In May 2023, Florida enacted a significant change to its health data laws. Senate Bill 264 amended the Florida Electronic Health Records Exchange Act restricting where certain patient data can be stored and accessed. Codified at Section 408.051(3) of the Florida Electronic Health Records Exchange Act, the change mandates that:

In addition to the requirements in 45 C.F.R. part 160 and subparts A and C of part 164, a health care provider that utilizes certified electronic health record technology must ensure that all patient information stored in an offsite physical or virtual environment, including through a third-party or subcontracted computing facility or an entity providing cloud computing services, is physically maintained in the continental United States or its territories or Canada. This subsection applies to all qualified electronic health records that are stored using any technology that can allow information to be electronically retrieved, accessed, or transmitted.

In other words, the law requires healthcare providers using certified electronic health record technology (CEHRT) to ensure that patient information stored outside their facilities—whether in a physical data center, virtual environment, or cloud service—is maintained only in the continental United States, its territories, or Canada.

Note this compliance requirement also comes with a statutory obligation (Section 408.810(14)) for any license under Chapter 408 of the Florida Public Health Law to sign an affidavit of compliance upon initial application and future renewals:  

The licensee must sign an affidavit at the time of his or her initial application for a license and on any renewal applications thereafter that attests under penalty of perjury that he or she is in compliance with s. 408.051(3). The licensee must remain in compliance with s. 408.051(3) or the licensee shall be subject to disciplinary action by the agency.

Emphasis added.

This amendment makes clear its intent that the new rule go beyond the requirements in the well-known federal privacy and security regulations for healthcare providers, the Health Insurance Portability and Accountability Act (HIPAA). HIPAA generally does not impose geographic restrictions on where protected health information (PHI) may be processed or stored, so long as appropriate safeguards and agreements are in place. Likely considered a more stringent protection for PHI, the Florida amendment would appear to survive HIPAA preemption.  

The law applies broadly across the healthcare sector, including hospitals, clinics, ambulatory surgical centers, home health agencies, hospices, nursing homes, labs, pharmacies, and many individual licensed practitioners—from physicians and nurses to therapists and pharmacists.

And, this restriction does not stop with covered providers. It extends to vendors and subcontractors that support healthcare operations. Managed service providers, IT vendors, scheduling support services, and other contractors that store or access patient information must also ensure that the data remains within the permitted geographic boundaries.

The requirements in the law also are not limited to certain types of patient information, such as diagnoses or mental health status. The rule extends to all patient information.

For many covered entities, the operational challenge is real. Disaster recovery environments, backup systems, and globally distributed cloud infrastructure often rely on servers outside the United States. Architectures designed for redundancy or resilience may now create compliance issues under Florida’s law.

Example: Healthcare providers often rely on vendors when handling investigations, such as for security incidents, and responding to data breaches. In some cases, providers may need to perform substantial data mining efforts to identify patients impacted by a breach. Third party data mining vendors often offer substantial discounts when that work is performed outside the U.S. Incident response plans of Florida covered providers should serve as a reminder of where patient information need to be stored.

Practically speaking, that means covered healthcare providers should be, at a minimum:

  • auditing where patient data is actually stored
  • reviewing vendor and subcontractor arrangements
  • updating contracts, BAAs, and data processing agreements to reflect storage restrictions
  • performing diligence on data location when onboarding new vendors

Florida’s move is also part of a larger trend. Regulators and policymakers are increasingly focused on data sovereignty and foreign access to sensitive health information. This amendment is an indicator of where state and federal regulation appears to be headed.

Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.