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What are the Consequences of a HIPAA Violation?

April 11, 2022

7 minutes

doctor working intensely avoiding HIPAA violations and consequences

The consequences for violating HIPAA regulations can be extremely harmful to businesses, especially for repeat offenders or those found being negligent to the established regulations.

Read on to learn more about what qualifies as a HIPAA violation, the consequences for each form of violation, and what businesses can do to protect themselves and their sensitive individual health information.

Examples of a HIPAA Violation

HIPAA is full of strict rules and regulations regarding the protection and use of individual healthcare information. The rules apply to covered entities like doctors, nurses, healthcare providers, and insurance companies that handle this type of data.

HIPAA violations are organized into two main categories: intentional and accidental. Both will result in fines, but intentional misuse of individually identifiable health information is a serious offense that is investigated by the Department of Justice (DOJ) and can result in both fines and jail time.

An accidental violation can occur due to a lack of encryption or cybersecurity standards, resulting in a data breach and loss of patient health data. Cyberattacks resulting in lost or stolen data can come from multiple attack vectors from full-blown cyberattacks to simpler phishing tactics or simply lost credentials.

Intentional violations can be done by anyone but typically involve stolen data that is intended to be sold or maliciously used for personal or commercial gain. An example would be stealing patient data to sell to a rival company or use as extortion.

The Consequences for Businesses That Violate HIPAA

Because protected patient information is so important, HIPAA violations are met with serious consequences, especially if covered entities are found to be negligent or the rules and regulations.

HIPAA Violation Fines and Tiers

HIPAA violations are categorized into four distinct tiers that identify the severity of the violation and measure the negligence performed by a covered entity (any organization that must follow HIPAA regulations) when handling the protected information and data.

HIPAA violation tiers and fines

Each tier has a designated fine minimum and maximum, but the actual fine is determined by an investigation by the Department of Health and Human Services’ (HHR) Office for Civil Rights (OCR) that takes violation history and severity into account.

Tier 1 Violation: This is when a covered entity was unaware of and could not have realistically avoided a violation, even if a higher amount of care had been given to following the HIPAA regulations. A tier 1 violation results in a minimum fine of $100 per violation up to $50,000.

Tier 2 Violation: This occurs when a HIPAA-covered entity should have been aware of a violation but could not have avoided it. This is the last tier before the OCR labels the violation “willful neglect.” For tier 2 violations, the minimum fine is $1,000 per violation up to $50,000.

Tier 3 Violation: A tier 3 violation is the first violation that is a result of what the OCR deems “willful neglect” of HIPAA regulations. In a tier 3 case, the covered entity has at least made an attempt to correct the violation. For tier 3 violations, the minimum fine is $10,000 per offense with a maximum of $50,000.

Tier 4 Violation: This is the highest tier of HIPAA violation and is defined as a violation due to willful neglect where there is no attempt at correction. There is a minimum fine of $50,000 per violation and no set maximum.

Criminal Violations of HIPAA

If a HIPAA violation is deemed criminal—for example, if HIPAA-protected information is stolen and knowingly obtain or disclose individually identifiable healthcare information—the DOJ will investigate, and offenders can face large fines and additional jail time depending on the severity of the offense.

Offenses committed under false pretenses can face fines up to $100,000 and 5 years in prison.

Offenses committed with the intent to sell, transfer, or use healthcare information for commercial gain, personal gain, or malicious harm can bring fines of $250,000 and up to 10 years in prison.

In Conclusion

Maintaining HIPAA compliance and meeting all regulations is critically important for covered entities in the healthcare industry because not only will you avoid fines and potential jail time, but a serious data breach can result in lost business, erosion of trust from patients, and irreparable harm to your reputation.

Find more blogs, checklists, infographics, and videos to help you learn more about the cybersecurity measures that businesses should take to ensure all critical data is protected from bad actors in our Insights Center.

For businesses who don’t know where they stand when it comes to cybersecurity, a risk audit from DOT Security might help, learn more here.