3 Questions Healthcare Organizations Should Consider for Third-Party Risk

3 Questions Healthcare Organizations Should Consider for Third-Party Risk Management

Did you know that 33% of third-party data breaches in 2021 targeted healthcare organizations? In fact, the healthcare industry is the most common victim of third-party data breaches. The sensitive data processed by healthcare organizations – and their third-party partners – is very lucrative to malicious actors. While organizations have responded to this threat by bolstering their own security, many suffer from a glaring blind spot: their third parties. Hackers are quickly taking advantage of what is often weaker security at a third party – and succeeding.   

To add to this, regulators continue to publish new, stringent regulations to protect PHI (Personal Health Information) and PII (Personally Identifiable Information) data. HIPAA and HITECH are just a few of the regulations that apply to most organizations in the healthcare industry. You need to ensure that everyone who touches your data complies with relevant regulations.  

With risk on the rise, your organization should prepare as if a data breach will occur. To help you get proactive, we’ve identified three important areas for healthcare organizations to improve their third-party risk management.   

What regulations do you need to address with your third-party providers?

Establishing expectations for your vendor’s regulatory compliance is the first step in protecting your organization’s sensitive data. Think of regulatory compliance as a starting point for bolstering security throughout the extended enterprise – your vendors should be compliant at a minimum.   

Below are a few of the most prominent regulations in the healthcare industry:   

  • HIPAA: The Health Insurance Portability and Accountability Act is a federal law created to protect sensitive health information from being disclosed without a patient’s consent. HIPAA’s Security and Privacy rules set parameters for storing and processing data without patient consent.   
  • HITECH: The Health Information Technology for Clinical and Economic Health Act was established ‘to promote the adoption and meaningful use of health information technology.’ HITECH requires that organizations have secure means of transmitting sensitive data.   

Both regulations include a broad definition of a third party as any ‘business associate’: any health information organization, e-prescribing gateway or another person that provides data transmission services involving PHI to a covered entity on a routine basis; a person that offers a personal health record to at least one other individual on behalf of a covered entity; or a subcontractor that creates, receives, maintains or transmits personal health information on behalf of a business associate.  

In short, you’ll need to ensure that you set compliance expectations with any third party that falls under this definition. 

Which vendors should you focus on assessing and monitoring?

It goes without saying that you should focus your time and resources on closely monitoring your highest-risk vendors. Most healthcare organizations have hundreds, if not thousands, of vendors to manage. Not every one of these requires the same level of scrutiny. However, it isn’t always clear-cut to identify which vendors fall under high risk.  

 Ask the following questions during intake questionnaires to identify your high-risk vendors. 

Does the third party…. 

  • store or process PHI/PII?  
  • support any of your critical IT infrastructures?  
  • have data compliance requirements?  
  • have adequate cybersecurity controls in place for protecting data?  
  • foster a cybersecurity-aware culture?  
  • regularly monitor their internal and third-party risk?  
  • have a history of risk incidents?  

A vendor’s responses to these questions will allow you to identify their inherent risk. With that information, you can make educated decisions about the scope and frequency of monitoring them.   

Keep in mind that even your best efforts won’t always be enough to thwart a third-party data breach. The best strategy is to develop an incident response plan that enables you to rapidly communicate with vendors, assess vulnerabilities and minimize any impacts on your business. 

What should you do in the event of a third-party data breach?

Should a data breach occur at one of your third-party providers, you’ll want to assess your exposure immediately. This begins with knowing who might be affected by maintaining transparency with your high and medium-risk suppliers. From there, you can assess the impact of the breach on your organization. 

Be prepared to distribute event-driven questionnaires to the relevant vendors. An automated platform like ProcessUnity Vendor Risk Management can help you quickly deploy emergency questionnaires while collecting responses in real-time. This solution eliminates any lines of miscommunication between your vendors – something that is critical in the aftermath of a breach.  

Healthcare and Third-Party Risk Management: ProcessUnity Vendor Risk Management Can Help

Most healthcare organizations are fully aware of how a data breach could affect their organization. At the same time, many admit that their current third-party risk management processes may be ineffective or inefficient. The problem often lies in manual processes encumbered by hundreds to thousands of documents, spreadsheets and emails.  

ProcessUnity Vendor Risk Management is a solution proven to support healthcare organizations in mitigating third-party risk. Automated tools and built-in workflows help standardize processes so that teams can manage vendors effectively across regulatory compliance and cybersecurity risk. 

Visit our product page to learn more about how an automated Vendor Risk Management solution can strengthen your program.