CMS healthcare data sharing raises PHI identity and API risk

At a glance

What this is: CMS’s aligned networks plan is a healthcare interoperability effort that could expand PHI access through standardized APIs while exposing identity and supply-chain control gaps.

Why it matters: It matters because IAM, PAM, and lifecycle teams must secure patient access, vendor access, and API trust boundaries together or interoperability will widen the attack surface.

By the numbers:

• Healthcare breaches rose 239% between 2018 and 2023, according to the HHS Office for Civil Rights.
• The CMS Aligned Networks program will unite 21 networks, 11 health systems, and seven electronic health record vendors.

👉 Read Imprivata's analysis of CMS healthcare data sharing and PHI risk

Context

CMS’s healthcare data sharing plan is a practical interoperability initiative built around standardized APIs, patient access, and broader exchange between providers and platforms. The primary identity issue is that every new integration expands the number of trust relationships that must be authenticated, authorised, monitored, and retired correctly.

In healthcare, the governance problem is rarely access in isolation. It is the combination of patient identity assurance, third-party application trust, and vendor lifecycle control across a distributed ecosystem where PHI is highly valuable and breaches can spread quickly.

Key questions

Q: How should healthcare organisations secure PHI sharing through APIs?

A: They should require strong identity assurance, narrow scopes, and continuous monitoring for every API client that can touch PHI. Authentication alone is not enough. Teams need to bind each application to a specific purpose, review access when vendors change, and revoke credentials immediately when a connection is no longer justified.

Q: Why do third-party healthcare integrations increase PHI risk?

A: Because every external app, vendor, or service provider adds another identity that can be abused, mis-scoped, or left active after the business need ends. The risk is not only compromise. It is unmanaged lifecycle drift, where access remains technically valid even after the relationship or use case has changed.

Q: What breaks when zero trust is not applied to patient data exchange?

A: Teams end up trusting network location, partner status, or prior authentication instead of evaluating each PHI request on its own merits. That creates blind spots in API-heavy environments, where a legitimate integration can be turned into a high-volume data access path if the request context is never rechecked.

Q: Who is accountable when a healthcare partner misuses delegated PHI access?

A: The provider, the partner, and the governing programme all share accountability, but the technical control owner must prove that access was scoped, monitored, and removed correctly. If delegated access survives beyond the approved purpose, the failure is governance, not just misuse.

Technical breakdown

API-based PHI exchange and identity assurance

Standardised APIs make data sharing easier by letting applications request PHI from connected systems using defined authentication and authorisation flows. That convenience only works if the identity presented by the patient, app, or third-party service is verified to the right assurance level and bound to the right scope. In practice, the risk is not the API itself. It is weak application trust, over-broad scopes, and unclear proof of who or what is asking for the data. Without strong assurance, an API becomes a high-volume path to sensitive records rather than a controlled exchange layer.

Practical implication: tie API access to explicit identity assurance, scope limits, and app registration rather than treating interoperability as a default trust grant.

Third-party access and the healthcare supply chain

Healthcare exchange is only as secure as the weakest vendor, developer, or service provider in the chain. Every partner that can call an API, host an app, or move PHI on behalf of a provider introduces an identity lifecycle problem: onboarding must be tightly controlled, privileges must be scoped, and offboarding must actually revoke access. Business associate agreements set obligations, but they do not enforce runtime controls. The real failure mode is standing access that persists after the business relationship, implementation phase, or support need has changed.

Practical implication: govern third-party access as a lifecycle problem, with revocation, attestation, and monitoring tied to contractual and operational change.

Zero trust for patient data sharing

Zero trust in this context means no network path, app, or vendor should be trusted solely because it sits inside the healthcare ecosystem. Each transaction must be re-evaluated based on identity, device, data sensitivity, and context. For PHI sharing, that means continuous verification, encrypted transmission, and policy checks at the point of use, not just at login. This matters because interoperability multiplies the number of places where trust can be assumed incorrectly, especially when patients, clinicians, apps, and intermediaries all interact through the same exchange fabric.

Practical implication: apply zero-trust decisioning to each PHI request, not just to the initial authentication event.

Threat narrative

Attacker objective: The attacker seeks to harvest high-value PHI for resale, fraud, or further compromise of healthcare accounts and services.

1. Entry occurs when malicious actors abuse broadened interoperability and third-party API access to reach PHI pathways that were meant to simplify legitimate exchange.
2. Escalation follows when over-broad application scopes, weak identity assurance, or persistent vendor access let the attacker move from a single integration point to larger record sets.
3. Impact is the exfiltration of protected health information at scale, with downstream exposure across patients, providers, and connected partners.

Breaches seen in the wild

• LiteLLM PyPI package breach — LiteLLM PyPI supply chain attack, credentials stolen from users.
• Shai Hulud npm malware campaign — Shai Hulud campaign: npm malware exposed secrets on GitHub.

Read our 52 NHI Breaches Analysis report for a comprehensive view of breaches impacting Non-Human Identities including AI Agents.

NHI Mgmt Group analysis

Interoperability does not reduce identity risk. It redistributes it across more trust boundaries. CMS-style data sharing improves usability, but every added network, vendor, and app expands the number of identities that can request or relay PHI. That means the control problem shifts from a single perimeter to lifecycle governance, authorisation scope, and transaction-level assurance. Practitioners should treat interoperability as an identity expansion event, not just a data exchange initiative.

Healthcare exchange fails when application trust is wider than business trust. The plan depends on third-party apps and service relationships that can outlive the purpose for which access was granted. This creates a classic governance gap: access persists after need changes, while contractual controls do not automatically revoke technical privilege. The implication is that identity governance must follow the vendor relationship through onboarding, review, and offboarding, or PHI exposure becomes structural.

Continuous verification is now a patient-data control, not just an enterprise access pattern. The move to API-driven exchange makes zero trust relevant beyond internal systems because the request for PHI may come from a patient device, a provider portal, or a partner app. The key governance question is whether the programme can distinguish legitimate access from authorised abuse at runtime. Practitioners should reframe patient-data protection around per-request trust decisions rather than static login success.

PHI sharing creates a compounded identity blast radius across humans, apps, and vendors. The more parties that can query or move records, the harder it becomes to contain abuse with traditional access models. That is why the real risk is not just data leakage but the inability to quickly isolate a compromised app, vendor credential, or delegated workflow. Practitioners should measure blast radius before they expand interoperability further.

From our research:

• 72% of organisations have experienced or suspect they have experienced a breach of non-human identities, according to The 2024 ESG Report: Managing Non-Human Identities.
• A quarter of enterprises in the same study encountered multiple attacks, which shows how quickly identity weaknesses compound once a trust boundary is opened.
• For a deeper lifecycle lens, see Ultimate Guide to NHIs , Lifecycle Processes for Managing NHIs for how onboarding, review, and offboarding should constrain access growth.

What this signals

PHI interoperability is becoming an identity governance problem before it becomes a data architecture problem. As more networks and vendors join the exchange fabric, teams should expect their access review model to be tested by third-party service accounts, delegated apps, and patient-facing trust flows. The right control question is whether the organisation can prove who is allowed to ask for data, not just who can reach the API.

Healthcare programmes should expect the identity blast radius to grow faster than the integration count. Once a partner can relay PHI, the practical risk is that one weak credential or one stale delegation can expose multiple downstream systems. That is why lifecycle controls, revocation discipline, and per-request monitoring now sit at the centre of interoperability governance rather than at the edges.

Two-thirds of enterprises have already suffered a successful cyberattack from compromised non-human identities, according to our 2024 ESG report. In a healthcare exchange model, that statistic is a warning that the programme will be judged by its weakest connected identity, not by its architecture diagram. Teams should prepare for more frequent vendor and app credential reviews as interoperability expands.

For practitioners

• Map every PHI access path to an identity owner Inventory the patients, providers, apps, vendors, and service accounts that can request or relay PHI, then assign a named owner for each path so reviews and revocation are not ambiguous.
• Enforce app-level scopes for every API integration Restrict each connected application to the minimum PHI scope it needs, and block broad token permissions that allow one integration to query records across unrelated use cases.
• Tie vendor offboarding to technical revocation When a partner relationship changes, remove API credentials, certificates, and delegated access immediately rather than relying on contract expiration or manual follow-up.
• Add continuous monitoring to healthcare exchange flows Watch for unusual query volume, off-hours access, and sudden changes in data access patterns so a compromised app or credential can be isolated before it spreads.

Key takeaways

• CMS-style healthcare interoperability widens the identity problem because every new API, vendor, and app adds another trust boundary for PHI.
• The main failure mode is not access in the abstract but access that outlives business need, making third-party lifecycle control a core security requirement.
• Healthcare teams need per-request trust checks, tight API scopes, and immediate credential revocation to keep data sharing from becoming data sprawl.

Key terms

• Identity assurance: The degree of confidence an organisation has that an identity is real and that the presented authentication evidence matches that identity. In healthcare data sharing, assurance must extend to patients, applications, and service accounts so that API access is not granted on weak or assumed trust.
• Delegated access: Access granted to one party to act on behalf of another, often through an application, partner, or service account. In PHI environments, delegated access is risky when the technical privilege remains active after the business reason changes or the relationship ends.
• Identity blast radius: The amount of data, systems, or workflows exposed when one identity is compromised or misused. In interoperability programmes, blast radius grows as APIs, vendors, and downstream services are connected without tight scope control and rapid revocation.

Deepen your knowledge

NHI governance, agentic AI identity, and machine identity lifecycle are core topics in our NHI Foundation Level course, the industry's only accredited NHI security programme. If you are responsible for identity security strategy or NHI governance in your organisation, it is worth exploring.

This post draws on content published by Imprivata: Tech Expert Breaks Down the Security Challenges Attached to the CMS Healthcare Data Sharing Plan. Read the original.