Hipaa Law Violation: Understanding The Legal Consequences

The penalties for violating HIPAA include civil and criminal charges, with fines ranging from $100 to $2,067,813 per violation and prison sentences of up to ten years. The specific charges depend on the type and severity of the violation, with four tiers of violations ranging from unavoidable breaches to willful neglect without correction. Criminal charges are reserved for flagrant violations or those involving a larger conspiracy.

Criminal charges and imprisonment

Tier 1

Criminal violations that occur as a result of negligence can result in a prison term of up to 1 year and a fine of up to $50,000.

Tier 2

Obtaining protected health information under false pretences carries a maximum prison term of 5 years and a fine of up to $100,000.

Tier 3

Knowingly disclosing PHI with malicious intent or for personal/commercial gain can result in a prison term of up to 10 years and a fine of up to $250,000.

Tier 4

There is also a mandatory two-year jail term for aggravated identity theft.

The above prison terms and fines are maximums and may be adjusted based on factors such as the nature of the violation, the number of people impacted, and the harm caused.

Civil penalties and fines

Tier 1: Lack of Knowledge

The covered entity or business associate was unaware of and, through due diligence, could not have known the HIPAA rule was violated. The minimum penalty is $100 per violation, with an annual maximum of $25,000 for repeat violations. The maximum penalty is $50,000 per violation, with a yearly maximum of $1.5 million.

Tier 2: Reasonable Cause

The covered entity knew or should have known through due diligence that its action (or omission) violated HIPAA, but the violation was not caused by willful neglect. The minimum penalty is $1,000 per violation, with an annual maximum of $100,000 for repeat HIPAA violations. The maximum penalty is $50,000 per violation, with a yearly maximum of $1.5 million.

Tier 3: Willful Neglect, Corrected within 30 Days

The violation was caused by willful neglect, but the covered entity took corrective action within 30 days. The minimum penalty is $10,000 per violation, with an annual maximum of $250,000 for repeat violations. The maximum penalty is $50,000 per violation, with a yearly maximum of $1.5 million.

Tier 4: Willful Neglect, Not Corrected within 30 Days

The violation of HIPAA rules constituted willful neglect, and the entity made no attempt to correct the violation within 30 days. The minimum penalty is $50,000 per violation, with an annual maximum of $1.5 million. The maximum penalty is the same as for Tier 1, 2, and 3: $50,000 per violation, with a yearly maximum of $1.5 million.

In addition to monetary penalties, organizations may be required to adopt corrective action plans to address and rectify the identified compliance issues. Violators may also face increased scrutiny and more frequent audits and assessments from regulatory bodies.

Tiered penalty structure

The penalties for breaking the HIPAA law are tiered and depend on the type and severity of the violation. The two types of violations are civil and criminal, with each category having graded tiers to determine the penalties. The civil penalties for HIPAA violations are imposed by the Department of Health and Human Services (HHS) Office for Civil Rights (OCR), while criminal penalties are handled by the Department of Justice (DOJ).

Tier 1: Lack of Knowledge

The covered entity or business associate was unaware of and, through due diligence, could not have known the HIPAA rule was violated. The minimum penalty per violation is $137, with a maximum of $68,928 per violation. The calendar-year cap is $2,067,813.

Tier 2: Reasonable Cause and Not Willful Neglect

The covered entity knew or should have known through due diligence that its action (or omission) violated HIPAA, but the violation was not caused by willful neglect. The minimum penalty per violation is $1,379, with a maximum of $68,928 per violation. The calendar-year cap is $2,067,813.

Tier 3: Willful Neglect, Corrected within 30 Days

The violation was caused by willful neglect, but the covered entity took corrective action within 30 days. The minimum penalty per violation is $13,785, with a maximum of $68,928 per violation. The calendar-year cap is $2,067,813.

Tier 4: Willful Neglect, Not Corrected within 30 Days

The violation of HIPAA rules constituted willful neglect, and the entity made no attempt to correct the violation within 30 days. The minimum penalty per violation is $68,928, with a maximum of $2,067,813 per violation. The calendar-year cap is $2,067,813.

Criminal penalties for HIPAA violations are also tiered and can result in jail time in addition to fines.

Tier 1: Wrongful Disclosure of PHI

This tier covers cases of reasonable cause or lack of knowledge. The maximum penalty is a $50,000 fine, up to one year in prison, or both.

Tier 2: Wrongful Disclosure of PHI Under False Pretenses

This tier includes obtaining PHI under false pretenses or disclosing it without permission. The maximum penalty is a $100,000 fine, up to five years in prison, or both.

Tier 3: Wrongful Disclosure of PHI Under False Pretenses with Malicious Intent

The most severe violation involves obtaining PHI with the intent to sell, transfer, or use the data for personal gain, commercial advantage, or malicious harm. The maximum penalty is a $250,000 fine, up to ten years in prison, or both.

Criminal penalties for individuals

Tier 1: Wrongful disclosure of PHI

This tier is the lowest-level violation and covers cases of reasonable cause or lack of knowledge. The DOJ does not acknowledge ignorance of HIPAA regulations as an excuse for violating the rules because all covered entities are responsible for compliance. The maximum penalty for this tier is a $50,000 fine, up to one year in prison, or both.

Tier 2: Wrongful disclosure of PHI under false pretenses

This tier includes obtaining PHI under false pretenses or disclosing it without permission. For example, a hospital employee accessing the records of patients who aren't under their care. The maximum penalty for this tier is a $100,000 fine, up to five years in prison, or both.

Tier 3: Wrongful disclosure of PHI under false pretenses with malicious intent

This tier involves the individual wrongfully obtaining PHI with the intent to sell, transfer, or use the data for personal gain, commercial advantage, or malicious harm. The maximum penalty for this tier is a $250,000 fine, up to ten years in prison, or both.

Compliance and corrective action plans

• The Office for Civil Rights (OCR) within the Department of Health and Human Services (HHS) is responsible for enforcing HIPAA rules and can impose corrective action plans on covered entities found to be in violation.
• Corrective action plans aim to address compliance deficiencies and ensure that policies and procedures meet HIPAA standards.
• Covered entities may be required to develop or revise policies, provide training on new or updated policies, and implement technical safeguards to protect protected health information (PHI).
• Compliance and corrective action plans are often accompanied by financial penalties, which can range from $137 per violation to $2,067,813 per violation, depending on the severity and nature of the violation.
• State attorneys general can also bring civil actions, resulting in monetary damages, and covered entities may be subject to increased scrutiny and more frequent audits.
• Compliance and corrective action plans are typically tailored to the specific violations that occurred and may include measures such as employee training, enhanced security protocols, and improved risk assessment procedures.
• The goal of these plans is to strengthen the entity's compliance framework and ensure the protection of sensitive health information.
• Entities that fail to comply with corrective action plans or continue to violate HIPAA rules may face more severe consequences, including criminal charges.

Frequently asked questions