HIPAA Certification Cost [Updated 2024]

The most common HIPAA budgeting mistakes include underestimating the costs of certification, overlooking the need and costs of ongoing compliance and not updating budgets regularly. This in turn poses a challenge for founders to balance HIPAA certification costs with other business priorities.

From preliminary prep work to audit expenses and post-audit maintenance, the costs can be overwhelming. But when making your mind up on pursuing a HIPAA certification, it’s important to keep in mind that the benefits outweigh the costs of non-compliance. 

This blog aims at helping you understand the true costs associated with HIPAA certification so that you can plan your budget accurately. 

Summary of HIPAA certification cost

HIPAA violations can cause a significant financial dent. The penalties for noncompliance vary based on the level of negligence you carry and can result in fines ranging from $100 to $50,000 per violation or record. 

HHS estimated the costs of HIPAA compliance in the first year of implementation to be between $114 million and $225.4 million followed by approximately $14.5 million annually which meant $1040 per organization. However, considering how comprehensive the HIPAA requirements are, this was an underestimation with a wide margin.

HIPAA certification costs can vary for small and larger organizations depending on a number of variables like current compliance levels, IT infrastructure, training levels, etc. These costs can start from $10000 and exceed $150000 depending on the nature and complexity of the organization’s requirements.

How Much Does a HIPAA Certification Cost? 

According to the U.S. Department of Health and Human Services (HHS) after releasing the HIPAA Final Rule in 2013, the costs per organization in obtaining HIPAA certification are as follows:

• $80 for updating the Notice of Privacy Practices
• $763 for updating breach notification requirements
• $84 for updating business associate agreements
• $113 for ensuring compliance with the Security Rule

Therefore, the estimated total HIPAA cost per organization was $1,040. However, it’s important to note that this estimate may only partially be accurate, especially when considering the complexities of the Security Rule. 

The Security Rule, introduced in 2003, introduced 75 new requirements and 254 points that organizations need to address and validate. Many of these requirements are technical, making it likely that the actual cost of HIPAA certification differs from the initial estimate.

What are the Factors Influencing HIPAA Cost? 

The factors influencing HIPAA costs will vary based on a range of factors, including but not limited to the size of the organization, its type, and the prevailing culture of compliance.

Here are a few key factors that can influence the cost of your overall HIPAA compliance efforts:

Your Organization Type

Whether you are a hospital, business associate, health information exchange (HIE), healthcare clearinghouse, or another type of healthcare provider, the level of PHI you handle and the associated risk levels will impact the cost of compliance. 

For example, a hospital dealing with a vast amount of PHI and managing numerous departments may need higher costs than a smaller healthcare provider with limited PHI exposure.

Your Organization’s Size

The size of your company plays a significant role in determining the cost of compliance. Larger ones often have more vulnerabilities due to large workforce members, programs, processes, computers, PHI storage, and departments. These factors contribute to additional problems and require more resources to maintain compliance.

For example, imagine your organization has multiple branches, numerous employees, and many IT systems. You will likely face higher costs to implement HIPAA compliance measures than a smaller clinic.

Your Organization’s Security Culture

The priorities and mindset of upper management directly impact the cost of HIPAA compliance. If data security is already a top priority and you have invested in a robust cybersecurity program, then the groundwork has been laid. Now all you have to do is map the gap from your existing security suite with the requirements of HIPAA and bridge the delta. This reduces the overall cost of HIPAA compliance. 

On the other hand, if your management has hesitated to allocate budget and resources towards security measures, you’ll need to work your way up? This means the HIPAA compliance costs will go higher!

Your Organization’s Environment 

The specific technology and infrastructure you use within your organization can impact the cost of HIPAA compliance. Factors such as the types of medical devices in use, the brand of computers, the quality of firewalls, and the model of backend servers can all influence the extent of security measures required to meet HIPAA standards.

How Can You Estimate Your HIPAA Certification cost? 

Check out this video to reduce your HIPAA cost:

To estimate the HIPAA certification cost, It’s important to consider the unique requirements of your organization. Here’s a breakdown of potential cost ranges based on your organization size:

For Small Covered Entities	For Medium/Large Covered Entities
Risk Analysis and Management Plan: Approximately $2,000	Onsite Audit: Approximately $40,000 or more
Remediation: Typically ranging from $1,000 to $8,000	Risk Analysis and Management Plan: Estimated at $20,000 or more
Training and Policy Development: Estimated between $1,000 and $2,000	Vulnerability Scans: Typically around $800Penetration Testing: Starting from $5,000
	Training and Policy Development: Typically around $5,000 or more

Variables that impact HIPAA certification costs

While it is obvious to consider a variable like the size of the organization when budgeting for HIPAA, the cost of maintenance can be easily overlooked. 

Here are the most important variables that you must reconsider while creating your budget:

Nature, size, and complexity

A covered entity like a hospital may be involved in creating and processing large volumes of PHI directly and may encounter greater risk than a business associate, say, handling only a fragment of data. Similarly, an organization with healthcare systems at multiple locations will incur more compliance costs because of the magnitude of resources required. So, nature, size, and complexity play a vital role in determining HIPAA certification costs.

Compliance status quo

The readiness status of the organization impacts the level of efforts and resources that need to be employed for HIPAA certification. If there are multi-layered security measures in place already and the employees are well-trained, the compliance efforts need not have to be built from the ground up and will naturally cost less.

IT infrastructure

In order to protect ePHI, organizations need encryptions, backups, firewalls, intrusion detection systems, and several other technological solutions. If the current IT infrastructure is not backed by such security measures, these can eat a large portion of the HIPAA implementation budget.

Training and awareness levels

The awareness levels of employees can expedite or slow down compliance efforts. Untrained employees bring greater risks of compliance violations and data breaches. These costs indirectly contribute to the overall HIPAA certification costs. Both technical and non-technical stakeholders must be trained on data handling.

Choosing in-house vs third-party vendors vs automation tools

The choice of method for achieving HIPAA compliance also affects the costs.

In house: Choosing to take up HIPAA compliance efforts in-house can mean investing in highly-skilled workforce, training programs, top-notch infrastructure and monitoring systems.

Third-party vendors: Outsourcing with third-party vendors or consultants can include costs of consultation, contractual costs, security measures implementation costs, training costs etc. These will again vary depending upon the complexity of tasks but can cost you thousands of dollars.

Automation tools: Choosing an automation tool is an effective solution that can be implemented much faster and at a fraction of the cost. It can help automate multiple levels of the compliance process with readymade policy templates, training modules, evidence collection, and audit management. Want to learn more? Speak to our experts today.

Control monitoring 

Since the goal is to ensure compliance on an ongoing basis, costs of monitoring internal controls must also be considered. These can include costs relating to employee access, vendor monitoring, procedure monitoring, network monitoring etc. These efforts will require people, processes, and technology and will affect the overall HIPAA certification costs.

HIPAA certification cost for small and larger enterprises

There can never be a definitive answer for this because of the complexity of the environment of every organization and several other factors. But we’ve tried to give a fair idea below.

A small organization will broadly need the following:

• HIPAA gap assessments
• Remediation
• Training and policy development.

These can cost small entities with 50 or less employees anywhere from $10000 to $50000 depending upon the readiness levels and technological infrastructure. Smaller organizations usually have more implementation gaps to fill so it is advisable to allocate the budgets accordingly.

For large organizations the costs amplify because of the additional expenses that go for on-site audits, vulnerability scans, penetration testing, incident management plans and more. Again, depending upon the size of the enterprise and current compliance levels, these costs start from $50000+ and can exceed $150000.

Is HIPAA Certification Worth the Cost?

Yes, HIPAA certification is worth the cost for organizations in the healthcare industry or those handling PHI. The certification ensures data security and builds trust with patients and stakeholders. 

And, of course you will also have a competitive advantage. Also, if a HIPAA-compliant company is ever breached, the governing bodies of HIPAA analyze the breach to see if the breach could have been avoided. 

If you are HIPAA compliant and you’ve done everything required to maintain a secure compliant posture, there is a good chance that the cause of breach will not include ‘poor posture’ or as reason for the breach and exempt your organization from any criminal or legal turmoil.

Costs of Data breach

According to the last IBM security report, the average costs of healthcare data breach reached $10.1 million making them one of the most expensive categories. 

Other costs associated with HIPAA data breach:

HHS Fines	Start from $127 to $50000 per patient record and can total up to $1.5 million
Federal State Commission Fines	$16000 for every violation
Criminal penalties in case of using PHI without authorization	$50000-$250000 with a maximum of 10 years in jail
Notifying state, and federal authorities and affected patients	$4-$10+ per patient and total costs can go beyond $1000
Credit monitoring services and id theft protection for patients	Start from $10 per patient record and can exceed $30
Lawsuits filed by affected individuals like class action lawsuits	$1000 per record and can go up to hundreds of thousands of dollars
Fees charged by state attorney general	Depending upon severity of breach it can range from $150000-$6.5 million+
Loss due to tarnished reputation	40% patient revenue
Lawyer fees	$2000+
Technology repairs	$2000+
Other miscellaneous expenses for changes/corrective actions	$5000-$10000

HIPAA compliance with Sprinto

As an entity collecting, processing, and transmitting PHI, not having HIPAA certification has serious ramifications that increase by the exponent. But keeping up with the requirements of a standard like HIPAA can be overwhelming. Automation software can go a long way in expediting the compliance process without burning a hole in your pocket.

From risk analysis to entity-level control monitoring, a compliance automation solution like Sprinto covers it all. What’s more? You can now leverage our auditor network which can help you save on audit costs.

Sprinto automates multiple facets of compliance and ensures that organizations comply with all applicable laws and regulations concerning patient data safety. This can help reduce non-compliance risk while building trust with customers and business partners.

Read about How Sprinto enabled Neurosynaptic to get HIPAA-compliant in 2 weeks.

 Streamline your path to HIPAA Certification with Sprinto in 3 simple steps:

1. Schedule a demo session – Have your questions answered and explore a tailored instance to help you evaluate your use case and align controls

2. Identify HIPAA compliance gaps – Utilize detailed reports to map data permissions and access controls while identifying and fixing lapses.

3. Automate and optimize HIPAA requirements – Implement efficient automation to expedite tasks and simplify your path to compliance readiness.

Stay ahead of the compliance game with Sprinto. Kickstart your journey today.

FAQs

Who performs HIPAA audits?

HIPAA audits are conducted by The Department of Human Services’ Office for Civil Rights (OCR). Both covered entities and business associates qualify for audit considerations.

How many years is HIPAA certification good for?

HIPAA logs need to be retained for at least 6 years so it is usually said that the certification is good for a minimum of 6 years. But in reality there is no fixed term of HIPAA certification expiration. However, businesses need to train their employees annually for any modifications or new rules introduced.

Can you get HIPAA certified for free?

There are some free HIPAA training courses but either they do not offer a valid certification or it is purchasable. However, these can be good for beginner employees seeking HIPAA compliance training.