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Healthcare organizations constantly explore ways to improve their products and services and ensure excellent productivity and quality output.
One cost-effective solution they use is business process outsourcing (BPO). Service providers bring a diverse pool of experts and technologies to streamline non-core medical functions. They let institutions focus on their core competencies to deliver high-quality patient care.
Because this line of work involves sensitive data, BPO companies must adhere to healthcare regulations. They study these critical rules to protect personal health information (PHI) and help avoid costly violations.
Let’s find out why and how they do it below.
Why BPO firms must abide by healthcare regulations
Any organization specializing in the healthcare industry must carefully handle confidential medical records. These files include personal and financial details. Without proper BPO security measures, sharing data online while collaborating with remote workers may expose them to cyber threats.
According to the U.S. Department of Health and Human Services (HHS), 16 data breaches in 2023 occurred among business associates of companies covered by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Hacking and unauthorized access were the top causes of these incidents, mainly in network servers.
Service providers thus develop and implement robust data security measures to avoid such issues. Their first step is to understand and familiarize their teams with healthcare laws. This knowledge lets them, their clients, and patients experience the following benefits:
- Avoid costly lawsuits, fines, and legal repercussions.
- Prevent operational disruptions, project delays, and low productivity.
- Establish a trustworthy reputation in the industry for exercising ethical practices.
- Attract new clients and foster long-term relationships with existing enterprise partners.
- Gain a competitive advantage.
- Prioritize efforts to improve the quality of healthcare services.
- Maintain the accuracy and reliability of critical health records and documents.
- Protect patient data and privacy.
- Reinforce patients’ trust in the national healthcare system.
Main healthcare laws that cover BPO operations
Achieving the benefits discussed involves identifying and comprehending important BPO-related healthcare regulations. Although they vary from country to country, these policies safeguard PHI and financial data from accidental public exposure and theft.
The list of healthcare laws below is what BPO companies must note. It guides them in drafting and executing compliance strategies that match their client organizations’ approaches.
HIPAA: The standard for PHI protection
The HIPAA sets the rules for defending sensitive PHI against unauthorized or unadvised disclosure. Led by the HHS Office for Civil Rights (OCR), the federal law outlines patients’ rights to understand and control how providers access and use their critical data.
This rule’s foundation is allowing significant data usage while protecting a patient’s privacy. It aims to enable safe information sharing while providing and promoting superior healthcare services.
Regarding outsourcing, the HIPAA mandates medical providers to sign business associate agreements (BAAs) with their BPO partners. BAAs detail the roles and responsibilities of the support vendor as follows:
- Ensure PHI security and confidentiality, especially for claims processing tasks.
- Align security measures with the electronic PHI (ePHI) protection guidelines.
- Obtain permission to access and manage health information from patients and clients.
- Regularly train employees regarding HIPAA requirements and policies.
- Promptly report breaches and related incidents to clients, victims, and authorities.
In cases of non-compliance, covered businesses can face criminal charges and fines. HIPAA civil sanctions vary based on the severity of a violation. The consequences can range from a warning to a maximum penalty of nearly $69,000 per case and a potential jail sentence.
HITECH: The extension of HIPAA provisions
The Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) broadens the reach of HIPAA provisions. It is part of the American Recovery and Reinvestment Act (ARRA), an economic stimulus package launched during the Obama administration.
The HITECH Act directly impacts BPO companies. It strengthens HIPAA security and privacy rules for healthcare providers’ business associates who handle ePHI. It further highlights the importance of BAAs, requiring service providers to comply with ePHI-related safeguards.
Moreover, the federal law encourages BPO companies to adopt technologies and measures to protect electronic health records (EHRs). It incentivizes the meaningful use of this data but increases penalties for infringing on HIPAA regulations.
Before the HITECH Act, the OCR could only impose a fine of $100 per violation and $25,000 max. The penalties became higher when the law was introduced in 2009 and were split into different tiers. The fines have been adjusted annually since 2016 following inflation. As of December 2023, the violation fee is similar to the amount mentioned in the previous section.
Besides enhanced sanctions, the HITECH Act emphasizes the importance of the HIPAA breach notification rule. BPO companies and their clients must agree to these crucial healthcare regulations:
- Notify affected parties within 60 days of the incident’s discovery.
- Send the notification letters via first-class mail.
- Detail the nature of the breach, the type of compromised PHI, mitigation efforts, and steps victims can take to minimize the adverse effects.
- Report the incident directly to the HHS.
- Provide records of 500 or more breaches to a prominent media outlet serving the jurisdiction where incidents occurred.
GDPR: A special defense for health data
The General Data Protection Regulation (GDPR) emphasizes the right to control personal data shared with businesses. This international law primarily safeguards European Union (EU) member states.
The rule significantly affects third-party providers operating in EU countries because they use massive medical records to deliver healthcare BPO services. They must implement the BPO-associated healthcare regulations and actions below to ensure GDPR compliance:
- Appoint a data protection officer (DPO).
- Execute robust measures to ensure data confidentiality and integrity.
- Establish a lawful basis for seeking access to and processing healthcare data.
- Develop guidelines to facilitate data subject rights over personal data management.
- Release prompt notification of data breaches to relevant authorities and victims.
- Implement safeguards such as binding corporate rules when sharing data internationally.
- Include specific GDPR provisions in service-level agreements (SLAs).
Not adhering to GDPR policies and requirements results in lawsuits and fines. Violators must pay up to €10 million ($10.8 million) or 2% of their global annual revenue from the preceding financial year for minor cases. More severe infringements require approximately €20 million ($21.5 million) or 4% of the company’s worldwide yearly revenue from the prior year.
Other healthcare laws to consider
Although the three laws discussed have a global scope, certain outsourcing hubs have specific data and privacy security rules that influence strategic outsourcing in the healthcare domain. These rules regulate the processing and exchange of personal information, including medical records.
Here are some examples of country-specific laws that help improve patient experiences:
- UK Data Protection Act 2018
- Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA)
- China’s Personal Information Protection Law (PIPL)
- India’s Digital Personal Data Protection Act
- Philippine Data Privacy Act of 2012 (DPA)
How to build healthcare-compliant BPO partnerships
Forming a legally compliant healthcare BPO partnership requires careful consideration of the discussed rules and regulations. Besides understanding them, including these policies in contract terms and conditions helps specify each party’s data and privacy security responsibilities.
As a medical provider seeking third-party support, you should perform due diligence before finalizing and signing an SLA. You must evaluate the BPO company’s track record in the healthcare market. Examine its security and compliance history to guarantee it aligns with yours and meets legal requirements.
Additionally, create incident response plans. These frameworks allow your teams to immediately resolve breaches, hacks, and related challenges. Having in-house and joint strategies with the potential BPO partner lets you avoid costly mitigation efforts and operational delays.
The bottom line
Accurate data equals streamlined and high-quality patient care. BPO companies help achieve this goal by understanding and adhering to national and international healthcare regulations. Doing so helps strengthen the resilience and trustworthiness of the entire medical field.
Before maximizing compliance benefits, you must find the right service provider and maintain a business continuity approach. These steps free your company from severe disruptions and ensure continuous operations. Let’s connect if you’re ready to work with a BPO partner.
