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What is HIPAA Violation?

Published January 17, 2024

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Just between 2020 and 2022, the healthcare industry witnessed $25 billion in losses as a result of cyberattacks.

As alarming and shocking as that may sound, the situation often becomes even more challenging for most organizations. The reason? The Health Insurance Portability and Accountability Act (HIPAA) obligates all organizations to undertake strict measures to ensure any PHI in their possession is appropriately protected at all times. In the event of a data breach, an organization could face additional financial penalties based on the adequacy of its efforts to prevent and mitigate such breaches.

In addition to the financial consequences of HIPAA violations, there is a significant risk of reputational damage that can be inflicted on organizations. Such violations can erode users' confidence in an organization's capacity to safeguard their data effectively.

Hence, it becomes evident why preventing HIPAA violations should be a critical priority for most organizations. Read on to learn all the important details an organization needs to know related to HIPAA violations, such as potential fines in the event of a violation, best practices to avoid such violations, and the best tools an organization can leverage in such instances.

What is a HIPAA Violation?

There are 5 HIPAA Rules, which are as follows:

Privacy Rule

The HIPAA Privacy Rule sets a standard for protecting individually identifiable health information held or transmitted by a covered entity or its business associate, in any form or media, whether electronic, paper, or oral - Protected Health Information (PHI). It limits who can access and disclose PHI.

Security Rule

The Security Rule establishes standards to protect individuals' electronic PHI (e-PHI) created, received, used, or maintained by an organization via appropriate administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and security of e-PHI.

Omnibus Rule

The Omnibus Rule obligates organizations to comply with patients’ requests to access or share their health-related information, giving patients greater control over who can access their health data and when such access is permitted.

Breach Notification Rule

The HIPAA Breach Notification Rule mandates that all covered entities promptly notify affected individuals in the event of a security breach involving their PHI. Apart from notifying the affected individuals, the Office of the Secretary of Health and Human Services, and in certain situations, the media, must also be informed. Additionally, Business Associates are required to notify the covered entities if a breach occurs on their end concerning data owned by the covered entity.

Enforcement Rule

The Enforcement Rule explains how investigations into complaints and violations are made and how fines and penalties are determined when an organization fails to follow the four rules above.

All covered entities and their business associates must comply with the aforementioned five rules. Failure to do so would result in a HIPAA violation, which may carry various degrees of consequences depending on the severity of the violation, as described in greater detail below.

Common Types of HIPAA Violations

As previously discussed, HIPAA has tiers related to what constitutes a “violation.”Hence, there is always a chance that an organization may commit a violation unintentionally or by not being proactive enough.

Some common types of such violations include the following:

  • Unauthorized access to PHI/ePHI;
  • Failure to conduct regular HIPAA risk assessments within the organization;
  • Not taking proactive measures to identify and mitigate security risks;
  • Denying patients access to their medical records upon request and without delay;
  • Failure to enter into HIPAA-Compliant Business Associate Agreement;
  • Lack of encryption or equivalent security measures to safeguard ePHI;
  • Failure to notify affected individuals within 60 days in the event of a data breach;
  • Sanctioning ePHI access without patient access;
  • Failure to appropriately destroy ePHI;
  • Creating unauthorized copies of ePHI;
  • Sharing ePHI via unauthorized methods such as private emails; and
  • Continued disclosure of ePHI after expiration of access authorization.

What Happens if a Business Violates HIPAA?

If an organization subject to HIPAA is found to have violated any of its regulatory obligations, it can expect the following consequences:

Civil Penalties

In case of any violation of HIPAA requirements, the covered entities may face civil monetary penalties. The exact amount of the penalty depends on the severity of the offense.

Criminal Penalties

If the organizations are found to have willfully violated HIPAA, they may be subject to criminal penalties. These penalties may include fines, imprisonment for personnel directly involved, or both, depending on the findings of the regulatory bodies.

Reputational Damage

Organizations in violation of HIPAA may face a severe dent in their public reputation, leading to a loss of trust and credibility among their clients and partners.

Contract Termination

Partners and other third-party entities may choose to terminate contracts with organizations in breach of HIPAA, leading to further financial and reputational damages for the organization.

Corrective Action Plan

The Office of Civil Rights (OCR) works directly with organizations found guilty of HIPAA violations to create a corrective action plan that addresses immediate concerns and prevents future violations.

Constant Scrutiny

Organizations that violate HIPAA may face a heightened degree of scrutiny and are subject to additional audits and assessments by the OCR.

What are the Penalties for HIPAA Violations?

The covered entities under HIPAA are subject to both civil as well as criminal penalties for violation of their obligations. The details of the penalties are as below:

Civil Penalties

Based on the nature of the violation committed, the civil money penalties have been prescribed in the following different levels (updated as of October 2023):

Tier 1: Minimum of $137 to a maximum of $68,928 for each violation with an annual maximum fine of $2,067,813 where the covered entity did not know and, by exercising reasonable diligence, would not have known that it was in a violation;

Tier 2: Minimum of $1,379 to a maximum of $68,928 for each violation with an annual maximum fine of $2,067,813 where the violation was due to a reasonable cause and not due to willful neglect;

Tier 3: Minimum of $13,785 to a maximum of $68,928 for each violation with an annual maximum fine of $2,067,813 where the violation was due to willful neglect and was corrected within 30 days beginning from the day when the covered entity came to know of the violation or, by exercise of reasonable diligence, would have come to know about the occurrence of the violation; and

Tier 4: Minimum of $68,928 to a maximum of $2,067,813 for each violation with an annual maximum fine of $2,067,813 where the violation was due to willful neglect and was not corrected within 30 days beginning from the day when the covered entity came to know of the violation or, by exercise of reasonable diligence, would have come to know about the occurrence of the violation.

Criminal Penalties

The provisions of HIPAA also provide for criminal enforcement for the offense of unlawful collection, use, or disclosure of individually identifiable health information. Different levels of criminal penalties to be imposed depending upon the nature of the offense are as follows:

  • Tier 1: Fine amounting to a maximum of $50,000, imprisonment for not more than one year or both for knowingly obtaining or disclosing identifiable health information;
  • Tier 2: Fine amounting to a maximum of $100,000, imprisonment for not more than five (05) years or both if the offense is committed under false pretenses; or
  • Tier 3: Fine amounting to a maximum of $250,000, imprisonment for not more than ten (10) years, or both if the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm.

How HIPAA Violations are Discovered?

HIPAA violations are typically discovered through the following primary channels:

  • Self Reporting: Organizations are required to conduct regular internal audits as part of HIPAA regulatory compliance. If an organization's practices are found non-compliant, violations will be highlighted, and the organization must self-report these violations. In addition, employees may also report HIPAA violations committed by themselves or their co-workers.
  • OCR Inquiries: The OCR investigates HIPAA-related complaints, especially those reported by users. If a reported violation involves a data breach and concerns 500 or more records, the OCR will initiate further investigations.
  • State Attorney General Involvement: State attorney generals' offices may become involved in investigating potential HIPAA violations, particularly if the violation could lead to criminal charges.

Timeline of Reporting HIPAA Violation

Complaints must be lodged within 180 days of discovering the violation, with the possibility of an extension to the reporting time limit granted in certain cases where there is good cause.  Although complaints can be submitted anonymously, it is crucial to note that OCR will not initiate an investigation into any HIPAA complaint if it lacks a supplied name and contact information.  Every complaint will undergo thorough review, and investigations into HIPAA complaints will be initiated if there are suspicions of violations of HIPAA Rules and if the complaint is submitted within the 180-day timeframe.

How to Avoid HIPAA Violations?

To avoid HIPAA violations, organizations should proactively adopt and consistently implement specific best practices. These straightforward measures play a crucial role in ensuring compliance with HIPAA:

  • Adopt strict access controls to govern who has access to sensitive PHI;
  • Conduct regular and thorough HIPAA risk assessments;
  • Adopt the safest encryption protocols to secure all PHI;
  • Undertake strict measures to destroy PHI once it is no longer needed;
  • Thoroughly vet all third-party vendors’ compliance with HIPAA security measures;
  • Ensure all PHI is transmitted only via encrypted methods;
  • Conduct regular employee training sessions related to best practices concerning PHI;
  • Maintain thorough documentation of all PHI and practices related to it.

How Does Securiti Help?

While the best practices outlined earlier are crucial for avoiding HIPAA violations, their implementation can pose challenges for organizations. Attempting to deploy these practices manually may place a significant strain on an organization's resources and prove highly inefficient.

This is where Securiti can help.

Securiti is the pioneer of the Data Command Center, a centralized platform that enables the safe use of data and GenAI. It provides unified data intelligence, controls, and orchestration across hybrid multicloud environments. These include dedicated modules such as its vendor risk assessment and internal assessment automation solutions that empower organizations to undertake and automate proactive measures on their part to minimize the chances or likelihood of HIPAA violations.

Request a demo and learn more about how Securiti can help you achieve HIPAA compliance today.

Here are some other frequently asked questions you may have:

If an organization is found guilty of a HIPAA violation, it may face regulatory actions ranging from fines to criminal charges, depending on the nature and severity of the violation. Individual employees may also face disciplinary action.

Yes, particularly if an employer’s HIPAA violation harms individuals. Such individuals may seek legal action to pursue damages.

Not particularly. HIPAA mandates organizations to undertake reasonable safeguards to protect all PHI. However, encryption is considered the most effective reasonable safeguard, making it the most reliable option an organization can opt for.

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