HIPAA Violations in 2022 : Penalties, Fines and Consequences
What Are the Penalties for HIPAA Violations?
The Health Insurance Portability and Accessibility Act (HIPAA) is a regulation that aims to protect patient health information in the US. Certain entities with access to protected health information (PHI) are required to implement the security controls, techniques, and processes outlined in the HIPAA regulations.
HIPAA prohibits the disclosure of sensitive patient health information without the consent of the patient, including information on specific treatments, test results, personal identification information, and demographic information.
In order to give patients the highest level of security for their medical records, the HIPAA Security Rule requires that covered entities keep electronic protected health information (ePHI) secure and ensure that their security can protect the organization from any type of physical, administrative, or technical compromise.
Depending on how much knowledge a covered entity has of the infringement, there are several levels of punishment for breaking HIPAA rules. Ignorance of the HIPAA rules is not an acceptable defense for breaking the rules. Each covered entity is in charge of making sure the HIPAA rules are known and adhered to. The highest sanctions are imposed when a covered entity is found to have willfully broken a HIPAA law.
Who Governs HIPAA?
The Office for Civil Rights (OCR), along with the Department of Health and Human Services (HHS) and state attorneys general, has the authority to impose penalties for HIPAA violations. In addition to paying fines, covered companies must establish a remedial action plan to bring their policies and processes in line with HIPAA requirements.
As of the Enforcement Final Rule of 2006, OCR has had the authority to impose monetary fines, appoint corrective action plans, and enter into settlement agreements to guarantee that the covered business complies with HIPAA.
OCR traditionally favors using non-punitive approaches to address infractions, such as voluntary compliance and corrective audit programs. Additionally, OCR uses a tiered penalty system to determine the severity of the breach and impose a proportionate consequence where HIPAA violation fines are required.
What is Considered a HIPAA Violation?
A HIPAA violation occurs when a HIPAA-covered organization or a business associate disregards one or more of the mandates of the HIPAA Privacy, Security, or Breach Notification Rules.
A violation might be intentional or accidental. For example, when excessive amounts of PHI are shared and the threshold for the minimum required information is broken, this becomes an unintended HIPAA breach. The smallest amount of information required to fulfill the purpose for which PHI is being revealed must be disclosed.
Unintentional HIPAA infractions are subject to financial penalties, but these are less severe than those for deliberate violations of the HIPAA Rules.
Penalty Structure of HIPAA Violations
When deciding on penalties, OCR takes into account a variety of variables, including the length of time a breach was tolerated, the population affected, and the type of data disclosed. The organization’s readiness to cooperate with an OCR inquiry is also considered. Prior history, the financial health of the organization, and the severity of the infraction are some broad variables that may influence the financial penalty amount.
Therefore, the degree and kind of the breach will determine the repercussions of a HIPAA violation. There are two categories of violations: civil and criminal. Penalties for HIPAA infractions are determined using tiered levels for each category.
Civil Penalties
Based on four categories of escalating culpability, OCR evaluates a case and the covered entity’s obligation. There are minimum and maximum fines for each tier, as well as an annual cap on the fines for repeated infractions of the same rule.
Tier 1 – Lack of Knowledge
The lowest clear violation is one that the covered business was ignorant of and could not possibly have prevented by taking reasonable steps to abide by HIPAA requirements. Due diligence would not have allowed the covered company or business partner to realize that the HIPAA regulation had been broken.
- Minimum penalty (per violation): $127
- Maximum penalty (per violation): $63,973
- Calendar-year cap: $1,919,173
Tier 2 – Reasonable Cause
Despite having knowledge of the breach, the covered entity was unable to stop it even with due diligence, which is not the same as willful disregard for HIPAA rules. The breach of HIPAA was not brought on by purposeful disregard; rather, the covered entity knew or ought to have known through due diligence that its conduct (or omission) violated HIPAA.
- Minimum penalty (per violation): $1,280
- Maximum penalty (per violation): $63,973
- Calendar-year cap: $1,919,173
Tier 3 – Willful Neglect (Within 30 Days)
The breach emerged as a consequence of “willful negligence” of the HIPAA rules, however the business immediately sought to repair the issue. Even if the covered business corrected the issue within 30 days, the breach was nonetheless the outcome of willful neglect.
- Minimum penalty (per violation): $12,794
- Maximum penalty (per violation): $63,973
- Calendar-year cap: $1,919,173
Tier 4 – Willful Neglect (Not Corrected Within 30 Days)
Due to “willful negligence” of HIPAA requirements, a breach occurred, and problems persisted without being fixed for a long time. The entity’s failure to take action to remedy the infraction within 30 days constituted intentional negligence in violation of HIPAA guidelines.
- Minimum penalty (per violation): $63,973
- Maximum penalty (per violation): $1,919,173
- Calendar-year cap: $1,919,173
Criminal Penalties
Employers often face civil fines for infractions committed by the workforce that functions in the healthcare industry. Healthcare practitioners are subject to criminal prosecution if they intentionally utilize or access PHI in violation of the law.
- Criminal consequences for HIPAA infractions are handled by the Department of Justice (DOJ) rather than the OCR.
- Depending on the severity, criminal sanctions might vary from fines to jail time.
- A court determines the sentencing on three kinds of criminal offenses.
Tier 1 – Wrongful disclosure of PHI
The most fundamental infraction occurs at this stage. It addresses both circumstances of reasonable cause, where the offender should have reasonably foreseen, and cases of ignorance, where the offender was unaware that they had broken the law. Since all covered companies are accountable for compliance, the DOJ does not accept ignorance of HIPAA requirements as a justification for breaking the law.
- The maximum punishment is $50,000, one year in jail, or both.
Tier 2 – Wrongful disclosure of PHI under false pretenses
This category covers getting PHI under false pretenses or revealing it without consent. A hospital staff, for instance, is prohibited from accessing the data of patients who are not in their care.
- The maximum punishment is up to $100,000 in fines, five years in jail, or both.
Tier 3 – Wrongful disclosure of PHI under false pretenses with malicious intent
The most serious infraction is when the offender gets PHI illegally with the purpose to sell, transfer, or utilize the information for deliberate injury, personal gain, or business benefit.
- The maximum penalty is two years in jail, up to $250,000, or both.
Conclusion
The HIPAA Security Rule governs several facets of the healthcare sector, including patient information and health insurance programs. The system currently collects the majority of its data electronically, and all of its components must adhere to the HIPAA Security Rule in order for the system to operate in accordance with HIPAA standards.
HIPAA’s main objective is to safeguard the PHI given to covered companies and their business partners. Organizations are required under the HIPAA Privacy and Security Rules to manage and track PHI access and safeguard it from unauthorized access.
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