contact us

By submitting this form, you are agreeing to Folio3’s Privacy Policy and Terms of Service.

Basic Guide on HIPAA Risk Analysis VS Risk Management

Get the inside scoop on the latest healthcare trends and receive sneak peeks at new updates, exclusive content, and helpful tips.

Contact Us

    Posted in HIPAA

    Last Updated | February 3, 2023


    Data breaches are not a new thing. With the availability of electronic medical records, they have become more common. Since HIPAA rules make it mandatory for healthcare establishments to ensure the security of their patient data, breaches can sacrifice the privacy of that data and lead organizations to big fines. Hence, most software vendors including top digital health companies, mobile health app development firms, Epic integration providers, EHR software development, HL7 integration services, and others make sure that they take care of their HIPAA security checklist. 

     So, where does the problem lie? Why do so many health organizations still fall victim to these data breaches? 

     Although many of them are experts at assessing the issues, they fail to prevent security issues because the solutions they produce are incompatible with the issues or organization. The majority of CEOs, IT professionals, and compliance officers lack understanding of what specific assessment their organization needs to comply with HIPAA regulations. 

     So, without knowing and taking the right assessment, no organization can ensure compliance with security requirements outlined in HIPAA. In terms of healthcare data security, two phrases- HIPAA risk analysis and HIPAA risk assessment- are used interchangeably.  So, is there a difference between them? Which one of them do you need to conduct? 

    To distinguish between these two types of risk evaluations, let’s discuss them in detail:

    What Is a HIPAA Risk Analysis?

    HIPAA law makes it necessary for every organization to conduct risk analysis accurately and thoroughly.  This process analyzes potential threats and vulnerabilities to the availability, confidentiality, and integrity of protected health information (PHI). It ensures that organizations keep their data protected. Risk analysis is a critical step to achieving data security and compliance with HIPAA. So, the goal of this analysis is to identify the weaknesses and vulnerabilities of an organization’s systems. This analysis helps the organizations to develop security procedures and policies, which is another step for complying with HIPAA security rules.

     The risk analysis process involves taking information from all systems and applications used to house and access data and classifying them by their risk levels. 

     A comprehensive and accurate risk analysis is the one that considers all relevant losses caused by a lack of security measures, including data corruption, data damage, and expected consequences of such damages.

    Why Do We Need Risk Assessment?

    Creating a risk assessment is the first step to analyzing risk. It elaborates a detailed understanding of potential risks to e-PHI. It also helps collect information and ensure all types of security measures required for HIPAA compliance.

     Though it is a HIPAA requirement, fulfilling it is also beneficial for you. The risk assessment gives you a detailed framework for completing your HIPAA compliance documentation, essential for every organization. 

     Furthermore, it assists your staff by providing them with key information to make decisions about prioritizing and mitigating risk. The frequency of performing a risk assessment depends on how large, small and complex your organization is.  Larger organizations may need to carry out risk assessments more than once each year. You may also need to complete one assessment when many changes take place in your organization.

     Conducting a risk assessment entails processes and technologies that assist with identifying, evaluating, and reporting on risk-related concerns. So, the first step in setting an organization’s security policies is analyzing the risk and the next is the risk assessment, which is completed to assess risk and determine if the breach of PHI needs to be reported.

    How is HIPAA Related to Risk Management?

    Complying with HIPAA rules is mandatory for all healthcare software companies- including telehealth software as a service– that store, share, or only have access to the patients’ health information. To achieve this, risk management is the foremost step towards complying with HIPAA and protecting an organization’s database, but what does risk management imply?

     Risk management is all about managing your organization whenever it is at risk. It helps you ensure data security, which HIPAA law requires you to do.  Whereas risk assessment only maps out where the risk lies, risk management is the actual execution of security measures to significantly reduce the organization’s risk of compromising or losing its ePHI and align it with general security standards.

     So, how do you address risk and manage it?

     There are many ways to address and manage risk. However, the following steps can be a guide to help you complete the risk management process:

    • First, you need to identify the hazards. This means you have to figure out where the security issues lie.


    • You must find out who can be harmed if the data is vulnerable to wrong hands.


    • Next, you will have to record the findings of the assessment and inform those who are susceptible.


    • Finally, review the risk assessment regularly.


    How to Develop a Risk Management Plan?

    Once you have completed a risk assessment, you are all set to create documents that will guard the information. To make it easy for you to develop a plan, Health and Human Services (HHS) provide some questions your organization needs to consider. Here are the questions to consider for a risk management plan:

    1. Are your security measures in place to protect ePHI and PHI?
    2. Do you communicate your security processes throughout the organization?
    3. Will your executive leadership and management be involved in risk management and risk mitigation decisions?
    4. Will a covered entity require to involve other resources to achieve risk management?


    Besides these issues, you need to figure out the key roles that will help protect the PHI. By identifying who in your organization knows about security measures, you can further get them to distribute the information among your staff.

    You also have an option to delegate some of your organization’s security measures to a third-party vendor or cloud file storage.  So, a third party will perform all necessary risk assessment and management processes for you. Besides this, you can also go for successful-approaches-for-HL7-integration-implementation to ensure the security integrity of your data.

    How Much Does a HIPAA Risk Assessment Cost?

    Just like telemedicine startup costs, HIPAA risk assessment costs vary from organization to organization. Perhaps, there is no specific amount of computing price an organization has to spend. It varies depending on how long your assessment takes and how many individuals, tools, and technologies it involves. 

    The cost of a HIPAA audit may be divided into two parts- direct and indirect costs.  While direct costs are the ones that cost an organization to audit and report a risk assessment, indirect costs refer to the time spent on auditing. The former is easy to calculate, whereas it is harder to quantify the latter cost. 

     For a HIPAA gap assessment, the direct cost might be $20,000- $30,000 and for full HIPAA audit, it can be about $20,000- $50,000. Since validated HITRUST assessment is a complete framework for HIPAA compliance, its direct cost is even higher, around $60,000-$120,000.

    The indirect cost of HIPAA risk assessment is subject to the number of employees in an organization and other factors, so it varies for each assessment. Hence, the time taken by any other organization for risk assessment may not be the same for your firm.

    Is HIPAA Risk Analysis the Same as Risk Assessment in Healthcare?

    Risk analysis and risk assessment refer to two sides of the same thing. You can consider risk analysis as the process that analyzes the risk and risk assessment as the tool to make decisions about dealing with risks. Risk analysis is all about identifying data vulnerabilities. HIPAA risk analysis breaks down complex risk issues into simple chunks that can be analyzed easily. It is conducted to understand how you can maintain security policies and procedures to ensure patient data protection. 

     In the healthcare industry, security risk assessments refer to enterprise-wide evaluations of the possible threats to sensitive data and systems, including ePHI. The risk assessment evaluates your organization’s capabilities to prevent, identify, and respond to cyberattacks. Risk assessment aims to break down threats or risks into different categories and define the potential impacts of each risk. In a nutshell, risk analysis is a micro-level process involving the measurement of risk and its associated impact whereas risk assessment assesses the risk to identify and address the severe risks before the ones with lower impact. 

    What Happens When Organizations Fail To Conduct Risk Assessment?

    Since HIPAA law requires healthcare practices to ensure physical, technical, and administrative security of data, making sure to keep it protected can guarantee an organization’s data security compliance. Non-compliance with HIPAA results in severe fines that have historically depended on the level of negligence and the number of patients affected by the patient’s reach of PHI.

     In recent times, a few organizations have been fined under the “Did Not Know” category that is the lowest HIPAA violation category allowing business associates and covered entities a little excuse for not knowing that they are legally responsible for safeguarding ePHI.

     The other HIPAA violation category, “Willful Neglect” imposes more fines than the previous one. Organizations that are fined under this category knew or should have known that they had an obligation to protect patients’ personal information. If the organizations fail to identify risks to the integrity of ePHI, they are issued some of the heaviest fines. 

     Therefore, it is critical for every firm to ensure the confidentiality of data that their systems hold does not get compromised.

    What are the Key Components of a HIPAA Risk Assessment?

    The US Department of Health and Human Services spells out that there is no specified methodology for assessing risk.  The reason behind not having a well-defined method for conducting a risk assessment is that the covered entities and business associates differ in size, capabilities, and complexity. So, the same method may not work for all of them.

    However, HHS outlines the objective of conducting a risk assessment that is to detect potential threats and vulnerabilities to the integrity of personal information of patients stored, received, maintained, or transmitted by an organization. 

    To achieve this objective, an organization should do the following:

    • Identify Risk

    Since new risks are constantly emerging, it may become challenging for risk assessments to recognize all the threats to healthcare entities. However, by using industry knowledge and engaging everyone, risk managers can uncover threats that would otherwise be hard to anticipate.

    • Quantify & Prioritize

    Once you identify potential risks and vulnerabilities, it is essential to categorize and prioritize them based on their likelihood and impacts. So, it will help you address the more severe risks as early as possible. Furthermore, you can communicate with other people in your organization and involve them in the decision-making process.

    • Investigate & Respond

    It is vital for organizations to immediately investigate when any sentinel events (unanticipated events in healthcare that result in death or serious injury) occur. Quickly responding and addressing a security risk can save organizations from drastic consequences.

    • Performing Compliance Reporting 

    Federal state and oversight bodies make it mandatory to report certain types of incidents, including medication errors, sentinel events, and medical device crashes. 

    Such incidents result in workplace and patient surgical errors; hence, they need to be documented and reported. Reporting those helps keep administrators aware of what they and their customers are at risk of.

     HIPAA risk assessment is an ongoing exercise. Organizations should review them periodically and when certain practices change or new technologies are adopted. Though HHS does not guide the frequency of reviews, it obliges to review assessments once a year, depending on an organization’s needs.


    How long does a HIPAA risk assessment take?

    The duration of a HIPAA risk assessment is more concerned with the approach you use. With certain approaches, it typically takes one week to plan the assessment followed by some days for each asset owner to enter the relevant information in healthcare asset management software and a week or more to complete the assessment. So, together they make up 6 to 12 weeks from the start of the project to reporting findings. 

    How often does HIPAA require a risk assessment?

    HIPAA regulations state that every organization must periodically assess the effectiveness of its security measures. Office of Civil Rights (OCR) oversight and audit have also asked organizations for providing documentation to these measures annually.

    What types of questions are required in a HIPAA risk assessment?

    A HIPAA risk assessment inquiry covers questions related to security policies and procedures, their update, and their alignment with current HIPAA laws. It even enquires whether organizations consistently follow policies and how often they train their staff on HIPAA procedures to ensure their compliance with the standards.

    Which hospitals use epic?

    A number of top-rated medical schools and hospitals in the United States use Epic. The list includes St. Elizabeth Healthcare, CHRISTUS Trinity Mother Frances Health System, and Presbyterian Healthcare Services.


     To achieve HIPAA security rule compliance, risk assessment and risk management are the first steps your organization can take.  

     Both are ongoing processes that provide covered entities and business associates a detailed framework of the risks to PHI and the security measures essential to effectively manage the risks. Analyzing, assessing, and managing risks are the ways to save your organization from being fined for some big data breaches.

    Now that you know about assessing the risk, you must develop an assessment plan and manage the security of data of your organization to prevent costly mistakes.