HITECH Act in Healthcare Guide: purpose, importance, requirements and more.
What is the HITECH Act? A Complete Guide for 2025 and Beyond
The Health Information Technology for Economic and Clinical Health Act (HITECH Act) was enacted as part of the American Recovery and Reinvestment Act on February 17, 2009. It amended key HIPAA requirements and today forms a core part of healthcare organizations’ compliance requirements.
What is the purpose of the HITECH Act?
The HITECH Act was designed to improve the United States health care delivery system through the adoption and use of health information technology. These provisions aim to create a nationwide electronic health system that is efficient, secure and private in an effort to improve health outcomes and lower the cost of healthcare. T
- Increased Connectivity: The HITECH Act was primarily designed to promote the adoption and meaningful use of interoperable health information technology and electronic health records (EHRs) – making patient data more easily accessible.
- Improved Patient Care: Faster and more fluid access to patient data via EHRs was intended to drive better patient care coordination, along with more effective research collaboration between institutions.
- Expand Infrastructure: The act was also intended to modernize US healthcare infrastructure, positioning the industry to benefit from future digital innovations.
The federal government allotted $19.2 billion of funding for these goals, but wider adoption of EHRs would also require meaningful updates to privacy and security rules.
How the HITECH Act Changed HIPAA Requirements
The HITECH Act led to a series of adjustments, updates, and expansions of existing HIPAA requirements:
- Tougher Penalties: The HITECH Act not only increased financial penalties associated with HIPAA violations, but also made enforcement mandatory – giving the regulations far greater weight. While previous penalties were almost negligible, the HITECH Act introduced severe penalties – sometimes north of $2 million – based on a tier system that took account of the severity of a breach and the organization’s level of culpability.
- Business Associate Liability: Before the HITECH Act was introduced, business associates (BAs) were “contractually obligated” to meet HIPAA requirements, but there was no enforcement of that obligation – and covered entities could avoid liability by arguing they were unaware a BA had not met HIPAA standards. The HITECH Act resolved this issue and made all BAs directly liable for PHI privacy and security.
- Breach Notification Rule: The HITECH Act introduced new breach notification requirements, with organizations now required to inform affected individuals and, in some cases, the media. A breach of more than 500 individuals’ data would require a notification within 60 days, while a smaller breach would require notification within 60 days of the end of the year.
- Greater Reputational Damage: Beyond increasing the potential fines for HIPAA non-compliance, the HITECH Act also increased the reputational harm associated with a breach. It led to the creation of the HHS’s “Wall of Shame” for HIPAA violations, as well as making it mandatory that organizations inform the state media when a breach of 500 or more patients’ data occurs.
Why is the HITECH Act Important?
Given that the HITECH Act is now 15 years old, we need to distinguish between its importance at the time of inception and today:
The HITECH Act 2009
The initial introduction of the HITECH Act came at a time when 90% of hospitals did not have EHRs, and the cost of adopting them was prohibitively expensive. Despite the efficiency and coordination improvements they promised, most organizations simply couldn’t justify the switch – leaving the healthcare industry in a difficult position.
Equally, the American economy was very much in shock from the 2008 financial crisis, with high unemployment and fears about the stability of government funding for healthcare. The HITECH Act was able to deliver benefits in both areas, injecting a powerful stimulus to the economy – by preserving and creating jobs – while helping many hospitals finally start the EHR adoption process.
How the HITECH Act Has Evolved
While the goals of the HITECH Act itself have not changed, its enforcement has evolved in tandem with subsequent updates to HIPAA. For example, the HIPAA Omnibus Rule of 2013 expand business associates’ HIPAA requirements, establishing mandatory HIPAA audits for such organizations.
Equally, while organizations were originally given financial rewards for adopting EHRs, the rules were slowly adjusted to punish those that did not adopt them. This was chiefly done through penalties for Medicare-eligible organizations, where a failure to adhere to EHR requirements would lead to the loss of 1% of reimbursements. This was then increased to 3% in 2017.
The HITECH Act in 2025
Today the HITECH Act is considered a part of core HIPAA requirements, dictating the how healthcare organizations must handle, protect, and report about breaches of protected health information (PHI). As such, it is a vital part of any informed healthcare compliance program – and you need an expert with in-depth knowledge of its implications.
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