Should Indian and Overseas Organizations be HIPAA Compliant?

August 28, 2023by manisha

Contact Us

Did you know? According to an IBM report, the global average cost of a data breach in 2023 was USD 4.45 million, a 15% increase over 3 years. That is why, a US-based regional healthcare provider recognized the value of protecting sensitive health information for its 1.5 million patients and assigned Japan-based NTT DATA to find a solution for the risk. NTT DATA Healthcare Consulting Services, a branch of NTT DATA, supported the healthcare provider with an automated data security solution to keep its 1.5 million patients’ data safe.

This is not the only example of an overseas organization helping US-based healthcare providers. Infosys, an Indian multinational IT company, also supported a US-based pharmaceutical firm with AWS Cloud services to store their Protected Health Information (PHI) data.

In another instance, Practo, an India-based healthcare platform providing company, offers Practo Ray, a software solution for clinics that allows US-based healthcare providers to store HIPAA-compliant patient data securely on 256-bit encrypted servers.

Do you want to know how Indian or non-US organizations can help US healthcare providers with their work? Do these organizations need to comply with HIPAA regulations?

To be more informed, read the blog to gain a better understanding of HIPAA, the compliance requirements for Indian and non-US overseas organizations, and the advantages that Indian and other international companies can attain by adhering to its regulations.

HIPAA: Introduction of a landmark law

Before 1996, in the US, the security of healthcare data had been a concern. Cyberattacks were and have been constantly causing security breaches in the healthcare sector. The victims of the security breaches cut across healthcare providers, health insurance providers, and patients. Healthcare data is inherently more sensitive than other types of information, and any tampering with patient data could potentially lead to flawed treatment, posing severe risks that may prove fatal for the patients.      

From an organization’s point of view, it may affect its reputation as well when it gets embroiled in data theft. To safeguard sensitive medical data, the United States legislation passed the HIPAA Privacy Rule on August 21, 1996, during the presidency of Mr. Bill Clinton with the intention of safeguarding data privacy for both patients and organizations. 

A brief description of HIPAA

The Health Insurance Portability and Accountability Act ensures data privacy and various security measures to safeguard patient-related medical information being handled by hospitals, insurance companies, and healthcare providers. Contravention of HIPAA leads to substantial penalties. HIPAA limits access to this information to those who need it to provide care or for other authorized purposes and obligates the handlers of this information to exercise sufficient care and due diligence to handle the data in a secure manner and in compliance with HIPAA itself. Organizations must comply with HIPAA regulations, which are enforced by the US Department of Health and Human Services (HHS).

4 Reasons why HIPAA was introduced

HIPAA envisions and expects a robust, efficient, and secure healthcare ecosystem by prioritizing US patients’ rights and data protection. 

Check out the 4 points below that will help you comprehend the intentions behind the introduction of the US healthcare rule.

  • Protecting the PHI

Protecting the PHI

The US healthcare law safeguards the confidentiality of individuals’ protected health information (PHI) with strict regulations that are utilized by healthcare providers and other entities. It is the firm need for protecting PHI that led to legislation as strong as HIPAA.

  • Safeguarding from data breaches

There was a need for security protocols to safeguard PHI against unauthorized usage. Data encryption and secure storage of data are part of these safeguarding measurements. HIPAA brings quality attention to this.

  • Streamlining electronic data exchange

Streamlining electronic data exchange

The federal healthcare-related law facilitates the adoption of electronic data exchange (including PHI) by encompassing electronic medical records and electronic claims processing. The electronic data exchange process can reduce the paperwork and administrative burdens as well.

  • Addressing Healthcare frauds

Addressing Healthcare frauds

The rule associated with healthcare has introduced regulations to counter healthcare fraud within the Healthcare system. Preventing fraudulent activities such as falsifying billing information or submitting misleading claims forms part of HIPAA regulations.

The various EHRs and EMRs in the healthcare sector including CPOE are mandatorily HIPAA compliant and ensure to a good extent that no erroneous data entry or falsification occurs. One reason for this is that these applications are easily integrated with other partner systems e.g. labs etc. which provide for no or minimal human intervention hence the data integrity is upheld as data travels from one system to another.

You now may have understood the basic intentions that worked behind the introduction of HIPAA. It is not within the boundaries of just the USA but even the organizations based out of the USA including those in India which deal with PHI of US patients, are mandatorily required to be HIPAA compliant. 

The Covered Entities and the Business Associates

Let us see which entities and individuals are impacted by HIPAA regulations and need to abide by them.

The Covered Entities and Business Associates are the two categories of organizations that regularly deal with PHI. It will help you to clearly understand the purpose of HIPAA to create a segregation between these two terms. Let us make an effort to understand how these entities contribute to HIPAA compliance.

  • The Covered Entities

As per the US Department of Health and Human Services (HHS), the healthcare clearinghouse and providers are considered as the Covered Entities. Generally, the Covered Entities are US-based organizations like hospitals, nursing homes, clinics, and pharmacies. These entities come under the ambit of HIPAA.

  • The Business Associates

Now coming to the Business Associates part, a vendor or subcontractor is considered a Business Associate by working with the PHI. Indian and overseas organizations, which perform some identified tasks for the Covered Entities, usually play the role of Business Associates. Such organizations assist the Covered Entities with their medical transcription, developing e-prescribing software, etc.

Being a Business Associate is not easy for Indian and other overseas organizations as there could be a steep learning curve.

Concerns of Indian and Overseas Organizations Seeking HIPAA Compliance

While earlier the US-based Covered Entities were largely considered responsible for abiding by HIPAA compliance, a new rule came up on September 23, 2013, making the Business Associates directly liable for contravention of certain federal healthcare rules. As a result, now most of the Business Associates dealing with PHI irrespective of their location, have to be strictly HIPAA compliant.

3 challenges that Indian and overseas organizations may face while trying to be HIPAA-compliant Business Associates.

3 challenges organizations face while trying to be HIPAA-compliant

3 Ways Indian and Overseas Firms Can Overcome These Concerns

On one hand, the HIPAA regulations can easily be seen by Indian and overseas organizations as an obstacle to working in the US Healthcare industry, the following three points can be viewed as a solution to these challenges.

Obstacle for working in the US Healthcare industry

  • Education and training

Indian and non-US organizations should invest in educating their employees about HIPAA requirements, privacy practices, and compliance assessments. This can be achieved through training programs, workshops, and knowledge transfer sessions that focus on HIPAA provisions.

  • Customized policies and procedures 

Business firms have to develop and implement customized policies and procedures that will align with both HIPAA requirements and non-US data protection regulations. This will help them to bridge the gap between the two frameworks and ensure compliance with both sets of regulations. It is worth noting that there could be sufficient overlaps between these sets of regulations which could be a breather.

  • Regular updates

These organizations have to update themselves regularly to ensure continued compliance with HIPAA regulations and make necessary adjustments to Healthcare policies accordingly.

By implementing these measures, Indian and other overseas organizations can effectively mitigate the challenges associated with HIPAA compliance.

Major Advantages of being HIPAA compliant for Indian and Overseas firms

There are certain advantages Indian and overseas organizations may achieve by being HIPAA compliant.   

  • Adherence to International Standards

HIPAA compliance can help organizations adhere to internationally recognized data protection standards. This can be beneficial when expanding operations globally or working with multinational clients who prioritize strict data protection practices. Therefore HIPAA compliance is a sort of sharp tool for business development activities for these organizations.

  • Collaborating with US Partner

The healthcare privacy rule can open up new business opportunities for Indian organizations by allowing them to collaborate and partner with US-based healthcare entities. This allows for seamless data exchange and integration within the global healthcare ecosystem, opening avenues for business expansion.

What’s India’s take on Healthcare Data Security Guidelines?

India, being the most populous country in the world generates a large volume of healthcare data. Unfortunately, India has not been able to come at par with the USA or EU (European Unions) yet, when it comes to creating guidelines for protecting healthcare data. 

The Information Technology Act 2000 and Information Technology (Reasonable Security Practices and Procedures, and Sensitive Personal Data or Information) Rules 2011 usually protect PHI but the rapid technology advancements act as a deterrent to keeping pace with these prevalent legislations. 

Realizing the gravity of the issue, the Ministry of Health & Family Welfare has proposed DISHA (Digital Information Security in Healthcare Act). DISHA has been created as an equivalent to HIPAA. Section 4 of the Act ensures the protection of digital personal data collected within the territory of India either online or offline.

It has two primary intentions:

  • Recognizing the right to protect the personal data of individuals.
  • Managing and processing digital personal data.

It remains to be seen whether the DISHA Act will be enacted or will go into spins of references and amendments before it gets enforced. However, the fact that the bill has been in development for several years suggests that the government is serious about protecting digital health data in India. However, the need for this is kind of urgent if we as a country have to keep pace with the developed world.


Although HIPAA is a US federal law, organizations worldwide can benefit by being compliant with the federal rule. Receiving HIPAA compliance can set your organization ahead of competitors who may not have achieved the same level of compliance. By adhering to its standards, Indian organizations can reduce the risk of data breaches, and enhance the protection of PHI. HIPAA compliance can safeguard sensitive information against unauthorized access, cyberattacks, and other security threats. Moreover, the upcoming laws for patient data protection in other parts of the world are more or less inspired by HIPAA.

Being an expert in Healthcare IT, we can help you by transforming healthcare management in your clinic or hospital with complete healthcare compliance technology and abiding by HIPAA as well. 

About Us:

Youngsoft India Pvt. Ltd. is an affiliate of Youngsoft Inc. that offers a full-service IT technology and consulting solution. Based in Hyderabad, India, and with Youngsoft Inc., we offer 24/7 support and solutions to clients across the globe.

Reach out to us to know more about our Healthcare IT solutions that are HIPAA compliant.