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HIPAA → HITECH
What is HITECH?
Healthcare companies and those serving clients that handle electronic health records know that they are required to keep individual’s health data safe, private, and available in order to comply with the Health Insurance Portability and Accountability (HIPAA) Act of 1996. Failing to do so can lead to major fines and reputational damage, but many businesses are not clear on the details of how HIPAA extends to their IT environment.
The final HIPAA omnibus rule, published in 2013, alters the Act’s Privacy, Security, and Enforcement Rules to implement the Healthcare Information Technology for Economic and Clinical Health (HITECH) Act. Since then, any company that requires HIPAA compliance also needs to maintain HITECH compliance, which is best achieved by having its servers hosted in an environment that has been audited for HIPAA compliance.
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The HITECH Act: an executive summary
The Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 is a U.S. law designed to accelerate the adoption and meaningful use of electronic health records (EHRs) while strengthening the privacy and security of electronic protected health information (ePHI). It expands HIPAA enforcement, mandates breach notifications, and incentivizes healthcare organizations to improve data-driven care through certified technology.
- Breach notification requirements – Mandated that covered entities and business associates notify affected individuals, the Department of Health and Human Services (HHS), and sometimes the media when breaches occur.
- Stronger HIPAA enforcement – Expanded the Office for Civil Rights’ authority to investigate, audit, and impose penalties for HIPAA violations.
- Sharper focus on ePHI security – Required encryption, access controls, and audit trails to safeguard patient data stored or transmitted electronically.
- Incentives for EHR adoption – Introduced Medicare and Medicaid incentive programs to encourage providers to adopt and demonstrate “meaningful use” of certified EHR technology.
- Business associate accountability – Extended HIPAA compliance requirements directly to business associates handling ePHI, not just covered entities.
A HITECH compliant hosting environment supports the specific security, privacy, and auditing requirements outlined in the HITECH Act and related HIPAA provisions.
HITECH hosting overview
Compliance is a shared responsibility, but HITECH hosting (or “HITECH compliant hosting”) is a hosting environment that supports the specific security, privacy, and auditing requirements outlined in the HITECH Act and related HIPAA provisions.
What the HITECH act accomplished
By setting both financial incentives and penalties, HITECH transformed how healthcare organizations use and protect patient information.
- Rapid EHR adoption – Incentive programs drove near-universal adoption of EHR systems in hospitals and a majority of physician practices.
- Integration of data-driven care – Improved clinical decision-making through better data availability, interoperability, and analytics.
- Stronger patient privacy and security – Elevated the importance of HIPAA compliance, especially around ePHI, with heavier penalties for breaches.
- Higher accountability for vendors – Brought business associates into direct regulatory scope, reducing weak links in the data handling chain.
- Public transparency of breaches – Created the HHS “Wall of Shame” database to publicly list breaches affecting 500+ individuals.
Three “Meaningful Use Phases” for achieving compliance
HITECH tied EHR incentives to “meaningful use” —a set of progressive stages designed to ensure technology actually improved healthcare outcomes.
- Stage 1: Data capture and sharing – Required providers to electronically capture health data in a structured format and begin sharing that data with patients and other healthcare professionals. This stage emphasized basic EHR functionality, such as e-prescribing, clinical summaries, and reporting on quality measures.
- Stage 2: Advanced clinical processes – Focused on expanding clinical functionalities, improving care coordination, and offering patients secure online access to their health information. Interoperability between systems became a central goal.
- Stage 3: Improved outcomes – Pushed providers to leverage EHR systems for measurable improvements in care quality, safety, and efficiency. This stage emphasized public health reporting, decision support, and full patient engagement.
Best practices for HITECH compliance
Maintaining compliance with HITECH requires both a robust security framework and an ongoing culture of data stewardship.
- Conduct regular risk assessments – Identify vulnerabilities in how ePHI is stored, accessed, and transmitted, and address them proactively.
- Encrypt data at rest and in transit – While not technically mandated, encryption offers safe harbor in breach reporting and drastically reduces exposure.
- Train staff and contractors – Ensure all workforce members handling ePHI understand their security responsibilities and incident response protocols.
- Vet and monitor business associates – Implement strict BA agreements and audit partners regularly for HIPAA/HITECH compliance.
- Implement strong access controls – Use role-based permissions, MFA, and audit logging to prevent and detect unauthorized access.
- Maintain incident response readiness – Have a documented and tested plan for detecting, reporting, and containing breaches.
HITECH violations
The HITECH Act significantly increased the financial and legal risks of noncompliance. Penalties can be civil or criminal, depending on intent and severity.
- Civil penalties – Divided into four tiers:
- Tier 1: Unknowing violations – $100 to $50,000 per violation, up to $1.5M/year.
- Tier 2: Reasonable cause – $1,000 to $50,000 per violation.
- Tier 3: Willful neglect (corrected) – $10,000 to $50,000 per violation.
- Tier 4: Willful neglect (uncorrected) – Minimum $50,000 per violation.
- Criminal penalties – Apply to individuals and can include fines up to $250,000 and imprisonment up to 10 years for offenses involving intent to sell, transfer, or use ePHI for personal gain or malicious harm.
- Examples – Lost unencrypted devices, unauthorized disclosures to media, failure to notify patients of breaches, and ignoring access control policies.
Key hosting requirements for HITECH compliance
HITECH-compliant hosting environments must support the administrative, technical, and physical safeguards needed to secure electronic health information. Below are the most important hosting-level requirements:
| Requirement | Description |
| Data encryption | Encryption of data in transit (SSL/TLS) and at rest |
| User access control | Role-based access, strong passwords, and multi-factor authentication |
| Audit logs | Logging of access attempts, logins, and administrative actions |
| Backup and retention | Encrypted backups stored offsite with defined retention schedules |
| Disaster recovery | Ability to recover from failures or breaches quickly and securely |
| Intrusion detection systems | Monitoring and alerting of unauthorized access or unusual behavior |
| Secure data centers | HIPAA-compliant facilities with physical access restrictions and monitoring |
| Business Associate Agreement (BAA) | Hosting provider must sign a BAA to share responsibility for compliance |
How to verify your hosting provider is HITECH compliant
Even if a provider claims to offer secure hosting, they may not meet HITECH’s specific compliance criteria. You’ll want to verify:
- Whether they provide a signed Business Associate Agreement (BAA)
- If the data centers meet HIPAA/HITECH security standards
- Whether technical safeguards like encryption, logs, and access controls are in place
- If the provider offers auditable documentation and breach response protocols
HITECH Act FAQs
Getting started with HITECH compliant hosting
HITECH compliant hosting ensures that healthcare providers and EHR vendors meet strict security, privacy, and auditing standards required by the HITECH Act and HIPAA. This includes features like data encryption, access controls, audit logs, and signed Business Associate Agreements (BAAs).
Choosing a HITECH-compliant hosting provider is essential for safeguarding electronic protected health information (ePHI) and maintaining regulatory compliance in medical environments. And that’s where Liquid Web comes in.
Liquid Web is HIPAA audited by independent accounting firm UHY LLP, an internationally trusted auditor with extensive experience. We are also compliant with other relevant standards including SSAE-16 and Safe Harbor, providing assurance to companies in the healthcare industry and their business associates.
Click through below to learn more or start a chat with one of our HIPAA-compliant hosting experts right now.
Get HIPAA-compliant cloud hosting
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Additional resources
What is HIPAA-compliant hosting? →
A complete beginner’s guide
Scaling a compliant cloud →
How to scale up without compromising security
HIPAA guide for small business →
A complete resources for medical SMBs
Michael Ashton is the former Senior Director of Platform Operations. He has over 24 years of experience in Information Technology and has held several different roles throughout his career, from IT analyst, IT specialist and Chief Information Officer. He brings a wealth of knowledge and experience and enjoys creating educational content for our readers.