How MSSPs help healthcare organizations avoid HIPAA fines

Since 2008, the Department of Health and Human Services Office for Civil Rights (HHS OCR) has collected over $123 million in HIPAA settlements and civil monetary penalties, according to Statista’s data on enforcement until the first half of 2024. Annual enforcement amounts have fluctuated, reaching a maximum of approximately $28.68 million in 2018 and decreasing to about $5.86 million in the first half of 2024, reflecting the most recent trend. Individual penalties can reach up to $1.5 million for willful neglect violations, as set by HIPAA’s statutory limits. One prominent example is the Northeast Radiology settlement, where a $350,000 fine was imposed after nearly 300,000 patient records were exposed, showing the financial consequences organizations face from data security failures.

Since the HIPAA Privacy Rule’s compliance date in 2003, the Department of Health and Human Services Office for Civil Rights (OCR) has received more than 374,000 HIPAA complaints, with over 31,000 cases requiring corrective actions or changes to privacy practices. OCR has also conducted more than 1,190 compliance reviews, proving the scope and seriousness of enforcement. 

With the vast majority of cases resolved through corrective action rather than penalties, the consensus is that healthcare organizations can no longer afford to treat cybersecurity and compliance as afterthoughts. A shift from reactive penalty recovery to proactive compliance is required for long-term resilience and survival in today’s threat environment. Managed Security Service Providers (MSSPs) are the strategic partners that help organizations implement the comprehensive safeguards needed to avoid these costly violations before they occur.

Understanding MSSP capabilities in the healthcare context

MSSPs specialize exclusively in cybersecurity through dedicated Security Operations Centers that monitor networks 24/7, detect threats in real-time, and respond to incidents within minutes. Unlike general Managed Service Providers (MSPS) that focus broadly on IT infrastructure, MSSPs concentrate specifically on threat detection, incident response, compliance monitoring, and vulnerability management, tailored to healthcare's unique regulatory requirements.

For HIPAA compliance, this specialization is necessary because healthcare organizations must satisfy administrative, physical, and technical safeguards simultaneously while maintaining detailed documentation for regulatory audits. MSSPs bring expertise in implementing these layered security controls while providing the continuous monitoring and incident response capabilities that internal teams often cannot sustain around the clock.

Read more: Choosing between MSP and MSSP for HIPAA compliant email

How MSSPs prevent common HIPAA violations

Unauthorized access prevention

Unauthorized access to protected health information (PHI) is among the most frequent causes of HIPAA enforcement actions by the HHS. In 2022, HHS OCR breach data revealed that unauthorized access or disclosure was responsible for 19% of large breaches, those affecting 500 or more individuals, and an overwhelming 93% of smaller breaches. Collectively, these violations represent a significant share of all reported HIPAA breaches, proving that unauthorized access is a large area of focus in compliance and enforcement efforts to safeguard patient data.

"Regarding breaches due to third parties, the fundamental thing that needs to be done is setting up a robust third-party risk management program. There are no shortcuts," explains Lee Kim, senior principal of cybersecurity and privacy at HIMSS. MSSPs extend this protection by monitoring not only internal access but also third-party vendor connections that could create unauthorized access points into healthcare networks.

Encryption and data protection

According to the HIPAA resource on NCBI, breaches involving unencrypted devices and a lack of proper safeguards have repeatedly led to significant penalties. Reported cases include fines ranging from $150,000 for an unencrypted flash drive to $2.5 million for loss of a laptop containing PHI. MSSPs implement comprehensive encryption strategies covering data at rest, data in transit, and data in use across all systems handling PHI. They ensure that mobile devices, backup systems, and communication platforms maintain encryption standards that meet or exceed HIPAA requirements.

Technical safeguards extend beyond basic encryption to include integrity controls that prevent unauthorized alteration of health records and transmission security measures that protect against interception during electronic communications. MSSPs maintain these controls automatically, reducing the risk of configuration errors that frequently lead to violations.

Continuous audit logging and monitoring

HIPAA requires detailed audit logs tracking every access, modification, and transmission of PHI. MSSPs provide automated logging systems that capture this information comprehensively while maintaining the logs securely for the required retention periods. Real-time monitoring capabilities identify suspicious activities immediately, allowing for rapid containment before violations can escalate.

Amy Larson DeCarlo from GlobalData emphasizes the importance of this approach, "As with any new or evolving attack technique, the first step is awareness. Security practitioners need to work with their colleagues across IT to educate them on how MFA bypass kits work and what gaps may exist in their security infrastructure. End users also need to be made aware of these as well." MSSPs provide this cross-functional expertise while maintaining the technical infrastructure needed for comprehensive monitoring.

The 2023 MOVEit breach affected over 2,100 organizations worldwide, including numerous healthcare entities that suffered HIPAA violations due to inadequate vendor security oversight. One affected regional health system lost PHI for 750,000 patients because their file transfer system lacked proper access controls and monitoring capabilities.

An MSSP partnership could have prevented this violation through several key interventions. First, vendor risk assessment protocols would have identified the security weaknesses in the file transfer system before implementation. Second, network segmentation would have isolated the vulnerable system, preventing lateral movement if compromise occurred. Third, continuous monitoring would have detected the initial intrusion within hours rather than months, reducing the scope of exposed information.

The financial impact extended beyond immediate penalties to include legal costs, credit monitoring services for affected patients, and reputation damage that affected patient enrollment for over two years. The total cost exceeded $15 million, far surpassing the annual cost of comprehensive MSSP services that could have prevented the incident entirely.

Read more: Lateral movement explained: How hackers navigate networks undetected

Vetting MSSPs for HIPAA readiness

Healthcare organizations evaluating MSSP partnerships should prioritize providers with specific healthcare compliance expertise and relevant certifications. SOC 2 Type II certification demonstrates that the MSSP maintains appropriate security controls for handling sensitive data, while HITRUST certification specifically addresses healthcare regulatory requirements.

Important questions for MSSP evaluation include their experience with HIPAA compliance audits, their ability to provide detailed audit trails for regulatory reporting, and their incident response procedures for potential violations. Leonard Hamer, CEO of Physician Select Management, notes,  "Choosing technology partners and platforms that prioritize HIPAA compliance and hold a HITRUST certification is vital in healthcare."

MSSPs should also demonstrate their capability to integrate with existing healthcare systems without disrupting clinical workflows while maintaining the security controls needed for compliance. The ability to provide compliance reporting that maps directly to HIPAA requirements can reduce the administrative burden during regulatory audits.

Go Deeper: Why HITRUST certification matters

Strategic partnership for compliance success

MSSPs function as strategic compliance partners rather than simple technology vendors, helping healthcare organizations navigate the complex intersection of cybersecurity and regulatory requirements.

Healthcare organizations should evaluate their current compliance posture against the growing enforcement trends and consider whether MSSP partnerships can strengthen their security while reducing violation risks. The cost of prevention through professional security services consistently proves lower than the financial and operational consequences of HIPAA violations.

For organizations ready to enhance their compliance strategy, begin by assessing current security gaps, evaluating MSSP providers with healthcare expertise, and developing implementation plans that address both immediate vulnerabilities and long-term compliance sustainability.

FAQs

What are MFA bypass kits?

Multifactor authentication (MFA) bypass kits are tools used by cybercriminals to avoid security systems that require multiple forms of verification (like a password plus a phone code). These kits capture user credentials and session tokens, allowing attackers to access systems even when MFA is enabled. 

What is lateral movement?

Lateral movement is when attackers move from one compromised system to another system within the same network. Once cybercriminals gain initial access (like through a vulnerable file transfer system), they explore the network to find and access additional valuable data.

What is network segmentation?

Network segmentation is a practice that divides a computer network into smaller, isolated sections or segments, each with its own security controls and access rules to contain potential breaches and prevent lateral movement.