Background: Organisational interoperability (OIoP) of the Healthcare Information System (HIS) is crucial for the success of HIS, however little is known about the impact of institutional factors. Objective: This cross-sectional study aimed to investigate the direct effect of institutional factors on OIoP for HIS in public sector hospitals in Malaysia. Methods: A conceptual OIoP framework was developed using the Personal Health Systems Interoperability and Refined eHealth European Interoperability frameworks. A self-administered questionnaire survey was used to solicit data from 300 healthcare professionals. Data were assessed through an Exploratory Factor Analysis followed by a Confirmatory Factor Analysis. Results: Structured equation modelling revealed Security and Privacy Compliance, and Stakeholder Engagement and Awareness to significantly and positively affect OIoP (R2 = 0.380). Conclusion: Healthcare organisations should prioritise clear and effective policies and regulations and enough budget and resources for the suggested framework.