Stolen healthcare records are the source of 95% of all identity theft, and that’s where HIPAA compliance for software development in the USA becomes crucial. Healthcare software solutions process a wide range of patients’ data; therefore, healthcare IT solutions providers need to ensure they build software that is HIPAA-compliant.

Be it protecting patient privacy, preventing identity theft, reducing legal & financial risk, preventing discrimination, or maintaining trust, HIPAA-compliant software puts an end to all these issues, making patients’ data secure and protected.

However, for developers, HIPAA compliance goes beyond encryption; it encompasses secure coding, access management, incident response, vendor oversight, and ongoing monitoring.

This comprehensive blog provides a developer-focused HIPAA compliance checklist for 2026, detailing administrative, technical, and physical safeguards; practical steps to build compliant software; common mistakes; and FAQs.

It’ll help you know everything beforehand, enabling you to find a HIPAA-compliant software development company to build healthcare software that aligns with HIPAA.

What Is HIPAA?

The Health Insurance Portability and Accountability Act (HIPAA) is a U.S. federal law enacted in 1996 to set national standards, aiming to protect patient health information (PHI) from being disclosed without consent.

It mandates rules for healthcare providers, insurers, and related entities (Covered Entities) to secure electronic health records (ePHI) and manage patient data, giving individuals the right to their health info.

HIPAA ensures that patients’ medical information remains confidential, accurate, and secure while allowing legitimate access for healthcare operations. It improves the efficiency of healthcare systems and standardizes electronic health transactions while ensuring privacy and data security.

HIPAA Compliance Rules Overview

The HIPAA compliance rules include the privacy rule, security rules, notification rule, and more. A software development company willing to build software that adheres to HIPAA compliance needs to follow these rules. Here’s how:

HIPAA Privacy Rule

This rule of HIPAA compliance governs how Protected Health Information (PHI) is used and disclosed. It allows patients the right to access, correct, and obtain copies of their medical information.

What’s more, patients can inspect a copy of the data and get any alterations done, if needed. The HIPAA Privacy Rule ensures that software handling PHI respects confidentiality and consent rules.

HIPAA Security Rule

This rule focuses on keeping electronic PHI (ePHI) secure by mandating administrative, physical, and technical safeguards. The security rule of HIPAA involves secure user authentication, encryption, audit controls, and risk management processes. Bear in mind that this rule only applies to covered entities and business associates.

These are mainly health plans, healthcare providers, and healthcare clearinghouses, while business associates include subcontractors of covered entities.

HIPAA Enforcement Rule

This rule establishes how HHS (U.S. Department of Health and Human Services) enforces the HIPAA law. It determines accountability and imposes penalties for non-compliance, including fines and potential criminal charges. This enforcement is conducted by the Office for Civil Rights (OCR), initiated when a data breach occurs.

HIPAA Breach Notification Rule

This HIPAA compliance rule requires covered entities and business associates to notify affected individuals, HHS, and sometimes the media in the event of a PHI breach.

The HHS has identified the elements that constitute a breach based on the volume and type of PHI implicated, the kind of disclosure, and more. A timely and documented breach response is critical for software teams.

What Is the Importance of HIPAA?

HIPAA compliance is important for many reasons, including protecting patient privacy, preventing identity theft, reducing legal & financial risks, and more. Here’s how:

• Protects Patient Privacy: HIPAA compliance prevents misuse of sensitive medical information relating to the patients.
• Prevents Identity Theft: It secures ePHI against unauthorized access for patients’ well-being.
• Reduces Legal & Financial Risk: Adhering to HIPAA compliance helps you avoid hefty fines and reputational damage.
• Prevents Discrimination: HIPAA compliance protects individuals with chronic conditions from being denied insurance or facing bias when switching jobs.
• Maintains Trust: Patients and healthcare partners trust platforms that handle data responsibly.

Who Needs to Be HIPAA-Compliant?

HIPAA compliance applies to Covered Entities (healthcare providers, health plans, clearinghouses) and their business associates (third-party vendors like IT, billing, and legal) that handle Protected Health Information (PHI).

The rule safeguards patient data for treatment and operations. Any entity creating, receiving, maintaining, or transmitting electronic PHI must comply, even if not traditionally “healthcare” but serving a healthcare function.

Below are the types of individuals and organizations that are subject to the Privacy Rule and considered covered entities:

Healthcare Providers

Every healthcare provider, including hospitals, clinics, telemedicine platforms, pharmacies, dentists, psychologists, and physicians, regardless of the size of their practice, that electronically transmits health information in connection with certain transactions, needs to be HIPAA compliant.

These transactions involve claims, referral authorization requests, benefit eligibility inquiries, and other transactions for which HHS has determined standards under the HIPAA Transactions Rule.

These organizations must prioritize it to protect patient data in electronic health records (EHRs), billing systems, and patient portals.

Health Plans

The following are the health plans that need to be HIPAA compliant:

• Health, vision, dental, and prescription drug insurers
• Health maintenance organizations (HMOs)
• Medicare, Medicaid, Medicare+Choice, and Medicare supplement insurers
• Employer-sponsored group health plans
• Government- and church-sponsored health plans
• Long-term care insurers, excluding nursing home fixed-indemnity policies
• Multi-employer health plans

Note: A group health plan with less than 50 participants administered solely by the establishing and maintaining employer is not covered and would be the exception.

Healthcare Clearinghouses

Organizations that process health information for standardization or translation are liable to be HIPAA compliant.

For example, those entities that process nonstandard information received from another entity into a standard format or vice versa, and healthcare clearinghouses that receive identifiable health information when providing processing services to a health plan or healthcare provider as a business associate, need to be HIPAA compliant.

Business Associates

Vendors and software providers that store, transmit, or process ePHI on behalf of covered entities need to adhere to HIPAA compliance.

These include a non-member of a covered entity’s workforce using individually identifiable health information for functions of a covered entity that need to be HIPAA compliant. These functions, activities, or services include claims processing, data analysis, utilization review, and billing.

These associates must sign Business Associate Agreements (BAAs) and adhere to HIPAA safeguards.

HIPAA Compliance Checklist for Software Development

The HIPAA compliance checklist for software development includes administrative, technical, and physical safeguards. Below is a detailed, 2026-ready checklist with explanations and practical guidance to help you ensure you build software that adheres to HIPAA law:

1. Administrative Safeguards (Governance & Accountability)

HIPAA Applicability & Scope Definition

Administrative safeguards begin with understanding the scope of compliance. Software developers working on a project need to know exactly which systems, processes, and personnel handle ePHI. 

For example, a telehealth app developer should know exactly which parts of the backend handle patient records, how those records are transmitted to clinicians, and where they are stored in the cloud.

• Identify ePHI Systems: Map databases, cloud storage, APIs, and third-party integrations. This ensures you know which components need HIPAA controls.
• Classify Your Organization: Determine if you are a Covered Entity, like a hospital or insurance company, or a Business Associate, like a SaaS provider handling ePHI.
• Data Flow Mapping: Track how ePHI moves between systems, applications, and external services, enabling you to identify vulnerabilities, unauthorized access points, and compliance gaps.

Security Risk Analysis & Risk Management

A formal security risk assessment is mandatory; therefore, software developers need to identify vulnerabilities, prioritize risks, and implement mitigations.

• Document Risks: Consider identifying threats, like ransomware, unauthorized access, or cloud misconfigurations, and their likelihood and impact on ePHI.
• Mitigation: Apply technical controls, such as encryption, access control, and administrative controls (policies, training) to mitigate these risks.
• Continuous Reassessment: Make sure you repeat assessments after major updates, infrastructure changes, or security incidents.

Pro Tip: Make use of automated scanning tools to identify vulnerabilities in APIs, servers, or dependencies.

Policies, Procedures & Documentation

Policies, procedures, and documentation formalize how your organization protects ePHI. Documentation is critical for audits. For example, you can document how your app encrypts PHI in transit and at rest, and which team is responsible for key rotation.

Policies cover access control, encryption, incident response, and acceptable use, procedures provide step-by-step instructions for developers and IT teams, and documents maintain architecture diagrams, risk logs, and change management records.

Workforce Management & Access Governance

When it comes to the HIPAA compliance checklist, human error emerges as a considerable risk. Therefore, you need administrative safeguards to control who can access ePHI.

For example, a new engineer joining a team should access only the data and environments necessary for development and testing, and the access should be revoked immediately once they leave the organization.

Assign roles and responsibilities clearly, and implement user onboarding and offboarding procedures. Moreover, conduct periodic access reviews to remove unnecessary privileges, and train developers, IT, and support teams on HIPAA security best practices to improve assurance on HIPAA compliance.

Incident Response & Breach Management

To ensure HIPAA compliance for software development, developers must plan for unexpected events, as it mandates a timely response and reporting when any incident of data breach occurs.

Consider maintaining a written incident response plan and defining processes for detection, investigation, containment, and remediation of any incident. What’s more, establish reporting timelines to affected individuals and OCR and preserve evidence for audits and legal purposes.

For example, if a vulnerability exposes PHI, your plan should allow for quick patching, notification to stakeholders, and documentation of the entire incident.

Vendor & Third-Party Risk Management

Business associates (vendors) are likely to introduce risks to ePHI; hence, vendor & third-party risk management is one of the essential elements.

To deal with this issue, identify vendors accessing ePHI and execute Business Associate Agreements (BAAs). Periodically review vendor security practices and monitor changes in vendor services or infrastructure that could affect data security.

For example, cloud storage providers must comply with HIPAA, and you should verify their safeguards and responsibilities under the BAA.

2. Technical Safeguards (System & Application Controls)

Identity, Authentication & Authorization

To be HIPAA-compliant, you should ensure that only authorized users access ePHI. For this to be possible, assign unique user IDs and avoid shared accounts. Implement Role-Based Access Control (RBAC) and enforce the least privilege principle.

Apart from these, make use of Multi-Factor Authentication (MFA) for sensitive systems, and ensure secure onboarding and immediate access termination on departure.

For example, only billing staff should access payment-related PHI; engineers should have access only to development data (preferably synthetic).

Session & Credential Security

Weak credentials are a common attack vector; therefore, ensuring session & credential security is crucial. Implement strong password policies and secure storage (hashed + salted) and automatic session timeouts for inactive users.

Moreover, monitor and prevent brute-force or credential-stuffing attacks. For example, software developers should never hard-code passwords in source code or configuration files.

Data Encryption & Integrity

Implement data encryption and integrity, as it ensures data is protected even if systems are compromised.

• Encrypt ePHI in transit (TLS 1.2+) and at rest (AES-256).
• Use digital signatures or checksums to detect unauthorized changes.
• Manage encryption keys securely and rotate them regularly.

For example, encrypt patient records stored in databases and transmitted between microservices.

Audit Logging & Monitoring

Tracking activity is essential for detecting breaches and proving compliance. Consider recording all access, modifications, and deletions of ePHI. Ensure logs are tamper-resistant and retained per policy, and monitor logs for unusual behavior or suspicious activity.

For example, record when a user exports PHI from the system and alert admins if abnormal volumes are detected.

Secure APIs & Integrations

APIs are a major attack vector in healthcare software; therefore, to ensure HIPAA compliance, secure APIs and integrations.

• Authenticate and authorize all API requests
• Validate and sanitize all inputs to prevent injection attacks
• Implement rate limiting and abuse prevention
• Ensure third-party integrations comply with HIPAA and BAAs

For example, you should make sure that only authenticated clinicians are able to retrieve patient records via API, and external integrations must be audited.

Data Minimization & Retention

Consider collecting and storing only the minimum necessary ePHI. For this to be possible, avoid storing sensitive data in logs or analytics, use de-identified or synthetic data for testing, and implement secure retention and deletion policies.

For example, a reporting service may only store anonymized metrics instead of full PHI.

Backup, Availability & Disaster Recovery

To be HIPAA compliant, software developers should plan for backup, availability, and disaster recovery. Availability is as important as confidentiality, so ensure you:

• Maintain encrypted backups with access controls
• Test restore procedures regularly
• Implement disaster recovery and business continuity plans
• Protect systems from ransomware and other attacks

For example, daily encrypted backups are stored in a separate region with automated restoration tests.

Secure Software Development Lifecycle (SDLC)

For optimal compliance, security must be integrated into the software development life cycle (SDLC) from day one. Apply secure coding standards, conduct peer code reviews focusing on security, and perform dependency and vulnerability scanning.

What’s more, conduct static and dynamic application security testing, and ensure separate development, staging, and production environments.

For example, software developers never use production PHI in test environments; CI/CD pipelines include automated security checks.

3. Physical Safeguards (Infrastructure & Device Controls)

Secure Infrastructure & Hosting

Secure infrastructure & hosting are part of the HIPAA compliance software checklists. That’s because even cloud deployments require physical safeguards. To make this possible, ensure you:

• Use HIPAA-compliant cloud providers or secure on-premises servers
• Maintain infrastructure security documentation
• Understand shared responsibility models in cloud hosting

For example, AWS or Azure HIPAA-compliant services can host ePHI if configured correctly under the BAA.

Workstation & Device Security

Devices are often the weakest link for compliance breaches; hence, ensuring security is of utmost significance. Consider encrypting laptops, mobile devices, and storage media, and apply endpoint protection and security patches.

Moreover, restrict physical access to systems handling ePHI, and enable remote wipe for lost/stolen devices. For example, a remote engineer’s laptop with access to ePHI must have disk encryption and VPN access.

Media Handling & Disposal

Data can persist on old devices or storage media; therefore, implement proper media handling and disposal.

Properly handle hardware storing ePHI, securely remove all data (media sanitization) or destroy media before reuse or disposal, and document disposal procedures for compliance audits.

For example, hard drives used to store PHI are shredded or sanitized using NIST-approved methods before disposal.

4. Ongoing Compliance & Oversight

Continuous Review & Improvement

HIPAA compliance is continuous, so you should make sure to frequently review and improve. Consider continuous monitoring of system logs and user activity. Conduct periodic risk reassessments after feature releases or architecture changes, and update policies, training, and technical controls as threats evolve.

For example, annual internal audits and quarterly training sessions ensure software remains compliant and secure.

Steps to Build HIPAA-Compliant Software

Steps to build HIPAA-compliant software include conducting a risk assessment, fixing the risk and adjusting the process, and establishing long-term risk management. Here’s how:

1. Conduct Risk Management

Begin your HIPAA-compliant software development by performing a formal security risk assessment to identify where and how ePHI is created, stored, transmitted, or accessed within your software.

Evaluate potential vulnerabilities such as weak access controls, insecure APIs, misconfigured cloud resources, or improper data handling practices. Document the likelihood and impact of each risk to prioritize remediation.

2. Fix the Risk & Adjust the Process

Address identified risks by implementing technical safeguards (encryption, access controls, logging), updating policies and procedures, and refining development and operational workflows.

Ensure mitigation steps are applied consistently across environments and validated through testing. This step often includes closing security gaps introduced by new features or third-party integrations.

3. Establish Long-Term Risk Management

HIPAA compliance is an ongoing process; therefore, schedule regular risk assessments, internal audits, and security reviews, especially after system updates or architectural changes.

Reinforce compliance through continuous monitoring, periodic training, and timely policy updates to adapt to evolving threats and regulatory expectations. Explore the complete HIPAA-compliant app development guide to know more about all the steps in detail. 

Common HIPAA Compliance Mistakes in Software Development

Common HIPAA compliance mistakes in software development are assuming encryption alone is enough, a lack of audit logging, over-permissioned users, and more. Here are the details you should know:

Assuming Encryption Alone Is Enough

Many developers rely solely on encryption to protect ePHI. While encryption is essential, HIPAA compliance also requires administrative safeguards, like policies, workforce training, access reviews, and physical safeguards, such as secure devices & media handling. Ignoring these layers leaves systems vulnerable despite encrypted data.

Lack of Audit Logging

Failing to log user activity prevents traceability of who accessed, modified, or deleted ePHI. Without audit logs, it is difficult to detect unauthorized activity, investigate incidents, or demonstrate compliance during audits.

Over-Permissioned Users

Granting users more access than necessary increases the risk of accidental or intentional data breaches. Therefore, implement least-privilege access and periodically review permissions to ensure only authorized personnel can access sensitive health information.

Using Real PHI in Test Environments

Using production patient data in development or testing environments is a major compliance risk. That’s because test environments often lack full security controls, which can lead to accidental exposure. Hence, developers should always use de-identified or synthetic data for testing.

Missing or Invalid BAAs

Business Associate Agreements (BAAs) are legally binding contracts that ensure vendors comply with HIPAA standards. Missing or improperly executed BAAs can make your organization liable for vendor-related breaches.

No Breach Response Plan

HIPAA requires a documented process for responding to data breaches. Organizations without a clear breach response plan risk delayed notification, inadequate containment, and legal penalties.

A proper plan defines detection, investigation, containment, reporting, and remediation procedures in HIPAA-compliant software development.

Build HIPAA-Compliant Healthcare Software with MindInventory

HIPAA compliance is a continuous, multi-layered process. Software developers must integrate administrative, technical, and physical safeguards into every stage of development, from design to deployment.

As a leading healthcare software development company, MindInventory excels at delivering HIPAA-compliant software development solutions that align with your comprehensive needs.

Be it custom healthcare software development, integration services for healthcare, modernization services, or just healthcare software consulting, we help you with all possible solutions.

Here’s how we built an AI-powered copilot for doctors that is 100% HIPAA-compliant and experienced:

• 33% Enhanced Prescription Note Generation
• 27%+ Optimized AI Model Performance
• 56% Improved Overall Efficiency

This healthcare solution demonstrates our excellence in HIPAA-compliant software development for healthcare, providing a reason why you should rely on us for your project development.

FAQs on HIPAA Compliance