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What are the Consequences of Violating HIPAA Rules?

The Department of Health and Human Services (HHS) passed the Health Insurance Portability and Accountability Act (HIPAA) to safeguard a patient’s personal health information. It also gave people control over their medical records.

All organizations that handle Protected Health Information (PHI) must follow HIPAA rules. These include healthcare facilities, covered entities, and business associates since all handle PHI in some form.

Violating HIPAA rules have severe consequences for the healthcare organization and its partners. Intentional HIPAA violations can cost companies millions in penalties and damages. There’s also the possibility of criminal charges and jail time.

HIPAA violations are also retroactive. An organization will still face the consequences even if the infraction happened years ago. So every covered entity should ensure that its workforce undergoes compliance training.

Most Common HIPAA Violations

There are several ways to identify breaches in HIPAA rules. A Covered Entity or Business Associate can uncover them during risk analysis and self-audits. The Health Department’s Office of Civil Rights (OCR) also discover them during audits or when a patient reports a violation.

There are dozens of possible HIPAA violations. The HIPAA Journal revealed that violations caused by employee neglect or bad behavior were the most common. Health organizations failing to train workers face consequences, especially if it led to non-compliance.

Failure to implement and maintain basic cybersecurity measures is the second most common violation. The report also revealed that these infractions could’ve been avoided if organizations had encryption procedures or information risk management.

Other violations include improper disposal of PHI, failing to allow patient access requests, and inappropriate PHI disclosures to staff and associates.  

Consequences of Violating HIPAA Regulations 

The OCR is authorized to act against organizations or individuals that fail to comply with the HIPAA Privacy Law. The OCR can impose the following consequences for offenders:

Fines and Penalties

The OCR prefers to resolve HIPAA infractions via non-punitive measures. It can offer the offending party the chance for voluntary compliance or issue a technical guide to help the covered entity address its issues.

However, financial penalties are levied for serious violations. An organization can be penalized if it committed multiple infractions or if the issue has persisted for a long time.

The OCR will determine the fine based on the HIPAA penalty structure. There are four tiers to consider.

*Tier 1: The covered entity was unaware of the violation and couldn’t avoid it. The organization also made a reasonable effort to follow HIPAA rules. The fine per violation is anywhere from $100 to $50,000.

*Tier 2: The covered entity should have been aware of the violation but couldn’t avoid it even with reasonable care. The infraction is almost a willful neglect of HIPAA policies. The minimum fine per violation is $1,000 to $50,000.

*Tier 3: The violation was caused by “willful neglect” of the covered entity. However, an attempt to correct the problem was made. There’s a fine of $10,000 to $50,000 per violation.

*Tier 4: This is the willful neglect of the HIPAA rules. No attempt was made to correct the issue. There’s a minimum fine of $50,000 for every violation.

Loss of Medical Insurance Payments

Failure to follow the HIPAA Privacy Law could see Medicare withholding their payments. Since Medicare is the largest medical insurance provider in the country, the loss of payment is a heavy financial blow.

Loss of Employment

Employees can see their employment contracts terminated if they violate HIPAA rules. It doesn’t matter if the mistake was due to unintentional negligence. The worker might not be allowed to remain on the job.

Aside from losing employees, the covered entity will also face OCR penalties. They might also have to undergo plaintiff settlements.

Criminal Charges or Jail Time

Severe HIPAA violations can result in criminal charges. The individual who committed the infraction could also face jail time, regardless if it was accidental or willful.

Criminal charges for HIPAA violations are divided into three tiers. The category is based on the person’s intention when they expose or accessed PHI.

*Tier 1: The penalty can be up to 12 months of jail time. The offending party has no knowledge of the violation committed.

*Tier 2: The intentional deception to gain access to PHI carries a five-year sentence.

*Tier 3: Violators can get up to ten-year imprisonment for “malicious intent” to access PHI.

It’s hard to recover from the consequences of violating HIPAA rules. Some companies have found it impossible to return from being sanctioned. It’s why your organization should comply with HIPAA Privacy Law.

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