HIPAA vs. PCI DSS Compliance: What Small and Mid-Sized Healthcare Practices Should Know for Payment Processing

Following regulatory standards is a bare-minimum requirement for sustainable healthcare practices. While you likely know how HIPAA impacts patient files and data transfer, you may be unaware of other regulatory frameworks that apply, such as PCI DSS. You might also overlook less common areas where HIPAA shows up in your practice, such as within the payment process.

Taking the time to review HIPAA vs. PCI DSS standards and how they impact your healthcare practice is important to maintaining compliance. Failing to meet either of these standards can lead to fines and other penalties, which are burdens your practice doesn’t need to face in an already competitive landscape fraught with obstacles.

Below, learn the similarities and differences between HIPAA and PCI DSS standards your practice should know.

What is HIPAA, and why is it important for payment processing?

HIPAA, or the Health Insurance Portability and Accountability Act, is a U.S. federal law that aims to protect sensitive patient health information from disclosure without the patient’s consent. It mandates administrative, physical, and technical safeguards to protect sensitive data from unauthorized access, use, or disclosure.

Many practices know that HIPAA applies to clinical records, like diagnoses and treatment information. But it is easy to overlook how this act also applies to billing data and financial records.

Any personally identifiable information connected to a patient’s care may be covered under HIPAA. This act applies to healthcare providers, health plans, and clearinghouses, as well as any business associates that handle protected health information on their behalf.

HIPAA violations can result in both civil and criminal penalties, including fines up to hundreds of thousands of dollars per violation. This is why HIPAA compliance is both a financial and legal priority.

HIPAA is primarily enforced by the Office for Civil Rights (OCR), which is a division of the U.S. Department of Health and Human Services (HHS). But other government agencies are responsible for other areas of enforcement, such as the Department of Labor and the Department of Justice.

What is PCI DSS, and how does it apply to healthcare practices?

PCI DSS (the Payment Card Industry Data Security Standard) is a global set of security requirements established by major card networks that help protect credit and debit card transactions. Protected data includes credit card numbers, CVVs, and other transaction data transmitted during processing.

Any healthcare practice that accepts, processes, or stores payment card data must comply with PCI DSS, which means this standard applies to virtually every small healthcare practice. If you accept credit card payments, you’re generally required to comply with PCI DSS under contractual obligations.

This set of security rules is maintained by the PCI Security Council and enforced by financial institutions rather than a government agency. Non-compliance can result in fines from card networks and the potential loss of card processing privileges. This can be detrimental in modern practices, where patients expect to be able to make convenient card payments.

PCI DSS outlines 12 technical and operational requirements that organizations must meet, grouped into six control objectives:

• Secure networks: Install and maintain firewalls; avoid vendor-supplied default passwords.
• Data protection: Encrypt data across public networks; protect stored account information.
• Vulnerability management: Use updated anti-malware systems; maintain secure systems and software.
• Access control: Restrict data access by business need-to-know rules; use unique IDs for system authentication; limit physical access to data.
• Network monitoring: Track and monitor all network resource access; test security systems frequently.
• Information security: Maintain formal security rules for all personnel.

HIPAA vs. PCI DSS: Key differences practices need to understand

HIPAA and PCI DSS standards both apply to healthcare practices like yours, but they differ in scope, enforcement, and application. Understanding the key differences between HIPAA and PCI DSS is important to ensuring that you precisely adhere to both standards.

Here’s what you need to know about the differences between the two frameworks.

The history of each framework

HIPAA was signed into law in 1996, while the PCI Data Security Standard was introduced in 2004. Each framework has a unique history that highlights its importance in modern healthcare operations.

President Bill Clinton signed HIPAA into law initially to help workers retain health insurance when changing jobs and to streamline healthcare administration. It wasn’t until the Privacy Rule came about in 2003 that HIPAA began enforcing national standards protecting patients’ medical records and giving individuals rights over their health information.

Two years later, the Security Rule went into effect to protect health information stored or transferred electronically. HIPAA has continued to evolve since then, with the Omnibus Rule going into effect in 2013. This rule created direct liability for “business associates,” or third-party contractors and vendors that handle protected health information, to maintain HIPAA compliance. These parties are required to sign business associate agreements with the healthcare provider.

Meanwhile, PCI DSS was introduced in 2004 to unify the fragmented security policies across five major card brands: Visa, Mastercard, American Express, Discover, and JCB. The initial version established the baseline of 12 core security requirements for merchants. In 2006, the PCI Security Standards Council was established as an independent governing body to manage the standard.

This standard has also evolved, with updates as recently as 2024 providing technical clarifications.

What data each framework protects

HIPAA and PCI DSS both seek to protect private data. But the data they apply to differs.

• HIPAA protects patient information, including medical records, treatment data, diagnoses, and billing information connected to a patient’s identity.
• PCI DSS protects cardholder data, including credit card numbers, expiration dates, CVVs, and transaction data processed during payment collection.

So HIPAA applies primarily to data that reflects personal health information, while PCI DSS applies primarily to financial data.

In a healthcare practice, both types of data are often present in the same transaction. When a patient pays a medical bill, the type of service they were billed for shows up on the statement, which can be considered private health information. If they paid with a card, their card data also needs to be protected. As a result, your practice needs to ensure compliance with both frameworks simultaneously.

Who enforces each framework?

HIPAA and the PCI DSS are also enforced by different organizations.

HIPAA is a United States Act of Congress and is therefore enforced by government agencies. While the act as a whole is enforced by the Office for Civil Rights under the U.S. Department of Health and Human Services, different agencies oversee specific areas of enforcement:

• The Department of Justice enforces criminal violations of HIPAA.
• The Centers for Medicare & Medicaid Services (CMS) enforces Administrative Simplification standards and National Identifiers.
• State attorneys general can bring civil actions on behalf of state residents.
• The Federal Trade Commission regulates health data breaches for non-HIPAA-covered entities, like health apps.
• The Department of Labor and the IRS enforce group health plan portability requirements.

Meanwhile, PCI DSS is enforced by the PCI Security Council. This council consists of major card networks including Visa, Mastercard, and American Express. Non-compliance with PCI DSS regulations often leads to contractual violations with these networks.

HIPAA does not have a formal certification process, while PCI DSS requires smaller organizations to complete a Self-Assessment Questionnaire and larger organizations to undergo an assessment by a Qualified Security Assessor. These assessments ensure ongoing compliance with data security controls.

How compliance is measured

Both frameworks also assess compliance differently. Understanding how compliance is measured is important to ensuring that you meet the specific requirements under both standards.

For example, HIPAA compliance is an ongoing obligation that requires practices to maintain and document safeguards year-round. There is no formal certification or single point-in-time audit; rather, organizations must continually validate their adherence to this law.

However, data breaches can trigger reactive investigations conducted by the HHS Office for Civil Rights. An organization might also seek an independent audit conducted by a specialized firm to prove compliance to business partners.

In contrast, PCI DSS compliance must be maintained throughout the year but is assessed at a specific point in time. The full assessment is generally required every 12 months, which involves either submitting a Self-Assessment Questionnaire or undergoing an on-site audit for a Report on Compliance. Businesses must also complete external vulnerability scans quarterly, and internal assessments are required after any significant network changes.

Both frameworks require practices to conduct regular risk assessments, maintain documentation, and update safeguards as their systems and workflows evolve.

Breach notification requirements for each

HIPAA and PCI DSS also have distinct breach notification rules, dictating next steps after a data breach occurs.

The HIPAA Breach Notification Rule requires covered entities and business associates to notify specific parties when unsecured protected health information is compromised. These notification requirements are as follows:

• Affected individuals must be notified via first-class mail, or email if consented, no later than 60 days from the breach discovery.
• The Secretary of HHS must be notified if a breach affects at least 500 individuals.
• Prominent media outlets must be notified when breaches affect at least 500 residents in a single state or jurisdiction.
• Business associates must notify their respective covered entities within 60 days of discovering a breach on their end.

The notice to individuals must generally include a brief explanation of the incident, the types of unsecured PHI involved, and actionable steps individuals can take to protect themselves from potential negative consequences.

Under PCI DSS Requirement 12.10, businesses that have suspected or confirmed a data breach must immediately alert their merchant bank and the affected payment card brands. “Immediate” alerting often means within hours or days of the detection. Delays or failure to report breaches within the required timeframes can result in fines of up to $500,000 per incident.

Acting quickly after a breach is important regardless of whether the leaked data was related to health or finances. The sooner you intervene, the greater the opportunity to mitigate further damage. You can also help rebuild trust with patients by notifying them quickly rather than waiting the maximum of 60 days, as delaying notification could suggest that you were trying to cover up the breach. 

Where HIPAA and PCI DSS overlap

While HIPAA and PCI DSS are two distinct regulatory frameworks, they also overlap in certain areas of healthcare operations. For example, they both share a common goal of protecting sensitive data from unauthorized access. Many of their core security requirements apply to both frameworks simultaneously.

These standards also have overlapping controls, including:

• Risk assessments: Identifying potential threats to data integrity
• Access controls: Limiting who can access certain data in the practice
• Encryption: Converting readable data into a scrambled format to shield it from unauthorized users
• Audit controls: Implementing hardware, software, or procedural mechanisms to record and examine activity in the systems that contain protected data
• Workforce training: Adequately training all workers on safe data handling practices
• Incident response planning: Creating formal blueprints for detecting, mitigating, and recovering from security incidents
• Physical security: Restricting physical entries to data centers and offices holding protected health information
• Third-party vendor management: Monitoring how third-party vendors use protected data and ensuring adherence to security measures

Because meeting both regulatory standards is important for your healthcare practice’s compliance, it makes sense to start by implementing shared controls first. Prioritizing encryption, access controls, and security training creates a strong compliance foundation and reduces instances of duplicate effort.

Practices that approach HIPAA and PCI DSS compliance together rather than separately maintain compliance more easily and with less administrative overhead.

Why small practices must meet both HIPAA and PCI DSS standards

Any healthcare practice that accepts credit card payments is required to meet both HIPAA and PCI DSS standards. There is no exception based on practice size or transaction volume, which means small practices are at risk of penalties for breaching these frameworks as well.

Small practices are especially vulnerable to data breaches and privacy violations because they often have fewer resources than large hospital systems. A single incident can lead to significant financial penalties and a permanent loss of patient trust that small practices may struggle to mitigate.

Thankfully, the Office for Civil Rights considers an organization’s financial condition and size when calculating monetary penalties. But the fines issued can still significantly impact a practice’s financial stability.

Because small practices often have smaller patient bases than large health systems, a single data breach with narrow-reaching effects can still impact a large portion of a practice’s patient load. When trust is breached with a significant number of patients, the practice may struggle to maintain sufficient patient volumes moving forward.

In general, the healthcare industry is one of the most targeted sectors for data breaches. No matter your practice size, strong security practices are critical to defending your practice against increasingly sophisticated cyber threats.

HIPAA and PCI DSS compliance help build patient trust by demonstrating that your practice handles sensitive financial and health information with the highest standard of care. While patients might not think much of your security measures working in the background, they certainly become aware when data breaches and other threats occur.

Overall, achieving compliance across both frameworks reduces the risk of costly breaches, penalties, and reputational damage that can have long-lasting consequences for small practices.

What to look for in a payment solution that meets both HIPAA and PCI DSS standards

If you are considering adopting a new payment solution in your healthcare practice, it is essential to choose one that strongly adheres to both HIPAA and PCI DSS standards. Payment solutions can save your practice a significant amount of time and improve billing efforts, but if they are not secure, they will pose more risks than advantages.

The right solution must have certain controls to be HIPAA and PCI DSS compliant, including:

• Encryption
• Tokenization
• Access controls
• Audit logging

Business associates must be willing to sign a BAA when required under HIPAA guidelines. A processor may qualify as a business associate if they were hired by a covered entity and perform functions that involve creating, receiving, maintaining, or transmitting PHI.

A payment solution that integrates with existing practice management and scheduling systems can also be helpful. Disconnected workflows often leave room for compliance gaps, but integrated tools help eliminate them.

Ease of use for staff is another critical factor to look for when evaluating payment solutions. If staff find a tool difficult to use, compliance risks may increase, even if the solution is generally secure.

Overall, aim to find a tool that connects compliant payment processing to your broader patient communication workflow, ensuring that every touchpoint in the billing journey meets the same security standards.

How Weave supports HIPAA- and PCI DSS-compliant payment processing for small practices

If you are looking for a payment tool that supports both HIPAA and PCI DSS compliance requirements, Weave’s communication platform is a user-friendly solution. This platform enables practices to collect payments via text-to-pay, online portal, in-office terminal, and a range of other methods through a secure interface that meets compliance standards.

Designed for small and mid-sized healthcare practices, Weave’s payment tools are easy to use and connect compliant processing to other steps involved in patient engagement. Scheduling, reminders, and patient communication are effortless with Weave, saving your front office time and giving you confidence that private data remains secure.

Weave’s payment tools include encrypted transactions and secure data handling across all channels. Weave also supports flexible payment plans and recurring billing to expand your payment options for patients facing financial difficulties.

With Weave, you can provide patients with convenient, secure payment options and streamline a range of administrative tasks, allowing your staff to spend more time on higher-level processes.

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Final thoughts

HIPAA and PCI DSS serve different purposes, but they are complementary obligations that small practices can meet more efficiently together than separately. If your practice accepts credit card payments, you are required to meet both standards to protect patients, avoid penalties, and maintain trust.

The overlap between the two frameworks is a good starting point for implementation. You can begin by implementing shared controls like encryption, access controls, audit logging, and training to satisfy the requirements of both standards. This creates a strong security foundation upon which you can add further controls to protect health data and credit card transactions.

Evaluating your current payment workflows and processing solutions against both frameworks helps you identify gaps and reduce compliance risks.

See how Weave simplifies HIPAA- and PCI DSS-compliant payments for your practice

Weave brings together compliant payment processing and payment communication into one platform designed for the needs of small and mid-sized healthcare practices. Our platform also streamlines tasks ranging from scheduling to automated reminders, freeing up your staff’s time without sacrificing security and interaction quality. 

If you’re ready to see firsthand how Weave can help your practice meet HIPAA and PCI DSS compliance requirements, all while improving the patient payment experience, request a demo today.