HIPAA Compliant Payment Processing for Telehealth Business

Сard payment systems are so deeply rooted in our daily lives that we take many aspects of such payments for granted, like accessibility, availability, and safety. The medical field is no different, and it’s a rare case when we pay for healthcare services with cash or checks, especially for services like telemedicine.

Credit card processing for medical practices differs from other card processing options because of its legal limitations. Popular billing services like PayPal or Vimeo can’t be used for medical billing, as they don’t meet HIPAA requirements for online payment processing.

Healthcare providers must consider many nuances when setting up HIPAA-compliant online payments. Mainstream payment systems often leave these aspects out. A payment system used in the medical field must not provide any patient’s health information on the bills or receipts, the processor must be PCI DSS compliant, and the data mustn’t be stored electronically or otherwise.

This article reviews HIPAA-compliant payment methods, discusses how to arrange compliance if you’re in the telemedicine business, and how the Empeek team can assist you with HIPAA-compliant credit card processing.

Are Data Attacks and HIPAA Violations That Common?

The rapid development of HIPAA-compliant telehealth services means, among other things, a bigger volume of data to process. As a result, there are also more attempts to steal sensitive information. Medical data, bills, and contact information allow criminals to receive treatment under a false name, make fake medical claims, and, most importantly, ruin the healthcare provider’s reputation because of the leakage.

Besides avoiding reputational damages, telehealth providers must remain vigilant about HIPAA compliance to escape costly penalties. Data breaches and leakages have happened too often lately, exposing millions of personal health records and billing details.

The  Oklahoma State University – Center for Health Sciences breach in 2018 affected 279,865 individuals due to inadequate security measures. Montefiore Medical Center in New York faced a $4.75 million penalty after an employee used patient data for identity theft. The OCR determined the center had insufficient risk analyses and security measures.

These are just a few of the loudest industry-wide cases, with the actual number of data breaches reported to OCR reaching 725 instances in 2023. 133 million personal records were disclosed without permission. It shows the importance of HIPAA compliance in every aspect of healthcare software operation, including credit card processing for medical practices. The HIPAA Act protects patients’ right to have their information intact and regulates providers’ activities regarding the patient’s data they receive, use, or store.

Why You Must Adopt HIPAA-Compliant Payment Processing

HIPAA obliges medical providers, business associates, insurers, and developers to manage the patient’s information without exposing it to risks associated with sharing, transferring, storing, or using PHI. For the medical industry, HIPAA compliance, including HIPAA-compliant credit card processing for medical practices, is the most important criterion for being deemed a lawful provider. HIPAA violations can entail penalties, license loss, or even criminal charges. They also undermine the healthcare organization’s reputation and show patients they should never trust it.

Therefore, if you run a medical office, provide telemedicine services for therapists and patients, help the provider institution with maintenance/service, or store and process personal patient information, your payments must comply with HIPAA’s payment processing requirements.

HIPAA and Credit Card Processing: A Subtle Bond

While credit card processing does not fall within the scope of HIPAA since no health record information is being stored, a telehealth provider must choose healthcare credit card processing that won’t use the merchant account to store, process, or receive protected health information (PHI).

The PHI includes the patient’s legal name, date of birth, credit card number, information from the medical record or insurance, etc. If the merchant/payment system uses any of it in its billing, it violates the HIPAA terms, which will entail legal consequences.

It is important to understand the card processing mechanisms and the involved parties to select the right processing company for your healthcare business. Let’s review the involved parties below.

Who Partakes in Credit Card Processing 

Credit card processing for medical practices involves a transaction initiated by the cardholder, forwarded by the provider’s POS, and processed by the provider’s payment processor. The processor sends the transaction request to the credit card network, which forwards it to the card issuer to approve or decline the transaction.

The key stakeholders in the credit card processing process are the following:

• Cardholder: the patient who wants to pay for services provided by the card.
• Card issuer: a bank or credit union authorized to issue the card to a particular person.
• Healthcare provider/merchant: an establishment that provides medical services.
• Card network and brands: the companies that enable financial transactions between cardholders and merchants.

To prevent credit card information from being intercepted or hacked during transactions, a merchant should select a processor that adheres to Payment Card Industry Data Security Standards (PCI DSS).

Summing up, working with a reliable provider that protects personal information is how healthcare providers can ensure that credit card transactions comply with HIPAA. While HIPAA primarily governs health information, it indirectly influences credit card processing by requiring healthcare providers to safeguard all patient-related data.

To prevent interception or hacking during transactions, you must choose processors adhering to Payment Card Industry Data Security Standards (PCI DSS). PCI DSS compliance ensures the secure handling of credit card information, aligning with HIPAA’s mandate to protect patient data. To learn more about how to develop a HIPAA-compliant telehealth platform, read our article dedicated to compliance requirements for telehealth.

Core Credit Card Processing Types in Telemedicine

Since telehealth services are provided online, payments are usually processed digitally through a phone, integrated telemedicine software, or direct transactions. All these modern healthcare payment systems ensure secure transactions through encryption, multi-factor authentication, and security protocols. But which credit card processing type is suitable for HIPAA-compliant telemedicine? Find out below.

By Phone

As the use of mobile devices increases, many patients also switch to smartphone payments and demand such services from healthcare providers. The global healthcare digital payment market was valued at $11.75 billion in 2023 and will reach USD 81.36 billion by 2033. Mobile wallets accounted for 15.5% of healthcare payments in 2022​. This growth is caused by the increasing demand for efficient, secure, and convenient HIPAA-compliant payment methods in the healthcare sector.

When finalizing a payment, the system requests specific information from the client, such as credit card details, billing address, and security code. While mobile payments are becoming increasingly popular, this credit card processing method has two main issues. 

Firstly, many issuers do not allow “card-not-present” payments and require creating a charge record and verifying the cardholder’s name and billing address. Secondly, providers cannot store or write down the information they obtain anywhere except the payment system. Therefore, this method might not be the safest or the best HIPAA-compliant credit card processing solution.

Integrated Telemedicine Software

This HIPAA-compliant payment processing option is becoming increasingly popular because it offers instant payments through an integrated telemedicine system. The system provides a pop-up window with a payment form. The request is processed once the user fills out the form with the required data.

Usually, the payment portal is PCI DSS compliant, which means you only need to integrate it into your system to set up the process and secure online transactions. However, to make HIPAA-compliant payments, users must sign up with a specific payment provider, which may be inconvenient due to additional barriers.

Direct Payments

This type of credit card processing includes a HIPAA-compliant payment processing gateway. Its biggest advantage is that you can customize the form, send it before or after the appointment, and include various modes of payment like ACH, Bank Transfers, or eChecks. Here, the clients themselves type in the necessary information, and the process gets finalized for a provider after the patient confirms the transaction.

Direct payment solutions are the safest and most convenient for healthcare providers who want custom telemedicine software. If set up and managed right, they can ensure a HIPAA-compliant payment processing system. Yet, you will need a reliable software development provider to connect direct payments and ensure their regulatory compliance.

As you can see, no method is 100% perfect as the best HIPAA-compliant credit card processing solution. You must evaluate your telehealth system specifics and expected implementation budget to choose the most suitable one. Integrated telemedicine software with a connected payment system is a quick solution to implement compliant credit card processing for medical practices. On the other hand, direct payments are more suitable for software systems that require customization. Contact Empeek to get consulting on which credit card processing type is better for your telemedicine platform.

Best HIPAA-Compliant Credit Card Processing Options to Consider

While there are many payment systems that merchants can use for their services, you cannot implement most of them for medical practice. This applies to systems like PayPal, Venmo, Zelle, QuickBooks, and Wave, which cannot ensure HIPAA-compliant payment methods. Therefore, using them for healthcare billing is off the table. What are the potential solutions or best practices in this case? Here are some options.

PaymentCloud

Square

Ivy Pay

Dharma Merchant Services

Implementing HIPAA-Compliant Credit Card Processing: Dos and Don’ts

The payment process involves a few stages, including generating an invoice/bill, sharing it with the payer, and completing the transaction. Since one cannot create an invoice without stating personal health information, every step of the way falls under the HIPAA-compliant electronic payment rules. Here are the things you should and shouldn’t do to follow these rules when implementing HIPAA-compliant credit card processing:

Don’t:

• Provide any protected health information that includes details about treatment or care in the billing;
• Send receipts via text or unsecured email, and make sure your processing company doesn’t do so either;
• Sign up with a payment processing company before checking if they are HIPAA-compliant. Never collaborate with the companies that left it unanswered;
• Use phone payment if you have an option not to do so.

Do:

• Create an official inquiry on whether a payment gateway provider can ensure HIPAA-compliant medical payment processing;
• Secure the credit card data by investing in an encrypted vault to make sure the sensitive card data isn’t saved electronically for open use;
• Sign a business associate agreement with the company that processes payments, especially if they not only deal with the payments but also assist you with marketing or data collection;
• Use payment data security encryption technology (P2P, vP2PE);
• Consider an in-house payment integration solution, especially if you already have a practice management network.

A HIPAA-compliant payment solution requires extensive resources and adherence to many legal guidelines. The above-mentioned points give a general idea of what direction to follow and what to avoid. However, because every healthcare provider is different, we recommend professional telehealth consulting to analyze your data processing practices and achieve regulatory-compliant safety.

How Can Empeek Help with HIPAA-Compliant Credit Card Processing?

Empeek is a healthcare software development provider that focuses on telehealth software development and knows how to create solutions that meet the strict requirements of healthcare regulations, including HIPAA. We have completed projects where our team implemented payment solutions as part of medical platforms from scratch.

By choosing our company, you get:

• A dedicated team with narrow-field experience in HIPAA payment processing solutions
• Flexible cooperation model adapted to your business and technical needs
• Software engineers and tech specialists ready to help you with specific tasks like consulting on HIPAA-compliant payments or from-scratch development

Final Thoughts

Creating a safe credit card payment option is in the best interest of the healthcare provider who wants to deliver telehealth services effectively, secure its position in the healthcare market, and provide a convenient and safe payment option for its clients.

If you need to set up the billing process for your telehealth business, Empeek is ready to design a HIPAA-compliant payment software solution for your business and help you to focus more on care provision rather than payment collection. After all, this is what healthcare should be about. Contact us today, and let’s talk about your project in detail.