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Last year, enforcement of the Health Insurance Portability & Accountability Act (HIPAA) imposed more financial penalties on covered entities and business associates than ever before. Could your organization be at risk?

Penalties for HIPAA violations can be issued by the Department of Health and Human Services’ Office for Civil Rights (OCR) and State Attorneys General. In addition to financial penalties, covered entities are required to adopt a corrective action plan to bring policies and procedures up to the standards demanded by HIPAA. 

The Health Insurance Portability and Accountability Act of 1996 placed a number of requirements on HIPAA-covered entities to safeguard the Protected Health Information (PHI) of patients and to strictly control when PHI can be divulged and to whom.

Since the Enforcement Final Rule of 2006, OCR has had the power to issue financial penalties (and/or corrective action plans) to HIPAA covered entities that fail to comply with HIPAA Rules.

Financial penalties for HIPAA violations were updated by the HIPAA Omnibus Rule, which introduced charges in line with the Health Information Technology for Economic and Clinical Health Act (HITECH). The Omnibus Rule took effect on March 26, 2013.

Since the introduction of the Omnibus Rule, the new penalties for HIPAA violations apply to healthcare providers, health plans, healthcare clearinghouses, and all other covered entities, as well as business associates (BAs) of covered entities that are found to have violated HIPAA Rules.

Financial penalties are intended to act as a deterrent to prevent the violation of HIPAA laws, while also ensuring covered entities are held accountable for their actions – or lack of them – when it comes to protecting the privacy of patients and the confidentiality of health data, and providing patients with access to their health records on request.

The penalty structure for a violation of HIPAA laws is tiered based on the knowledge a covered entity had of the violation. The OCR sets the penalty based on a number of “general factors” and the seriousness of the HIPAA violation.

Ignorance of HIPAA Rules is no excuse for failing to comply with HIPAA Rules.  It is the responsibility of each covered entity to ensure that HIPAA Rules are understood and followed. In cases when a covered entity is discovered to have committed a willful violation of HIPAA laws, the maximum fines apply.

What Constitutes a HIPAA Violation?

There is much talk of HIPAA violations in the media, but what constitutes a HIPAA violation? A HIPAA violation is when a HIPAA-covered entity – or a business associate – fails to comply with one or more of the provisions of the HIPAA Privacy, Security, or Breach Notification Rules.

A violation may be deliberate or unintentional. An example of an unintentional HIPAA violation is when too much PHI is disclosed and the minimum necessary information standard is violated. When PHI is disclosed, it must be limited to the minimum necessary information to achieve the purpose for which it is disclosed. Financial penalties for HIPAA violations can be issued for unintentional HIPAA violations, although the penalties will be at a lower rate to willful violations of HIPAA Rules.

An example of a deliberate violation is unnecessarily delaying the issuing of breach notification letters to patients and exceeding the maximum timeframe of 60 days following the discovery of a breach to issue notifications – A violation of the HIPAA Breach Notification Rule.

Many HIPAA violations are the result of negligence, such as the failure to perform an organization-wide risk assessment. Financial penalties for HIPAA violations have frequently been issued for risk assessment failures.

Penalties for HIPAA violations can potentially be issued for all HIPAA violations, although OCR typically resolves most cases through voluntary compliance, issuing technical guidance, or accepting a covered entity or business associate’s plan to address the violations and change policies and procedures to prevent future violations from occurring. Financial penalties for HIPAA violations are reserved for the most serious violations of HIPAA Rules.

The above information was taken from the HIPAA Journal published on January 23, 2022. Read the full document HERE

Know your responsibilities under HIPAA law to safeguard protected health information. Get started today!