PHI can be rendered "unusable, unreadable, or indecipherable" if the data is either encrypted or destroyed according to specified technologies or methodologies.

Encryption:
In encrypting PHI, the strength of the encryption algorithm is most important.  The algorithmic process should transform the PHI into a form that has low probability of being assigned meaning without use of a confidential process or key.  The confidential process or should be stored at a location or on a device that is separate from the data it is used to encrypt or decrypt to avoid a breach.

• Valid encryption processes for data at rest (i.e., data that resides in databases, file systems, and other structured storage methods) are described in NIST Special Publication 800-111, Guide to Storage Encryption Technologies for End User Devices (PDF - 279KB).
• Valid encryption processes for data in motion (i.e., data that is moving through a network, including wireless transmission) are those that comply with Federal Information Processing Standards (FIPS) 140-2 (PDF - 1.4MB). These include:
  • NIST Special Publication 800-52, Guidelines for the Selection and Use of Transport Layer Security (TLS) Implementations (PDF - 322KB)
  • NIST Special Publication 800-77, Guide to IPsec VPNs (PDF - 1.2MB)

Destruction:
The destruction method is dependent on the type of media.  Paper, film, and other hard copy media should be shredded or destroyed so that the PHI cannot be read or be reconstructed.  Electronic media should be cleared, purged or destroyed so that the PHI cannot be retrieved and be consistent with NIST Special Publication 800-88, Guidelines for the Media Sanitization (PDF - 541KB).

Resources:

• Guidance to Render Unsecured Protected Health Information Unusable, Unreadable, or Indecipherable to Unauthorized Individuals - Published in the Federal Register (2009).
• IPsec  - Resources from Microsoft for configuring and supporting IPsec.