HIPAA’s 2025 Overhaul: What Startup Clinics Need to Know—And Why It’s Not Just About Cybersecurity
By: Drew Duffy, MHA, FACHE, Founder & Managing Director, ClearPath Compliance
A Quiet Shake-Up in Healthcare Compliance
While most of the headlines in 2025 have focused on AI, staffing shortages, and hospital closures, another critical shift is happening under the radar: a proposed revamp of the HIPAA Security Rule.
These changes represent the most significant overhaul to HIPAA’s technical requirements in more than a decade. And for clinics just getting off the ground, the implications are real—especially if you’re planning to accept Medicare, Medicaid, or insurance of any kind.
But this isn’t a sky-is-falling moment. It’s a reality check. If you’re preparing to launch or grow a clinical practice, understanding what’s coming (and how to prepare for it) can save you from future penalties, patient trust issues, or worst-case scenario: a breach you weren’t equipped to prevent.
What’s Actually Changing?
The proposed updates to the HIPAA Security Rule aren’t about adding red tape for the sake of it. They’re a response to real threats: ransomware attacks, third-party vendor breaches, and outdated tech in healthcare settings.
Here are a few of the biggest proposed changes that providers—especially those starting fresh—should have on their radar:
🔐 Multi-Factor Authentication (MFA)
Any system that stores or transmits ePHI (electronic protected health information) would be required to use MFA. That means no more logging into your EHR or billing platform with just a password.
📁 Data Encryption at Rest and In Transit
If your patient data isn’t encrypted—both when it’s stored and when it’s sent—it may soon be considered a compliance failure. Encryption used to be labeled an “addressable” standard under HIPAA, but these changes would make it mandatory.
🧩 Asset Inventories and Technical Safeguards
Clinics will need to maintain a formal inventory of their hardware, software, and network configurations that impact ePHI. It’s not just about knowing what tools you use—it’s about knowing what risks they carry.
🔄 Incident Response and Recovery
You’ll need to have an actual, documented plan for what happens if your data is compromised. That includes how staff report the issue, who’s responsible for containment, and how you notify patients and regulators. Tabletop exercises (mock breaches) may become standard best practice.
🤝 Third-Party Vendor Risk Oversight
If your billing, EHR, or scheduling system is run by an outside vendor—and it probably is—you’ll be expected to vet their safeguards and ensure they notify you of any incident within a tight timeframe. Blaming the vendor won’t be a valid excuse.
What This Means for Clinics in the Startup Phase
If you're a new or soon-to-be clinic owner, these updates can feel overwhelming. But in many ways, you’re in a better position than established practices to build smart systems from the start. Here's why:
You don’t have to untangle legacy tech. You can choose HIPAA-compliant platforms with MFA, encryption, and access controls baked in from day one.
You’re building processes fresh. It’s much easier to adopt incident response planning and routine audits when you’re not reversing bad habits.
Your vendor choices matter. Selecting trustworthy partners and understanding their breach response policies now prevents painful problems later.
The key is this: compliance isn’t a one-time box to check—it’s a system of small, strategic decisions made over time. Those decisions become your safety net when something (inevitably) goes wrong.
So… What Should a Startup Clinic Do Now?
Here are a few smart, doable steps to get aligned with the proposed rule—whether or not it’s finalized exactly as written:
Choose software with built-in security (MFA, encryption, access logging).
Create a written incident response plan. Even a one-pager is better than nothing.
Vet your vendors. Ask about their security posture and breach protocols.
Get signed Business Associate Agreements (BAAs) from every vendor who handles or accesses protected health information.
Under the new rule, BAAs are not optional. They help legally define responsibility, ensure safeguards are in place, and protect your clinic in the event of a breach or data handling issue.Run a basic risk assessment. Even if you’re small, you need to document what systems you use and how they’re protected.
Start training your team. A culture of compliance beats a binder on a shelf every time.
-Drew
Where ClearPath Compliance Comes In
At ClearPath, we help new clinics set up with all of this in mind. From credentialing and compliance policies to HR templates and system selection, we build the foundation that lets providers focus on care—not constant paperwork.
We don’t just hand you a HIPAA binder. We design your clinic’s compliance ecosystem around the Seven Elements of an Effective Compliance Program, as outlined by HHS, with tailored tools, training, and support to help you stay ready—without getting overwhelmed.
If you’re planning to launch or expand a clinical practice in 2025, now’s the time to get this right. Let’s make sure your systems are future-proofed—before future penalties arrive.
💬 Ready to get started?
We offer flexible consulting options, tiered setup packages, and fee reductions for providers serving low-income or underserved patients. Let’s talk about what your clinic needs—no pressure, no fluff, just real support. For more information please visit our about us tab, or the contact us form. You can also just give us a call at 1-888-996-8376.
About the Author
Drew Duffy, MD (not practicing), 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