What is the Civil Penalty for Unknowingly Violating HIPAA?

The civil penalties for unknowingly violating HIPAA (Health Insurance Portability and Accountability Act) can vary depending on the nature and extent of the violation. HIPAA violations are categorized into four tiers, each with its associated penalty range. These tiers are as follows:

1. Tier 1: Violations that the individual was unaware of and could not have reasonably known about. The penalty for such violations ranges from $100 to $50,000 per violation, with an annual maximum of $25,000.
2. Tier 2: Violations that were due to reasonable cause but not willful neglect. The penalty for such violations ranges from $1,000 to $50,000 per violation, with an annual maximum of $100,000.
3. Tier 3: Violations that are a result of willful neglect but are corrected within a specified time period. The penalty for such violations ranges from $10,000 to $50,000 per violation, with an annual maximum of $250,000.
4. Tier 4: Violations that are a result of willful neglect and are not corrected within a specified time period. The penalty for such violations starts at $50,000 per violation, with an annual maximum of $1.5 million.

It’s important to note that these penalty ranges are per violation, meaning that if multiple individuals are affected by the violation, each individual’s record may be considered a separate violation. Additionally, the Office for Civil Rights (OCR), the enforcing body for HIPAA, takes various factors into account when determining the actual penalty amount, including the nature and extent of the violation, the organization’s compliance history, the organization’s efforts to mitigate the violation, and other relevant factors.

Even thought the US Office for Civil Rights (OCR) has the discretion to waive a civil penalty for unknowingly violating HIPAA, ignorance of the HIPAA regulations is not a justifiable excuse for failing to implement the appropriate security measures.

It may also be possible to be given a civil penalty for unknowingly breaching HIPAA if the state in which the violation occurs allows people to bring legal action against the person(s) responsible for the violation. Although HIPAA lacks a private right of action, people can still use the regulations to establish a standard of care under common law.

However, OCR prefers to resolve HIPAA breaches using non-punitive measures, such as with voluntary compliance or  issuing technical guidance to allow covered entities address areas of non-compliance. A HIPAA violation may occur due to a deliberate act or could take place completely unintentionally by the organization or person responsible. A good example of an unintentional HIPAA violation is when too much PHI is disclosed and the minimum necessary information standard is breached.

When PHI is shared, it must be kept to the minimum necessary information to reach the purpose for which it is disclosed. Financial penalties for HIPAA violations can be sanctioned for unintentional HIPAA violations, although the penalties will be at a lower rate to willful violations of HIPAA Rules.

However, if the HIPAA breaches violations are more serious in nature, have been allowed to go on occuring for a long time, or if there are many different areas of noncompliance witnessed, financial penalties may have to be applied.

The two HIPAA penalty categories relevant in relation to unknowingly violating HIPAA are as follows:

• Tier 1: A violation that the covered entity was unaware of and could not have realistically avoided, had a reasonable amount of care had been taken to abide by HIPAA Rules
• Tier 2: A violation that the covered entity should have been aware of but could not have avoided even with a reasonable amount of care. (but falling short of willful neglect of HIPAA Rules)

When calculating the financial penalty to be applied, an organization’s willingness to help with an OCR investigation is also taken into account. The general factors that can impact the level of financial penalty also include previous history, the organization’s financial state and the level of harm caused by the violation.

• Tier 1: Minimum fine of $100 per violation up to $50,000
• Tier 2: Minimum fine of $1,000 per violation up to $50,000

 

Criminal Penalties

In addition to civil penalties, certain HIPAA violations can result in criminal charges. Criminal penalties are typically reserved for intentional and egregious violations, such as obtaining or disclosing PHI for personal gain or with malicious intent. Criminal penalties can include fines and imprisonment. The potential penalties are as follows:

• For knowingly obtaining or disclosing PHI in violation of HIPAA, the penalties can include fines up to $50,000 and imprisonment up to one year.
• If the offense is committed under false pretenses, the penalties can include fines up to $100,000 and imprisonment up to five years.
• If the offense is committed with the intent to sell, transfer, or use PHI for commercial advantage, personal gain, or malicious harm, the penalties can include fines up to $250,000 and imprisonment up to ten years.

It’s important to note that the actual penalties imposed can vary based on the specific circumstances of each case, the impact on affected individuals, and the actions taken to correct the violation. The enforcement of HIPAA and determination of penalties is carried out by the Office for Civil Rights (OCR) within the U.S. Department of Health and Human Services (HHS).

Conclusion

HIPAA civil penalties serve as a critical enforcement mechanism in safeguarding individuals’ protected health information (PHI) and upholding the privacy and security standards outlined by the Health Insurance Portability and Accountability Act (HIPAA). These penalties act as a deterrent against non-compliance, ensuring that covered entities and business associates prioritize the protection of sensitive patient data. By imposing financial consequences for violations, HIPAA civil penalties not only aim to hold accountable those who fail to adhere to the regulations but also send a clear message regarding the importance of maintaining patient privacy and security in the ever-evolving healthcare landscape.