How to use this industry guide
Use this guide to separate three questions that are often conflated: whether you are a government contractor, whether you handle regulated health information, and whether you operate or support a government information system. Each can create a different cybersecurity obligation.
A healthcare contractor may have only basic safeguarding duties for FCI, or it may have HIPAA Security Rule obligations, Privacy Act obligations, NIST SP 800-171 duties for CUI, agency ATO requirements, cloud authorization requirements, or breach/incident-reporting obligations depending on the work.
What usually drives cybersecurity obligations in this sector
Healthcare obligations usually arise from the information being handled. PHI, electronic PHI, medical records, claims data, patient scheduling data, clinical research records, genomic data, public-health data, benefits information, and agency system credentials can all change the compliance analysis.
Contractors may also see agency-specific security requirements from HHS, VA, DoD, CMS, CDC, NIH, Indian Health Service, or state health agencies. Where the contractor operates a system for the agency, the work may involve FISMA/NIST SP 800-53 controls, ATO processes, privacy impact requirements, or cloud authorization. Where the contractor only receives health-related CUI on its own systems, NIST SP 800-171 and contract-specific CUI handling may be the more important layer.
Requirements to review for this sector
Review these areas first:
- FAR 52.204-21 for FCI on covered contractor information systems.
- HIPAA Security Rule and breach notification duties where the contractor is a covered entity or business associate.
- Privacy Act obligations where the contractor operates or supports a system of records for a federal agency.
- NIST SP 800-171 where health-related CUI is handled on contractor systems.
- DFARS/CMMC if the healthcare work is for DoD and involves CDI/CUI.
- FISMA/NIST SP 800-53 and ATO requirements where the contractor operates a federal information system.
- Agency-specific security clauses, particularly for HHS, VA, CMS, CDC, NIH, and DoD health programs.
- State health privacy, breach-notification, and consumer health data laws where applicable.
Implementation focus areas
Healthcare contractors should map data first. Identify whether the environment contains PHI, ePHI, CUI, Privacy Act records, FCI, research data, or agency system credentials. Then map which systems store, process, transmit, or administer that data.
Implementation evidence should usually include access controls, audit logs, encryption decisions, role-based access, business associate agreement tracking, incident and breach response procedures, subcontractor/vendor oversight, backup and recovery evidence, training records, risk analysis/risk management documentation, and contract-specific security deliverables.
This page is an index. The actionable items are the requirements below.
Standards and frameworks commonly adopted
Healthcare
Healthcare providers, payers, and contractors handling protected health information (HIPAA) and federal health data.
Adopts: HIPAA— Handling ePHIAdopts: HITRUST— Common certifiable framework in healthcare
Mapped requirements and controls
Data-Type / Sector-Specific Safeguards
Requirement
Decontrol CUI When Safeguarding Is No Longer Required in accordance with 32 CFR 2002.18.
Plain-English explanation
CUI status is not permanent. 32 CFR 2002.18 lets the designating agency decontrol information when safeguarding is no longer required, and contractors should not keep treating decontrolled data as CUI. Decontrol is an agency decision — contractors follow it rather than make it.
Implementation examples
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Handling decontrol:
- Follow agency decontrol instructions and remove or update CUI markings accordingly.
- Note the decontrol decision and date in your records.
- Do not unilaterally decontrol CUI you received; confirm with the designating agency.
- Update access controls once data is decontrolled.
Required by
Requirement
Destroy CUI Using Approved Methods in accordance with 32 CFR 2002.14(f); NIST SP 800-88.
Plain-English explanation
CUI must be destroyed using methods that make it unreadable and irrecoverable. 32 CFR 2002.14(f) requires approved destruction, and NIST SP 800-88 provides the media-sanitization guidance the government relies on. Improper disposal is a common and avoidable cause of CUI loss.
Implementation examples
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Approved destruction practices:
- Cross-cut shred or pulp paper CUI to NSA/agency-approved standards.
- Sanitize digital media per NIST SP 800-88 (clear, purge, or destroy as appropriate).
- Use destruction logs or certificates of destruction for accountability.
- Include cloud and backup copies in your destruction process.
Required by
32 CFR 2002.16; CUI LDC Registry
Apply Limited Dissemination Controls and Lawful Government Purpose
DISSEM
Requirement
Apply Limited Dissemination Controls and Lawful Government Purpose in accordance with 32 CFR 2002.16; CUI LDC Registry.
Plain-English explanation
CUI may only be shared for a lawful government purpose, and Limited Dissemination Controls (LDCs) further restrict who may receive it. 32 CFR 2002.16 and the CUI Registry's LDC list govern which controls (e.g., NOFORN, FED ONLY) can be applied and how. Applying the wrong control — or ignoring one — is a disclosure risk.
Implementation examples
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Managing dissemination:
- Confirm a lawful government purpose before sharing CUI internally or externally.
- Apply only LDCs listed in the CUI Registry and only when authorized by the designating agency.
- Restrict distribution lists and shared drives to authorized recipients.
- Document dissemination decisions for CUI Specified categories.
Required by
DFARS 252.204-7012(m); proposed FAR CUI rule
Flow Down CUI Safeguarding Requirements to Subcontractors
FLOWDOWN
Requirement
Flow Down CUI Safeguarding Requirements to Subcontractors in accordance with DFARS 252.204-7012(m); proposed FAR CUI rule.
Plain-English explanation
CUI obligations do not stop at the prime — they flow down to subcontractors that will handle CUI. DFARS 252.204-7012(m) requires the clause be included in covered subcontracts, and the proposed FAR CUI rule would extend flowdown government-wide. Primes remain responsible for ensuring subs are covered.
Implementation examples
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Managing flowdown:
- Include the applicable CUI/safeguarding clause in subcontracts that involve CUI.
- Verify subcontractors' safeguarding posture (e.g., SPRS score, SSP) before sharing CUI.
- Track which subs receive CUI and under which categories.
- Require subs to report incidents up the chain.
Required by
Requirement
Protect Health Information CUI in accordance with HIPAA (45 CFR 160 & 164).
Plain-English explanation
Health information held in connection with federal work is CUI and is also governed by HIPAA when it is protected health information. 45 CFR Parts 160 and 164 impose privacy and security rules, including breach notification. Where both apply, satisfy HIPAA and the CUI baseline.
Implementation examples
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Protecting health-information CUI:
- Execute Business Associate Agreements where HIPAA applies.
- Apply the HIPAA Security Rule safeguards (access controls, encryption, audit).
- Follow HIPAA breach-notification timelines in addition to CUI incident reporting.
- Minimize collection and retention of PHI.
Required by
EO 13556; 32 CFR Part 2002; NARA CUI Registry
Identify and Categorize CUI Using the CUI Registry
IDENTIFY
Requirement
Identify and Categorize CUI Using the CUI Registry in accordance with EO 13556; 32 CFR Part 2002; NARA CUI Registry.
Plain-English explanation
Before you can protect CUI you have to recognize it. The CUI program replaced dozens of agency-specific markings with one government-wide system, and the NARA CUI Registry is the authoritative list of what qualifies and under which category. Contractors should map where covered information lives and tag it to a Registry category.
Implementation examples
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Practical steps to identify and categorize CUI:
- Inventory systems, shares, and email that may hold government information and trace each to a contract or data flow.
- Match each information type to a NARA CUI Registry category (e.g., Controlled Technical Information, Privacy, Procurement).
- Confirm categorization with the contracting officer or data owner when a marking is ambiguous.
- Re-run the inventory when new contracts, tools, or data sources are added.
Required by
32 CFR 2002.20; CUI Marking Handbook
Apply CUI Markings (Banner, Portion, Category, and Limited Dissemination)
MARK
Requirement
Apply CUI Markings (Banner, Portion, Category, and Limited Dissemination) in accordance with 32 CFR 2002.20; CUI Marking Handbook.
Plain-English explanation
CUI must carry consistent markings so everyone who handles it knows the limits. The ISOO CUI Marking Handbook prescribes banner marks, portion marks, category designators, and limited-dissemination controls. Correct marking is what makes downstream safeguarding and dissemination rules enforceable.
Implementation examples
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Ways to apply CUI markings correctly:
- Add a CUI banner at the top (and bottom) of documents and a designation indicator identifying the source.
- Use category markings (e.g., CUI//SP-CTI) for CUI Specified.
- Apply portion marks where required and add Limited Dissemination Control markings (e.g., NOFORN, FED ONLY) when authorized.
- Configure templates, email footers, and DLP labels so markings are applied by default.
Required by
NIST SP 800-171 Rev 3; 32 CFR 2002.14(g)
Protect CUI on Nonfederal Systems per NIST SP 800-171
NIST171
Requirement
Protect CUI on Nonfederal Systems per NIST SP 800-171 in accordance with NIST SP 800-171 Rev 3; 32 CFR 2002.14(g).
Plain-English explanation
For CUI on nonfederal information systems, NIST SP 800-171 is the control set the government expects. Revision 3 (2024) reorganized the families and tightened several controls; DFARS 252.204-7012 and 32 CFR 2002.14(g) make it contractually and regulatorily binding for many contractors. A System Security Plan and POA&M are the core evidence artifacts.
Implementation examples
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Implementing NIST SP 800-171:
- Maintain a current System Security Plan (SSP) describing how each control is met.
- Track gaps in a Plan of Action & Milestones (POA&M) with owners and dates.
- Implement the access-control, MFA, logging, configuration, and incident-response families.
- Confirm which revision (Rev 2 vs Rev 3) your contract requires before scoping work.
Required by
Requirement
Protect Proprietary Business Information / Trade Secrets in accordance with 18 USC 1905; FOIA Exemption 4.
Plain-English explanation
Proprietary business information and trade secrets shared with or generated for the government are protected from improper disclosure. 18 USC 1905 (Trade Secrets Act) and FOIA Exemption 4 limit government release of confidential commercial information. Contractors should mark and segregate proprietary data.
Implementation examples
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Protecting proprietary information:
- Mark proprietary/trade-secret data with appropriate restrictive legends.
- Segregate it and limit access to a need-to-know basis.
- Assert confidentiality when submitting data the government might disclose.
- Track where proprietary data is shared and stored.
Required by
Requirement
Protect Privacy CUI and Sensitive PII in accordance with Privacy Act (5 USC 552a).
Plain-English explanation
Privacy CUI and sensitive PII require protection under the Privacy Act and related guidance. 5 USC 552a governs federal records about individuals, and contractors operating systems of records inherit those duties. Sensitive PII (e.g., SSNs) warrants stronger controls.
Implementation examples
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Protecting privacy CUI / sensitive PII:
- Identify Privacy Act systems of records and apply the required safeguards.
- Encrypt and access-restrict sensitive PII; minimize collection.
- Follow breach-notification and reporting requirements.
- Honor Privacy Act use limitations and routine-use constraints.
Required by
Requirement
Safeguard CUI at the 32 CFR 2002 Baseline in accordance with 32 CFR 2002.14.
Plain-English explanation
This is the baseline duty to protect CUI at rest, in transit, and in use. 32 CFR 2002.14 sets the floor for all CUI; for CUI on nonfederal systems that floor is implemented through NIST SP 800-171. Treat it as the minimum standard every CUI handler owes regardless of category.
Implementation examples
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Baseline safeguarding measures:
- Limit access to CUI to people with a lawful government purpose and a need to know.
- Encrypt CUI in transit and at rest using FIPS-validated cryptography.
- Control physical access to printed CUI and CUI media.
- Log access and review it; train staff on handling rules.
Required by
Requirement
Apply Category-Specific (CUI Specified) Handling Controls in accordance with 32 CFR Part 2002 (CUI Specified).
Plain-English explanation
Some CUI categories are 'CUI Specified' — a law, regulation, or government-wide policy imposes handling controls beyond the CUI Basic baseline. 32 CFR Part 2002 directs you to the controlling authority for each Specified category. Always check whether a category is Basic or Specified before deciding how to handle it.
Implementation examples
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Handling CUI Specified:
- Identify the category's controlling law/regulation in the CUI Registry.
- Apply the category-specific dissemination and safeguarding rules, which may exceed the baseline.
- Mark Specified CUI with the correct category designator.
- Escalate questions to the contracting officer or the designating agency.
Required by
Requirement
Provide CUI Awareness Training to the Workforce in accordance with 32 CFR 2002.30.
Plain-English explanation
People are the front line of CUI protection, so the program expects workforce awareness training. 32 CFR 2002.30 contemplates training on identifying, marking, handling, and reporting CUI. Document that staff who touch CUI have completed it.
Implementation examples
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Building a CUI training program:
- Deliver role-based training before staff are granted CUI access and at least annually.
- Cover identification, marking, dissemination limits, incident reporting, and destruction.
- Track completion and retain records as evidence.
- Refresh content when CUI policies or contract requirements change.
Required by
Requirement
A covered entity or business associate must implement the HIPAA Security Rule administrative, physical, and technical safeguards for electronic protected health information (45 CFR Part 164 Subpart C), conduct an accurate and thorough risk analysis, and — as a business associate — execute a Business Associate Agreement before receiving ePHI.
Plain-English explanation
If you handle health information for a covered entity, you are a business associate and the HIPAA Security Rule binds you directly. Two things anchor it: a real, documented risk analysis, and a signed Business Associate Agreement before any ePHI changes hands.
Implementation examples
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Examples of meeting this requirement:
- Execute a Business Associate Agreement with every covered entity and downstream subcontractor.
- Perform and document a HIPAA risk analysis and risk-management plan.
- Implement the administrative, physical, and technical safeguards and keep policies current.
Required by
External Notification & Reporting
Requirement
Report Loss or Compromise of CUI in accordance with 32 CFR 2002; agency incident-reporting policy.
Plain-English explanation
Loss or compromise of CUI must be reported, often on tight timelines. 32 CFR Part 2002 and agency/contract incident-reporting policy (and DFARS 7012's 72-hour rule for DoD) govern when and to whom. Build the reporting path before an incident, not during one.
Implementation examples
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Incident-reporting readiness:
- Maintain an incident-response plan with defined roles and reporting timelines.
- Know the reporting channel (e.g., DIBNet for DoD) and required contract notifications.
- Preserve images and affected media for the period the contract requires.
- Run tabletop exercises so the team can meet the deadline.
Required by
Requirement
A covered entity or business associate that discovers a breach of unsecured protected health information must notify affected individuals without unreasonable delay and no later than 60 days after discovery, notify HHS, and (for breaches affecting 500+ individuals in a jurisdiction) notify prominent media; a business associate must notify the covered entity. (45 CFR 164.400-414.)
Plain-English explanation
Beyond securing ePHI, HIPAA requires you to tell people when it is exposed. The clock is 60 days from discovery; large breaches also trigger HHS and media notice. Business associates (most contractors) must promptly tell the covered entity they serve.
Implementation examples
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Examples of meeting this requirement:
- Maintain a breach-risk-assessment procedure (the 4-factor test) to decide when notice is required.
- Keep notification letter templates and a media/HHS submission checklist ready.
- Define in every Business Associate Agreement how fast you will notify the covered entity.
Required by
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