HIPAA Security Rule Updates & IAM Compliance Recommendations
© 2025 IDPro, Sharon Chahal and Hanita Epstein
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Introduction to HIPAA
Passed in 1996, HIPAA is a U.S. federal law enacted to safeguard sensitive patient-protected health information (PHI). HIPAA establishes comprehensive standards for handling, storing, and transmitting PHI to ensure the privacy and security of medical records. These standards include the Privacy, Security, Breach Notification, and Enforcement Rules.
Privacy Rule establishes national standards for safeguarding PHI, regulating how covered entities and their business associates use and disclose PHI.1
Security Rule outlines the administrative, physical, and technical safeguards required to protect electronic PHI (ePHI) from unauthorized access or disclosure.2
Breach Notification Rule requires covered entities and business associates to notify individuals and the HHS in the event of a breach of unsecured PHI.
Enforcement Rule establishes the procedures for investigations, penalties, and enforcement of HIPAA rules. The Office of Civil Rights (OCR), a division of the Department of Health and Human Services (HHS), is responsible for enforcing HIPAA compliance.
Compliance with HIPAA is mandatory for covered entities3, including healthcare providers, pharmacies, health plans (insurance providers), and healthcare clearinghouses, as well as their business associates. Violations, deliberate or accidental, can lead to fines and penalties ranging from $141 - $2,134,831 with the possibility of prison for 1 to 10 years, according to the law as of the time of this writing.4
The last major update to HIPAA was in 2013 when the HIPAA Omnibus Rule introduced new HIPAA regulations mandated by the Health Information Technology for Economic and Clinical Health (HITECH) Act; this amendment addressed challenges arising from electronic health records (EHR), helping HIPAA accomplish its principal objective: ensuring patients feel safe disclosing sensitive information with their healthcare provider while allowing that data to be shared for treatment, research, and public health needs.5,6
Since then, most HIPAA changes have consisted of amendments to existing standards to accommodate changes to other laws, Executive Orders, and new transaction code sets. On December 10, 2020, the HHS OCR issued a Notice of Proposed Rulemaking, which proposed a range of changes to the HIPAA Privacy Rule. The new federal administration is expected to release a final rule implementing these changes later in 2025.
In December 2024, the HHS OCR proposed a rule that will implement numerous changes to the HIPAA Security Rule (a major goal being the improvement of cybersecurity in alignment with the NIST framework in an all-up cybersecurity initiative to secure PHI). After delays, the proposed rule was added to the Federal Register7 (a daily publication for the U.S. government to announce changes to government requirements and policies) on January 6, 2025. For the next 60 days, any person or group can submit a comment on any part of the proposed rule by clicking the green “Submit a Formal Comment” button on the rule’s page. These comments will be added to the public record and weighed alongside data and facts presented for the final ruling on March 7, 2025; however, several lobbying groups are pushing for this not to go into effect8, so the rule may get a last-minute pause.
Terminology
Term | Description |
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Business Associate | Person or entity that performs certain functions or activities that involve the use or disclosure of protected health information on behalf of, or provides services to, a covered entity.12 |
Covered Entity | Person, organization, or institution that transmits ePHI (e.g., healthcare providers, health plans, healthcare clearinghouses).3 |
DID | Decentralized identity is a system allowing users to manage their personal information without relying on a central authority. |
ePHI | Electronic Protected Health Information |
Healthcare Clearinghouse | A healthcare clearinghouse under HIPAA is defined as a public or private entity, including a billing service, repricing company, community health management information system or community health information system, and “value added” networks and switches, that performs either of the following functions: (1) Processes or facilitates the processing of health information received from another entity in a nonstandard format or containing nonstandard data content into standard data HIPAA elements, or (2) Receives a standard transaction from another entity and processes or facilitates the processing of health information into nonstandard format or nonstandard data content for the receiving entity.12 |
HHS | Department of Health and Human Services |
HIPAA | Health Insurance Portability and Accountability Act |
IAM | Identity and Access Management (IAM) is the discipline used to ensure the correct access is defined for the correct users to the correct resources for the correct reasons.13 |
MFA | An approach whereby a user’s identity is validated to the trust level required according to a security policy for a resource being accessed using more than one factor (something you know (e.g., password), something you have (e.g., smartphone), something you are (e.g., fingerprint)18 |
NIST | National Institute of Standards and Technology |
NIST Cybersecurity Framework | The NIST Cybersecurity Framework helps businesses of all sizes better understand, manage, and reduce their cybersecurity risk and protect their networks and data.15 |
NPRM | Notice of Proposed Rulemaking is the first public release of a proposed document explaining an agency’s plan to create a new regulation or change an existing one.14 |
OTP | A one-time password is a security code valid for one transaction or login attempt. |
PHI | Protected Health Information |
RBAC | Role-Based Access Control is a security method restricting access to systems and resources based on a user’s role within an organization. |
SOD | Segregation of Duties is a principle preventing any one person from being solely responsible for an entire process – it involves assigning different tasks to multiple people, which reduces the risk of fraud or error. |
Transaction Code Sets | Transaction code sets refer to a standardized collection of codes used to represent specific actions or events within a system, allowing for the electronic exchange of information between different entities in a consistent format. In healthcare, it ensures accurate data transmission through standardized codes for diagnoses and procedures.16 |
ZTA | Zero Trust Architecture is a cybersecurity plan that utilizes zero trust concepts and encompasses component relationships, workflow planning, and access policies. Therefore, a zero-trust enterprise is the network infrastructure (physical and virtual) and operational policies that are in place for an enterprise as a product of a zero-trust architecture plan.17 |
Introduction to Identity and Access Management (IAM)
Identity and Access Management (IAM) is the discipline used to ensure the correct access is defined for the correct users to the correct resources for the correct reasons.13 This helps to ensure that only the right people (or systems) have access to specific data, applications, and resources within an organization. Compromised user credentials are frequently targeted by hackers to infiltrate organizations' networks via malware, ransomware, and phishing attacks. IAM safeguards resources by performing authentication (the process of proving that the user with a digital identity who is requesting access is the rightful owner of that identity13) and authorization (determining a user’s rights to access resources and the level at which that access should be granted13) actions.
This article will cover the proposed cybersecurity measures added to the HIPAA Security Rule and the required IAM safeguards organizations should implement.
2024 Updated HIPAA Security Rules Requirements Related to IAM
HIPAA guidelines for protecting the security and privacy of healthcare information came into effect in 200521; IAM plays a crucial role in meeting HIPAA's Security Rules requirements, as it governs individuals' access to PHI and ensures only authorized users can interact with the data. Below are the 2024 proposed updates to HIPAA Security Rule requirements:
Access Control (HIPAA Security Rule – § 164.312(a))
The Access Control HIPAA Security Rule mandates that covered entities and business associates implement policies to ensure that only authorized individuals can access PHI. IAM platforms play a crucial role in controlling and managing access to sensitive data:
Unique User Identification: Each user must have a unique ID to track and log access to PHI, such as an email address, employee ID, or similar unique identifier in the context of the covered entity.
Emergency Access Procedure: Establishing Emergency access procedures to allow authorized personnel to access PHI in case of an emergency while maintaining security policies.
Access Authorization and Management: Access must be granted based on job roles and responsibilities (e.g., a doctor might have full access to patient records, while a billing clerk might only access billing-related information).
Access Control Mechanisms: Restricting access based on user roles.
Audit Controls (HIPAA Security Rule – § 164.312(b))
HIPAA now requires audit controls to monitor access to PHI. IAM systems are crucial for providing detailed logging and audit trails of which individual had access to data and when.
Audit Logging: IAM systems must record all access to PHI, including user activity, successful and failed login attempts, and access to specific records.
Audit Reports: Organizations must be able to generate reports from IAM systems that show user access patterns and potential breaches or anomalies. IAM systems must be capable of generating data, which is typically done through access and audit logs.
Monitoring and Response: IAM systems must allow for the continuous monitoring of user activity and the ability for organizations to respond to suspicious or unauthorized access.
Authentication and Password Policies (HIPAA Security Rule – § 164.312(d))
Strong authentication is a vital component of IAM under HIPAA to ensure that only authorized individuals can access PHI.
Authentication Mechanisms: Authentication must be implemented using methods such as strong passwords and MFA.
Password Complexity: HIPAA doesn’t specify exact password policies, but it does require entities to implement policies to ensure strong passwords.
Data Encryption (HIPAA Security Rule – § 164.312(a)(2)(iv))
Data encryption protects PHI at rest and in transit. IAM solutions can be used to ensure that data is not exposed to unauthorized users, even if access control measures are bypassed.
Encryption of PHI: Access to encrypted data should require proper authentication, and the IAM system should control who has the decryption keys.
Access Control for Decryption: Only authorized individuals should be allowed to access encryption keys.
User Training and Awareness (HIPAA Security Rule – § 164.308(a)(5))
Conducting training initiatives ensures users understand the importance of safeguarding PHI.
User Training: Users should be regularly trained on security best practices.
Access Control Awareness: Organizations should inform users about the consequences of unauthorized access.
Data Minimization and Least Privilege (HIPAA Security Rule – § 164.308(a)(4))
The principle of least privilege ensures access to the minimum amount of PHI necessary to perform their job duties, supporting separation of duties.9
IAM systems need to enforce the principle of least privilege by assigning users access based on their roles.
Access permissions should be reviewed regularly to ensure that users no longer have access to data they no longer need for their job functions.
Data Integrity (HIPAA Security Rule – § 164.312(c)(1))
Ensuring the integrity of PHI is vital; IAM systems must be designed to prevent unauthorized changes to PHI and monitor for any alterations.
Only authorized users should have permission to modify PHI. IAM systems should restrict this based on user roles and responsibilities.
Any changes to PHI should be logged, tracked, and auditable through IAM tools.
Physical and Logical Security (HIPAA Security Rule – § 164.310 and § 164.312)
Though IAM primarily addresses logical access, it also interacts with physical security measures; both physical and logical security should be aligned to prevent unauthorized access to systems containing PHI.
IAM systems should integrate with physical access control mechanisms, such as smartcards or biometric systems, to prevent unauthorized physical access to facilities where PHI is stored.
IAM should ensure that remote access to PHI is secure.
Implementing IAM in Compliance with HIPAA
Below is a step-by-step guide on IAM updates required by the proposed updates in the HIPAA Security Rule:
HIPAA Security Rule | Definition | IAM Recommendation |
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Access Control (HIPAA Security Rule – § 164.312(a)) |
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Audit Controls (HIPAA Security Rule – § 164.312(b)) |
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Authentication and Password Policies (HIPAA Security Rule – § 164.312(d)) |
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Data Encryption (HIPAA Security Rule – § 164.312(a)(2)(iv)) |
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User Training and Awareness (HIPAA Security Rule – § 164.308(a)(5)) |
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Data Minimization and Least Privilege (HIPAA Security Rule – § 164.308(a)(4)) |
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Data Integrity (HIPAA Security Rule – § 164.312(c)(1)) |
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Physical and Logical Security (HIPAA Security Rule – § 164.310, § 164.312) |
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Challenges and Best Practices
The challenges in implementing IAM for HIPAA Security Rule compliance include ensuring granular access control based on roles, managing multiple user identities and roles across dynamic healthcare environments, and establishing secure emergency access procedures. Organizations also struggle with timely provisioning and de-provisioning of user access, maintaining accurate audit trails and monitoring for suspicious activity, and effectively managing third-party vendor access while ensuring compliance with HIPAA’s strict access and security requirements.
The following best practices are designed to address the challenges in managing an IAM system to ensure HIPAA compliance and protect PHI and ePHI from unauthorized access.
Best Practice | Description |
---|---|
Role-Based Access Control (RBAC) | Defining user roles and groups based on job responsibilities, granting access only to the minimum (least privilege access) PHI necessary for each role. |
Multi-Factor Authentication (MFA) | An approach whereby a user’s identity is validated to the trust level required according to a security policy for a resource being accessed using more than one factor (something you know (e.g., password), something you have (e.g., smartphone), something you are (e.g., fingerprint) |
User Provisioning and De-provisioning | Automating the creation and termination of user accounts to ensure timely access provisioning and revocation, minimizing the risk of unauthorized access. |
Emergency Access Procedures | Establishing secure emergency access mechanisms, with time-bound (JIT, PIM) and logged access, to ensure authorized personnel can access PHI in critical situations. |
Continuous Monitoring and Audit Trails | Logging all access to PHI and monitoring it in real-time, generating audit trails for compliance audits, and detecting unauthorized access or anomalies. |
Vendor and Third-Party Management | Implementing strict access controls for third-party vendors, ensuring they sign Business Associate agreements and have limited, monitored access. |
Periodic Access Reviews | Regularly reviewing user access to ensure permissions are appropriate and aligning them with roles and the least privilege principle. |
Data Encryption | Ensuring all PHI is encrypted both in transit and at rest, using strong encryption standards (e.g., AES-256 for storage, TLS 1.2+ for transmission). |
Segregation of Duties (SoD) | Prevent conflicting roles by ensuring that one user cannot access PHI in ways that could lead to fraud, misuse, or errors by dividing responsibilities. |
Compliance Audits and Reporting | Using automated tools for generating compliance reports, ensuring easy demonstration of adherence to HIPAA access and security requirements during audits. |
Security Awareness Training | Providing ongoing training for all employees on HIPAA requirements, secure access practices, and recognizing phishing or social engineering attacks. |
Future Trends in IAM and HIPAA
As the healthcare industry continues to evolve, tools and practices are also evolving to protect PHI and ePHI to ensure HIPPA compliance.
Trend | Description | Implications for IAM and HIPAA |
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Zero Trust Architecture (ZTA) | A ZTA security model assumes no implicit trust and continuously verifies access based on user behavior, device health, and context. |
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AI and Machine Learning for IAM | AI and ML will enhance identity management and threat detection by analyzing user behavior, login patterns, and risk levels in real-time. |
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Biometric Authentication | Increased use of biometric authentication (fingerprint, facial recognition, etc.) as part of MFA for accessing PHI. |
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Cloud-Based IAM Solutions | The shift to cloud environments drives the adoption of cloud-based IAM solutions for managing identities and access across hybrid or multi-cloud environments. |
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Blockchain for Access Control | Blockchain could provide tamper-proof audit trails and enable transparent access management to PHI with decentralized, immutable logs. |
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Decentralized Identity (DID) Management | DID technologies will allow patients and healthcare providers to manage and verify access to PHI independently of central authorities. |
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Granular Consent Management and Patient-Centric IAM | IAM systems will provide more robust consent management tools, allowing patients to control who accesses their PHI and for what purposes. |
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Enhanced Privacy Controls | IAM will incorporate advanced privacy controls and support regional/national privacy laws, helping healthcare organizations comply with data sovereignty requirements. |
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Zero Knowledge Proof (ZPK) | IAM will incorporate ZPK, a method that allows a person to prove a claim without disclosing additional information. ZPK can be used to prove a user's identity without revealing their actual identity (e.g., username or password). This can secure the authentication process and prevent hackers from stealing the user’s identity. |
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Post-Quantum Cryptography (PQC) | IAM platforms will integrate post-quantum cryptography to protect sensitive user authentication processes, such as passwords and biometric data, from quantum threats. These platforms will transition to quantum-resistant algorithms for secure identity verification, user access controls, and data protection. Note: PQC is being adopted as the FIPS standard. Future modifications to HIPAA will likely require adherence to PQC requirements |
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Conclusion
IAM plays a crucial role in HIPAA compliance by ensuring the confidentiality, integrity, and availability of PHI and ePHI; it establishes the foundational security framework for controlling who can access what data and under what conditions, helping healthcare organizations meet several key HIPAA Security Rule requirements.
IAM ensures access to PHI and ePHI is managed, monitored, and logged, while ongoing security practices—such as risk assessments, training, encryption, and incident response—ensure that patient data remains protected in an increasingly complex healthcare environment. By implementing security protocols and a culture of continuous improvement, healthcare organizations can safeguard patient information and remain compliant with HIPAA’s requirements.
Sources
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8 Medical Group Management Association. (2025, February 17). MGMA urges Trump Administration to rescind proposed HIPAA Security Rule. Medical Group Management Association. https://www.mgma.com/advocacy-letters/february-17-2025-mgma-urges-trump-adminsitration-to-rescind-proposed-hipaa-security-rule
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Author Bios
Sharon Chahal is a Principal Product Manager in the Microsoft Security Customer Experiencing Engineering team for Identity and Network Access. Sharon leads a team of deep technical experts helping enterprise organizations deploy Entra ID within their environments. With 25+ years in the industry, she is a trusted advisor and is leading efforts in platform improvements to support healthcare regulatory compliance.
Hanita Epstein is a Senior Product Manager in the Microsoft Security Customer Experiencing Engineering team for Identity and Network Access. Prior to joining Microsoft, she was a data analytics consultant and a healthcare technology consultant.