Florida has quietly created one of the strictest state-level rules on where electronic health records can be stored. Under recent changes to the Florida Electronic Health Records Exchange Act (through CS/CS/SB 264), certain healthcare providers that use certified EHR technologies must ensure that offsite storage of “qualified electronic health records” is physically located in the continental United States, its territories, or Canada.
For independent practices, medical groups, hospitals, and billing companies that rely on cloud EHRs and offshore RCM support, this is not a theoretical issue. It directly affects how you host, back up, and share patient data, and it has licensing consequences if you get it wrong.
This article breaks down how Florida’s EHR storage requirement works, what it does and does not prohibit, and how to operationalize compliance without blowing up your current revenue cycle model or vendor relationships.
What Florida’s EHR Storage Requirement Actually Says (In Plain Language)
At a high level, the amended Florida Electronic Health Records Exchange Act does three important things that healthcare leaders should understand:
- It regulates storage location. Covered Florida-licensed providers must ensure that patient information stored in an offsite physical or virtual environment, including cloud computing services and subcontracted computing facilities, is “physically maintained” in the continental U.S., its territories, or Canada.
- It focuses on data at rest, not where a user sits. The statutory language is about storage, not user access. The law addresses where the servers and storage systems reside, not whether a contracted workforce is physically located in another country when they log in.
- It ties compliance to licensure. Covered providers and practitioners must submit an affidavit when renewing their Florida license attesting, under penalty of perjury, that they comply with the Act.
Why this matters now:
- Many EHRs and related tools rely on globally distributed cloud architectures. If a vendor uses data centers in Europe or Asia, even for redundancy, you may already be out of compliance.
- Florida’s affidavit requirement makes this a personal risk for licensed professionals and facility leaders. This is no longer “just IT’s problem.”
- Auditors, health plans, and plaintiffs’ attorneys increasingly ask detailed questions about data handling. State law violations can become leverage in disputes or litigation.
From a revenue cycle perspective, this law is not about reimbursement rules, yet it has a direct effect on how you structure RCM technology and outsourcing. If you need to replace or reconfigure systems, that project competes with every other priority, and missteps can lead to disruptions in charge capture, claims submission, and cash flow.
Access vs Storage: What Offshore RCM Teams Can Still Do
One of the biggest misconceptions in early commentary was that Florida had effectively “banned offshoring” of any RCM or IT activity touching PHI. A careful reading of the statutory language does not support that conclusion.
The amendment is written around storage location. It requires that patient information stored “in an offsite physical or virtual environment” be maintained in the U.S., its territories, or Canada. It does not explicitly prohibit authorized users who are physically outside those locations from remotely accessing that data, so long as:
- The data itself resides on compliant infrastructure.
- Access is controlled, auditable, and compliant with HIPAA and applicable business associate agreements (BAAs).
In practice, this creates the following operating model for Florida providers that use offshore partners for billing, coding, or IT support:
- Allowed: A revenue cycle specialist in India securely logs into a U.S.-based EHR or billing platform via VPN or other secure channel. No PHI is stored locally on non-compliant servers, and the EHR vendor can attest that production and backup storage is in the U.S., its territories, or Canada.
- Not allowed: An offshore vendor exports encounter data or full EHR extracts and stores them in a local database or file repository hosted on servers in India or any other non‑U.S./non‑territory/non‑Canada region.
Why this distinction matters for your revenue cycle:
- You do not have to tear down every offshore relationship. Many billing and coding workflows can continue with stronger guardrails around data export, saving substantial labor cost and preserving mature teams.
- The risk shifts to architecture and process design. You must be able to prove that the “system of record” and any sanctioned exports are stored only on compliant infrastructure.
- Audit trails become critical. If a regulator or licensing board asks, you need logging that shows what offshore users accessed, when, and how, with evidence that no long‑term storage occurred outside permitted locations.
RCM leaders should work closely with compliance and security teams to map each offshore process, identify where PHI might land, and redesign those workflows so that they use view‑only access, in‑platform work queues, and secure file exchange that terminates on U.S. or Canadian infrastructure.
Licensing Affidavits and Enforcement Risk: Why Executives Cannot Treat This as “IT Only”
Florida’s amendment hardwires compliance into licensure renewal. Covered providers must submit an affidavit, under penalty of perjury, attesting that their patient information storage is compliant. That has several implications for leadership and governance.
Operational and legal implications:
- Personal accountability. The person signing the affidavit, often a medical director, practice owner, or senior hospital leader, is personally asserting compliance. Inaccurate attestations can create exposure in disciplinary proceedings and, potentially, civil litigation if misrepresentations are alleged.
- Investigations can extend beyond IT. If the licensing board or another authority investigates a data storage complaint, they will not stop at your CIO. They will ask what leadership knew, how decisions were documented, and whether risk assessments were performed.
- Downstream vendor behavior becomes a licensing risk. If a vendor quietly stores backups or test data on non-compliant infrastructure, you may be out of compliance even though you never touched that infrastructure yourself.
RCM and compliance leaders should treat this like any other licensure‑linked risk, for example, Stark compliance or controlled substance prescribing rules. A disciplined approach should include:
- A documented risk assessment focused on EHR and PHI storage locations.
- Board or executive committee review of the assessment and remediation plan.
- Updated policies that explicitly reference Florida’s storage requirement.
- Annual re‑verification of vendor hosting attestations aligned with license renewal cycles.
Failing to formalize this governance invites ad hoc decisions. That is exactly what trips organizations up when an incident occurs and investigators ask, “Who approved this architecture and what due diligence was done?”
Step‑by‑Step: How to Assess Your Current EHR, Cloud, and Vendor Footprint
Before making any changes, you need a clear picture of where PHI actually lives today. For many organizations, this is more complex than “we use Vendor X as our EHR.” RCM workflows involve eligibility tools, clearinghouses, scanning platforms, data lakes, and countless exports.
Use the following assessment framework:
1. Inventory all systems that store or process PHI
Build a master list of systems that touch PHI, with a special focus on those used in your revenue cycle:
- EHRs and practice management systems
- Billing platforms and clearinghouses
- Scanning and document management tools
- Denial management and analytics platforms
- Data warehouses and reporting databases
- Secure file transfer and archival solutions
For each, identify the legal entity that owns or operates the system and whether the organization is a covered entity or business associate under HIPAA.
2. Determine physical storage locations
For each system on your inventory, request written confirmation from the vendor or internal IT of:
- Primary data center or cloud regions used for production storage.
- Backup and disaster recovery locations.
- Any use of “global replication” or content distribution that may place copies in other regions.
Ask explicitly whether any PHI associated with your Florida operations is stored or backed up outside the continental U.S., its territories, or Canada. Many vendors can scope storage by client or tenancy, but you must confirm.
3. Map exports and offline storage
Even if core systems are compliant, your teams or vendors may be exporting PHI:
- Daily AR worklists downloaded into spreadsheets.
- Denials reports exported to CSV or PDF.
- Large claim files or encounter extracts for analytics.
For each recurring export, document:
- Who runs it and where the files are stored.
- Whether offshore teams receive or store the files.
- Retention periods and destruction procedures.
Any export stored on servers outside the permitted geography represents a potential violation, even if the source system is compliant.
4. Evaluate offshore vendor practices
For billing companies and health systems that use offshore teams:
- Review your business associate agreements and statements of work to see what they say about data storage location.
- Request a technical summary from each vendor describing their hosting arrangement; clarify whether they operate any PHI‑hosting infrastructure outside the U.S., its territories, or Canada.
- Ask for policies on local caching, screenshots, and file downloads to local devices.
Document all responses, since they will form the backbone of your risk analysis and remediation plan.
Designing a Compliant Architecture Without Disrupting Revenue Cycle Operations
Once you know where data lives, you will likely find a mix of compliant and questionable patterns. The goal is to redesign your architecture and workflows so that you minimize disruption to billing and coding while eliminating storage in non‑permitted regions.
Key design principles for Florida‑compliant EHR and RCM environments include:
- Centralize PHI in a small number of “systems of record.” Avoid proliferation of secondary databases and rogue file shares that hold patient information.
- Use secure remote access for offshore workers. Provide login‑based access to U.S.‑hosted systems rather than sending data extracts.
- Tighten export capabilities. Limit which roles can export data and where those exports can be saved. Consider disabling certain export functions for offshore user roles entirely.
- Segregate environments. If you operate in multiple states, ensure your Florida data is not co‑mingled in ways that force you to move the entire enterprise environment if another state later adopts conflicting rules.
Example: A multi‑specialty practice with offshore coding support might redesign its workflow so that coders work exclusively in the EHR’s native coding work queues. Exports of charts for coding support are eliminated, and coders cannot download or print PHI. The EHR vendor confirms that all data, including backups, are hosted in U.S. data centers with failover in a U.S. territory.
This design preserves the labor model and coding quality while aligning data at rest with Florida’s locality requirement. It also simplifies your affidavit obligations, because you can point to a clean architecture diagram and vendor attestation.
Contracting, Documentation, and Audit Readiness With RCM and Cloud Vendors
Florida’s storage rule will increasingly be baked into due diligence checklists, payer audits, and board‑level risk discussions. To avoid scrambling later, embed it directly into your vendor management and contracting processes now.
Recommended steps:
- Update standard contract language. Ensure your master services agreements and BAAs for Florida operations include explicit commitments that:
- All storage of PHI related to your Florida‑licensed entities is limited to the continental U.S., its territories, or Canada.
- Backups, disaster recovery, and test environments adhere to the same locality constraint.
- Any proposed changes in hosting location require prior written approval.
- Require annual written attestations. Ask key vendors (EHRs, billing platforms, scanning vendors, analytics tools) to provide annual statements confirming ongoing compliance with Florida’s requirements and identifying the specific regions used.
- Align your documentation with license renewal. Maintain a “Florida EHR Storage Compliance Binder” (physical or virtual) containing:
- System and vendor inventory
- Architecture diagrams
- Vendor attestations and data center locations
- Policies governing offshore access and exports
- Test your story. Have compliance or internal audit run a mock inquiry: “Show us how you know you comply with the Florida Electronic Health Records Exchange Act.” Identify gaps and close them before a real regulator asks the question.
For revenue cycle leaders, the payoff is simple. If a payer or regulator challenges your data handling during an audit or dispute, you can produce structured documentation instead of a frantic scramble through emails and vendor portals. That confidence will also make license renewal attestations much less stressful.
Practical Safeguards for Offshore Billing, Coding, and IT Support Teams
Given that remote access from offshore locations is not explicitly prohibited, many organizations will choose to retain or expand offshore RCM capabilities. To keep those relationships both productive and compliant, put in place practical, enforceable controls around daily work.
Key safeguards include:
- Role‑based access with least privilege. Give offshore users only the permissions required for their tasks. For example, AR follow‑up staff may need claim and balance details, but not full chart access.
- Disable unneeded export and print functions. Configure roles so offshore users cannot mass export PHI or print large batches of charts or statements.
- Use virtual desktops or controlled workspaces. Where feasible, provide offshore users with virtual desktops hosted in U.S. data centers. This keeps PHI from ever touching local devices.
- Enforce data loss prevention (DLP) policies. Monitor for unusual behaviors, such as high‑volume downloads, copy‑and‑paste to external applications, or large outbound file transfers.
- Train and certify offshore teams on Florida‑specific requirements. Go beyond generic HIPAA training. Explain the state storage rule, what it means for their daily work, and what is prohibited (for example, saving spreadsheets with PHI to local PCs).
- Audit periodically. Sample user activity logs and workstation configurations for offshore teams. Confirm that local storage is encrypted, and that PHI is not persisting in non‑approved locations.
A useful KPI set for monitoring offshore RCM compliance might include:
- Number of PHI export attempts blocked by access controls per month.
- Percentage of offshore users who have completed Florida‑specific data handling training.
- Number of DLP alerts involving offshore user accounts per quarter.
- Remediation cycle time from detection of non‑compliant storage to confirmed resolution.
These metrics give leadership objective signals that remote operations remain within both HIPAA and state‑specific guardrails.
Turning Compliance Work Into a Revenue Cycle Advantage
On the surface, Florida’s EHR storage restriction looks like “just another regulation” that drains resources. With the right approach, it can be a catalyst for better RCM performance.
As you rationalize systems and exports to comply with the law, you will often find:
- Redundant or poorly governed data flows that create reconciliation headaches.
- Obsolete tools that no longer support current workflows but still hold PHI.
- Manual offline worklists that contribute to delays and lost charges.
By consolidating PHI into fewer systems of record and tightening how data leaves those systems, you can:
- Reduce denial risk driven by inconsistent or outdated data sets.
- Shorten AR cycles through better alignment between clinical, billing, and analytics views of the same encounter.
- Lower security and storage costs by retiring legacy databases and uncontrolled file repositories.
In some cases, the effort to comply with Florida’s law will coincide with broader EHR optimization, automation of claim status and denials, or consolidation of disparate billing platforms. Those changes can have direct cash flow impact that more than offsets the cost of compliance remediation.
If your organization is looking to improve billing accuracy, reduce denials, and strengthen overall revenue cycle performance while navigating complex regulatory and hosting requirements, working with experienced RCM professionals can make a measurable difference. One of our trusted partners, Quest National Services medical billing, specializes in full‑service revenue cycle support for organizations that need both operational excellence and strong compliance discipline.
Regardless of whether you engage outside help, Florida’s EHR storage rules are here to stay, and more states may follow. Providers, medical groups, hospitals, and billing companies that address these requirements proactively will not only protect licenses and reduce legal exposure. They will also emerge with cleaner architectures, better data, and more resilient revenue cycle operations.
If you would like guidance on how to translate these legal requirements into practical RCM workflows and technology decisions for your organization, contact us to start a focused discussion with our team.
References
Florida Legislature. (n.d.). CS/CS/SB 264: Interests of foreign countries. Retrieved from https://www.flsenate.gov/Session/Bill/2023/264
U.S. Department of Health & Human Services. (n.d.). Summary of the HIPAA Privacy Rule. Retrieved from https://www.hhs.gov/hipaa/for-professionals/privacy/laws-regulations/index.html
U.S. Department of Health & Human Services. (n.d.). Summary of the HIPAA Security Rule. Retrieved from https://www.hhs.gov/hipaa/for-professionals/security/laws-regulations/index.html
