HIPAA vs PCI DSS: Differences and Similarities

HIPAA vs PCI DSS is a comparison every organization handling sensitive information should understand. If you manage healthcare records or process credit card payments, you’re responsible for protecting both Protected Health Information (PHI) and cardholder data. These two frameworks—HIPAA for health data and PCI DSS for payment card data—set the standards for security, privacy, and risk management in their respective fields.

Knowing the differences and similarities between HIPAA and PCI DSS is crucial because compliance isn't optional. Each regulation comes with its own set of requirements for encryption, network segmentation, breach notification, and more. Whether you’re filling out a PCI SAQ, preparing a ROC or AOC, managing BAAs, or vetting a service provider, understanding your obligations can help you avoid costly penalties and data breaches.

In this article, we'll break down why you should get HIPAA and PCI compliant, highlight their key differences, uncover where they overlap, and clear up common misunderstandings. By the end, you'll have a clear roadmap for securing PHI and cardholder data, so you can protect your business and your customers with confidence.

Why get HIPAA and PCI compliant?

Investing in HIPAA and PCI compliance is more than just checking off regulatory boxes—it’s about building trust, safeguarding your reputation, and protecting the very core of your business operations. When we handle PHI or cardholder data, we’re holding someone’s identity, financial security, and peace of mind in our hands. Compliance with HIPAA vs PCI standards provides a structured approach to managing these serious responsibilities.

Here’s why getting HIPAA and PCI compliant matters so much:

• Legal and Contractual Obligations: Both HIPAA and PCI DSS are enforced by law and industry mandates. Non-compliance can result in severe penalties, lawsuits, and even criminal charges. For HIPAA, Business Associate Agreements (BAA) are required with every service provider who touches PHI. PCI DSS demands proper documentation, such as the Self-Assessment Questionnaire (SAQ), Report on Compliance (ROC), and Attestation of Compliance (AOC), especially for organizations processing large volumes of card payments.
• Reducing Risk of Data Breach: Security incidents involving PHI or cardholder data can devastate an organization—both financially and reputationally. Implementing network segmentation, encryption, and tokenization makes your data harder to compromise. If a breach does occur, having a well-established breach notification process is vital for fast response and minimizing damage.
• Customer Trust and Competitive Advantage: Patients and customers want assurance that their sensitive information is safe. Demonstrating compliance with HIPAA and PCI DSS shows you take data protection seriously, making you a more attractive partner and earning lasting loyalty.
• Operational Preparedness: Both frameworks require you to assess risks, train your staff, and regularly review your policies. This isn’t just for auditors—it keeps your team sharp and your systems resilient as threats evolve. Compliance is also a signal to potential partners and clients that your security posture meets industry expectations.
• Simplifying Vendor Relationships: When you work with vendors or service providers, showing that you’re compliant (and requiring the same from them) reduces uncertainty and streamlines onboarding. For example, ensuring your payment processor is PCI compliant or your IT provider signs a HIPAA BAA protects your ecosystem from weak links.

Ultimately, HIPAA and PCI DSS set a baseline for responsible data stewardship. Achieving compliance isn’t a one-time event—it’s an ongoing commitment to integrity, transparency, and care for those who trust you with their most sensitive information.

Difference between HIPAA Compliance and PCI

When we compare HIPAA compliance and PCI DSS, we’re looking at two robust, but fundamentally different, regulatory frameworks. Each is tailored to protect a specific type of sensitive data—HIPAA for PHI (Protected Health Information), and PCI DSS for cardholder data. Understanding the nuances between them is crucial for any organization that handles either, both, or is a service provider supporting clients in healthcare and payments.

Here’s a clear look at the major differences between HIPAA and PCI DSS:

• Type of Data Protected: HIPAA is laser-focused on PHI—which includes medical records, diagnoses, insurance details, and any information tied to a patient’s health. PCI DSS, on the other hand, is all about cardholder data: credit card numbers, expiration dates, and security codes.
• Scope and Applicability: HIPAA applies to covered entities (like hospitals, clinics, and insurers) and their business associates (BAA) who have access to PHI. PCI DSS applies to any organization, regardless of size or industry, that stores, processes, or transmits credit card data—including merchants and service providers.
• Compliance Validation: For PCI DSS, organizations validate compliance annually through a Self-Assessment Questionnaire (SAQ), or, for larger operations, an on-site audit resulting in a Report on Compliance (ROC) and an Attestation of Compliance (AOC). HIPAA does not have a prescribed annual certification, but organizations must conduct regular risk assessments and be prepared for audits by the Office for Civil Rights (OCR).
• Technical Safeguards: PCI DSS is highly prescriptive about technical controls—think network segmentation, encryption, tokenization, and regular monitoring to isolate and protect cardholder data. HIPAA outlines requirements for securing PHI but is more flexible, allowing organizations to choose specific methods such as encryption based on their risk analysis.
• Business Relationships: HIPAA requires signed Business Associate Agreements (BAA) with any partner handling PHI. PCI DSS requires that third-party service providers maintain their own compliance, and their responsibilities must be clearly defined by contract, but there’s no direct equivalent to a BAA.
• Breach Notification: HIPAA mandates strict breach notification requirements—affected individuals, regulators, and sometimes the media must be notified within specific timelines if unsecured PHI is compromised. PCI DSS also requires notification, but the process typically runs through card brands and acquiring banks, with expectations set by those entities.
• Penalties and Enforcement: HIPAA penalties are enforced by the Department of Health and Human Services and can be substantial, especially for willful neglect. PCI DSS fines are imposed by card brands and acquiring banks, and can lead to the loss of payment processing privileges.

In summary, while both HIPAA and PCI DSS aim to safeguard sensitive information, their approaches, legal frameworks, and operational requirements are distinct. Organizations handling both PHI and cardholder data must address each regime independently, ensuring the right controls—like network segmentation for PCI DSS or BAAs for HIPAA—are in place. This dual focus not only reduces risk but also builds trust with patients and customers alike.

Similarities between HIPAA Compliance and PCI

When we look at HIPAA vs PCI DSS, it’s clear these frameworks were built for different worlds—but they share some fundamental similarities in their approach to data protection. Both establish rigorous standards to safeguard highly sensitive information, whether it’s PHI in a healthcare setting or cardholder data in payment environments. Here’s how their core principles overlap and why it matters for organizations navigating both sets of rules:

• Risk-Based Security Approach: Both HIPAA and PCI DSS require organizations to assess risks and implement security controls appropriate to the sensitivity of the data handled. Regular risk assessments are the backbone of both, ensuring threats and vulnerabilities are identified before they become incidents.
• Data Protection Requirements: There is a strong emphasis on protecting data—whether it’s in storage or in transit. This includes technical safeguards like encryption and tokenization to protect data from unauthorized access and breaches. Both frameworks expect organizations to leverage modern security tools to keep information secure.
• Access Control and Authentication: Limiting access to sensitive data is a shared priority. Both HIPAA and PCI DSS mandate that only authorized users—those with a legitimate business need—should access PHI or cardholder data. This includes requirements for unique user IDs and robust authentication procedures.
• Vendor and Service Provider Oversight: Managing third-party risk is vital in both standards. HIPAA requires formal Business Associate Agreements (BAA), while PCI DSS expects organizations to ensure service provider compliance, often verified through documents like the Attestation of Compliance (AOC).
• Network Segmentation and Monitoring: Both frameworks recognize the value of network segmentation to isolate systems that process sensitive data. Monitoring and tracking access—via audit logs and regular reviews—helps detect and respond to suspicious activity in both environments.
• Incident Response and Breach Notification: Having a plan for when things go wrong is essential. Both HIPAA and PCI DSS require organizations to establish and test incident response protocols, including timely breach notification to affected parties and regulatory bodies.
• Documentation and Validation: Keeping accurate records is a must. HIPAA expects thorough documentation of policies and compliance actions. PCI DSS formalizes this via tools like the Self-Assessment Questionnaire (SAQ), Report on Compliance (ROC), and the AOC.
• Continuous Improvement: Neither standard is “set and forget.” Both require ongoing training, regular reviews, and updates to policies and technical safeguards to stay ahead of evolving threats.

In short, while HIPAA and PCI DSS target different types of sensitive data, they’re united by the goal of reducing risk and ensuring trust. Their shared focus on risk analysis, technical safeguards like encryption, tight access controls, and strong third-party oversight means that organizations experienced in one will recognize many familiar themes in the other. However, it’s crucial to appreciate the unique requirements each brings—especially if your business operates in both healthcare and payment processing spaces.

Penalties for Non-Compliance of PCI DSS and HIPAA

Understanding the penalties for non-compliance with PCI DSS and HIPAA is critical for any organization that handles PHI or cardholder data. The consequences can be severe, going well beyond financial losses and reaching into lasting reputational harm and even criminal charges in some cases. Let’s break down what’s at stake for both HIPAA and PCI DSS violations.

HIPAA Penalties

• Civil Penalties: HIPAA violations are categorized into four tiers, depending on the level of negligence. Fines can range from $137 to $68,928 per violation, capped at $2,067,813 per year for violations of an identical provision.
• Criminal Penalties: If an organization knowingly discloses or obtains PHI in violation of HIPAA, criminal charges can result in fines up to $250,000 and imprisonment for up to 10 years.
• Breach Notification: Failing to follow breach notification requirements can trigger additional penalties. Covered entities and business associates (as defined in a BAA) are required to notify individuals, regulators, and sometimes the media if PHI is compromised.
• Corrective Action Plans: The Office for Civil Rights (OCR) may impose mandatory improvement plans, audits, and ongoing monitoring.

PCI DSS Penalties

• Fines from Card Brands: Payment brands like Visa and Mastercard can levy fines on acquiring banks, who often pass them on to merchants. These fines typically range from $5,000 to $100,000 per month until compliance is achieved.
• Increased Transaction Fees: Non-compliant organizations may face higher processing fees or lose the ability to process card payments entirely.
• Liability for Damages: If a data breach involving cardholder data occurs, organizations may be held liable for fraudulent charges, card replacement costs, forensic investigations, and additional legal actions.
• Mandatory Assessments: Businesses may be required to complete a full Report on Compliance (ROC) or Self-Assessment Questionnaire (SAQ), and provide an Attestation of Compliance (AOC) to demonstrate corrective actions—especially when a breach is linked to a lack of network segmentation, encryption, or tokenization.
• Reputational Damage: Losing customer trust after a breach or publicized non-compliance can devastate a brand’s reputation, affecting long-term business viability—especially for service providers.

What’s the Bottom Line? Non-compliance with HIPAA or PCI DSS isn’t just about regulatory fines. The aftermath often includes legal expenses, costs of breach notification, mandatory improvements, and a loss of trust that can take years to rebuild. That’s why regular risk assessments, robust encryption and tokenization, strict network segmentation, and up-to-date agreements (like BAAs) with every relevant service provider are non-negotiable. Taking compliance seriously is the best way to avoid costly mistakes and protect the sensitive data entrusted to your care.

Common Misunderstandings of PCI DSS and HIPAA Compliance

Navigating compliance between HIPAA vs PCI DSS can be confusing, and there are plenty of myths and misconceptions that trip up even experienced organizations. Let’s clarify some of the most common misunderstandings so you can protect PHI and cardholder data with confidence.

• “If we’re compliant with one, we’re covered for both.”

It’s easy to assume that if you meet HIPAA requirements, you’re automatically PCI DSS compliant, or vice versa. Unfortunately, this isn’t true. HIPAA and PCI DSS are built around entirely different types of data, risk models, and reporting obligations. Being compliant with one framework does not address the specifics of the other—especially when it comes to technical controls like encryption, tokenization, or audit trails for cardholder data versus PHI.

“Third-party service providers handle all compliance for us.”

Many organizations believe that using a payment processor or cloud EHR platform shifts all compliance responsibilities to the vendor. In reality, you—and not just your service provider—remain accountable for compliance. Business Associate Agreements (BAAs) are required for HIPAA, and for PCI DSS, you must ensure that service providers deliver an Attestation of Compliance (AOC) and meet all requirements relevant to their services.

“Segregating networks isn’t necessary if we use strong passwords.”

Strong passwords are important, but network segmentation is a key PCI DSS requirement to keep cardholder data isolated and protected. Without it, the entire network could be in scope for compliance and vulnerable to breaches. Similarly, HIPAA expects you to minimize PHI exposure across your systems. Technical safeguards always go beyond passwords.

“Encryption is optional—only required when convenient.”

Both HIPAA and PCI DSS emphasize encryption, but neither treats it as merely optional. For PCI DSS, encryption is mandatory for cardholder data in transit over public networks. For HIPAA, while some encryption requirements are “addressable,” failing to encrypt PHI demands a strong documented rationale and equivalent safeguards. Encryption and tokenization are best practices that dramatically reduce risk and liability.

“Self-assessment is always enough for PCI DSS.”

Not all organizations are eligible to complete a Self-Assessment Questionnaire (SAQ) for PCI DSS. If you process larger volumes of cardholder data, a full Report on Compliance (ROC) conducted by a Qualified Security Assessor is required. Don’t assume you can opt for the SAQ without checking your merchant level and validation requirements.

“Breach notification is the same for both.”

Both frameworks require you to notify stakeholders in case of a data breach, but the process, deadlines, and details differ. HIPAA breach notification involves contacting affected individuals, the Department of Health and Human Services, and sometimes the media. PCI DSS, on the other hand, requires reporting breaches to payment brands, acquiring banks, and often conducting forensic investigations. Do not mix up these obligations—they’re both critical, but unique.

Understanding these common pitfalls ensures your organization doesn’t stumble into compliance gaps. Keep in mind that HIPAA vs PCI DSS is not about choosing one over the other, but about building a layered, robust approach to security—protecting both PHI and cardholder data, with the right controls, documentation, and partnerships in place.

HIPAA vs PCI DSS comes down to understanding what type of sensitive data your organization handles—and what’s required to keep it secure. While HIPAA focuses on safeguarding PHI in the healthcare sector, PCI DSS is all about protecting cardholder data in payment environments. Both frameworks demand a strong commitment to privacy and security, but their rules, validation methods, and documentation (like SAQ, ROC, and AOC) are tailored to the unique risks of their industries.

Despite some overlap—such as the importance of network segmentation, encryption, and prompt breach notification—their approaches aren’t interchangeable. For example, if you’re a service provider for both healthcare and retail clients, you’ll likely need to maintain both a BAA for HIPAA compliance and evidence of PCI DSS controls for your payment processing activities. Tokenization and encryption play a critical role in both, but the specific technical standards and reporting requirements differ.

Ultimately, treating HIPAA and PCI DSS as separate but equally essential obligations is the safest path. We recommend regularly reviewing your compliance posture, updating security controls, and ensuring your staff understands the difference between protecting PHI and cardholder data. By keeping up with evolving standards and learning from every audit or self-assessment, you’ll be able to protect your organization, your customers, and your reputation in a rapidly changing risk landscape.

If you’re ever unsure, don’t hesitate to engage compliance experts or leverage trusted service providers—compliance is a team effort, and proactive steps today can save you from costly headaches tomorrow.

FAQs

Can one program satisfy both HIPAA and PCI?

No single program can satisfy both HIPAA and PCI DSS requirements in their entirety. While there are some similarities—such as the need to secure sensitive data, implement strong access controls, and use encryption—each framework targets different types of information and has unique compliance demands. HIPAA focuses on protected health information (PHI) and mandates policies like BAAs, annual risk assessments, and specific breach notification protocols. In contrast, PCI DSS is designed to protect cardholder data and requires rigorous technical controls, including detailed network segmentation, regular SAQs or ROC submissions, and precise encryption and tokenization of payment data.

Even if a program addresses overlapping areas such as encryption or access management, full compliance means meeting the exact specifications of each standard. For example, PCI DSS might require an AOC from a service provider, while HIPAA would expect a signed BAA. These documents serve different purposes and satisfy different audit requirements.

Organizations handling both PHI and cardholder data must implement separate, dedicated compliance processes for HIPAA and PCI DSS. Attempting a “one-size-fits-all” approach risks gaps that could lead to non-compliance in audits or, worse, in the event of a breach. The best strategy is to map overlapping controls but maintain distinct management for each compliance area, ensuring both healthcare and payment security standards are fully met.

Are payment portals in scope for HIPAA?

Payment portals can be in scope for HIPAA if they process, store, or transmit protected health information (PHI) on behalf of a healthcare provider or any covered entity. If a payment portal is used in a medical setting and collects details that directly identify a patient—such as name, treatment information, or insurance data—then it falls under HIPAA regulations. In this scenario, the payment portal provider must sign a Business Associate Agreement (BAA) and ensure all data handling practices meet HIPAA standards, including breach notification requirements and robust security controls.

If the payment portal only processes cardholder data and does not handle any PHI, it’s primarily subject to PCI DSS requirements, not HIPAA. However, many healthcare payment transactions involve a blend of both cardholder data and PHI, putting the portal in the unique position of needing to comply with both HIPAA vs PCI requirements. This means using proper encryption, tokenization, and potentially network segmentation to protect sensitive data.

Ultimately, whether a payment portal is in HIPAA scope depends on the type of information it processes and the nature of its relationship with healthcare organizations. Service providers supporting healthcare payments should evaluate their data flows and contractual obligations carefully to determine their compliance responsibilities.

What SAQ applies to a clinic taking cards?

If your clinic accepts payment cards from patients, you’re required to comply with PCI DSS by completing a Self-Assessment Questionnaire (SAQ). The specific SAQ you need depends on how you process cardholder data. Most healthcare clinics use a third-party payment processor—like a standalone payment terminal that’s not connected to your internal network—or a secure web-based system. In these typical scenarios, SAQ A or SAQ B is most likely to apply.

SAQ A is for clinics that never store, process, or transmit cardholder data electronically on their systems—meaning all processing is entirely outsourced to a PCI DSS-compliant service provider. If you use web-based payment forms hosted by your payment processor (not your own website), SAQ A is appropriate.

SAQ B applies if you process card payments only using standalone dial-out terminals (not connected to your internal network or the Internet) and don’t store electronic cardholder data. This is common in clinics with simple countertop credit card machines.

It’s important to review your payment environment and consult your payment processor or service provider to determine the right SAQ. Remember, while PCI DSS (and the right SAQ) covers cardholder data, HIPAA covers PHI. Network segmentation, encryption, and a signed BAA with service providers keep both compliance frameworks in check. If there’s ever a payment data breach, breach notification rules from both HIPAA and PCI may apply!

Do BAAs matter for PCI service providers?

Business Associate Agreements (BAAs) are a core requirement for HIPAA compliance, specifically designed to protect Protected Health Information (PHI). However, in the world of PCI DSS and cardholder data, BAAs are not relevant. If you’re a PCI service provider, your primary concern is safeguarding credit card information—such as through network segmentation, encryption, and tokenization—not PHI.

PCI DSS requires service providers to demonstrate compliance through methods like the SAQ (Self-Assessment Questionnaire), ROC (Report on Compliance), and AOC (Attestation of Compliance). None of these require a BAA, because their focus is on cardholder data security, not health information. Instead, you may need contracts or agreements specifying security responsibilities, but these are not BAAs.

If you handle both PHI and cardholder data—say, as a payment processor for healthcare—you’ll need a BAA for the HIPAA side and strict PCI compliance for payment data. But for PCI service providers alone, BAAs simply don’t matter.

Bottom line: BAAs are essential for HIPAA, not PCI. PCI service providers should focus on PCI DSS requirements and leave BAAs to organizations working with PHI. If you’re unsure, review your agreements and compliance obligations—focusing on the data type you handle most.