A bug bounty program invites independent security researchers, often called ethical or “white hat” hackers, to look for weaknesses in an organization’s systems. The organization pays a reward for each valid flaw reported. Defense Daily describes the practice as recruiting benign hackers to probe a network and rewarding them for finding legitimate security flaws. It noted that bug bounties were already common in the private sector before the Pentagon tried one.

A bounty program differs from a vulnerability disclosure program (VDP), which is the more basic building block. The Cybersecurity and Infrastructure Security Agency (CISA) publishes a VDP template for federal agencies. According to that template, a policy spells out which systems and types of research are covered, how to send reports, and how long researchers should wait before disclosing publicly. The template’s model language says that good-faith research will be treated as authorized and that the agency will not recommend or pursue legal action. A bounty program adds cash rewards on top of this foundation.

The Congressional Research Service notes that two federal documents, OMB Memorandum M-20-32 and CISA’s Binding Operational Directive 20-01, set the federal VDP policy. CISA’s directive is compulsory for federal civilian agencies. ASIS Security Management reported that CISA framed the directive as an effort to make reporting vulnerabilities “as easy conceptually as dialing 911.”

A Healthcare IT News commentary on bug bounties also says a bounty program is not the same thing as routine vulnerability scanning. Scanners focus on known, patchable issues. The commentary argues that the researcher community can surface hard-to-find flaws, such as Log4j-style problems, that scanners might miss.

 

Why healthcare is under pressure

The scale of breaches

Data from the HHS Office for Civil Rights (OCR) breach portal, as analyzed by TechTarget, shows more than 35 million people affected by large healthcare breaches reported in 2025. TechTarget adds that hacking or IT incidents have been the most common cause for nearly a decade. It also cautions that the true number is likely higher, because the portal lists only breaches affecting 500 or more people.

 

Third parties

GovInfoSecurity, analyzing the OCR portal at mid-2025, counted 345 major breaches affecting nearly 29.9 million people. Of those, 127 breaches involved business associates and exposed more than 15.8 million people. That was about 37% of incidents but more than half of those affected. The same analysis reported that since the portal began in 2009, there have been 6,982 major breaches affecting nearly 884.6 million people.

 

Patient safety

Researchers writing in STAT estimated that patient volume drops by roughly 20% during the first week of a ransomware attack. They also estimated that ransomware attacks killed between 42 and 67 Medicare patients from 2016 to 2021. They concluded, “We can save lives” if the disruptions can be reduced. The effects spill over to neighbors, too. A JAMA research letter on California hospitals, indexed in PubMed Central, found that unattacked nearby hospitals saw temporary increases in emergency department visits. The authors concluded the consequences are “broader than the targeted hospitals.”

 

Limited security capacity

Former HHS acting deputy CIO La Monte Yarborough told Information Security Media Group that healthcare providers’ “core competency isn’t necessarily cybersecurity.” HHS’s 405(d) Program, a public-private effort, exists partly to help the sector close that gap. Its website describes a mission to strengthen the sector’s cybersecurity posture through resources such as the Health Industry Cybersecurity Practices (HICP) publication. A bug bounty can extend a small security team by providing outside expertise.

 

What the evidence shows

The strongest public data on bounties comes from the Department of Defense, not from healthcare. It is still a useful test case, because the Pentagon faced the same problem healthcare does, which is a large, complex system and too few specialists.

  • Results. 1,400 vetted hackers were invited to the 2016 “Hack the Pentagon” pilot. About 250 submitted reports, and 138 were judged legitimate, unique and eligible for a bounty. Then-Defense Secretary Ash Carter said all of those vulnerabilities had been fixed. Participants came from 44 states.
  • Cost. FedScoop reported that the DoD awarded $71,200 in bounties out of $150,000 set aside for the pilot, an average of $588 per finding. Carter said a contractor would otherwise have cost more than $1 million, or the Pentagon would have been “finding out the hard way.” He stated that the pilot was “a cost effective way to supplement and support” the department’s own staff.
  • Depth of findings. Nextgov reported on a presentation by the Pentagon’s Hunter Price to a federal advisory board. Price said contractors had earlier tested certain DoD websites and found 10 low-risk vulnerabilities. Bounty hunters then ultimately found 165 problems, some of them high risk, and the first came “within five minutes.”
  • Expansion. FedScoop said the Pentagon wanted to make bounties a fixture and to push contractors toward independent security reviews before delivering technology to the department.

 

How bug bounties benefit healthcare organizations

1. They find flaws that periodic testing misses. Scheduled audits capture a moment in time, while researchers can test continuously. The DoD comparison above shows how a wider pool of testers can find more than a one-time engagement.

2. They can be cost-efficient. Rewards are tied to validated findings rather than hours worked. In the Pentagon pilot, cost came in below the contractor estimate cited by Carter.

3. They reach medical devices. Healthcare has a long-running problem with device security. Security Ledger reported in 2016 that HHS was weighing a bounty-style program. Experts at an FDA workshop had said bounties held promise for medical devices and software. Healthcare Dive reported that FDA draft guidance urged manufacturers to adopt coordinated vulnerability disclosure policies. FDA’s Suzanne Schwartz said the agency wanted manufacturers to take “a proactive approach to cybersecurity management.” Healthcare IT News later reported that FDA’s updated premarket guidance addresses coordinated disclosure, including vulnerabilities identified by outside researchers.

4. They build trust with the research community. CyberScoop reported on a BSides Las Vegas discussion in which experts said disclosure had matured as manufacturers set up programs and legal threats against researchers receded. Schwartz said she wanted adoption to extend beyond the “two handfuls” of companies then leading. Healthcare organizations that publish clear, safe reporting channels can give researchers a legitimate route instead of silence.

5. They support regulatory expectations. Federal civilian agencies must publish disclosure policies, according to CISA and the Congressional Research Service. The 405(d) Program’s HICP guidance is the sector’s vetted set of practices. A disclosure or bounty program fits these efforts.

6. They can improve the whole security program. Findings often reveal patterns, such as repeated configuration errors, that feed back into secure development and patching practices.

 

Risks and how to manage them

Bounty programs are not risk-free. Healthcare IT News’s commentary warns about improper scoping and suggests a “crawl, walk, run” approach to starting. Nextgov noted that even the DoD had to accept some risk when it allowed outside participants.

Healthcare organizations should think through several points:

  • Start with a VDP, using CISA’s template as a model for scope, reporting channels and safe-harbor language.
  • Scope narrowly at first. Patient-facing web applications are a common starting point, per the Healthcare IT News commentary. Keep clinical systems and live patient-care devices out of scope until processes are mature.
  • Keep researchers away from patient data. A policy should prohibit accessing, copying or disclosing protected health information, and it should say what to do if a researcher encounters it by accident.
  • Prepare to triage and fix. Finding bugs is only valuable if the organization can validate and remediate them. This is why the Pentagon emphasized that the discovered flaws were fixed.

 

FAQs

Can bug bounties replace regular security testing?

No, they are meant to supplement tools like scanners and audits, not replace them.

 

Do organizations have to run a bounty program in-house?

No, many organizations work with outside platforms or vendors to manage submissions and researchers.

 

Why would a researcher choose a bounty program over selling or exploiting a flaw?

Bounty programs offer a legal, rewarded route that protects researchers from legal threats when they act in good faith.

 

How should a program handle patient data that a researcher accidentally sees?

The policy should prohibit accessing or sharing it and give researchers clear steps to follow if it happens.