

The privacy rules govern how the PHI will be accessed and how much can be shown. From a software perspective, it translates to:

• Controlling data access for PHIs and how they can only be viewed by those with relevant roles
• The ‘minimum necessary principle’ that demands the system not expose patient data if there is no relevance in terms of the task to be done

If an app allows unrestricted access to records, shared logins, or overexposed dashboards, this violates the privacy laws even without a breach.

HIPAA Security Rule & Software Architecture

The HIPAA security rule for software development defines how PHI needs to be protected within a software system. It has three layers of safeguards. Let’s discuss them:

• Administrative safeguards: These encompass internal policies, access management, risk assessments, and incident response planning. 
• Physical safeguards: It demands secure servers, controlled and role-based data center access, and protected development environments.
• Technical safeguards: This covers encryption, authentication, audit logs, automatic logoff, and secure APIs.

Most apps fail to meet HIPAA IT requirements due to violations of the technical layer. Most common reasons are weak access controls, poor encryption, or missing audit trails.

HIPAA Software Requirements: What Your Product Must Support?

Developing a HIPAA-compliant app requires the dev team to enforce a series of HIPAA software requirements. Here is a list of those requirements that you need to focus on to develop a compliant product.

Core HIPAA Software Requirements

• Authentication & Authorization: Users need to be uniquely identified based on role-based access, where PHI visibility is limited to what is required for the job.
• Audit Logs: The system needs to automatically record who accessed the PHI. It should also include what was accessed and when, without any manual tracking.
• Encryption (at rest & in transit): PHI needs to be encrypted in databases, backups, and while moving across networks or APIs.
• Automatic Logoff: Inactive sessions need to be closed automatically to avoid any unauthorized access, especially on shared or unattended devices.
• Data Integrity Controls: HIPAA-compliant software needs to prevent any unauthorized changes to the patient data and needs to detect any accidental or malicious alterations.
• Secure Backups & Disaster Recovery: Encrypted backups and tested recovery plans are essential to ensure PHI availability during failures or incidents.

Together, these capabilities form the foundation of HIPAA software requirements and should be treated as the core features of healthcare software, and not optional add-ons.

Developing a HIPAA-Compliant App: Step-by-Step Process

Developing a HIPAA-compliant app requires more than integrating security features. Instead, HIPAA compliance directly dominates several decisions between the stages from planning to launch. Think of this practical process as a healthcare development guide that you can adopt for HIPAA compliance software development.

Step 1: Define Data Flows & PHI Exposure

Start the process by mapping how PHI will be entered, moved, and exited from the system. This would help you clarify the nodes where security controls will be mandatory.

Step 2: Choose HIPAA-Compliant Infrastructure

Select cloud platforms, databases, and third-party services that support encryption, access control, logging, and business associate agreements.

Step 3: Secure App Architecture & APIs

Ensure that the system you are designing or getting designed has the least privileged access. On top of that, integrate encrypted APIs and strict separation between public and PHI-handling components.

Step 4: Compliance-First UI/UX Decisions

Interfaces should be limited so that they prevent any unnecessary data visibility, prevent accidental exposure, and enforce secure session behavior by default.

Step 5: Testing, Validation & Risk Assessment

Validate your security controls through testing, vulnerability scans, and periodic risk assessments before and after launch.

Step 6: Documentation & Compliance Readiness

Maintain clear documentation for all the security policies, system behavior, and incident response. This will demonstrate compliance during audits.

For teams that don’t have in-house compliance experts, execution is often supported through a specialized HIPAA compliance software development company.

HIPAA Software Compliance Checklist (Developer & IT Ready)

HIPAA compliance is not proven by intent or any other document. Instead, it is proven through verifiable system controls. A strong HIPAA software compliance checklist is meant to help development and IT teams. Additionally, it ensures security, infrastructure, and operational safeguards for consistent implementation and auditability.

The checklist below aligns technical controls with real HIPAA IT requirements, making it suitable for engineers, DevOps teams, and compliance reviewers. It also doubles as a HIPAA compliance checklist for information technology covering both application and infrastructure layers.

How Developers Should Use This Checklist?

• During Coding: Check Access, Data Handling, APIs
• During PR Review: Audit logs, exposure risks, third parties
• Before Release: Infrastructure, vendors, incident readiness
  

Rule: Any unchecked or “Not Sure” item is a compliance gap.

HIPAA Software Development Best Practices (What Top Teams Actually Do?)

Teams that succeed with HIPAA don’t treat compliance as a final checklist. Instead, they design, ship, and maintain the software around that. To aid with it, we have provided HIPAA software development best practices to go beyond minimum requirements and align with the real-world implementation of the standard.

• Compliance by Design: Security and compliance are planned during architecture and data modeling. And not patched once the product is live.
• Least Privilege Architecture: Every user, service, and API gets absolutely necessary access. And, nothing is impermanent.
• Zero-trust Principles: No request is trusted by default. Every access attempt is trusted through verification, logs, and continuous evaluation.
• Secure DevOps (CI/CD): Security checks, secrets management, and access controls should be integrated directly into the build and deployment pipelines.
• Regular Risk Assessments: Teams periodically need to review data flows, permissions, and infrastructure to catch compliance gaps early on.
• BAAs with Vendors: All third-party services can only get access to PHI if they are covered by Business Associate Agreements and have been reviewed for compliance.

Applied consistently, these HIPAA software development best practices can help teams meet the evolving HIPAA standards while reducing security risk and costly rework.

Common HIPAA Compliance Mistakes in Software Projects

Here are some common mistakes made during HIPAA-compliant software development that can lead to absolute failure. Let’s assess them:

• Logging PHI in Plaintext: Debug logs, error messages, and even monitoring tools sometimes capture sensitive data unintentionally. This creates compliance risks silently.
• Misconfigured Cloud Storage: Another series of common reasons that lead to PHI exposure are public buckets, open databases, or weak network rules.
• Over-privileged Roles: Giving users or services broader access “just in case” ends up violating the minimum necessary principle and increases the impact of a breach.
• No Audit Review Process: Logging PHI access is useless if logs are never reviewed or monitored for suspicious activity.
• Assuming Cloud Providers Equal Compliance: Cloud platforms offer compliant infrastructure. However, application-level security and access control are still the team’s responsibility.

Addressing each of these primary issues covers a much wider range in terms of maintaining HIPAA compliance for software development without any cost rework or post-incident fixes.

What Can NewAgeSysIT Do For You?

At NewAgeSysIT, we have teams for full-stack software development and digital transformation. And, our working experience is more than 25+ years in the outsourcing business across industries, which includes healthcare too.

For HIPAA compliance software development, we can help you with:

• Designing and developing a healthcare application that aligns with HIPAA requirements
• Building a secure cloud and DevOps pipelines for long-term compliance
• Providing cybersecurity and compliance consulting to help with better integration
• We provide staff augmentation and dedicated team models to help you extend your internal team
• We deliver ongoing support and monitoring to ensure your healthcare software remains secure and compliant

With decades of experience and a transparent, agile development process, we can help turn your requirements into a secure and scalable digital product. Plus, we do it at a price range of $25-$49 per hour, depending upon the complexity of the project, despite being a U.S.-based company.

Final Thoughts

The requirement for fulfilling compliance in healthcare keeps changing with geographies, as different countries have mandated different compliance. However, being HIPAA compliant means that you are maintaining compliance with most of the compliance requirements for other regions, because the majority of them are more or less the same. Plus, HIPAA in itself is so extensive that it prepares your application with better access controls, high-end encryption, audit-readiness, and a lot more. 

On an end note, whether you’re a founder, a product manager, or a developer, HIPAA compliance software development will remain a mandate and will demand more in the future, especially if you are dealing with PHIs. However, if in your journey, you feel stuck. Fret not, we are just a call away.

FAQs:

Q.1 How to ensure HIPAA compliance in healthcare software development?

Ensuring HIPAA compliance in healthcare software development is a task of its own. The most important aspect of this task is that the team should treat compliance as part of a build rather than an afterthought. This helps you build compliance integrated into the system from scratch.

Additionally, these are some actions you can take:

• Start by understanding the creation of PHI, where it is stored, and how it will move through your system.
• Design access carefully. Not everyone needs to see everything, so use role-based access and keep permissions as tight as possible. Less access means less risk.
• Lock the data down. PHI should always be encrypted—sitting in a database or traveling between services, no exceptions.
• Turn on visibility. Implement audit logs that quietly record who accessed what, and when, with zero manual effort.
• Choose your infra wisely. Work only with platforms that are HIPAA compliant, and make sure you sign BAAs with every vendor that touches PHI.
• Test your defenses often. Run risk assessments and vulnerability scans regularly, not just before launch or after a scare.
• And finally, write things down. Clear documentation of policies, system behavior, and incident response plans is what saves you during audits and security reviews.

Q.2 What are the key HIPAA security rules for software developers?

Key HIPAA security rules that need to be followed by software developers to protect PHI are:

• Enforcement of unique user identification and role-based access
• Encryption of PHI at both rest and in transit
• Logging and audit readiness of PHI for each access
• Auto-expire feature for sessions
• Prevention of any unauthorized data changes and detection of tampering of data
• Secure, authenticated, and minimal APIs and integrations
• Security controls to be tested regularly

Q.3 What are the steps to perform a HIPAA risk assessment for new software applications?

We have laid out clear steps to perform HIPAA risk assessment for any new software applications you may be developing:

• First, start by figuring out where PHI will be created, stored, processed, or transmitted
• Then, map all your data flows across the application, APIs, infrastructure, and third parties
• List out all the potential threats and vulnerabilities. This can include access misuse and misconfigurations
• Evaluate if there is any likelihood of risk, and if yes, what will be the impact
• Check if your system has requirements for administrative, physical, and technical safeguards
• Finally, review and update the assessment. And do it regularly, especially after releases or system changes.

Q.4 How to integrate HIPAA compliance into the software development lifecycle?

Integrating HIPAA into your software development lifecycle isn’t a cakewalk. But if you go procedural, neutralizing the complexity of implementation at each level, it becomes fairly easy. Below are some actions you can take to achieve the aforementioned.

• Identify PHIs and map their data flow at the planning stage itself
• During design, apply least-privileged access and secure architecture as the default
• In the development stage, follow secure coding practices and avoid logging into PHI unless absolutely required
• In the testing phase, validate access controls, audit logs, and check vulnerabilities
• During deployment, focus primarily on securing your infrastructure, keeping all the secrets ‘secret’, and taking relevant backups
• After launch, monitor access made into PHIs, review logs, and reassess to avoid leaving any risk unnoticed

Q.5 What are some common HIPAA violations in software, and how can they be avoided?

Here are some common violations in software that can arise from everyday technical mistakes:

It may sound odd, but most HIPAA violations that occur actually happen because of fairly common technical mistakes; here they are:

1. Logging in Plaintext: Logging in plaintext can expose data. However, it can be avoided by using masking or excluding PHI from logs.
2. Misfigured Cloud Storage: This often leads to data leaks. And, the best way to protect is by locking down buckets, databases, and controlling network access. 
3. Over-privileged Roles: Over-privilege violates the minimum necessary rules. So, using role-based access is necessary.
4. Audit Logs: Missing or unused audit logs often end up hiding breaches. Therefore, log every PHI access and review them periodically.
5. Cloud Providers: Assuming all cloud providers offer similar compliance can lead to gaps. So, secure the application layer by itself.

Q6. Do all healthcare software products need to be HIPAA compliant?

No. Some healthcare software products do not need to follow the rules of HIPAA. Most examples of such products lie in categories like fitness, wellness, education, or general health tracking.

Q7. What is the role of developers in Healthcare software HIPAA compliance?

Developers play a central role in HIPAA implementation. 

Basically, any security feature like role-based access, encryption, audit logging, etc., is implemented only because developers provide the technical skills and use them to integrate it into our product.

Q8. Can HIPAA compliance be achieved using open-source frameworks and tools?

Yes, HIPAA compliance is achievable by using open-source frameworks and tools. Here are some examples to prove:

Security & Authentication

• Keycloak – Identity and access management, RBAC, MFA
• OAuth 2.0 / OpenID Connect – Secure authentication standards
• Spring Security – Access control for Java applications

Encryption & Secrets Management

• OpenSSL – Data encryption in transit and at rest
• HashiCorp Vault – Secure secrets and key management
• Let’s Encrypt – TLS certificates for HTTPS

Audit Logging & Monitoring

• ELK Stack (Elasticsearch, Logstash, Kibana) – Centralized audit logs
• Wazuh – Security monitoring and intrusion detection
• Auditd (Linux) – System-level audit trails

Secure DevOps & Compliance Automation

• OWASP ZAP – Security testing for web apps
• Trivy – Container vulnerability scanning
• SonarQube – Secure code analysis
• OpenSCAP – Policy and compliance checks

Infrastructure & Access Control

• Kubernetes (with RBAC) – Least-privilege infrastructure access
• Terraform – Auditable, version-controlled infrastructure
• Ansible – Secure, repeatable configuration management

Q9. What is the HIPAA security rule for software development?

The HIPAA security rule dictates that the PHI needs to be effectively handled and protected through administrative, physical, and technical safeguards.

Q10. How often should HIPAA compliance be reviewed after a product launch?

HIPAA compliance should be reviewed continuously. At a minimum, a formal review can be conducted every year. However, immediate review after any major release is the go-to approach.