The recent pandemic has underscored the importance of accurately diagnosing COVID-19 in hospital settings. A major challenge in this regard is differentiating COVID-19 from other respiratory illnesses based on chest X-rays, compounded by the restrictions of HIPAA compliance which limit the comparison of patient X-rays. This paper introduces a HIPAA-compliant model to aid in the diagnosis of COVID-19, utilizing federated learning. Federated learning is a distributed machine learning approach that allows for algorithm training across multiple decentralized devices using local data samples, without the need for data sharing. Our model advances previous efforts in chest X-ray diagnostic models. We examined leading models from established competitions in this domain and developed our own models tailored to be effective with specific hospital data. Considering the model's operation in a federated learning context, we explored the potential impact of biased data updates on the model's performance. To enhance hospital understanding of the model's decision-making process and to verify that the model is not focusing on irrelevant features, we employed a visualization technique that highlights key features in chest X-rays indicative of a positive COVID-19 diagnosis.