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Are Your Cloud-Based Services HIPAA-Compliant?

Are Your Cloud-Based Services HIPAA-Compliant?
02 Jul 2026
By HIPAA Exams®

Cloud storage can be HIPAA-compliant if the service provider implements required security safeguards, signs a Business Associate Agreement, and meets HIPAA Privacy and Security Rule standards.

To avoid HIPAA violations, data breaches, and costly penalties, healthcare professionals must understand these requirements. In this article, we’ll explain what makes cloud storage HIPAA compliant and how to vet potential providers.

Table of Contents

What Cloud Storage Means in a Healthcare Setting

Cloud storage is when remote servers – accessed via the internet and managed by third-party cloud service providers – are used to store, process, or transmit your data instead of using local servers under your organization’s control.

Cloud storage is incredibly common across all industries, but it presents particular compliance challenges in a healthcare setting, where so much of the data being handled is legally considered protected health information (PHI) under the Health Insurance Portability and Accountability Act (HIPAA).

By law, healthcare providers, health plans, and other covered entities must ensure that PHI is stored, accessed, and used according to HIPAA’s strict provisions. By contracting this management to a third-party cloud service, covered entities are placing their HIPAA compliance into another organization’s hands. Thus, precautions are critical.

Types of Cloud Services Used in Healthcare

The cloud services employed by healthcare organizations typically fall into one of three service models, each of which has specific implications for HIPAA compliance.

Software as a Service (SaaS)

The Software as a Service (SaaS) model means that you’re using cloud-hosted software applications. You access the software through the internet rather than installing it on a local server. This saves an organization the time and trouble of implementing the software through its own IT department.

In healthcare, electronic health record (EHR) management, billing systems, and scheduling platforms are often Software as a Service. SaaS applications make the maintenance and technical challenges of software into the service provider’s problem, providing the healthcare organization with ease-of-use and quick adoption, but limiting the amount of control they have over HIPAA compliance.

Platform as a Service (PaaS)

The Platform as a Service (PaaS) model gives healthcare providers the ability to develop, test, and deploy custom health applications on a managed platform. They outsource the management of the platform’s underlying infrastructure to a third-party service provider.

In healthcare, PaaS services are used for internal application development, tool integration, and analytics. The PaaS model allows healthcare organizations to maintain more direct control over their HIPAA compliance than the SaaS model.

Infrastructure as a Service (IaaS)

The Infrastructure as a Service (IaaS) model means the organization rents only the fundamental computing infrastructure, including the virtual servers, storage, and networking, while retaining control over management and security configurations.

IaaS provides healthcare organizations with maximum control over their security configurations for the best HIPAA compliance management. This model is used for custom data storage, servers, and networking.

Is Cloud Storage Allowed Under HIPAA?

Can healthcare providers use cloud services?

HIPAA does not prohibit cloud storage. Instead, it requires that any cloud provider handling PHI follow HIPAA safeguards and sign a Business Associate Agreement.

What Makes Cloud Storage HIPAA-Compliant?

Is cloud storage HIPAA compliant? It can be, as long as it meets all fundamental HIPAA requirements, including:

  • A signed and comprehensive Business Associate Agreement (BAA)
  • Administrative Safeguards
  • Physical Safeguards
  • Technical Safeguards
  • Audit Controls
  • Access Controls
  • Encryption

We’ll discuss these requirements in further detail below.

How HIPAA-Compliant Cloud Storage Benefits Healthcare Organizations

Healthcare organizations are often caught between two goals: deliver high-quality care while maintaining strict data privacy. Operational efficiency is often at war with regulatory requirements, but HIPAA-compliant cloud storage can deliver both.

HIPAA-compliant cloud storage benefits healthcare organizations through:

  • Improved access to patient records. Authorized professionals can access patient records quickly and securely from virtually any location.
  • Secure data sharing between providers. Patient information can be instantly shared across departments, facilities, and organizations due to advanced security measures.
  • Support for telehealth and remote care. Virtual visits, telehealth consultations, and remote monitoring are only possible through the rapid, secure, and compliant sharing of PHI.
  • Scalable storage without on-site infrastructure. Organizations eliminate the investment and maintenance required by physical hardware. Meanwhile, they gain the ability to adapt quickly to changing data volumes without compromising performance or security.
  • Disaster recovery and data backups. When data is automatically replicated across multiple secure locations, organizations can guarantee continuity of operations and care delivery during system failures, cyberattacks, and natural disasters.
  • Proactive security improvements. Cloud service providers proactively patch security vulnerabilities, reducing the burden on in-house IT teams for healthcare organizations.

By leveraging HIPAA-compliant cloud storage, healthcare organizations can streamline operations, enhance collaboration, and strengthen compliance while improving the overall quality of care.

Common HIPAA Risks When Using Cloud Storage

The most common mistake covered entities can run into is choosing cloud storage with a provider that has inadequate technology for, and experience in, HIPAA compliance. This is why vetting a cloud provider properly is so important.

However, even with a rigorously compliant cloud provider, cloud storage still introduces privacy and security risks that must be accounted for. Relevant compliance failures are often caused not by the technology itself, but by misconfigurations, poor processes, or lack of oversight, including:

  • No BAA (or an inadequately rigorous one). Cloud service providers that handle protected health information (PHI) are generally considered business associates under HIPAA and are subject to applicable HIPAA Security Rule requirements. However, without a valid Business Associate Agreement (BAA) in place, both the healthcare organization and the cloud provider may be noncompliant with HIPAA regulations. A BAA formally establishes each party’s responsibilities for safeguarding PHI, reporting breaches, and maintaining appropriate security controls.
  • Improper access controls. When configuring access controls, role-based access must be properly deployed to prevent employees from accessing more patient data than the “minimum necessary.” Organizations also must revoke access for former employees quickly.
  • Weak authentication and password practices. Multi-factor authentication, identity verification measures, and requirements for strong, unique passwords are all necessary to prevent vulnerabilities.
  • Lack of, or inadequate, encryption. Even if data is properly encrypted on the cloud service’s part, HIPAA requires PHI to be secured both in transit and at rest. Organizations must take responsibility for ensuring that encryption is properly configured and that gaps are bridged.
  • Untrained staff. Cloud service staff must receive regular training in HIPAA compliance. Further, healthcare staff need adequate training in how to manage the risks inherent to cloud-based data sharing. For example, sending unsecured links, sharing files without expiration dates, and failing to restrict downloads can all lead to accidental data leaks from an otherwise secure cloud system.
  • Insufficient audit logging and monitoring. Enabling audit logs is not enough; they must be reviewed regularly to detect unauthorized access, suspicious behavior, and potential breaches in a timely manner.
  • Poor backup and recovery practices. Organizations may check that cloud providers offer backup solutions, but then fail to configure them correctly or test recovery processes.
  • Failure to conduct risk assessments. Skipping or rushing this important step, often due to a faulty assumption that the cloud provider has everything covered, can allow risks to accumulate unnoticed until a breach occurs.

To leverage cloud storage safely, organizations must proactively address these risks and be on the lookout for others.

Required HIPAA Safeguards for Cloud-Based PHI

HIPAA’s Security Rule requires administrative, physical, and technical safeguards to be applied when storing and transmitting electronic PHI (ePHI) to ensure data confidentiality, integrity, and availability.

Necessary safeguards for cloud-based PHI include:

  • Administrative safeguards are the policies, procedures, and governance structures that control security risks. These are typically outlined in the BAA, and specific examples include training, risk analysis, incident response, breach notification protocols, and vendor management.
  • Physical safeguards are measures that physically restrict access to PHI. Physical safeguards remain essential even in a cloud-based environment. This includes security, surveillance, and environmental protections for the data centers, redundancy measures for the data, and device controls on the organization’s side.
  • Technical safeguards are the mechanisms that protect PHI within the cloud system. Essential measures include encryption, authentication, access controls, audit logs, secure transmission, automatic session timeouts, and integrity controls to prevent unauthorized data alteration.

How to Choose a HIPAA-Compliant Cloud Provider

You can improve the likelihood of picking a strong compliance partner if you look for a cloud provider with the following attributes:

  • Experience with healthcare clients. HIPAA compliance is complex, and the best way to know if a provider is up to the task is proven experience.
  • Willingness to sign a BAA. If a provider is not willing to sign a rigorous BAA, they’re not a suitable vendor, period. Failing to have a BAA is a direct violation of the law.
  • Transparent security documentation. A trustworthy provider should be open about sharing details of its security policies, architecture overviews, compliance certifications, and audit reports. Your organization should review this documentation carefully as due diligence.
  • Encryption at rest and in transit. Your provider should support strong encryption standards for both stored data and data moving across networks. Make sure to clarify who is responsible for encryption under the shared responsibility model.
  • Incident response support. Security incidents are inevitable, which is why it’s important to have a plan for handling them quickly and effectively. Your provider should have clearly defined processes for detection, containment, and notification. Ensure that response timelines and communication protocols are explicitly defined in the BAA.
  • Third-party audits. Since there is no official government certification for cloud service providers, look for providers who have undergone rigorous independent audits (such as those by SOC 2 or HITRUST).

These are only a few examples of factors to consider when choosing a cloud service partner. Other HIPAA requirements should be verified, like audit logging and monitoring capabilities, access controls, disaster recovery uptime requirements, and more.

Ongoing Responsibilities After Moving to the Cloud

Under HIPAA, the responsibility for protecting PHI with a third-party service provider is always shared. This means your organization remains accountable for ensuring safeguards and compliance measures are in place.

Once you’ve secured a HIPAA-compliant cloud storage provider, your organization will retain many key compliance responsibilities, including:

  • Regular risk assessments. Regularly evaluate configurations, access controls, third-party integrations, and evolving threats.
  • User access reviews. Ensure PHI access follows the “minimum necessary” standard by routinely reviewing user permissions. Maintain protocols for removing access upon termination, adjusting permissions for role changes, and auditing privileged accounts.
  • Security monitoring. Reviewing audit logs, leveraging security tools, and setting up alerts for unusual behavior (like large data transfers) are critical for breach prevention.
  • Breach response planning. Have a documented and tested response plan, including how to identify, contain, investigate, and report security incidents. Plans must include defined timelines, communication protocols, and coordination with cloud providers.
  • Employee training. Employees are one of the most common sources of HIPAA risks. Training should be conducted on an ongoing basis, include drills, and be regularly updated to reflect new threats, technologies, and regulatory changes.
  • Business Associate oversight. Annual verification is now mandatory to ensure that your cloud service provider adheres to the Privacy and Security Rules.

Why Employee HIPAA Training Still Matters in the Cloud

Even the most secure cloud storage can become non-compliant if employees mishandle PHI. Regular HIPAA training helps staff understand proper access, sharing, and data protection practices.

Employee behavior, even well-intentioned, can create huge HIPAA compliance risks, including activities like:

  • Simple, predictable, or reused passwords
  • Falling for phishing or social engineering attacks
  • Using unofficial communication tools or applications
  • Sending files to the wrong recipient
  • Labeling files with PHI (patient name, DOB)
  • Using unrestricted sharing links
  • Using personal devices without proper security
  • Accessing cloud EHR or storage on public Wi-Fi without a secure VPN
  • Failing to log out, especially on shared or public workstations
  • Downloading or storing PHI locally
  • Skipping software updates, disabling security features, or ignoring protocols
  • Mishandling printed information or physical reports
  • Accessing PHI outside of their role
  • Talking about their day on social media

As a result, training needs to attack compliance from multiple angles, explain the value of all precautions, provide examples of how things can go wrong, and emphasize practical applications.

Training Your Team for HIPAA-Compliant Cloud Use

Just as you can streamline operations by choosing the right cloud storage partner, you can lessen the burden of HIPAA training by partnering with the right training provider. As a compliance training partner with over 20 years of experience, we offer online courses that provide employees with the fundamentals of HIPAA knowledge. They can study on their own schedule, at their own pace, for the best comprehension and retention.

Our HIPAA courses are also role-specific, providing employees with the context they need to apply their knowledge on the job. Our catalog supports many common roles, including:

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