FedRAMP for healthcare: The complete guide for cloud security 

Do you think cyberattacks in healthcare happen only once in a blue moon? Think again. In the first half of 2024 alone, over 387 reported data breaches of 500+ patient records were reported. 

Why is healthcare one of the most targeted industries for cyber criminals? Ransomware attackers recognize that healthcare providers must pay large ransoms to restore critical operations and protect sensitive PHI (protected health information). This can result in regulatory fines, erosion of patient trust, and potential shutdowns. 

Handling sensitive patient data comes with compliance responsibilities. HIPAA compliance covers patient data privacy. But if you’re building a cloud-based healthcare solution, FedRAMP is how you prove your infrastructure is secure enough to handle that data. 

Understanding FedRAMP is important for healthcare providers offering cloud-based services, as it allows them to implement the right security practices and manage risks.

So, let’s explain FedRAMP, why it matters, and how you can become compliant. 

TL;DR Healthcare is a prime target for cyberattacks, especially with cloud-first systems.FedRAMP protects the cloud infrastructure that stores, transmits, and/or receives sensitive patient data.  Healthcare startups must align with FedRAMP to meet federal-grade security standards and get new contracts.  FedRAMP complements HIPAA compliance by safeguarding cloud environments and not just patient data.  Healthcare companies must align early with FedRAMP to reduce risk, build patient trust, and stay compliant.

What is FedRAMP?

FedRAMP, short for Federal Risk and Authorization Management Program, is a US government-wide compliance framework that applies to cloud service providers (CSPs). It is designed to make cloud adoption safer and more consistent, especially when handling sensitive data like patient records.

For this, FedRAMP evaluates, authorizes, and continuously monitors sensitive data, including PHI in healthcare. It sets clear security guidelines that cloud security providers must follow, covering everything from data encryption to security controls.   

FedRAMP follows NIST (National Institute of Standards and Technology) special publication 800 series. It requires cloud service providers to pass independent security assessments by third-party organizations (3PAOs).

Before FedRAMP, federal agencies had to run security checks on cloud vendors. This involved many reviews and was a waste of time and effort. Now, every cloud service provider must pass FedRAMP standards as a commitment to maintaining high security standards. 

Why healthcare providers can’t ignore FedRAMP?

Healthcare today goes beyond managing patient care. It’s just as much about handling patient data, about cloud apps, patient portals, and electronic patient records. 

In short, healthcare has gone cloud-first, making it vulnerable to cybersecurity threats. This is where FedRAMP compliance comes in. It helps you in the following ways: 

Maintaining patient trust

Patient trust is non-negotiable. When people share their personal data, they trust you to keep it safe. FedRAMP helps you prove that your cloud system prioritizes security at its core, not as an afterthought. 

Outsmarting cybercriminals 

Attackers are getting smarter and faster, often faster than you can react. They’re deploying AI-driven phishing, launching ransomware attacks, and exploiting cloud misconfigurations. FedRAMP prepares you for this reality with practices and standards that cover all these threats. 

Avoiding the actual cost of non-compliance

For a second, let’s consider what will happen if you fail to comply with regulations like FedRAMP. Patients are less likely to trust such a provider, which might dent your reputation. You also can’t afford the operational downtime due to ransomware attacks. 

Turning compliance into a competitive edge

FedRAMP is more than a checkbox compliance. Federal agencies, hospitals, security-conscious vendors and partners increasingly require FedRAMP-compliant vendors. Without it, you’re less likely to be shortlisted.

Productive, less burned-out staff

Healthcare staff work in one of the most high-stress environments to stay efficient and productive. Let your staff focus on maintaining high efficiency levels while FedRAMP helps you stay secure and run smoothly. 

FedRAMP helps you secure the cloud, protect patients, and stay ahead of threats. 

FedRAMP vs HIPAA: What’s the difference?

If you’re considering FedRAMP compliance, chances are you’re also assessing HIPAA compliance. Perhaps you already have a HIPAA compliance certification. And if you’re HIPAA-compliant, do you need FedRAMP too? 

There’s HIPAA compliance to protect all the patient data. Meanwhile, FedRAMP secures the cloud that holds this data. Both of these matter, and for different reasons. 

HIPAA compliance 

HIPAA is an acronym for the Health Insurance Portability and Accountability Act. Every HIPAA-compliant organization is required to obtain patient consent to disclose or use sensitive protected health information (PHI). This ensures that the data is used for its intended purpose and is not misused or disclosed for unethical purposes. 

You need to comply with HIPAA rules and amendments if you fall under the following categories: 

Health Information Exchanges (HIEs)

Any organization managing or facilitating the exchange of health data must comply with HIPAA to protect patient confidentiality and integrity. This includes companies building health plans for clients/organizations, and staff outsourcing, billing, or other such services for healthcare companies.

Covered entities

As a covered entity, you need to follow the rules mentioned in HIPAA if you collect, create, transmit, or store electronic PHI. This includes hospitals, medical care providers, nursing homes, third-party healthcare businesses, and health insurance providers. 

Business associates

You’re a business associate if you support healthcare operations and handle PHI on behalf of a covered entity. Examples include cloud storage providers, billing companies, third-party administrators, and software vendors. 

So what kind of data does HIPAA protect? And what counts as PHI?

PHI

PHI includes individually identifiable health information such as names, addresses, medical records, social security numbers, payment data, treatment plans, and medical history. HIPAA safeguards such information whether it is received, transmitted, stored, or created. 

HIPAA comprises several key rules to protect patient data, ensure privacy, and enforce security at each step. These include rules around privacy, security, breach notification, transactions, enforcement, authorization, and accountability.  

FedRAMP

While HIPAA focuses on protecting patient data itself, FedRAMP establishes rules and practices to protect the cloud infrastructure that stores, processes, or transmits such data. 

FedRAMP is the security compliance framework trusted by government healthcare agencies and the veteran affairs. For cloud-based healthcare products, SaaS platforms, or patient management tools that handle patient data, FedRAMP is a trust signal that your platform meets federal-grade security standards. 

FedRAMP compliance is built around 3 core pillars: 

1. Risk impact levels:

FedRAMP classifies cloud services as low, moderate, or high risk based on the potential damage a breach could cause. Healthcare platforms managing PHI require moderate or high risk impact levels. These risk levels determine which controls will be used to address the threats.

2. Security controls: 

FedRAMP enforces controls like multi-factor authentication (MFA), data encryption, audit logging, and incident response planning. This helps secure access, protect data, and establish contingency plans. 

3. Continuous monitoring: 

FedRAMP mandates continuous monitoring to ensure that vulnerabilities don’t turn into data breaches. This includes vulnerability scans, penetration tests, real-time event monitoring, and updates to Plans of Action and Milestones. 

Here’s an at-a-glance comparison between HIPAA and FedRAMP-  

Category	HIPAA	FedRAMP
Purpose	Protects sensitive patient data from misuse, unauthorized access, or disclosure.	Secures the cloud infrastructure that stores and transmits
Who it applies to	Healthcare providers, hospitals, medical services, nursing homes, health insurance companies, and business associates handling PHI.	Cloud service providers working with federal agencies or needing federal contracts fall in this category. Also, companies that need high-assurance cloud security.
Focus	Individually identifiable health information	Cloud system security
Key requirements	Patient consent management, breach notification, and safeguards for electronic PHI.	Implement NIST 800-53 controls and an independent security assessment by 3PAO
Controls	Privacy safeguardsSecurity safeguardsBreach notifications	NIST 800-53 controlsData encryptionAccess controls & MFAContinuous monitoring and vulnerability scanning
Primary goal in healthcare	Protect patient privacy, ensure ethical use of PHI, and reduce legal risks	Secure healthcare cloud systems and minimize breach risks

To summarize, HIPAA protects patient data, and FedRAMP secures the cloud systems that handle such data. For healthcare companies or those working with clients in that space, both are critical to growth and trust.

FedRAMP Authorization Process  

Getting FedRAMP authorization isn’t about checking off items from a list of security controls. There’s a comprehensive process you need to follow, and it’s built to make sure your cloud environment is monitored and resilient. 

To complete FedRAMP authorization, here are the steps you need to follow: 

1. Prepare and plan 

This is the groundwork phase, aligning your security program with FedRAMP’s NIST 800-53 controls. It typically includes: 

• Opting for your authorization path: You can either work with the Joint Authorization Board (JAB) for a Provisional Authority to Operate (P-ATO). Alternatively, you can use a federal agency authority to operate (ATO).  
• Defining your impact level: Most healthcare products or cloud-based solutions handle medium or high impact-level data. This determines how stringent your controls will be. You will learn more about this in the later sections.
• Building your security program: This is where you implement the security controls laid out in NIST 800-53, tailored to the identified impact level. 
• Implementing controls and documentation: Prepare your system security plan (SSP) and other supporting policies and procedures. 

Use a GRC platform like Sprinto, which supports FedRAMP and multiple other compliance frameworks. It automates control mapping and helps you stay on track with your healthcare compliance efforts. 

2. Assess

Once your security controls are in place, it’s time for third-party assessment organizations (3PAOs) to step in. They assess your cloud service offering against federal security standards. Their reports help federal agencies make risk-based decisions about whether to authorize your products.

The 3PAOs produce the following reports for this purpose: 

• Readiness Assessment Report (RAR): This report shows that a cloud service offering has the technical, management, and operational requirements to receive the FedRAMP authorization. 
• Systematic Assessment Plan (SAP): FedRAMP lays out the CSP assessment method.
• Security Assessment Report (SAR): With the Security Assessment Report, 3PAOs present the findings from assessing a CSP. It identifies all the report’s threats, vulnerabilities, and risks and recommends a remediation pathway to align with federal security requirements. 

3. Authorization

Once your 3PAO assessment is complete and you’ve addressed all gaps, you must submit your security package for final review to your authorizing official (AO) or JAB. 

Your AO will: 

• Review everything, from your controls and risk posture to your plans for maintaining security over time.
• Approve the package or ask for further testing if something isn’t clear or is incomplete.

If the AO gives you an authority to operate (ATO), you get the green light to do business with federal agencies. It’s like receiving a federal-grade trust stamp that your solution is secure enough to handle critical healthcare data. 

4. Continuous Monitoring 

The FedRAMP authorization process doesn’t stop once you’ve received your ATO. Next, you must prove you’re continuously managing risks, fixing vulnerabilities, and keeping your security posture sharp. 

This involves: 

• Running regular vulnerability scans to catch risks early on. 
• Validating controls by performing annual security assessments.
• Updating your security controls regularly as your product evolves. 

For healthcare startups, this isn’t optional. Your compliance posture must keep pace with product changes, evolving regulations, and new threats.

Impact Levels in FedRAMP

The first critical step in getting a FedRAMP authorization is choosing the right impact level for your cloud system. 

But what exactly are FedRAMP impact levels? FedRAMP classifies cloud services into low, moderate, and high impact categories based on the severity of potential risks in the event of a data compromise.

If you’re building for healthcare and want to ensure federal-grade protection of sensitive PHI,  getting the impact level right from day one saves time, cuts cost, and sets you up for a smoother compliance process. 

Here’s how FedRAMP breaks down different impact levels: 

1. Low impact level

This is for startups building SaaS platforms that don’t process sensitive patient data. Low impact levels apply to those platforms where a breach would only cause minimal disruption. 

It offers two baselines for systems with low-impact data:  

1. LI-SaaS baseline: For low-impact SaaS apps that do not store personal identifiable information (PII) beyond what login capability requires. This includes passwords, usernames, emails, etc.
2. Low baseline: For public-facing systems, a breach wouldn’t harm operations or reputation. 

In terms of control scope, it includes over 155 security controls covering basic cyber hygiene, such as:

• Account Management
• Access Control
• Event Logging and Time Stamps
• Training and Security Awareness
• Remote Access
• Wireless Access
• Policy and Procedures

2.  Moderate impact level

Almost 80% startups fall into the moderate impact level category. This covers systems where the loss of confidentiality, integrity, and availability can amount to serious harm. Think financial loss, operational issues, or compliance violations. 

Moderate impact level systems must implement 300+ security controls that include the low-impact level controls along with some of the following: 

• Authentication Feedback
• Incident Handling and Reporting 
• Controlled Maintenance
• Supply Chain Risk Assessment
• Risk Management and Audit Readiness

3. High-impact levels

High-impact level data encompasses healthcare, law enforcement, emergency services, and financial systems. If your startup manages life-critical healthcare data or supports emergency services, you should look at high-impact levels.

In this case, the loss of confidentiality, integrity, and availability of data can have a catastrophic or severe impact on individuals, assets, operations, or organizations involved. 

High-impact authorization requires more than 400 security controls, building on the low and moderate baselines with additional layers such as: 

• Transmission confidentiality and integrity- Cryptographic Protection
• Tamper Resistance and Protection 
• Supply Chain Risk Management Plan
• Security Alerts, Advisories, and Directives
• Protection of information at rest
• Memory Protection 
• Inspection of Systems or Components
• Error Handling 
• System Backup
• Timely Maintenance
• Personnel Termination

How Healthcare SMBs Can Achieve FedRAMP Compliance

For healthcare startups, FedRAMP might seem out of reach and complex. But it doesn’t have to be. With the right tools and strategies, even lean teams can meet FedRAMP requirements without derailing operations. 

Here’s how you can get there: 

1. Scope your impact level early on

For starters, you need to be clear on where you fall on the spectrum of impact levels—low, moderate, or high. Broadly speaking, healthcare falls within the category of high-level impact, given the nature of sensitive information that is exchanged, transmitted, or stored. 

2. Build security into your product from day one 

Given the high-stakes data you’re handling, treat healthcare compliance, especially FedRAMP and HIPAA, as product features. Align your infrastructure with FedRAMP early on to prevent costly reworks later in the process. Use compliance automation across monitoring, logging, and incident response to prevent risks seamlessly.

3. Use compliance automation tools 

FedRAMP can be rigorous and time-consuming, but automation can reduce complexity. With a compliance automation platform like Sprinto, you can meet FedRAMP controls more quickly and with fewer errors by: 

• Mapping controls to frameworks
• Running automated checks to stay on track 
• Offering integrated risk management and advanced training modules 
• Automatically capturing compliance evidence

4. Document everything 

Documentation is how you prove compliance readiness. Every control, process, and protocol needs to be documented to show intent and implementation. For healthcare startups, this can feel like a heavy lift, especially with lean teams and limited bandwidth. 

The trick is to use pre-built policy templates to fast-track documentation. This helps you focus on execution and continuous improvement. 

5. Focus on continuous monitoring 

Healthcare environments are dynamic and also hold highly sensitive data. That’s why FedRAMP shouldn’t be seen as a one-and-done certification. It calls for continuous monitoring, for which you must: 

• Perform continuous control monitoring 
• Track and resolve Plans of Action and Milestones (POA&Ms)
• Update security documentation regularly
• Conduct real-time checks backed by automation to get alerted about deviations and stay audit-ready.

Sprinto: Your Compliance Co-pilot for FedRAMP in Healthcare

Healthcare startups looking to open doors to federal contracts struggle to balance growth with security. That’s where Sprinto comes in. 

Sprinto automates the heavy lifting across your FedRAMP journey. From mapping controls to running automated checks, it streamlines your entire FedRAMP workflow. So, instead of getting buried in tasks, your team can focus on scaling your solution and protecting patient data.  

CTA: Wondering how Sprinto can simplify your FedRAMP journey? Schedule a call with us today.

FAQs

1. What is FedRAMP?

FedRAMP is the acronym for Federal Risk and Authorization Management Program, which serves as a standardization for assessing and authorizing cloud service providers. 

2. Why do healthcare startups need FedRAMP compliance?

FedRAMP compliance provides federal-grade protection to healthcare companies. As part of the compliance, it outlines the rules, policies, and procedures to protect sensitive healthcare information. 

3. What are the main advantages of FedRAMP for healthcare companies? 

FedRAMP boosts cloud security, strengthens control monitoring and risk management, and helps build trust with patients and federal agencies. 

4. What are the different impact levels in FedRAMP? 

FedRAMP classifies cloud services into low, moderate, and high impact levels based on the potential damage from a data breach:

1. Low impact level covers basic systems with minimal risks. 
2. Moderate impact level applies to cloud environments where a breach could cause significant operational or reputational damage. 
3. The high impact level covers healthcare systems, emergency services, and financial services, where a breach could cause severe or catastrophic damage to assets, individuals, operations, or organizations.