When it comes to compliance, with the countless governing boards, rules, and regulations, it’s easy to get confused. That’s why Abyde is here to help. You’ve probably heard a ton about HIPAA, and now you’ve most likely heard a bit about SOC 2, too. You might be wondering, what’s the difference? Isn’t it the same thing?
Well, let’s break it down.
HIPAA vs SOC 2 origins:
HIPAA, or the Health Insurance Portability and Accountability Act was enacted by Congress in 1996. HIPAA was not only meant to reform the health insurance industry but was in response to the increase in the transmission of electronic protected health information (ePHI). HIPAA establishes how patients’ sensitive information needs to be protected securely. HIPAA includes patients’ rights to their information, how PHI needs to be created, received, maintained, or transmitted, and how a HIPAA-regulated entity needs to report a breach. Since HIPAA was established on a federal level by the government, it is a requirement for practices and organizations that handle PHI to follow.
SOC 2, or Systems and Organization Controls 2, was established by the AICPA (American Institute of Certified Public Accountants) in 2010. SOC 2 is broken down into five areas of compliance: security, availability, processing integrity, confidentiality, and privacy. Following SOC 2 is completely voluntary since it is not upheld by a government agency, like HIPAA. However, following SOC 2 guidelines has become so common that many organizations will not work with non-compliant companies.
HIPAA vs SOC 2 Scope:
HIPAA must be followed by all who handle the PHI of patients. This means not only Covered Entities (CEs) like healthcare providers, health plan programs, healthcare clearinghouses, but also Business Associates (BAs). BAs are all organizations that work with a CE and handle PHI. For instance, BAs include IT companies, proper disposal companies, medical manufacturers and much more.
On the other hand, SOC 2 is not healthcare-specific. SOC 2 includes all industries and is a security framework for organizations handling data.
HIPAA vs SOC 2 Penalties:
HIPAA is enforced by the Office of Civil Rights (OCR) under the US Department of Health and Human Services (HHS). Violating HIPAA can come along with hefty monetary fines. These fines can range from $137 to millions of dollars, depending on the severity of the case. Implicated regulated entities also could be monitored by the OCR for years after a violation, ensuring the same mistake isn’t made again. A HIPAA violation could completely upend a practice or organization.
In contrast, SOC 2 is a voluntary framework, so there are no specific penalties for non-compliant organizations. As stated before, it has become customary to uphold SOC 2 standards. So, a ‘penalty’ for not following SOC 2 could be lost business, affecting your reputation.
Overall, HIPAA and SOC 2 both promote responsible information handling, which in turn, builds trust for a practice or organization. However, HIPAA is focused solely on healthcare information, while SOC 2 is a non-specific framework for organizations to follow to be compliant. Additionally, HIPAA only affects practices or organizations that handle PHI, whereas SOC 2 includes all organizations, including those outside of healthcare. Lastly, HIPAA is a requirement enforced by the government, which can result in heavy fines. On the other hand, SOC 2 is voluntary but is in good business practice to follow.
Want to learn more about compliance? Email us at info@abyde.com or schedule a consultation here for CEs and here for BAs.
