PHI Data Security & Healthcare Tokenization

Maintaining HIPAA Security Best Practices Can be Tough. Let the Experts Help Encrypt and Secure your PHI Data.
Updated December 15, 2023

PHI Data and HIPAA Regulations for Medical Billing Portals

What is PHI data? Medical billing portals typically store very sensitive personal information, commonly referred to as PHI data (protected health information data). That specific set of data is regulated by laws and requirements covered by HIPAA (Health Information Portability and Accountability Act). It was originally enacted in the 1996 and has been updated as technology — and cyberattacks — evolves. Some of the most pertinent components of HIPAA relate to the privacy rules and security requirements of medical billing portals.

The requirements demand the end-user to be informed of what personal information is being stored on a HIPAA compliant website, as well as their right to have their data deleted (if it's no longer needed). Sensitive user data must get fully deleted from the system upon request. Additionally, the information must be securely stored at all times and only those that absolutely need it are granted access.

HIPAA also has a handful of other key requirements that are part of HIPAA security best practices, but the core concept is that the data is secured and audited as to when it is accessed, by whom, and to what extent. That access can be removed immediately based on someone losing their respective rights. For example, a terminated employee or customer service rep can no longer access the data after their departure. This aids in safeguarding sensitive information from being easily exploited.

All data needs to be encrypted and managed quite effectively between the aspects of access, privacy, and security. This forces the infrastructure where data is stored — and the ability to access it — to be extremely well locked down and guarantee that HIPAA compliance encryption requirements are followed.

When combined, the above measures result in a key component around the PHI data that medical billing portals must adhere to. Protected health information is data that fundamentally has a minimal access scope. One of the best ways to achieve this — to effectively limit access to critical information — is to use what's referred to as data tokenization and is a vital part of healthcare data management.

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Seek Out Experienced Developers

HIPAA security best practices and PHI data security isn't something to be taken lightly. Make sure you find a medical portal developer that has experience working with such sensitive information.

What is Tokenization of Data?

How Tokenization Keeps Data Secure

Tokenization of data is a general concept that is widely accepted as a best practice for storing credit card information, which, like PHI data, is highly sensitive. A common industry best practice is to send credit card information to a tokenization API and transfer that data securely over SSL from the user interface itself.

Essentially, none of the backend application stores or caches that data as it goes straight to an API, which is the only layer that physically has that data in a stored format. The API is simply taking the data and sending back a token of reference with that particular sensitive information. Tokenization has become quite common as a generic capability, not just for payment information but for any data that is sensitive in nature.

As a next step, that token gets combined with an access key or a username and password. It's not uncommon to force all of the communication over SSL and then lock down the IP address(es) that can access the API calls for that particular set of data (IP whitelisting). The end result is a multi-pronged limitation and filtering of the access to tokenized data.

In summary, you're taking very sensitive PHI data and putting it into a database. HIPAA-compliant data storage is well architected, heavily guarded, and protected. Considering the time it would take to guess the number, it would be unfeasable to attempt accessing that data without the right permission.

The data itself is represented by a token, which is used later if we need to access the actual information. Apart from the token and access, we can also use a username and password with validation of the authorized IP address. Finally, all data is sent over encrypted SSL to enable a secure transmission. Sending the token returns the requested sensitive data that could be displayed in the user interface. This can all happen via HIPAA compliant apps, websites, or patient portals.

PHI Data Security

Medical portals can be an excellent place to protect both financial and patient EMR/EHR, keeping you in line with HIPAA best practices. Clarity would be happy to show you how it works.

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A doctor filling out medical information that will be transferred into PHI data on a Clarity patient portal.
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Tokenization in Medical Billing Portals

With regards to a HIPAA eCommerce medical billing portal, it is possible to be fully compliant with the privacy and security rules of HIPAA. While heavily removing a lot of the risk, tokenization doesn't automatically take care of every aspect of HIPAA. However, it does dramatically reduce some of the physical infrastructure and security needs that are directly associated with a healthcare provider.

Ultimately, that's an immensely effective mechanism at a relatively low cost for a medical billing portal: enabling access to data that's very sensitive information, without physically making it easy — or even feasible — for someone to access that data in case the front facing portions of the application become compromised.

If the user interface, or even the core of an application for a medical billing portal gets exposed, it's still extremely difficult for someone to reach the underlying PHI data if everything is tokenized. We strongly recommend tokenizing as there are multiple ways to leverage tokenization and store the PHI data. We highly endorse tokenization and suggest making sure that all not tokenized information stored in the application’s caching and HIPAA-compliant database is, ideally, non-PHI.

We hope this article was helpful with explaining how tokenization works and when it’s used. Our team would be happy to discuss solutions for your medical billing portal project and answer any questions you may have. You're always welcome to review any of the articles below that relate to all aspects of HIPAA compliant websites and portals.



Protected Health Information (PHI) encompasses sensitive data in healthcare, including patients' medical history, treatment records, and identifiable information like names and addresses. The security of PHI is paramount in healthcare for several reasons.

First, it safeguards patient privacy, a fundamental aspect of ethical healthcare practices. Secondly, maintaining the security of PHI is a legal obligation to comply with regulations such as the Health Insurance Portability and Accountability Act (HIPAA) in the United States. Breaches in PHI security not only jeopardize patient confidentiality but also erode trust in healthcare systems.

Robust security measures are essential to prevent unauthorized access, ensure data integrity, and mitigate the risk of identity theft or fraud, ultimately fostering a secure and trustworthy healthcare environment.


Healthcare tokenization is a security measure that involves replacing sensitive Protected Health Information (PHI) with unique tokens, rendering the original data indecipherable. It is a critical component of PHI data security in healthcare.

Unlike traditional encryption methods, tokenization uses irreversible algorithms, enhancing security by ensuring that even if a breach occurs, stolen tokens lack meaningful information without access to the tokenization system. This process protects patients' medical records, treatment details, and personal identifiers.

Healthcare tokenization not only fortifies data security but also aligns with regulatory requirements, such as the Health Insurance Portability and Accountability Act (HIPAA). By mitigating the risk of data breaches, healthcare tokenization plays a pivotal role in maintaining patient trust, safeguarding privacy, and ensuring compliance with stringent healthcare data protection standards.


Tokenization significantly enhances the security of Protected Health Information (PHI) compared to traditional methods like encryption. In tokenization, sensitive data is replaced with unique tokens using irreversible algorithms, making the original information meaningless without access to the tokenization system.

Unlike encryption, where data can be decrypted with the right key, tokens cannot be reversed into the original PHI. This adds an extra layer of security, reducing the risk of exposing patient information in the event of a data breach. Tokenization minimizes the likelihood of unauthorized access and protects against potential vulnerabilities in traditional encryption systems.

The approach not only fortifies PHI data security but also aligns with healthcare regulations, such as the Health Insurance Portability and Accountability Act (HIPAA), ensuring comprehensive protection for sensitive healthcare information.


Yes, healthcare tokenization is compliant with data protection regulations. It aligns with stringent regulations such as the Health Insurance Portability and Accountability Act (HIPAA) in the United States. Tokenization ensures the secure handling of Protected Health Information (PHI) by replacing sensitive data with tokens, rendering stolen information useless without access to the tokenization system.

This approach strengthens data security, mitigates the risk of breaches, and supports healthcare organizations in meeting regulatory requirements for safeguarding patient information.


No, tokenization does not compromise the accessibility or usability of PHI data for healthcare professionals. Tokenization is designed to be seamless and transparent for authorized users. Healthcare professionals can access and utilize the tokenized data in the same way they would with the original information.

The process involves replacing sensitive data with unique tokens, ensuring that the actual information remains protected while maintaining the necessary functionality for medical professionals. This innovative security measure preserves the efficiency and usability of PHI data within healthcare systems, facilitating the seamless delivery of patient care without compromising data security or violating privacy regulations.

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