Healthcare regulatory compliance: What IT compliance managers must know

Your email inbox hits 200 unread messages. Half are audit requests, a quarter are vendor security questionnaires, and the rest? Urgent flags about a regulation you've never heard of that went into effect yesterday. Meanwhile, someone just plugged in another medical device to your network, your EHR (Electronic Health Record) vendor updated their terms overnight, and the board wants a compliance status update by Friday.

This is healthcare IT compliance in 2025. Nearly 32% of organizations now face financial liabilities of $1 million or more from audits — more than triple the rate two years ago. And the stakes keep climbing as telehealth expands, connected devices multiply, and AI enters clinical workflows. Every new technology brings fresh risks for patient data, and scattered spreadsheets won't cut it anymore.

The fix? Connected compliance platforms that centralize your risk management, automate evidence tracking, and give you real-time visibility across HIPAA (Health Insurance Portability and Accountability Act), HITECH (Health Information Technology for Economic and Clinical Health), state privacy laws, and every other regulation hitting your organization. When your compliance data lives in one system instead of dozens, you spend less time chasing documentation and more time protecting patient information.

What is healthcare regulatory compliance?

Healthcare regulatory compliance is the ongoing work of weaving federal and state patient privacy laws into how you operate, but maintaining documentation that proves you're doing the right thing when auditors come knocking. As telehealth expands, connected devices multiply, and AI tools enter clinical workflows, compliance teams are juggling more moving parts than ever.

The stakes? Sky-high. Healthcare organizations hit a record-breaking average of $9.77 million for healthcare data breaches — the priciest of any industry for the 14th year running. Since 2009, over 846 million people have had their health information exposed in breaches reported to the Department of Health and Human Services (HHS). Get compliance wrong, and you're facing fines, operational mishaps, reputation hits, and patients who've lost trust in you.

Key regulations shaping IT healthcare compliance

Healthcare compliance isn't one rule — it's a tangled mess of overlapping regulations, each with its own penalties and enforcement style. Here's what you're dealing with:

• HIPAA: National standards for protecting protected health information (PHI), including Privacy Rule, Security Rule, and Breach Notification Rule
  • Real-world impact: Oklahoma State University, Center for Health Sciences, paid $875,000 in 2023 after hackers accessed 279,000 patient records on unencrypted laptops.
• HITECH Act (Health Information Technology for Economic and Clinical Health): Strengthens HIPAA enforcement with tiered penalties and pushes electronic health record adoption.
  • Hospitals without encryption or proper non-compliance issues assessments face multi-million-dollar fines for repeat violations.
• 21st Century Cures Act: Bans practices that block electronic health information sharing; requires interoperable systems.
  • Real-world impact: Applies to healthcare providers, EHR developers, and health information networks — you need patient access via APIs (Application Programming Interface) without creating security holes​.
• GDPR (General Data Protection Regulation): Governs personal data of EU residents, including health data, no matter where your organization is located
  • Real-world impact: A European hospital network paid €1.5 million in 2022 when staff accessed patient medical records they shouldn't have.
• State Privacy Laws: Expand patient data rights beyond HIPAA through compliance laws like CPRA (California Privacy Rights Act), Washington's My Health My Data Act, and Texas HB 300.
  • Real-world impact: Multi-state providers need compliance mapping for each state and flexible policies that adapt to different compliance requirements.
• FTC Health Breach Notification Rule: Covers breaches by entities not subject to HIPAA, like mobile health apps and fitness trackers
  • Real-world impact: GoodRx paid $1.5 million in 2023 for sharing user health data with advertisers without consent.

Healthcare compliance doesn't stop at mandatory regulations. Three voluntary frameworks show up in nearly every vendor review and cyber insurance application: NIST Cybersecurity Framework (NIST CF), SOC 2, and ISO 27001.

NIST CF provides security baselines that auditors reference constantly. SOC 2 reports prove vendors test their controls rather than just claiming they do. ISO 27001 matters when evaluating vendors operating across multiple countries with different regulatory requirements.

Who needs to comply

HIPAA calls out "covered entities" (healthcare providers and health plans) and "business associates" (anyone handling patient health information, or PHI, on their behalf). But honestly, the compliance net is wider than most people realize:

• Healthcare providers: Hospitals, clinics, doctors' offices, nursing homes, dental practices
• Payers: Health insurance companies, Medicare and Medicaid managed care
• Business associates: EHR vendors, cloud hosting companies, analytics firms, telehealth platforms, billing healthcare services
• Subcontractors: Anyone handling PHI for a business associate — yes, liability goes down the chain
• Digital health startups: If you're building health apps or telehealth tools, you might fall under the FTC (Federal Trade Commission) rule or state laws even if HIPAA doesn't directly apply

Here's where it gets tricky: liability cascades. If you're a cloud-based EHR vendor who subcontracts your data hosting, you're responsible for making sure your subcontractor meets HIPAA standards. That means tight contracts and proof of compliance management all the way down. Many patient care vendors also pursue SOC 2 compliance because it aligns closely with HIPAA's Security Rule and gives customers confidence that you're serious about data security and patient safety.

Top challenges for healthcare IT compliance in 2025

Regulatory frameworks are well-defined. The hard part? Operationalizing compliance when your technology environment keeps changing.

Data privacy and security

Every infusion pump, imaging machine, and wearable you add to the network creates another way in for attackers. Last year, over 1 million IoT medical devices sat exposed online, leaking MRI scans, X-rays, and patient identifiers. The problem? Nobody tracked device identities or managed their lifecycles.

Here's what keeps compliance officers up at night: Roughly 75% of infusion pumps have security holes that let hackers mess with medication dosages remotely. When breaches hit, $7,500 disappears every minute your systems are down. Ransomware locks you out for 17 days on average, burning through $1.9 million daily. Recovery takes over 100 days for most organizations.

You need encryption, network segmentation, continuous scanning, and alerts that flag weird behavior — someone exporting massive amounts of EHR data at 2 a.m., for example. But tech won't save you alone. Run phishing tests quarterly and you'll cut successful attacks by 40%.

Managing third-party risk

Your vendors are your biggest risk: 72% of healthcare breaches in 2023 came through third parties. Billing companies, telehealth platforms, and AI diagnostic tools — they all touch patient data.

Change Healthcare proved how bad vendor breaches get. The attack exposed 192.7 million people and cost $2.87 billion. When one vendor gets compromised, the damage spreads everywhere. In a separate incident, hackers found a single vulnerability in HealthEC's platform and gained access to 17 healthcare organizations at once. Another vendor outage took down 142 hospitals and 40 nursing facilities across two states.

Healthcare ransomware jumped 30% in 2025 because attackers figured out that hitting vendors pays better. They get access to dozens of healthcare organizations through a single breach.

Compliance management means continuous vendor monitoring now. Ochsner Health runs HIPAA security risk assessments to keep tabs on their vendors. Your business associate agreements need real consequences — specific security requirements, audit rights, and penalties for SOC 2 compliance failures.

Steps to building a compliance program

Compliance programs fail when they're treated as checklists. The ones that work integrate governance, technology, and culture into daily operations.

Risk assessments

Risk assessments tell you where you're vulnerable before regulators or hackers do. You need annual enterprise-wide assessments backed by quarterly focused evaluations on specific areas — new vendors, system updates, or emerging threats.

Effective risk assessments cover:

• PHI flow mapping: Tracking how patient data moves from intake to storage to third-party sharing
• Vulnerability identification: Technical gaps (unpatched systems, weak access controls) and process gaps (missing policies, unclear ownership)
• Vendor risk evaluation: Security posture, contractual compliance, incident history, and access levels for each business associate
• Qualitative workshops: Bring IT, clinical staff, legal, and operations together to surface risks that don't show up in scans
• Quantitative scoring: Assign risk ratings (likelihood × impact) to prioritize remediation

Feed findings into updated policies, training priorities, and vendor contracts. Include near-miss incidents too — they show where defenses are holding and where they're thin.

Policies, training, and controls

Policies without enforcement are suggestions. Controls without monitoring are accidents waiting to happen. Here's what holds up under scrutiny:

Executive sponsorship matters. Your CISO, or chief information security officer, needs a direct line to the C-suite and board. Set up a compliance steering committee with IT, legal, clinical leadership, and operations.

Document everything. Maintain version-controlled repositories of all policies, mapped to workflows. During audits, regulators want proof of implementation — who reviewed it, when it was updated, how staff were trained, and evidence that controls function.

Deploy technical safeguards: Implement Multi-Factor Authentication (MFA) across all systems accessing PHI, encryption in transit and at rest, network segmentation, continuous vulnerability scanning, and automated alerts for anomalous activity.

Make training relevant. Role-specific modules work better than generic annual training. Run quarterly phishing simulations — organizations doing this see fewer successful attacks.

Monitor continuously. Run semi-annual internal audits and external audits every 18–24 months. Track KPIs like breach detection time, policy exceptions, vendor compliance scores, and training completion rates. Compliance management platforms centralize evidence collection and automate status tracking.

Common pitfalls to avoid

Compliance programs fail in predictable ways. Scattered documentation and manual processes create gaps that auditors find and penalties that hurt.

Inadequate evidence tracking — failing to document compliance activities

Say Auditors show up asking for proof of quarterly access reviews from the past two years. Your team starts hunting through email threads, three versions of the same spreadsheet, and a shared drive folder someone renamed six months ago. Two hours later, you've found half the documentation, and it shows gaps in coverage.

This happens because compliance evidence lives everywhere and nowhere. IT logs control testing in one system. Clinical staff document policy reviews in another. Training records sit in HR's database. When auditors ask for proof, nobody knows where everything lives or whether it's current.

Missing documentation gets read as missing compliance, which triggers findings and penalties even when the actual work happened. The fix requires moving from scattered evidence to centralized tracking where all compliance activities — risk assessments, control testing, policy reviews, training completion — get documented in one place with timestamps and ownership.

Manual, siloed processes — inefficiency and audit fatigue

Audit season hits and compliance teams disappear for three months. They're pulling data from six different systems, reconciling inconsistencies between what IT says happened and what the spreadsheet shows, and building reports manually because nothing talks to anything else.

This creates a specific kind of exhaustion. By the time the audit wraps, healthcare regulations have shifted and the whole cycle starts over. Manual tracking means every new requirement triggers updates across multiple disconnected systems while teams hope nothing falls through the cracks during the translation.

Compliance management platforms eliminate this by putting evidence collection, status tracking, and reporting in one system so audits don't require months of manual data gathering.

How AuditBoard helps healthcare organizations

AuditBoard fixes scattered compliance data by putting risk management, control testing, and audit documentation in one connected platform.

Centralized compliance management — unified platform for risk and controls

Compliance teams answer “which vendors finished their security assessments" by opening six different systems and hoping their spreadsheet reconciliation catches everything. AuditBoard puts all of it — risk assessments, control testing, vendor evaluations, audit trails — in one place.

Turn on multi-factor authentication and tag it once for HIPAA Security Rule, SOC 2, and state requirements. The control updates everywhere. No duplicate documentation for different auditors. Organizations managing IT risk and compliance across dozens of healthcare facilities and vendors stop tracking the same controls in multiple places.

The platform pulls evidence automatically from cloud apps, ticketing systems, and security tools as work happens. Access certifications complete, vulnerability scans run, training wraps — documentation flows in without manual uploads. Teams review compliance status instead of chasing screenshots, similar to how SOX compliance automates financial controls.

Audit-ready dashboards — easy reporting for regulators and executives

Audit prep typically burns three months pulling data from disconnected healthcare systems and building reports manually. AuditBoard generates regulator-ready reports in minutes with complete audit trails showing who did what and when.

Executives see high-risk findings by department, vendor compliance scores, and remediation progress without requesting manual summaries. The dashboards support continuous monitoring metrics that spot trends before they become audit findings.

Compliance works better when everything lives in one place instead of scattered across six different tools. Teams spend less time hunting for documentation and more time fixing problems before audits find them. Request a demo to see how AuditBoard handles healthcare industry compliance without messy spreadsheets.

About the authors

Natalie Dytrych is a Senior Product Marketing Manager for Regulatory Compliance at AuditBoard. She has 8 years of experience helping financial institutions navigate complex regulatory compliance and risk challenges, most recently as a Senior Manager at PwC.