Navigating Multi-Factor Authentication and New Minnesota Guidelines: What Direct Care Practices Must Know in 2025

By: Drew Duffy, MHA, FACHE, Founder & Managing Director, CleaarPath Compliance

Direct Care Practices (DCP), also known as membership medicine or concierge medicine, continue to grow as an alternative healthcare model offering personalized, patient-centered care. However, as this model expands, so do regulatory and cybersecurity demands — especially in Minnesota, where recent 2025 healthcare compliance updates introduce new requirements affecting DCP providers.

This blog unpacks the latest Minnesota guidelines impacting membership medicine, with a focus on Multi-Factor Authentication (MFA) mandates and cybersecurity best practices that providers must understand to remain compliant, protect patient data, and sustain trust in this rapidly evolving sector.

Understanding Membership Medicine and Its Regulatory Landscape

Membership medicine practices operate on a model where patients pay a retainer or membership fee for enhanced access to their providers, often bypassing traditional insurance billing. This model fosters closer patient-provider relationships but also introduces unique compliance challenges:

• Patient Data Sensitivity: Many DCPs use modern technology platforms and electronic health records (EHR) tailored to small patient panels, increasing the cybersecurity risk profile.

• Regulatory Applicability: While some DCPs operate as cash-only or outside typical insurance frameworks, they are not exempt from federal HIPAA rules or state laws, especially when patient health information (PHI) is electronically stored or transmitted.

• Minnesota-Specific Requirements: The state has strengthened its healthcare privacy and security regulations, demanding more rigorous safeguards.

What’s New in Minnesota’s 2025 Healthcare Compliance?

Minnesota’s 2025 updates emphasize cybersecurity and patient data protection. Here are the key points relevant to DCP:

1. Mandatory Multi-Factor Authentication (MFA) for Healthcare Providers

• What is MFA? MFA requires users to verify their identity through two or more factors before gaining access to electronic systems containing PHI. These factors may include a password (something you know), a physical device or token (something you have), or biometric data (something you are).

• Minnesota’s MFA Mandate: Effective 2025, all healthcare providers accessing patient records electronically, including DCPs, must implement MFA on systems that handle PHI.

• Why MFA? It dramatically reduces the risk of unauthorized access due to compromised credentials, a common entry point for cyberattacks such as ransomware.

2. Expanded Data Breach Reporting Requirements

• Minnesota now requires faster notification timelines and more detailed reporting when breaches involving PHI occur.

• DCPs must have documented incident response plans aligning with these timelines.

3. Increased Oversight of Third-Party Vendors

• Contracts with EHR vendors, billing services, and other technology providers must include stringent cybersecurity and compliance obligations.

• DCPs should conduct due diligence on vendors’ MFA and security practices.

Why MFA Matters Deeply for Membership Medicine Providers

DCPs often rely on digital tools — from telehealth platforms to patient portals — making them prime targets for cybercriminals. Unlike larger health systems, smaller practices may lack dedicated IT security teams, increasing vulnerability.

Implementing MFA is not just a regulatory checkbox; it is a foundational security layer to:

• Prevent Unauthorized Access: Stolen or weak passwords alone no longer suffice to protect sensitive patient data.

• Build Patient Trust: Membership patients expect heightened privacy; security lapses could damage reputations irreparably.

• Avoid Financial and Legal Fallout: Data breaches risk costly penalties, lawsuits, and regulatory scrutiny.

Best Practices for DCP Compliance with Minnesota 2025 Guidelines

If you operate or manage a membership medicine practice in Minnesota, consider these steps:

1. Implement MFA Across All Systems with PHI Access

• Apply MFA not only to EHR logins but also email, administrative portals, and any remote access tools.

• Opt for hardware tokens or authenticator apps over SMS codes when possible, as they are more secure.

2. Update Policies and Staff Training

• Revise your cybersecurity policies to reflect MFA requirements.

• Train all team members on recognizing phishing attempts and the importance of strong authentication.

3. Conduct Regular Vendor Risk Assessments

• Confirm your technology partners comply with Minnesota’s 2025 standards, including their use of MFA.

• Require vendors to provide security attestations and audit reports.

4. Prepare for Incident Response

• Develop or update a breach response plan that meets Minnesota’s accelerated notification timelines.

• Test your plan with periodic drills to ensure readiness.

5. Document Everything

• Maintain detailed records of MFA implementation, staff training, vendor compliance, and incident management for audits.

Looking Ahead: The Future of DCP Compliance in Minnesota

With cyber threats growing more sophisticated, Minnesota’s 2025 healthcare rules represent just the beginning of a more robust regulatory environment. Membership medicine providers who proactively embrace MFA and comprehensive cybersecurity measures will be best positioned to safeguard their patients, their practice, and their professional reputation.

Staying informed and agile in your compliance approach will be critical as new technologies and regulations emerge.

How ClearPath Compliance Can Help

At ClearPath Compliance, we specialize in supporting innovative healthcare models like Direct Care Practices to navigate complex compliance landscapes. From HIPAA and Minnesota-specific regulations to cybersecurity frameworks and MFA implementation guidance, our expert team partners with providers to build secure, sustainable, and patient-focused practices.

This blog is the first in a series dedicated to helping DCP and membership medicine providers stay ahead of the complex and ever-changing regulatory and operational environment. Our next post will focus on how telehealth and virtual visits impact your membership practice, including compliance considerations and best practices.

Whether you’re just starting your membership medicine journey or looking to sharpen your compliance strategy for 2025 and beyond, we’re here to help you focus on what matters most — your patients.

If you want a tailored consultation or help setting up MFA and security policies aligned with Minnesota’s new healthcare mandates, reach out to us at info@clearpathcompliance.org or call 1-888-996-8376.

About the Author
Drew Duffy, MD, MHA, CPCO, CRCMP, CHCO, CIPP/M, FACHE, is Founder & Managing Director of ClearPath Compliance. With over 20 years in healthcare operations and compliance, Drew draws on his clinical background and extensive expertise, supported by a network of experienced healthcare leaders—to deliver practical, ethical solutions for providers navigating today’s complex regulatory landscape.