The Health Insurance Portability and Accountability Act (HIPAA) is a federal law enacted in 1996 to protect the privacy and security of individuals’ health information, known as Protected Health Information (PHI). HIPAA applies to healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates. The law sets standards for:
- Privacy Rule: Ensures the confidentiality, integrity, and availability of PHI.
- Security Rule: Establishes safeguards for electronic PHI (ePHI).
- Breach Notification Rule: Requires timely notification of individuals affected by a breach of unsecured PHI.
- Transactions and Code Sets Rule: Standardizes electronic transactions and code sets for healthcare claims and other administrative processes.
HIPAA Violation Penalties:
HIPAA violations can result in both civil and criminal penalties. The Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) is responsible for enforcing HIPAA.
Civil Penalties:
- Tiered Penalty Structure: Based on the level of culpability and harm caused by the violation.
- Tier 1: Unreasonable disregard (minimum $100, maximum $50,000 per violation, with an annual cap of $2,067,813).
- Tier 2: Lack of reasonable diligence (minimum $1,000, maximum $50,000 per violation, with an annual cap of $2,067,813).
- Tier 3: Willful neglect (minimum $10,000, maximum $50,000 per violation, with an annual cap of $2,067,813).
- Tier 4: Willful neglect with no corrective action (minimum $50,000 per violation, with an annual cap of $2,067,813).
- Corrective Action Plans: May be required to address compliance deficiencies.
- State Attorneys General: May pursue civil penalties for HIPAA violations, but only after HHS’ OCR has conducted an investigation and demonstrated harm to a resident of the state.
Criminal Penalties:
- Knowingly and Wrongfully Disclosing PHI: Minimum fine $50,000, maximum fine $250,000, and imprisonment up to 1 year.
- Willful Violations: Maximum fine $1.5 million and imprisonment up to 10 years.
Key Points:
- HIPAA violations can result in both civil and criminal penalties.
- The OCR determines penalties based on the nature and extent of the violation, resulting harm, and other aggravating and mitigating factors.
- State Attorneys General may pursue civil penalties for HIPAA violations, but only after HHS’ OCR has conducted an investigation and demonstrated harm to a resident of the state.
- HIPAA violations can have significant financial and reputational consequences for covered entities and business associates.