How much does HIPAA compliance cost the industry

How much does HIPAA compliance cost the industry
June 21, 2022
Last updated on June 21, 2022
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Many business sectors have to comply with specific regulations in their respective domains. However, some are more critical than others and have stringent regulatory rules. The medical industry is one such sector where companies must do their best to abide by compliance policies. 

Compliance in the medical industry is the process regulated by HIPAA. The businesses in this industry have to follow specific data and information security protocols to enable PHI. If you are a service provider in the medical industry and wonder what the cost of HIPAA compliance is, this post is for you. 

HIPAA budget

Most medical healthcare providers forget to allocate adequate resources needed for HIPAA compliance. This happens primarily due to a lack of finances or inadequate budgeting. According to the HHS statistics, after the final release of HIPAA compliance rules, the current cost of compliance stands at $1,040 for pre-organization. 

However, other reports suggest that the entire cost of gap assessment to full-scale implementation of HIPAA compliance can cost you $20,000 or more. 

For a small business, the compliance cost is as follows: 

  • $2,000 for risk management and analysis planning 

  • Between $1,000 and $8,000 for remediation

  • Up to $2,000 for policy development and employee training

So your total compliance cost may range between $4,000 and $12,000. 

For medium to large businesses, the cost will be: 

  • $40,000 or more for an onsite audit

  • $20,000 or more for risk management and analysis planning

  • $800 to scan for vulnerabilities

  • $5,000 or more for penetration testing

  • $5,000 or more for policy development and training

All of these expenses bring your overall cost to over $50k.

Factors affecting compliance cost

Several factors directly impact the cost of compliance in your organization. These are as follows. 

  • The compliance cost may vary as per the nature of your business in the healthcare industry

  • The size of your organization

  • The extent of information security measures you would like to implement

  • Whether you would like to create a dedicated department to ensure HIPAA compliance

Unforeseen costs

Apart from the implementation of infrastructure to ensure compliance, there are costs associated with data breaches. All these expenses cause a significant strain on the businesses operating in the medical industry. Here are some to mention. 

  • HHS can penalize you for non-compliance with fines of up to $1.5 million per year

  • FTS can hand you a penalty of $16,000 for a violation

  • You may lose your revenue by 40%

  • Attorney’s fee of more than $2,000

  • Technology repairs of more than $2,000

How to avoid high compliance costs

While you have to bear the costs to become HIPAA compliant, you can avoid paying a hefty sum for solutions and penalties by implementing adequate solutions such as BillPro. You can be an NEMT in New York or a medical business anywhere in the country; BillPro is a customizable solution to suit your budget and needs. 

BillPro is a web-based solution to cater to all your medical billing needs, from claim corrections to automated data import and remittance resolution. You can try it with a 90-day free trial

Conclusion

Whether you are a large healthcare provider or a small-scale entity, compliance with HIPAA regulations will not only help you secure customers' data but also establish your brand's image as a trusted entity. Plan smartly and implement the right compliance software solution to avoid any breaches and penalties. 

You can also hire a third-party expert to identify the loopholes in your business systems and recommend preventive measures to avoid any unforeseen incidents. 

 

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