How to build HIPAA-compliant software: 6 key tips you should follow

Building healthcare software is one thing. Making it HIPAA-compliant? That’s a whole different challenge.

HIPAA is a U.S. law that sets rules for how healthcare data must be handled. If you want to build healthcare software for the U.S. market, those rules apply to you.

The problem is, HIPAA compliance isn’t always straightforward – especially from a development perspective.

The rules are strict, the risks are real, and the details are easy to miss. One small mistake with data handling, and you’re looking at serious consequences.

The good news? You don’t need to be a legal expert to build HIPAA-compliant software.

You just need to understand how the rules apply to your product and how to bake them into your development process from the start.

In this article, discuss how HIPAA applies to software development and walk you through 6 key tips you should follow to build HIPAA-compliant software.

Let’s dive in!

How does HIPAA apply to software development?

If your software product handles protected health information (PHI), HIPAA applies to you.

It doesn’t matter whether you’re storing it, transmitting it, or just briefly touching it – it’s still your responsibility to protect it.

HIPAA sets strict standards for how health data is managed in the U.S. And these standards aren’t just for hospitals or insurance companies.

They also apply to software vendors, service providers, and any company building digital health products.

There are three key rules you need to understand: the Privacy Rule, the Security Rule, and the Breach Notification Rule.

Here’s what each means when it comes to building healthcare software:

Key HIPAA rules that impact software development: overview

And here’s the thing: HIPAA enforcement isn’t theoretical.

A single security lapse can cost hundreds of thousands of dollars – not to mention the reputational damage.

The biggest HIPAA settlement to date was Anthem’s $16 million fine after access control failures exposed the PHI of over 79 million people.

Here’s an overview of the civil and criminal penalties for HIPAA violations:

source: Sprinto

HIPAA compliance is not a one-off checklist.

It’s something that should influence your every decision during development: your architecture, tooling, team, and processes.

From the first commit to production deployment, every part of the system needs to respect the rules.

If your product handles health data, build like someone’s privacy depends on it – because it does.

Key tips on building HIPAA-compliant software

Next, we’ll give you some top tips on how to develop HIPAA-compliant software.

Identify protected health information (PHI) early

If you don’t know what counts as PHI, you can’t protect it. And if you miss something, it’s on you.

Protected health information (PHI) includes anything that links health data to an individual.

That could be names, emails, device IDs, diagnoses, prescriptions, billing details, and even location data if it’s tied to medical use. 

HIPAA defines 18 specific identifiers, and if your software handles any of them, you’re in PHI territory:

source: Databrackets

Here’s the issue: PHI isn’t always obvious. 

Say your app collects heart rate data and an email address. That combination is PHI. 

Or you’re storing chat logs from a patient-doctor interaction. PHI again.

A huge chunk of HIPAA violations come down to improper use or disclosure of PHI. Not huge system breaches or hackers, just bad handling.

That’s why you need to map it early, at the planning stage, and not halfway through development or post-launch.

Ask yourself these questions:

• What data will you collect?
• Where does it go?
• Who has access to it?
• How long is it stored?

If your product is in healthcare, assume every user interaction could involve PHI – better safe than sorry.

PHI isn’t just a legal term. It’s what makes your product a target for cyberattacks and malicious actors.

And it’s your responsibility to protect it.

Choose HIPAA-compliant tools

You can do everything right in your own code and still fail HIPAA compliance because of your tools.

If a third-party service handles PHI, it needs to be HIPAA-compliant. 

That means your cloud provider, database, email provider, analytics platform, and even your video or messaging API. Every piece of the stack counts.

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Now, there’s no official HIPAA certification for software – compliance is about how you configure and use a particular tool.

And here’s the catch: many tools don’t cover all of their services under HIPAA. 

Some only offer compliance on specific plans. Some won’t sign a Business Associate Agreement (BAA) at all. Without that agreement in place, you’re the one on the hook – not them.

Before you plug anything in, ask the right questions:

• Do they sign a BAA?
• Are all their services covered?
• Do they have a HIPAA compliance statement?
• What’s their data handling policy?

Let’s take a closer look at cloud services for a minute. Here’s how HIPAA affects cloud service providers and users:

source: Atlantic.net

Keep in mind that while the top cloud platforms like AWS, Azure, and Google Cloud do sign BAAs, they don’t offer HIPAA support for every service.

And then there’s logging tools, error monitoring, and CI/CD services. If those logs contain user data, they fall under HIPAA too.

Here’s the bottom line: if you can’t prove your vendors are compliant, you’re not compliant.

So make a list, audit your tools, and replace anything that doesn’t meet the standard.

Implement strong security measures

HIPAA doesn’t just recommend security – it requires it. You need to protect PHI at every level of your product. 

Every safeguard matters.

HIPAA’s Security Rule defines administrative, physical, and technical safeguards you need to implement:

source: Secureframe

We’ll focus on technical safeguards and security protocols – that means encryption, access controls, audit logs, and proper system monitoring.

Let’s start with encryption. 

PHI must be encrypted both at rest and in transit. Not optional. Not a “nice to have.” 

Encryption under HIPAA isn’t fully required yet, but a late 2024 proposal from the Department of Health and Human Services (HHS) would make it a legal obligation.

You’re dealing with personal medical data. If that data leaks, it’s not just a bad look – it’s a HIPAA violation.

Use strong, modern encryption standards like AES-256 and TLS 1.2 or higher. And make sure you encrypt all of your data, including:

• Backups
• Log files
• PHI in dev or staging environments

If it’s in your system, it should be encrypted.

Next, access control. Every user should have the minimum necessary access to do their job.

So, for example, a QA engineer shouldn’t see real patient info in test environments.

You should implement role-based access control (RBAC) and multi-factor authentication (MFA) for all admin-level users. 

Also, make access revocation part of your offboarding process. Forgotten accounts are one of the easiest ways to get breached.

You also need to keep records. Set up audit logs that track who accessed PHI, when, and what they did with it. 

These logs should be tamper-proof and stored securely so if a breach happens, they’ll show how it happened. 

Finally, you need to continuously monitor your system and:

• Set up alerts for unusual login activity
• Track failed access attempts
• Patch infrastructure regularly
• Keep dependencies updated
• Address known vulnerabilities 

Security isn’t just about tools, it’s about habits.

And you’ll never get in trouble for locking things down too tightly.

Regularly perform internal audits

Internal audits aren’t bureaucracy, they’re your early warning system.

Audits help you answer the most important question in compliance: Are we actually doing what we said we’d do?

You can’t just document your safeguards, you need to prove they work. 

Here’s what HIPAA says about internal audits:

A covered entity or business associate must, in accordance with § 164.306, perform a periodic technical and nontechnical evaluation, based initially upon the standards implemented under this rule and, subsequently, in response to environmental or operational changes affecting the security of electronic protected health information, that establishes the extent to which a covered entity’s or business associate’s security policies and procedures meet the requirements of this subpart.

HIPAA Security Rule (164.308(a)(8))

But, what does this mean, exactly?

It means you have to:

• Test access controls and review permissions
• Review encryption settings
• Make sure your logs are complete
• Verify that your backups are secure

Start with a checklist and check that your audit logs are running and that no one can change them.

Use automated tools where you can, like security scanners, permission audits, and config checkers. 

But don’t rely on them alone. Code reviews, manual walkthroughs, and human testing are just as important.

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Run your internal audits on a schedule. Quarterly is good, but monthly is better if you’re building a new product and your requirements might change mid-development.

And after every major release, do a mini-review. Don’t assume that just because something was secure yesterday, it still is today.

Internal audits are one of the easiest ways to catch issues before they become violations.

They don’t take long and don’t cost much. But they could save you from fines, breaches, and lost trust.

Make them part of your normal workflow, just like code reviews or QA.

Handle data disposal correctly

HIPAA doesn’t just care about how you collect and store data – it also cares about how you get rid of it.

Improper disposal of PHI is a violation. And it’s one of the easiest ways to get caught off guard.

Disposal isn’t just about deleting files, it’s about making sure PHI can’t be recovered by anyone. 

This includes database records, cached files, logs, emails, backups, and old devices. HIPAA is clear on this:

Implement policies and procedures to address the final disposition of electronic protected health information, and/or the hardware or electronic media on which it is stored.

HIPAA Security Rule (164.310(d)(2)(i))

In software development, these risks show up in places you might not think to look:

• Staging databases that were never cleaned.
• Crash logs with sensitive info left on a server.
• Backups stored in a third-party service, never encrypted, never deleted.

You need a clear data retention policy. Define how long you keep PHI, and why. 

If there’s no reason to hold it, delete it. And when you delete it, do it securely by overwriting files, wiping disks, or using tools designed for secure erasure.

Also, set automated expiration dates and add data disposal to offboarding when you shut down user accounts.

Also, make sure dev and test environments don’t contain real PHI.  If they do, they need the same disposal policies as production.

Every copy of PHI you hold is a liability. If you’re not using it, you shouldn’t be keeping it.

Invest in training for your team

Your tech stack can be flawless. Your architecture bulletproof. But if your team isn’t trained, you’re risking non-compliance.

Most HIPAA breaches don’t start with code, they start with people. The weak link isn’t always technical. It’s human.

And that’s why HIPAA requires workforce training:

A covered entity must train all members of its workforce on the policies and procedures with respect to protected health information required by this subpart and subpart D of this part, as necessary and appropriate for the members of the workforce to carry out their functions within the covered entity.

HIPAA Privacy Rule (164.530(b)(1))

This isn’t just for hospitals. It applies to your developers, testers, product managers, and designers.

Anyone who touches the product needs to understand what PHI is, how it flows through your system, and how to handle it properly.

Here’s why that’s important:

source: The HIPAA Journal

Training doesn’t have to be complicated.

Start with the basics:

• What qualifies as PHI
• How to identify risks
• What to do in case of a breach
• Why documentation matters
• What not to put in test environments

Make HIPAA training a part of onboarding. Refresh it every quarter and update it every time your product or policies change.

Security tools can’t fix what people don’t understand. You need a team that knows the rules and respects the data.

Make training routine and specific and ensure your team knows why this matters – not just for compliance, but for trust.

Because when someone mishandles data, it’s not just a HIPAA violation. It’s a user who may never trust your product again.

How to build HIPAA-compliant software: FAQs

Need a reliable development partner?

Healthcare software doesn’t just need to work. 

It also needs to protect your sensitive data, respect privacy laws, and follow industry standards.

But, to get there, you need to hire the right development partner.

And that’s where we come in.

From day one, we build with compliance in mind – HIPAA, GDPR, HL7, ISO/IEC 27001 – so you know you’re in safe hands.

If you want to learn more, feel free to reach out and our team will be happy to answer any of your questions and see how we can help you.