Decoding Healthcare Regulations: A SaaS Startup's Guide to Navigating Compliance
In the rapidly evolving healthcare landscape, compliance with regulations is paramount for SaaS startups seeking to establish a foothold in the industry.
But as the demand for innovative healthcare solutions grows, so too does the complexity of the environment in which they operate.
To traverse this intricate landscape, the humble start-up must be able to understand the various regulations in addition to the best practices that promote compliance.
In this post, we’ll help you understand:
Why the rules are complex.
The key regulations SaaS startups need to know.
Compliance tips and best practices, and
Common compliance mistakes.
The Complexity of Healthcare Regulations
Three factors explain the complexity of health regulations in the United States: the presence of multiple stakeholders, the evolution of technology, and the interaction of state and federal laws.
Multiple stakeholders
Healthcare involves various participants, such as providers, insurers, patients, and regulators. Each has distinct interests and requirements, and there may be communication barriers between different stakeholders which can further complicate compliance.
Evolving technology
Rapid innovation in healthcare means that existing regulations can become outdated.
This creates ambiguity around compliance and requires businesses to continuously adapt.
State and federal laws
The interplay between state and federal laws also complicates compliance.
While the Health Insurance Portability and Accountability Act (HIPAA) sets national standards for patient data privacy, state laws may override the Act in some circumstances.
Determining whose laws apply depends on which jurisdiction offers more privacy to the individual. However, compliance may still be problematic if state laws cover particulars that are not covered in the HIPAA.
California’s Confidentiality of Medical Information Act (CMIA), for example, establishes more stringent rules with regard to access requests, patient authorizations, and permissible disclosures of medical information.
The Key Regulations for SaaS Startups
Three key regulations impact the delivery and administration of healthcare in the United States.
1. HIPPA
Initially enacted to provide health insurance coverage for redundant employees, HIPAA now focuses on the privacy and security of patient healthcare information.
Administered by the Department of Health and Human Services, the Act stipulates how medical records can be used and released.
HIPAA rules apply to covered entities that include:
Health care providers.
Health plans, and
Healthcare clearinghouses that process non-standard information.
Rules relevant to startups
The above rules also apply to business associates of covered entities.
Business associates—which includes SaaS startups—are classed as those that help covered entities undertake healthcare activities or functions related to protected health information (PHI).
Here are some of the specific rules relevant to SaaS startups:
Privacy Rule. This encompasses patient rights as well as how PHI is used and disclosed.
Security Rule. This rule sets standards for how electronic PHI (ePHI) is protected across the three key areas of administrative, physical, and technical safeguards.
Breach Notification Rule. As the name suggests, this rule outlines the requirements for notifying affected individuals of a data breach.
2. GDPR
The General Data Protection Regulation is a European Union framework that governs data protection and privacy for individuals within the EU.
Startups that handle data from EU citizens must comply with these requirements and, in addition to PHI, protect health, biometric, genetic, financial, and insurance-related data.
What's more, startups that deal with Special Category Data—such as a patient's ethnicity or religion—are required to implement additional data security protection and data minimisation techniques.
3. FDA
Guidelines set down by the U.S. Food and Drug Administration (FDA) regulate the development, testing, and deployment of medical devices. This includes software as a medical device (SaMD).
Three FDA rules applicable to SaaS healthcare startups include:
510(k) clearance. To obtain clearance, a submission must detail how a new device has similar safety and efficacy to an existing device. Once clearance is received, the new device can be marketed.
Premarket Approval (PMA). This is a more rigorous process for high-risk medical devices. PMA applications must be supported by clinical data, manufacturing information, and detailed device descriptions.
Quality System Regulation (QSR). Here, the overarching objective is to ensure device design and manufacture meet safety and effectiveness standards.
Compliance Best Practices for Healthcare Start-ups
Navigating the complexities of healthcare regulations in the United States requires a proactive and holistic approach.
Here are some best practices startups can incorporate into a comprehensive compliance program.
Establish written policies and procedures
Perhaps the most important elements of a compliance program are the written policies and procedures that define it.
One example is the code of conduct or ethics, which helps establish operational standards. This document clarifies acceptable forms of conduct for employees (and third parties) and why such conduct is important in the context of compliance.
Other procedures should cover compliance enforcement and the recovery plan in case of non-compliance, among other facets.
Implement robust security measures
The protection of PHI is paramount in healthcare, but the industry is also one of the most targeted by cybercriminals.
In 2023, for example, the Office for Civil Rights (OCR) alone received 725 data breach reports that collectively exposed more than 133 million patient records.
So how can a startup protect itself?
Data encryption, role-based access control (RBAC) and periodic security audits are good places to start. Employee education around the risks of various cyberattacks (such as phishing) is also important.
Conduct regular monitoring and audits
To promote policy adherence, continuous monitoring and regular auditing are key. This approach helps identify potential issues before they escalate and encourages your startup to maintain a record of its compliance efforts.
Periodic risk assessments that identify potential vulnerabilities in data protection systems are also crucial. These assessments must evaluate hardware, software, and any other assets that handle sensitive information.
To Conclude
Making sense of complex healthcare regulations is a non-negotiable for SaaS startups. To succeed, you must understand how the industry is regulated and implement compliance strategies that satisfy all stakeholders.
At ABIG Health, we understand the compliance-related obstacles that startups face in healthcare. Our expertise can help you move forward with confidence and peace of mind.
Let us help you navigate this complex landscape so you can focus on transformative healthcare solutions.
References
https://www.paubox.com/blog/the-function-of-the-privacy-rule-in-preventing-conflict-with-state-laws
https://www.hhs.gov/hipaa/for-professionals/covered-entities/index.html
https://www.metomic.io/resource-centre/how-does-gdpr-apply-to-healthcare-organisations
https://www.hipaajournal.com/healthcare-data-breach-statistics/
https://www.hipaajournal.com/hipaa-california-law/
