How Startups Can Get HIPAA Compliance (Free Guide)

Photo by S O C I A L . C U T on Unsplash

Getting HIPAA compliance right is like trying to solve a Rubik’s cube while blindfolded — it seems impossible until you know the system. For startups dealing with protected health information (PHI), HIPAA compliance isn’t just another regulatory checkbox; it’s a foundational element that can determine whether your business thrives or faces crippling penalties.

The healthcare startup landscape is booming, with digital health funding reaching record levels in recent years. But with great opportunity comes significant responsibility. Many founders don’t realize they need HIPAA compliance until they’re deep into development, which can lead to costly redesigns and delays.

This guide cuts through the complexity to provide startups with a clear path to HIPAA compliance. We’ll walk through who needs to comply, what the rules require, and how to get certified without breaking the bank.

Which Startups Need to Follow HIPAA?

Not every healthcare-adjacent startup falls under HIPAA’s jurisdiction. The determining factor isn’t your industry — it’s whether you handle Protected Health Information (PHI).

You likely need HIPAA compliance if:

You’re a Covered Entity:

• Healthcare providers who conduct electronic transactions (doctors, clinics, hospitals)
• Health plans (insurance companies, HMOs, company health plans)
• Healthcare clearinghouses (entities that process health information)

You’re a Business Associate:

• You provide services to covered entities involving PHI
• You handle, transmit, maintain, or access PHI on behalf of covered entities
• You create, receive, maintain, or transmit PHI for another business associate

Many startups fall into the “Business Associate” category without realizing it. For example:

• A telemedicine platform connecting patients with doctors
• An app that helps patients manage medications or health conditions
• Software that helps healthcare providers manage patient records
• A cloud storage solution used by hospitals or clinics
• Analytics companies processing de-identified health data

Consider this real-world scenario: A startup creates an app to help users track their fitness goals. If the app only collects data directly from users and doesn’t connect with healthcare providers, it likely doesn’t need HIPAA compliance. However, if the same app integrates with hospital records or allows doctors to monitor patient progress, it needs to be HIPAA compliant.

If your startup is anywhere near healthcare data, it’s better to carefully analyze your HIPAA obligations early rather than face penalties later.

What are the HIPAA Rules?

HIPAA isn’t a single regulation but a collection of rules that work together to protect PHI. Understanding these components is crucial for startups building compliant systems from the ground up.

Privacy Rule

This is the cornerstone of HIPAA, establishing when and how PHI can be used and disclosed. Key requirements include:

• Limiting uses and disclosures of PHI to the minimum necessary
• Giving patients the rights to access their health information
• Requiring appropriate safeguards to protect PHI
• Implementing proper authorization procedures
• Creating privacy policies and procedures

Security Rule

While the Privacy Rule covers all PHI (electronic, paper, and oral), the Security Rule specifically focuses on electronic PHI (ePHI). It requires:

• Administrative safeguards: Risk analysis, management policies, staff training
• Physical safeguards: Facility access controls, workstation security, device and media controls
• Technical safeguards: Access controls, audit controls, integrity controls, transmission security

The Security Rule is particularly relevant for tech startups, as it directly addresses how you build and maintain your systems.

Breach Notification Rule

If a data breach occurs, HIPAA-covered entities and business associates must:

• Notify affected individuals within 60 days
• Notify the Department of Health and Human Services (HHS)
• In cases affecting 500+ individuals, notify prominent media outlets serving the area
• Document breaches and response actions

For startups, this means developing incident response plans before you need them.

Omnibus Rule

This 2013 update strengthened HIPAA by:

• Extending compliance requirements directly to business associates
• Increasing penalties for noncompliance
• Strengthening limitations on marketing and fundraising using PHI
• Prohibiting the sale of PHI without authorization

Understanding these rules helps startups build compliance into their products from day one, rather than retrofitting it later, which is almost always more expensive and disruptive.

How to Conduct a HIPAA Risk Assessment for Compliance
Learn 10 Key Steps to Stay Compliant and Secure secureslate.medium.com

HIPAA Certification Process for Startups

Despite what many believe, there’s no official government “HIPAA certification.” Instead, compliance is self-implemented and demonstrated through documentation, policies, and safeguards.

However, several recognized frameworks can help prove your compliance to partners and customers. Here’s a practical roadmap:

1. Conduct a Risk Assessment

Start by thoroughly evaluating your organization’s handling of PHI:

• Identify where PHI is stored, transmitted, and accessed
• Document potential threats and vulnerabilities
• Assess current security measures
• Determine the likelihood and impact of potential threats
• Prioritize risks based on potential harm

This isn’t a one-time task but an ongoing process. For startups, it’s best to build this assessment into your development cycle.

2. Implement Required Safeguards

Based on your risk assessment, implement appropriate safeguards:

Administrative:

• Designate a Privacy Officer and Security Officer (yes, even in a small startup)
• Develop written policies and procedures
• Train all staff members
• Implement business associate agreements with partners who access PHI

Physical:

• Secure physical access to servers and workstations
• Implement proper disposal procedures for devices containing PHI
• Create policies for mobile devices and remote work

Technical:

• Implement access controls (authentication, authorization)
• Use encryption for data at rest and in transit
• Set up audit logs to track PHI access
• Establish secure communication channels

3. Document Everything

HIPAA compliance is as much about documentation as implementation. Create and maintain:

• Privacy and security policies
• Risk assessment reports
• Training materials and attendance records
• Business associate agreements
• Breach notification procedures
• Regular review schedules

A startup founder once told me, “If it isn’t documented, it didn’t happen.” This perfectly captures HIPAA’s approach to compliance.

4. Validation and Attestation

While there’s no official HIPAA certification, these approaches help demonstrate compliance:

• Self-attestation with documentation
• Third-party HIPAA compliance assessments
• SOC 2 + HITRUST certification (widely recognized in healthcare)
• HITRUST CSF certification (the gold standard, but expensive for startups)

For most startups, beginning with thorough self-documentation followed by a third-party assessment provides a good balance of credibility and cost-effectiveness.

HIPAA Certification Cost for Startups

HIPAA compliance isn’t free, but it doesn’t have to break the bank. Costs vary widely based on your organization’s size, complexity, and current security posture.

DIY Approach

Small startups can implement basic HIPAA compliance for as little as $5,000-$10,000, covering:

• Policy templates and documentation ($1,000-$3,000)
• Basic security implementations ($2,000-$5,000)
• Staff training ($500-$2,000)

However, this approach requires significant time investment and carries greater risk of overlooking requirements.

Consulting and Software Solutions

Most startups benefit from specialized help:

• HIPAA compliance software platforms ($200-$800/month)
• HIPAA consultants ($10,000-$40,000 depending on scope)
• Technical implementation costs ($5,000-$20,000)
• Ongoing maintenance (typically 20–30% of initial costs annually)

Formal Assessments and Certifications

For startups seeking formal validation:

• Third-party HIPAA assessment ($15,000-$30,000)
• HITRUST CSF certification ($50,000-$100,000+)
• SOC 2 + HITRUST ($40,000-$80,000)

Hidden Costs to Consider

Don’t overlook these expenses:

• Employee time spent on compliance activities
• Potential redesign costs if compliance is addressed late
• Ongoing maintenance and updates
• Regular reassessments (typically annual)

A practical approach for cash-conscious startups is to implement a solid compliance foundation internally, then progressively add third-party validation as you grow. Several startups have succeeded by using compliance platforms that combine software tools with expert guidance, providing a middle ground between DIY and full consulting.

Benefits of being HIPAA Compliant

HIPAA compliance unlocks access to a wider healthcare market, allowing you to work directly with covered entities like hospitals and insurance providers. It gives you a competitive advantage over non-compliant businesses, acts as a strong trust signal for investors and partners, and can significantly speed up procurement and sales processes with healthcare customers.

It also reduces risk. Compliance helps you avoid steep penalties — up to $1.5 million annually per violation type — and lowers the likelihood of data breaches, which average $9.23 million in the healthcare sector. It also provides legal protection and documentation during incidents and can lead to lower cyber insurance premiums.

Operationally, HIPAA compliance strengthens your security posture across the board. It promotes better data protection practices, clearer handling procedures, and improved employee awareness around security. It also encourages a more systematic approach to managing risk.

From a growth perspective, HIPAA lays a strong foundation for scaling securely. It prepares you for other compliance frameworks like SOC 2 and ISO 27001, aligns your business with healthcare customer expectations, and demonstrates to investors that you’re ready to handle regulatory requirements.

Conclusion

Getting HIPAA compliance right for startups handling sensitive health data is tough, but doing it early makes it a strength, not just a rule you follow. It’s a path you stay on as you grow. Focus on what applies to you, stick to the main privacy and security rules, keep good records, and get help from tools or experts. Taking care of HIPAA upfront helps you build trust, lower risks, and do well in healthcare tech.

Ready to Streamline Compliance?

Building a secure foundation for your startup is crucial, but navigating the complexities of achieving compliance can be a hassle, especially for small teams.

SecureSlate offers a simpler solution:

• Affordable: Expensive compliance software shouldn’t be a barrier. Our affordable plans start at just $99/month.
• Focus on Your Business, Not Paperwork: Automate tedious tasks and free up your team to focus on innovation and growth.
• Gain Confidence and Credibility: Our platform guides you through the process, ensuring you meet all essential requirements and giving you peace of mind.

Get Started in Just 3 Minutes

It only takes 3 minutes to sign up and see how our platform can streamline your compliance journey.