The US government does not prohibit the transfer of PHI (protected health information) offshore , but it does subject offshore data processing to extra reporting  and more scrutiny in general. The CMS (Centers for Medicare & Medicaid Services, part of the Department of Health and Human Services) has said
Given the unique risks associated with the use of contractors operating outside the jurisdiction of the United States, CMS encourages sponsors using offshore subcontractors to take extraordinary measures to ensure that offshore arrangements protect beneficiary privacy [3, emphasis added].
Why are the risks unique? For one thing, subcontractors outside the US may not be familiar with US law or held accountable for complying with that law.
What are the necessary “extraordinary measures”? The CMS does not say because the answer depends very much on context. The probability of being able to identify someone from a set of data fields depends on what those fields are. It also can change over time, and so the conclusion needs to be reviewed periodically.
It is legal to give a third party access to PHI if there is a BAA (business associate agreement) in place. For example, if a hospital outsources billing, the company doing the billing must see personal information in order to carry out their business function. But with offshore processing, it seems safest, if practical, to proceed as if there were no BAA in place and deidentify the data before it leaves the US.
If you’d like help with privacy regulation compliance or data de-identification, let’s talk.
 Nothing in this blog post is legal advice. Compliance with privacy regulation is both a legal and statistical matter. I address statistical questions and let lawyers address legal questions. I have a lawyer specializing in healthcare law who I recommend if clients don’t have their own legal expert.
 CMS memo September 16, 2011. Contract Year (CY) 2012 Medicare Advantage and Part D Readiness Checklist. Available here.
 Allen Briskin, Lisa C. Earl, Gerry Hinkley, and Joseph E. Kendall. Offshoring Health Information: Issues and Lingering Concerns. Journal of Health & Life Sciences Law. Vol. 8, No. 1.