SOC 2 vs HIPAA: Key Differences for Healthcare

SOC 2 and HIPAA are both critical for protecting sensitive data in healthcare, but they serve different purposes. Here's a quick breakdown:

• SOC 2: A voluntary framework focused on evaluating how organizations manage customer data using five trust service criteria: security, availability, confidentiality, processing integrity, and privacy. It’s widely used by vendors and service providers to demonstrate strong data security practices.
• HIPAA: A mandatory U.S. federal law designed to protect patient health information (PHI). It imposes strict requirements on healthcare providers, insurers, and their partners for handling, storing, and sharing PHI.

Key Differences:

1. Legal Requirement: HIPAA is mandatory for entities handling PHI, while SOC 2 is voluntary but often expected by clients.
2. Scope: HIPAA focuses on PHI, whereas SOC 2 applies to all types of sensitive data.
3. Audit Process: SOC 2 requires third-party audits, while HIPAA relies on self-assessments and documentation.
4. Output: SOC 2 provides shareable reports for clients; HIPAA compliance is demonstrated through internal records.

Quick Comparison:

Both frameworks support healthcare organizations in managing risks and protecting sensitive data. While HIPAA ensures regulatory compliance, SOC 2 helps build trust by exceeding basic requirements. Together, they create a stronger approach to data security.

SOC 2 vs HIPAA Compliance: What’s the Difference?

What is SOC 2

SOC 2 is a voluntary framework developed by the AICPA to audit how organizations handle customer data. It's particularly important for healthcare vendors and cloud service providers that deal with sensitive information on behalf of healthcare entities. Achieving SOC 2 compliance demonstrates that an organization has implemented robust security measures - an increasingly important factor as healthcare data comes under greater scrutiny.

SOC 2 reports serve as a bridge between service providers and their clients by outlining how risks are managed and data is protected. For healthcare organizations, these reports simplify vendor evaluations by providing standardized documentation that supports informed decision-making.

This framework evaluates organizations against five core criteria.

SOC 2 Trust Services Criteria

SOC 2 compliance is built around five Trust Services Criteria defined by the AICPA. These criteria provide a structured way to assess how organizations secure sensitive data and maintain operational reliability ^[2][3].

• Security: This is the only mandatory criterion for all SOC 2 reports ^[1][2]. It focuses on protecting systems and information from unauthorized access, disclosure, and damage. Security includes nine key areas, such as risk assessment, monitoring, logical and physical access controls, and change management. For healthcare organizations, this is critical because it directly addresses the protection of patient information and clinical systems.
• Availability: This criterion ensures that systems are operational and accessible to authorized users ^[1][2]. It includes measures like data backups, disaster recovery, and business continuity planning, all of which are essential for uninterrupted patient care and timely access to medical information ^[2].
• Confidentiality: This focuses on safeguarding information designated as confidential, such as financial records, passwords, and intellectual property ^[1][2]. It ensures that only authorized individuals can access sensitive data. Healthcare organizations often rely on this criterion when working with vendors managing clinical or research data.
• Processing Integrity: This ensures that systems process data accurately, completely, and in a timely manner ^[1][2]. In healthcare, this is vital for maintaining accurate patient records, billing systems, and clinical decision-support tools ^[2].
• Privacy: This criterion addresses the protection of personally identifiable information (PII) and ensures compliance with the AICPA’s Generally Accepted Privacy Principles ^[1][2]. It governs how organizations handle personal data like names, addresses, Social Security numbers, and health information. While similar to HIPAA, SOC 2’s privacy criteria apply more broadly to all types of personal data.

While the Security criterion is required, the other four - Availability, Confidentiality, Processing Integrity, and Privacy - are optional and can be tailored to meet specific business needs or customer expectations ^[1][2].

Type 1 vs. Type 2 SOC 2 Audits

SOC 2 audits are divided into two types, each serving a different purpose: Type 1 and Type 2.

• Type 1 SOC 2 audits review the design of an organization’s controls at a specific point in time. They assess whether the controls are properly designed to meet the Trust Services Criteria but do not evaluate their ongoing effectiveness. These audits are quicker and less expensive, making them a good starting point for organizations new to SOC 2 compliance. For healthcare vendors, a Type 1 audit signals an initial commitment to security and can serve as a foundation for future improvements. However, it offers only limited assurance regarding the long-term effectiveness of controls.
• Type 2 SOC 2 audits go a step further by testing the operational effectiveness of controls over a defined period, typically six to twelve months. These audits evaluate both the design and the consistent performance of controls, providing detailed results that highlight any deficiencies or exceptions. Healthcare organizations often prefer Type 2 reports when assessing critical vendors, especially those handling protected health information or supporting essential clinical operations. The extended testing period gives greater confidence in the reliability of security measures, which is crucial for meeting HIPAA and other regulatory requirements.

The choice between Type 1 and Type 2 audits depends on factors like the organization’s maturity, customer expectations, and business goals. Many healthcare technology companies start with a Type 1 audit to establish a baseline and later transition to Type 2 audits as their systems and processes mature to meet more demanding client needs.

What is HIPAA

HIPAA, short for the Health Insurance Portability and Accountability Act of 1996, is a federal law designed to protect the privacy and security of patient health information. It applies to a wide range of organizations, including healthcare providers, insurance companies, and any third-party vendors that handle protected health information (PHI).

The law identifies two main groups responsible for safeguarding PHI: covered entities and business associates. Covered entities include hospitals, clinics, doctors' offices, health insurance providers, and healthcare clearinghouses. Business associates, on the other hand, are third-party vendors or contractors - such as cloud storage providers, IT support companies, medical billing services, and electronic health record (EHR) system providers - that access or manage PHI on behalf of covered entities.

HIPAA’s primary purpose is to ensure the confidentiality and security of health information while still allowing the necessary exchange of data to support effective healthcare delivery. The law establishes a standardized framework for how healthcare organizations handle and protect patient information.

HIPAA’s protections cover all forms of PHI, whether it’s a medical record, billing information, appointment details, or insurance claims. To enforce this, HIPAA is built around three core rules: the Privacy Rule, the Security Rule, and the Breach Notification Rule. Together, these rules outline clear requirements for how PHI must be managed and protected.

HIPAA Privacy, Security, and Breach Rules

HIPAA’s framework includes three essential components that work together to safeguard patient health information:

• Privacy Rule: This rule sets national standards for protecting medical records and other personal health information. It gives patients the right to access their health records, request corrections, and control how their information is used or shared. While PHI can be used without patient consent for treatment, payment, and healthcare operations, other uses require explicit authorization.
• Security Rule: This rule focuses on protecting electronic PHI (ePHI) by requiring covered entities to implement safeguards in three areas:
  • Administrative safeguards: Appointing a security officer, training staff, and setting up access controls.
  • Physical safeguards: Restricting physical access to systems and devices that store ePHI.
  • Technical safeguards: Implementing measures like encryption, access controls, and audit systems to secure data during storage and transmission.
• Breach Notification Rule: This rule outlines the obligations for notifying individuals, the Department of Health and Human Services (HHS), and sometimes the media when a breach of unsecured PHI occurs. Breaches affecting 500 or more individuals must be reported to HHS and impacted individuals within 60 days. Smaller breaches, involving fewer than 500 individuals, must still be reported to HHS annually.

HIPAA Penalties and Enforcement

Violating HIPAA can lead to severe financial and legal consequences. The law is enforced by the Department of Health and Human Services' Office for Civil Rights (OCR), which has the authority to impose civil and criminal penalties.

Civil penalties are categorized into tiers based on the nature and severity of the violation:

• Fines range from $137 to $2,067,813 per violation, depending on the level of negligence.
• The lowest tier applies when a violation occurs without the entity’s knowledge, while the highest penalties are for willful neglect that isn’t corrected promptly.
• Annual penalties for repeated violations can reach up to $2,067,813.

Criminal penalties are even more severe. Individuals who knowingly access or disclose PHI can face:

• Up to 1 year in prison and fines of $50,000.
• Up to 5 years in prison and fines of $100,000 if the offense involves false pretenses.
• Up to 10 years in prison and fines of $250,000 for offenses involving intent to sell, transfer, or use PHI for personal gain, commercial advantage, or malicious harm.

Enforcement is rigorous, with many organizations facing multimillion-dollar settlements for non-compliance. Beyond the fines, these penalties often come with additional requirements, such as implementing comprehensive compliance programs, undergoing regular audits, and maintaining ongoing monitoring processes. These measures can create long-term operational and financial challenges for the organizations involved.

SOC 2 vs HIPAA: Main Differences

Both SOC 2 and HIPAA aim to safeguard sensitive data, but they serve distinct purposes and follow different frameworks. These differences are critical for healthcare organizations when designing their security programs. Let’s break down how these frameworks impact risk management in healthcare.

Mandatory vs Voluntary Compliance

The biggest distinction between SOC 2 and HIPAA lies in their legal requirements and enforcement. HIPAA is a federal law, meaning compliance is mandatory for covered entities and business associates. If your organization handles protected health information (PHI), you’re legally obligated to follow HIPAA’s Privacy, Security, and Breach Notification Rules. Failure to comply can result in legal penalties.

On the other hand, SOC 2 is a voluntary framework created by the American Institute of Certified Public Accountants (AICPA). Organizations choose to undergo SOC 2 audits to showcase their commitment to data security and operational controls. While there are no legal consequences for not obtaining SOC 2 compliance, the absence of it can harm business relationships, especially when customers or partners require it for vendor agreements.

In short, HIPAA compliance is a legal necessity in healthcare, while SOC 2 acts as a way to build trust and stand out in the market. These differences influence how healthcare organizations balance regulatory obligations with customer expectations.

Data Types and Coverage

HIPAA and SOC 2 also differ in the types of data they protect. HIPAA is focused specifically on protected health information (PHI), including its electronic form (ePHI). This encompasses any health-related data that can identify an individual, such as medical records, billing details, appointment schedules, and insurance information.

SOC 2, by contrast, has a broader scope, covering all customer data that service organizations handle. This includes personal details, financial information, intellectual property, and other sensitive data entrusted to a provider. While HIPAA zeroes in on healthcare-related information, SOC 2 extends its reach to data of any kind, making it applicable to a wider range of operational contexts.

For example, a cloud-based electronic health record (EHR) provider must comply with HIPAA to protect patient health information. At the same time, they may pursue SOC 2 compliance to address the broader customer data and operational controls expected by their healthcare clients. Together, these frameworks create a more comprehensive approach to data security.

Audit Requirements and Processes

The processes for SOC 2 and HIPAA audits are fundamentally different. SOC 2 relies on independent third-party assessments conducted by certified public accounting firms. Auditors evaluate the design and effectiveness of controls based on the five Trust Services Criteria. There are two types of SOC 2 audits: Type 1, which assesses control design at a specific point in time, and Type 2, which evaluates how effectively those controls operate over a period of six to twelve months.

HIPAA, on the other hand, is centered around self-assessment and documentation. Covered entities and business associates are responsible for conducting their own risk assessments, implementing safeguards, and maintaining detailed compliance records. While the Office for Civil Rights may conduct audits or investigate complaints, the day-to-day responsibility for compliance lies with the organizations themselves.

SOC 2 audits produce shareable reports that can be shown to customers and partners as proof of a strong security posture. In contrast, HIPAA compliance results in internal documentation that demonstrates adherence to federal regulations but doesn’t generate a formal certification or report for external use.

For healthcare organizations, these differences impact resource allocation. SOC 2 compliance often requires budgeting for third-party audits and formal reporting, while HIPAA compliance demands ongoing internal expertise and robust documentation systems. Both frameworks play a role in shaping how organizations prioritize and manage security efforts.

How SOC 2 and HIPAA Work Together

SOC 2 and HIPAA might focus on different objectives, but when combined, they create a strong foundation for safeguarding data and improving security practices ^[4]. Both frameworks align in their emphasis on security and privacy, making them a powerful duo for healthcare organizations looking to strengthen their risk management strategies and protect sensitive information effectively.

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Using SOC 2 and HIPAA in Healthcare

Healthcare organizations can use both SOC 2 and HIPAA frameworks to build a strong security foundation that meets regulatory standards while also earning stakeholder trust. By combining these frameworks, they can tackle compliance from multiple angles, ensuring thorough risk management and better protection for sensitive healthcare data.

Managing Third-Party Vendor Risk

Healthcare organizations often rely on a wide range of vendors, such as cloud service providers and device manufacturers. While HIPAA mandates business associate agreements (BAAs) with vendors handling protected health information (PHI), these agreements alone don't guarantee strong security practices.

SOC 2 reports, on the other hand, offer a detailed look at a vendor's security controls and how effectively they operate. When considering potential business associates, healthcare organizations can request SOC 2 Type II reports to confirm that vendors follow consistent and reliable security practices. This approach goes beyond the basic requirements of BAAs by evaluating how security measures are actually implemented.

Take, for example, a hospital choosing an electronic health records (EHR) vendor. In this case, the hospital should not only require a HIPAA-compliant BAA but also review the vendor's SOC 2 Type II report to ensure their security practices are up to par.

Censinet RiskOps™ simplifies this vendor evaluation process by allowing healthcare organizations to perform thorough third-party risk assessments. These assessments combine HIPAA compliance checks with SOC 2 analysis, making it easier for risk teams to evaluate vendors across multiple compliance frameworks. The platform’s automated workflows save time while ensuring no stone is left unturned.

This vendor-focused strategy also applies to cloud storage, a critical area for safeguarding PHI.

Cloud Storage for PHI

As healthcare organizations increasingly adopt cloud solutions for storing patient data, running clinical applications, and managing administrative systems, ensuring the security of these environments is paramount. HIPAA requires safeguards for PHI in all settings, but SOC 2 certification adds an extra layer of assurance by verifying that cloud providers implement strong, operational security controls.

By combining HIPAA compliance with SOC 2 certification, healthcare organizations can be confident that their cloud vendors not only meet regulatory requirements but also adhere to industry-recognized security standards. Cloud providers with SOC 2 certification often demonstrate a stronger security posture than those meeting only HIPAA's minimum requirements, as SOC 2 audits evaluate operational effectiveness over a longer period.

When selecting cloud vendors, healthcare organizations should prioritize those that offer both up-to-date SOC 2 reports and HIPAA-compliant BAAs. This dual approach ensures that PHI is protected by proven security controls, not just by contractual agreements.

Beyond selecting vendors, maintaining compliance requires continuous oversight and monitoring.

Ongoing Risk Monitoring

HIPAA requires healthcare organizations to regularly assess risks and implement safeguards, but it doesn’t specify how often or in what manner these assessments should occur. SOC 2 Type II audits complement HIPAA's risk management requirements by providing structured evaluations over a 6–12 month period.

SOC 2 frameworks can enhance HIPAA's risk assessment processes by focusing on the five Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy. These criteria align closely with HIPAA's administrative, physical, and technical safeguards, offering more detailed guidance on how to implement them effectively.

Conducting regular SOC 2 assessments allows healthcare organizations to identify potential weaknesses in their controls before they escalate into compliance violations or security incidents. This proactive approach aligns with HIPAA's emphasis on ongoing risk management while also providing detailed documentation to demonstrate due diligence to regulators and stakeholders.

Censinet's platform supports continuous risk monitoring by consolidating data from SOC 2 assessments, HIPAA evaluations, and other sources. This enables healthcare organizations to track risk trends, detect emerging threats, and prioritize remediation efforts based on a comprehensive view of their risk landscape, rather than relying on one-off assessments.

How Censinet Supports Healthcare Risk Management

Healthcare organizations face the dual challenge of adhering to SOC 2 and HIPAA compliance while managing intricate vendor relationships. Censinet RiskOps™ offers a streamlined solution by providing a unified platform that simplifies compliance management for both frameworks. This helps organizations reduce their exposure to risks without sacrificing operational efficiency.

What sets this platform apart is its ability to merge SOC 2 assessments and HIPAA compliance requirements into a single, cohesive workflow. By eliminating the need for separate systems, organizations can cut down on administrative burdens and ensure consistent risk evaluations across all vendor relationships. This integrated approach reflects a strong commitment to managing risks effectively while adhering to regulatory standards.

Automated Risk Assessments

Censinet RiskOps™ takes efficiency a step further by automating third-party risk assessments for SOC 2 and HIPAA compliance. The platform evaluates vendors against multiple compliance frameworks simultaneously, saving time and resources.

Powered by Censinet AITM technology, the platform speeds up the process of completing security questionnaires. Vendors can quickly summarize evidence, document integration details, and pinpoint fourth-party risk exposures. This results in actionable risk summary reports that organizations can use to make informed decisions.

Automation ensures that assessments can be processed at scale, but it doesn’t replace human oversight. Configurable rules and review processes ensure that critical decisions regarding PHI protection and patient safety remain in capable hands. Automated workflows also trigger reassessments and alert risk teams to any changes in vendor risk profiles, ensuring compliance is maintained continuously.

Cybersecurity and Compliance Management

Beyond risk assessments, the platform delivers robust tools for managing cybersecurity and compliance. It benchmarks an organization’s cybersecurity posture and evaluates control maturity for both SOC 2 and HIPAA. These benchmarking tools provide clear insights into how security measures stack up against industry peers, helping organizations identify and address potential vulnerabilities before they become compliance issues.

All compliance data - whether from SOC 2 assessments, HIPAA evaluations, or other frameworks - is consolidated into a single, unified dashboard. This centralization allows risk teams to monitor compliance effectively, detect overlapping controls, and focus on areas that need remediation.

Censinet RiskOps™ also facilitates secure data sharing between trusted partners, reducing redundant efforts and establishing consistent security practices. The platform strengthens governance by centralizing compliance policies, tracking updates to frameworks, and ensuring alignment with SOC 2 and HIPAA safeguards.

For organizations leveraging AI technologies, Censinet AITM routes AI-related risks to designated stakeholders, ensuring that emerging technologies are evaluated against compliance standards and regulatory requirements. By integrating AI governance, the platform enhances its role in creating a comprehensive risk management strategy tailored to the healthcare sector.

Conclusion

Effective compliance in healthcare requires a clear understanding of both SOC 2 and HIPAA. While HIPAA lays the groundwork for safeguarding patient health information, SOC 2 adds an extra layer of assurance by focusing on security controls and operational practices. Together, they form a comprehensive approach to protecting sensitive data.

Rather than viewing SOC 2 and HIPAA as separate obligations, healthcare organizations should see them as complementary. SOC 2 audits enhance HIPAA's protections for PHI and broaden the scope of data security. However, managing these dual requirements can create additional administrative challenges.

This is where Censinet RiskOps™ steps in. By unifying SOC 2 and HIPAA compliance management, the platform streamlines the entire process, saving organizations significant time - potentially hundreds of hours in preparation and ongoing maintenance ^[5]. With features like a centralized dashboard and automated risk assessments powered by Censinet AITM, healthcare providers can shift their focus from complex compliance tasks to delivering exceptional patient care.

Additionally, the platform's benchmarking tools help identify potential gaps before they become major issues, reducing breach risks and reinforcing a commitment to protecting patient data.

As technology evolves and regulatory demands increase, integrated tools like Censinet RiskOps™ are becoming essential. Organizations that embrace compliance as a strategic advantage can foster trust with patients, partners, and regulators while maintaining the efficiency needed to provide high-quality care.

FAQs

Why should healthcare organizations prioritize SOC 2 compliance even though it’s not legally required like HIPAA?

Healthcare organizations should make SOC 2 compliance a priority because it highlights their dedication to safeguarding sensitive data, securing operations, and building patient trust. While HIPAA zeroes in on mandatory protections for protected health information (PHI), SOC 2 takes a broader approach, addressing key principles like confidentiality, integrity, and availability.

Adopting SOC 2 standards allows healthcare providers to better manage risks, minimize the chances of data breaches, and enhance their overall security measures. Beyond that, it simplifies compliance efforts, eliminates redundancies, and strengthens trust with both patients and business partners. In a healthcare landscape where data security is non-negotiable, SOC 2 compliance is a critical step forward.

How can healthcare organizations use SOC 2 and HIPAA together to manage vendor risks?

Healthcare organizations can improve vendor risk management by aligning SOC 2 and HIPAA compliance strategies. While SOC 2 emphasizes protecting data through security, availability, and confidentiality measures, HIPAA focuses on safeguarding patient health information (PHI). Together, these frameworks offer a solid foundation for managing third-party risks effectively.

By mapping SOC 2 controls to HIPAA requirements, organizations can pinpoint and address gaps in key areas like access controls, audit trails, and data security. This unified approach not only improves visibility but also ensures consistent security practices across vendors. Tools like Censinet RiskOps™ can make this process more manageable by supporting streamlined risk assessments and continuous monitoring tailored specifically to the healthcare sector.

How does Censinet RiskOps™ help healthcare organizations manage SOC 2 and HIPAA compliance more effectively?

How Censinet RiskOps™ Transforms Compliance Management

Censinet RiskOps™ takes the hassle out of compliance management for healthcare organizations by automating critical workflows and cutting down on manual tasks. With features like real-time risk monitoring, automated compliance checks, and centralized documentation, staying audit-ready becomes a much smoother process.

The platform is designed to help healthcare providers tackle risks tied to patient data, PHI, and third-party vendors. By reinforcing security and ensuring adherence to regulatory standards, it not only saves valuable time but also boosts the efficiency of risk management efforts.

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