What is a HIPAA Violation?

What Is a HIPAA Violation?

A HIPAA violation occurs when a covered entity (like a healthcare provider, health plan, or healthcare clearinghouse) or a business associate fails to follow the privacy, security, or breach notification rules set out under the Health Insurance Portability and Accountability Act (HIPAA). These rules are designed to protect individuals’ Protected Health Information (PHI)  including medical records, health histories, and other sensitive data. 

Failure to comply can be expensive with the HIPAA violation fines range from $100 to over $4 million. There are two types of HIPAA violations – civil or criminal and each of them has a different fine structure that is explained below.

Civil HIPAA Penalties

Civil penalties apply when a HIPPA violation occurs without malicious intent. In these cases, the individual may have acted unknowingly, carelessly, or without fully understanding the requirements of HIPAA. Penalties are assessed based on the level of negligence involved and may include the following:

• Unknowing violation: If the individual was unaware that a HIPAA violation occurred, fines may be $100 per violation.
• Reasonable cause: If there was a valid reason for the action and no willful neglect, fines may start at $1,000 per violation.
• Willful neglect (corrected): If the violation resulted from willful neglect but was later corrected, fines may be at least $10,000 per violation.
• Willful neglect (not corrected): If the individual acted with willful neglect and failed to correct the issue, fines may be $50,000 or more per violation.

Criminal HIPAA Penalties

Criminal HIPAA penalties apply when a violation is committed with malicious or intentional intent. These penalties are significantly more severe than civil penalties and may include fines and imprisonment:

• Knowingly obtaining or disclosing PHI: Fines of up to $50,000 and up to one year in prison.
• Violations under false pretenses: Fines of up to $100,000 and up to five years in prison.
• Violations for personal gain or harm: If PHI is sold or used to harm a patient, penalties can reach $250,000 in fines and up to ten years in prison.

 

Penalty Tier	Culpability	Minimum Penalty per Violation	Maximum Penalty per Violation	Annual Penalty Cap
Tier 1	Lack of Knowledge	$145	$36,505.50	$36,505.50
Tier 2	Reasonable Cause	$1,461	$73,011	$146,053
Tier 3	Willful Neglect	$14,602	$73,011	$365,052
Tier 4	Willful neglect (not corrected within 30 days	$73,011	$2,190,294	$2,190,294

 

Examples of HIPPA Violations 

 

1.   Misplacing (losing) work devices

Mobile devices serve various purposes for their users, and for employees working in the healthcare industry, they are a tool that offers them convenience and more productive processes. Mobile devices can be used to access medical records, contact clients, and schedule appointments, among many other tasks. 

While this makes them exceptionally convenient for the modern medical industry, it also makes them a target. If your company’s devices store PHI, and you lose them, that will be classified as a HIPAA violation, resulting in you having to pay fines. 

2. Inadequate security training

An aspect of remaining HIPAA-compliant is to educate your team members on the importance of cybersecurity and how to exercise HIPAA regulations within your company operations. Organizations that do not invest in high-quality employee training are more likely to succumb to other HIPAA violations and cyber threats. 

3. Leveraging technologies that do not conform with HIPAA compliance

According to HIPAA’s Security Rule, healthcare organizations are obligated to deploy “administrative, technical, and physical safeguards for protecting e-PHI”. In other words, you must only use technological solutions that deploy innovative cybersecurity measures to protect data and patient information within the workplace and while it is in transit.

Failing to use these sorts of tools (for example, a specific software application) can constitute a HIPAA violation because the solution does not meet HIPAA’s criteria for effective PHI management.

4. Unauthorized access to sensitive information

One of the more common HIPAA violations, unauthorized access involves an entity breaching protocols to access information within your network. Unauthorized access often occurs in several ways such as the use of stolen credentials, the installation of malicious software, losing an unprotected work device, and more.  

In the eyes of the OCR, data privacy is foundational to HIPAA compliance. Regardless of one’s intention for accessing the information, only authorized personnel should be privy to the data.   

5. Defying the Breach Notification Rule

Simply put, the Breach Notification Rule is a HIPAA requirement that specifies that HIPAA-covered entities and their corresponding business associates must report all security breach incidents. Generally speaking, the timeframe for issuing a report is 60 days, though the specific time you are required to make the notification to the HHS depends on the violation’s number of victims. Not reporting violations on time is a common occurrence.

6. Exposing PHI to unauthorized parties

Data privacy is important for healthcare organizations, as the information they have can be used to exploit patients. This HIPAA violation relates to the Privacy Rule- the part of HIPAA that deals with the protection of patient information and its disclosure. 

Outside of data breaches, PHI can be exposed to unauthorized personnel in several ways. This includes:

• Passing along incorrect information.
• Conducting classified conversations in public settings, within earshot of others.
• Mishandling PHI.
• Disclosing PHI after the patient has revoked their permission.
• Data leaks after sensitive devices were lost or stolen.
• Disclosing PHI without considering the minimum necessary rule

7. Incorrectly disposing of PHI

Once the PHI of a patient is not needed or the period where it must be kept within your network has passed, HIPAA-covered entities must destroy the record permanently. This can be done through the shredding of paper records and the permanent deletion of digital information. Any device that contains PHI should also be destroyed to ensure that its data cannot be retrieved by others and used for malicious purposes.

Conclusion

HIPAA penalties are designed to reflect the seriousness of a violation and the intent behind it. While civil penalties address unintentional or negligent actions, criminal penalties are reserved for deliberate and malicious misuse of protected health information. Understanding these distinctions emphasizes the importance of HIPAA compliance, proper training, and timely corrective actions to protect patient privacy and avoid severe legal and financial consequences.

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