SOC 2 vs HIPAA: A Comparative Review

SOC 2 or HIPAA: Which Compliance Framework Do You Need?

SOC 2, or System and Organization Control 2, is a voluntary framework that consists of criteria and controls that enable you to showcase a strong control environment and safeguard customer data from unauthorized access and vulnerabilities. 

HIPAA, or the Health Insurance Portability and Accountability Act, is a federal rule that is an ongoing practice for healthcare organizations. It integrates into operations to safeguard the privacy, security, and integrity of PHI. Ensuring compliance protects sensitive patient data and helps healthcare organizations avoid legal and financial repercussions.

The good thing about both frameworks is that SOC 2’s security and privacy principles can be tailored to meet HIPAA’s Security and Privacy Rule requirements. Organizations have the flexibility to integrate SOC 2 controls that address HIPAA’s administrative, physical, and technical safeguards.

Where Do SOC 2 Compliance and HIPAA Certification Meet?

SOC 2 and HIPAA, while distinct, share common goals in security and data privacy. Both require ongoing processes and compliance audits by independent evaluators to ensure compliance.

HIPAA compliance includes key requirements like security, privacy, and breach notification rules. These overlap with SOC 2’s Trust Service Criteria. HIPAA takes foundational elements from SOC 2, as both frameworks focus on protecting sensitive information. For HIPAA, this means safeguarding PHI.

Here is an overview of the contrasts and overlaps between SOC 2 and HIPAA.

In the next sections, we’ll dissect the exact differences between SOC 2 vs HIPAA so that you can decide which one to choose or go with both.

HIPAA vs SOC 2: Key Differences and Contrasts

SOC 2 compliance vs HIPAA shows the critical differences between the two programs. SOC 2 focuses on controls over security, privacy, availability, confidentiality, and processing integrity for various systems and organizations. On the other hand, HIPAA maintains compliance standards for areas handling PHI, especially in the healthcare industry. 

Interestingly, the systems covered by SOC 2 often overlap with those under HIPAA. Combining both frameworks can be a time and cost-saving strategy for your team.

Below, we further dissect the difference between the two leading security programs based on different parameters. 

1. Scope
2. Prerequisites and Requirements
3. Application of Standard
4. Process of Compliance
5. Impact on Service Organizations

Scope

SOC 2

The scope of SOC 2 includes evaluating an organization’s systems and processes related to data security and privacy, ensuring they meet industry standards and client requirements. It covers all aspects of data handling, including storage, processing, and transmission, to ensure comprehensive protection against unauthorized access and breaches.

It is determined by the expectations and requirements of these clients, typically centered on the software systems in use and the locations where data is processed and stored within the service organization’s infrastructure.

SOC 2 compliance has a broader scope than HIPAA compliance. While HIPAA focuses solely on protecting PHI, SOC 2 includes a wider range of data, including financial, customer, and intellectual property information.

HIPAA

HIPAA sets the boundaries for how healthcare entities handle sensitive patient data. It outlines the rules and procedures that healthcare providers, insurers, and related businesses must follow to safeguard individuals’ health information. 

This includes regulations on data encryption, access controls, and breach notifications. In essence, HIPAA creates a framework for ensuring the confidentiality, integrity, and availability of PHI, with strict penalties for non-compliance.

This is why the HIPAA Breach Notification Rule requires healthcare providers and their vendors to notify patients when their PHI is breached. They must inform affected individuals promptly but no later than 60 days after discovering the breach.

Also, from a HIPAA standpoint, the scope of PHI covers all the places in your setup where PHI is stored or moved. This includes various areas such as:

• Application databases
• Computers used by users containing ePHI
• Records and backups of logs
• Cloud-based file-sharing platforms
• Integrations with cloud visualization tools

Prerequisites and Requirements

SOC 2

The five Trust Services Criteria (TSCs) for a SOC 2 audit are security, availability, integrity in processing, confidentiality, and privacy. Since December 2018, all SOC 2 audits must align with the criteria outlined in TSP Section 100.

Here’s a quick breakdown:

• Security: The most crucial criterion (mandatory) ensures that all data is properly processed, transmitted, and disposed of.
• Availability: Ensures information and systems are operational and accessible when needed, with minimal downtime.
• Processing Integrity: Focuses on the accuracy and completeness of system outputs, ensuring results are tamper-free.
• Confidentiality: Protects sensitive information from unauthorized access or leaks during processing.
• Privacy: Ensures that personally identifiable information is handled in compliance with AICPA regulations, maintaining privacy at all stages of its lifecycle.

However, the requirements don’t just stop with fulfilling the Trust Service Principles. Some of those requirements are:

• Controls. SOC 2 compliance means setting up strong internal controls tailored to your needs. These controls make sure all systems and processes are secure, reliable, and efficient.
• Monitoring Programs. Continuous monitoring programs are key. They help track and analyze system activities regularly so you can catch and fix any issues or security threats quickly.
• Risk Assessments. Regular risk assessments are crucial. They help identify potential vulnerabilities and threats, evaluate their impact, and put measures in place to reduce risks.
• Change Management. Effective change management processes ensure that any changes to systems or processes are planned, tested, and implemented smoothly. This means documenting changes and assessing their impact without disrupting operations.
• Incident Response. A clear incident response plan outlines steps to take in case of a security breach or other incidents, ensuring a quick and effective response to minimize damage and restore normal operations.

SOC 2 compliance provides a strong framework for managing data security and privacy. While it can be tailored to include controls relevant to HIPAA compliance, SOC 2 alone doesn’t cover all HIPAA compliance requirements, such as specific regulations for protecting PHI and detailed breach notification protocols.

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HIPAA

To achieve HIPAA compliance, healthcare organizations must follow the HIPAA Privacy Rule, Security Rule, and Breach Notification Rule. These rules set the standards for protecting PHI and detail the protocols for responding to data breaches. They are explained in detail below:

• HIPAA Privacy Rule. The Privacy Rule ensures that individuals’ personal health information is properly safeguarded while allowing the flow of health data necessary to provide high-quality care and protect public health.
• HIPAA Security Rule. The Security Rule mandates that healthcare providers implement appropriate administrative, physical, and technical safeguards to protect electronically stored health information (ePHI). This ensures the confidentiality, integrity, and security of this data.
• Breach Notification Rule. This rule requires HIPAA-covered entities and their business associates to promptly notify individuals following a breach of unsecured protected health information, ensuring transparency and accountability.

HIPAA also requires covered entities to implement safeguards to protect the privacy of PHI, and the safeguards are:

• Administrative Safeguards. These are actions, policies, and procedures to manage selecting, developing, implementing, and maintaining security measures that protect ePHI. They guide how staff should handle ePHI.
• Technical Safeguards. These involve technology and policies for using it to protect ePHI and control access. Some technical safeguards are “addressable,” meaning healthcare organizations should implement them in a way that’s reasonable and appropriate for their specific setup.
• Physical Safeguards. These measures protect electronic information systems from environmental hazards and unauthorized access. They are a crucial part of the HIPAA Security Rule.

Application of Standard

SOC 2 

SOC 2 applies to any service organization that stores, processes, and transmits customer data. It’s useful for tech solution providers like cloud services and data hosting. 

Some examples include:

• Technology Companies
• Healthcare Organizations
• Financial Institutions
• Legal Firms
• Consulting Firms
• E-commerce Platforms
• Data Centers and Hosting Providers
• Education Institutions
• Telecommunications Companies
• Supply Chain and Logistics Companies

HIPAA

HIPAA applies to entities in the healthcare industry, like healthcare providers, health plans, healthcare clearinghouses, and business associates. If your organization deals with Protected Health Information and is considered a covered entity, it must adhere to HIPAA regulations, requiring adjustments in contracts and practices for compliance.

Process of Compliance

SOC 2

The compliance process and focus will depend on the selected SOC 2 criteria and the service organization industry. Despite this, SOC 2 compliance follows a general structure to ensure the proper establishment of security controls. 

Here are the steps to become SOC 2 compliant.

• Choose the Right SOC Report. Start by selecting either a SOC 2 Type 1 or Type 2 report, tailored to your client’s needs and audit requirements. Type 1 looks at control design at a specific time, while Type 2 evaluates operational effectiveness over time.
• Define What’s Audited. Identify the systems, processes, and controls to be audited, aligning them with business goals and regulations.
• Assess Internal Risks. Quantify the potential revenue at risk and determine which Trust Service Criteria apply. Set expectations with your audit partner to prioritize tasks effectively.
• Form Your Team. Assemble a team with key roles like an Executive Sponsor, Project Manager, Primary Author, IT and Security Personnel, Legal Personnel, and External Consultants.
• Gather Documents. Collect all necessary documentation, including asset inventories, HR procedures, core policies, and security controls. Address any gaps early on to ensure a smooth audit process.
• Prepare with Readiness Checks. Conduct a readiness assessment to identify and fix any control deficiencies beforehand. This helps narrow down the audit focus and ensures controls are working correctly.
• Spot and Fix Gaps. Perform a gap analysis to ensure essential controls are in place. Address common issues like lacking core policies or inconsistent employee background checks.
• Make Necessary Changes. Enter the remediation phase, lasting from two to nine months, to implement the required adjustments. Thoroughly assess and document security procedures and adapt processes as needed.
• Organize Documentation. Compile all required documentation for the audit, ensuring each department provides necessary information. Centralize the data so auditors can access it and address any discrepancies easily.

If you find these steps daunting, fret not. At IS Partners, we specialize in SOC 2 audit services tailored to demonstrate your commitment to data security, system integrity, and privacy. With our expertise as a licensed CPA firm, we’ll guide you through achieving SOC 2 certification in no time without any hassle.

HIPAA

The main difference between the SOC 2 and HIPAA compliance processes lies in the specificity of the protected data.

HIPAA begins with a comprehensive evaluation of current practices related to PHI handling and security. On the other hand, SOC 2 starts with selecting either a SOC 2 Type 1 or SOC 2 Type 2 report based on the organization’s needs and identifying the systems and controls to be audited.

Now, let’s take a look at the compliance process of HIPAA in detail:

• Check Your Setup. First things first, take a good look at your organization’s current setup. What are you doing right, and where could you improve?
• Get to Know HIPAA. Understand what HIPAA is all about. It’s not just one thing—it’s a set of rules covering privacy, security, and breach notification for patient health information.
• Appoint a Leader. Choose someone to lead the charge on HIPAA compliance. This person will be your go-to for all things HIPAA-related.
• Create Policies. Develop clear policies and procedures that outline how your organization will handle patient information and security.
• Assess Risks. Identify any risks to patient privacy and data security. This could be anything from outdated software to employees who need more training.
• Train Your Team. Make sure everyone on your team knows their role in keeping patient information safe. Training is key!
• Beef Up Security. Put technical measures in place to protect patient data—things like encryption and access controls.
• Keep an Eye Out. Regularly monitor and audit your HIPAA compliance efforts to catch any slip-ups before they become big problems.
• Keep Records. Keep detailed records of everything you’re doing to stay compliant. This will come in handy if you ever get audited.

Managing patient records and sensitive data is non-negotiable. It’s imperative to recognize the significance of specialized support for critical tasks. 

However, ensuring compliance with industry standards like HIPAA is equally essential. That’s where IS Partners comes in. 

As industry experts, we guarantee full compliance with HIPAA regulations for your business associates, giving you the confidence that your data is handled with utmost care and security.

Impact on Service Organizations

SOC 2

The primary benefit of SOC 2 compliance is that it assures clients and stakeholders that your organization follows stringent standards in protecting their sensitive data, thereby enhancing trust and credibility. However, there is more to it than meets the eye; some other benefits of having SOC 2 include:

• Operational Visibility: SOC 2 compliance ensures your firm has a clear understanding of normal operations, regularly monitors for suspicious activities, documents system changes, and oversees user access levels.
• Brand Reputation: Achieving SOC 2 Certification proves your that your service provider has taken all necessary steps to prevent data breaches, build credibility, and enhance your brand’s market reputation.
• Improved Security Posture: Implementing SOC 2 standards encourages discussions on various aspects of your business, providing valuable insights and promoting improvements in operations and security measures to minimize breach risks.

HIPAA

HIPAA compliance helps healthcare organizations protect patients’ private health information, ensuring it’s kept secure and confidential as it is a federal law. This, of course, builds trust with patients and ensures adherence to regulatory compliance. However, some of the other benefits of having HIPAA certification include:

• Protection Against PHI Loss: HIPAA shields your company from the severe consequences of PHI loss. When your healthcare organization loses PHI, it jeopardizes patients’ sensitive data. Every interaction with this information is a chance to expose or protect it.
• Reduces Risk: HIPAA-compliant organizations experience fewer breaches and avoid fines if breaches occur. Following HIPAA standards strengthens cybersecurity practices and prevents incidents like hacking.
• Ongoing Profitability: Maintaining HIPAA compliance is most beneficial because it avoids costly corrective actions for noncompliance. Ensuring compliance secures your organization from significant monetary penalties and disruptions.

Can a SOC 2 Report Lead to HIPAA Compliance?

If your PHI management systems and business units fall under your SOC 2 scope, achieving HIPAA compliance might be easier than you think. There’s a significant overlap between SOC 2 and HIPAA requirements, so combining efforts could require minimal additional work.

To understand what this means, speak to an expert at IS Partners. We’ll help you scope the necessary steps to achieve SOC 2 and HIPAA compliance.

Map Your Way to SOC 2 and HIPAA Compliance with the Help of IS Partners

When deciding between SOC 2 and HIPAA audits, it’s important to understand their objectives and target users and benefactors. Both have overlapping security and privacy requirements, but they serve different purposes.

A SOC 2 audit establishes a baseline for data security practices, while HIPAA has additional requirements to meet specific healthcare standards. A SOC 2 report alone won’t demonstrate full compliance with the HIPAA Security Rule.

When deciding whether to pursue SOC 2 or prioritize HIPAA, or learn if you need to comply, engaging the help of a reputable CPA firm is critical. 

Whether you need a SOC 2 audit or help with HIPAA compliance, IS Partners can help you. Our team of SOC 2 and HIPAA experts can even combine these workstreams to streamline the process by mapping an efficient pathway to compliance. 

IS Partners offers features that simplify the technical components of security tracking, helping you get audit-ready quickly. 

With over 20 years of experience in the compliance industry, we provide deep insights and proven methods to ensure a smooth process for your SOC 2, HIPAA or HITECH audits.

Schedule a consultation with our experts today!

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About The Author

Joe Ciancimino

Joe is a Director in the IS Partners SOC practice. He is a Certified Information Systems Auditor (CISA) and Certified in Risk and Information Systems Controls (CRISC) practitioner and a member of the ISACA Philadelphia Chapter. Joe has been performing IT audit and attestation services for the last 6 years and continues to assist clients in performing a variety of engagements. These include System & Organization Controls (SOC) Reports (SOC 1/SOC 2), Information Technology and Information Systems Audits, IT General Controls / IT Application Controls Testing, ISO/IEC 27001:2013 Internal Audit/Compliance, Internal Audits on a outsourced/co-sourced basis