What Are the Consequences of a HIPAA Violation?

September 2, 2024

Table of Contents 

• What is HIPAA Training?
• When do HIPAA Violations Happen?
• Category of HIPAA Violations
• Consequences of HIPAA violation
• Civil and Criminal Penalties for HIPAA violation
• How to Avoid HIPAA Violations?
• Protect Your Reputation: Preventing HIPAA Violations

HIPAA violation consequences could be grave if you don’t follow them. With the growth of cyber intervention in the healthcare sector, the cases of data breaches have increased. From 2019 to 2020, almost 34.9 million people have encountered breaches of personal data. That’s exactly why HIPAA regulations were introduced. 

The main aim of HIPAA is to protect employee relations with healthcare coverage. There are various rules governing HIPAA policies, and failure to meet those laws results in a HIPAA violation. Some violations include disclosure of Protected Health Information (PHI) and failure to conduct a risk evaluation. When these situations arise, the overall operation of the healthcare industry gets disrupted. 

In this blog, we will focus on answering the question: What are the consequences of violating HIPAA? The main aim is to understand the different violations that happen. Furthermore, you will be able to understand the situations that give rise to such violations and their penalties.

What Is HIPAA Training? 

HIPAA training is one of the most crucial elements in the healthcare industry. It ensures compliance with HIPAA and secures the security and privacy of patients. HIPAA training includes educating employees, staff members, and other medical professionals on the various regulations, practices, and guidelines of HIPAA.

Through HIPAA training, individuals gain a comprehensive understanding of their responsibilities, which includes:

• protecting patient information
• handling sensitive data
•  maintaining confidentiality

The training program increases awareness of the importance of security in the healthcare industry. 

Read More: 

When Do HIPAA Violations Happen? 

Generally, HIPAA violations happen when any organization goes against the standards mentioned by the 1996 US Federal Legislation. 

• Most HIPAA violations involve mishandling a patient’s Protected Health Information (PHI). Violations can also stem from inadequate staff training and improper log monitoring.
• HIPAA violations are often discovered through the actions of responsible employees. The transfer of covered entities can also expose violations. Additionally, the OCR’s (Office of Civil Rights) audits of covered entities and their associates may reveal violations.
• When a HIPAA complaint is filed, the information related to the issue is carefully investigated. HIPAA policies ensure that organizations found to have committed malpractice do not retaliate. After a thorough investigation, the necessary actions are taken.
• HIPAA violations occur when an organization’s stability in terms of data security and privacy is compromised. When such violations are encountered, a resolution agreement is usually reached to address the issue.

Category of HIPAA Violations

HIPAA breaches can be categorized into different types. A few of them are:

• Absence of HIPAA training: Compliance training and documentation of that training are essential. Not having either one would lead to a violation.
• Failing the risk analysis of an organization: Every organization must conduct a detailed analysis of its vulnerabilities. This will help sustain itself in the market.
• Mishandling of medical records: Leaving computer screens open increases the chances of unauthorized viewing. Enhancing security by using lock screens and transitioning to digital records can help protect valuable data.
• Use of unencrypted technology to transfer PHI:Sharing patient files through unprotected channels is a HIPAA violation. Using encrypted platforms is strongly recommended.
• Failing to counter cyber attacks: The increasing number of cyber attacks jeopardizes the data stored in systems or the cloud. Securing records and detecting breaches is crucial for avoiding HIPAA violations.
• Failing to obtain authorization for record sharing: Employees must be properly trained to obtain written consent before sharing records, including for billing or treatment purposes. They should avoid sharing information without the patient’s permission.

Read more: Who Must Comply with HIPAA Rules and Regulations?

Consequences of HIPAA Violation

The question of what happens if HIPAA is violated can be answered by looking at the consequences of HIPAA violations. Encountering a HIPAA violation generally damages an organization’s reputation and hampers its overall image.

HIPAA violations deal a significant blow to the company’s reputation. Just imagine notifying patients that their data has been leaked; this easily breaks their trust in that organization. Such unprofessional behavior would drive them to choose another healthcare provider that offers more safety.

Apart from this, there are legal penalties for HIPAA violations, which can include:

• Legal action
• Amendments in the company’s operations and security measures
• Fines
• Criminal charges

Penalties are determined based on the number of people impacted, the specific type of violation, and whether the public was informed about the violation. Depending on the severity of the breach, fines range from 100 to 60,000 US dollars per violation. 

There have been cases where organizations have paid millions in fines due to their failure to secure patient data. These economic penalties are very difficult for businesses to handle, as they significantly impact the financial stability and goodwill of the companies involved.

Real-life Example

One of the biggest examples of the consequences of HIPAA violations is the case of Premera Blue Cross. In 2020, the OCR found that hackers gained access to the data of nearly 10.4 million individuals. 

The hackers disrupted the computer systems with a phishing email that installed malware. This particular malware gave access to the ePHI, which went undetected for almost 9 months. OCR’s investigation found “systemic noncompliance” with the rules of HIPAA. 

According to the OCR, the company failed to conduct an effective risk analysis to detect threats to the security and disclosure of the ePHIs. They also failed to protect the data from vulnerabilities and prevent unauthorized access. 

When it was found that the company had failed to secure the data, it agreed to pay 6.85 million US dollars to the OCR at the US Department of HHS (Health and Human Services) and develop a corrective action plan to address all the violations.

Civil and Criminal Penalties for HIPAA violation

Individuals found involved in HIPAA Violations can face criminal and civil penalties. Depending on the magnitude of the violation, charges can be formulated against them. Therefore, organizations should be very careful in handling all the essential data of the patients. A forfeiture of those would put the reputation and image in jeopardy.

1. Civil Violations 

In cases of noncompliance where the company fails to resolve the matter, OCR imposes civil money penalties (CMPs). The civil penalty structure determines the CMP and the HHS secretary sets the penalty amount based on the magnitude of the violation. If violations are corrected within 30 days, the secretary is prohibited from imposing civil penalties. Some of the tentative amounts imposed for various issues are:

• For reasonable cause, the company can be fined between 1,000 and 50,000 US Dollars. An additional 100,000 US Dollars can be charged for repeat violations.
• Cases of willful negligence by the company may result in fines ranging from 10,000 to 50,000 US Dollars per violation. For repeated violations, a fine of 250,000 US Dollars may be charged.
• Companies that willfully neglect violations and do not correct them within the required period may face fines of 50,000 US Dollars per violation, up to a maximum of 1.5 million US Dollars annually.

1. Criminal Violations 

Criminal violations are handled by the DOJ (Department of Justice). Penalties may involve the submission of money, time behind bars, or both. 

• Situations categorized as being done “knowingly” by individuals for personal benefit can result in fines of up to 50,000 US Dollars and imprisonment for 1 year.
• Offenses committed under “False Pretenses” can result in penalties of up to 100,000 US Dollars and 5 years in prison. 
• Offenses pertaining to transferring health information, selling it for personal gain, or causing malicious harm can result in fines of up to 250,000 US Dollars and 10 years in prison.

How to Avoid HIPAA Violations? 

“A single data breach can cost an organization millions, not just in fines, but in lost reputation and trust.” In the healthcare industry, HIPAA violations can have severe consequences. Some preventive measures organizations can undertake to avoid HIPAA violations are:

• Conducting self-audits: Ensuring the administration and technical aspects of security is very important in an organization to protect PHI. Self-audits help an organization identify areas of gaps and vulnerabilities. Once identified, the issues can be addressed and mitigated effectively. More importantly, the organization should develop plans that make the company invincible to such risks in the future.
• Employee Training: Proper training on how to handle patients’ documents is crucial. This is because most data breaches occur from these sources. Training them on cybersecurity can also fortify overall systems and protect valuable data. Plus, you must deliver knowledge about protection policies to staff and various associates in the industry.
• Implementation of Business Associate Agreements (BAAs): BAAs are key elements of HIPAA compliance. They protect the organization from breaches caused by third parties. A BAA is a legal contract between an organization and its business associate vendors. The contract ensures both parties maintain HIPAA compliance at all times.

Read more: Complete HIPAA Compliance: IT Checklist, Security Rules & More 

Protect Your Reputation: Preventing HIPAA Violations

Our discussion demonstrates that HIPAA violations can have severe consequences. Whether intentional or unintentional, they could harm an organization’s image. Therefore, they should be avoided at all costs. 

The saying, “Prevention is better than cure,” holds in these situations, as the consequences of violations can be very costly. The repercussions can include substantial penalties and even imprisonment.

Additionally, the accused organization’s goodwill and reputation can be severely damaged, which can affect its long-term business plans.