HIPAA Violation Consequences: What Every Healthcare Professional Should Know

IN THIS ARTICLE

• What HIPAA Regulations Actually Represent
• The Most Common Types of HIPAA Violations
• How Can HIPAA Violations Hurt Healthcare Providers?
• How can HIPAA Violations Hurt Patients?
• How are HIPAA Violations Discovered?
• Tips for Preventing HIPAA Violations
• Final Thoughts

What are the consequences of a HIPAA violation? Well, it varies greatly depending on the violation. More importantly, let’s talk about the fairly simple ways that you can remain compliant and avoid violation altogether. Then we’ll get into the consequences of not adhering.

What HIPAA Regulations Actually Represent

HIPAA, or the Health Insurance Portability and Accountability Act of 1996, is a federal law that requires the creation of national standards to protect sensitive patient health information from being disclosed without the patient’s consent or knowledge. HIPAA regulations represent a set of guidelines and standards that covered entities and business associates must follow to protect the privacy and security of protected health information (PHI). These regulations include the Privacy Rule, which protects the privacy of individually identifiable health information, and the Security Rule, which sets national standards to protect electronic protected health information (e-PHI). The HIPAA Privacy Rule pertains to all PHI, including paper and electronic, while the Security Rule deals specifically with e-PHI. HIPAA Rules and Regulations lay out three types of security safeguards required for compliance: administrative, physical, and technical. For each of these types, the HIPAA Privacy Rule identifies security standards, and for each standard, it names both required and addressable implementation specifications. There is obviously a litany of information out there and too much to digest in a single sitting. So, in an effort to remain succinct, here’s a short roundup of some of the regulations and what they mean to your practice.

Standardize Your Coding and Electronic Transmissions

HIPAA wants to make sure that everyone is communicating about healthcare issues in a unified way, and regulations in its “Transactions and Code Sets” rule accomplish this. To comply, simply use a compliant electronic health record (EHR). Easy peasy. 

Get Unique Identifiers for You (and Your Organization)

In the “Identifier Standards” rule, HIPAA mandates that every individual or organization that renders healthcare have a unique 10-digit National Provider Identifier (NPI). To comply, make sure that all HIPAA-covered entities in your practice have an NPI.

Protect Your Patients’ Privacy

The HIPAA Privacy Rule, in conjunction with the HIPAA Security Rule, constitutes the most important part of HIPAA for most providers. The rule spells out how healthcare entities may use PHI, and it also delineates patients’ rights to be informed of and control those uses. In a nutshell, you can comply by designating a privacy official, understanding PHI and keeping a record of all uses, and understanding the concept of “minimum necessary” to guide your uses. There’s more on these points in this article. 

Secure Your Electronic Medical Information

Perform a risk analysis for electronic PHI in your organization, and then implement safeguards to address security gaps identified by the risk analysis. Make sure everything is documented appropriately, and repeat those steps on a periodic basis. There’s a lot that goes into doing this correctly and thoroughly, but this is the necessary high-level approach. The final pieces are understanding the penalties associated with violations and how to handle information breaches.

The Most Common Types of HIPAA Violations

The most common types of violations include:

Improper Disposal of Records

Failing to secure electronic records and not properly disposing of paper records.

Unauthorized Access

Failing to limit access to patient records to only authorized personnel.

Device Theft

The theft or loss of devices containing patient information, such as laptops or smartphones.

Unencrypted Data

Failing to encrypt electronic patient information and not properly securing physical records.

Disclosure of Information

Failing to train employees on HIPAA compliance and not having policies and procedures in place to ensure compliance.

Failure to Conduct Risk Analysis

Implementing safeguards to address security gaps identified by the risk analysis. It’s critical for medical practices to not just be aware of these common violations (and take the appropriate steps to prevent them), but to comply to avoid financial penalties and ultimately the loss of patient trust—a significant penalty in its own right.

How Can HIPAA Violations Hurt Healthcare Providers?

Financial Penalties

There can be both civil and criminal penalties for violating HIPAA. The consequences of violating HIPAA depend on the nature of the violation and the classification of the violator (e.g., covered entity, business associate, or workforce member). This is probably a good time to point you to the HIPAA Enforcement Rule, the actual section of HIPAA that imposes the penalties and serves as the source of truth. The following are some of the potential consequences of a HIPAA violation. Civil Penalties:

• Unknowing violation: Minimum penalty of $100 per violation, with an annual maximum of $25,000 for repeat violations.
• Reasonable cause: Penalty range of $1,000 – $50,000 per violation, with an annual maximum of $100,000 for repeat violations.
• Willful neglect but violation is corrected within the required time period: Penalty range of $10,000 – $50,000 per violation, with an annual maximum of $250,000 for repeat violations.
• Willful neglect and violation is not corrected: Minimum penalty of $50,000 per violation, with an annual maximum of $1.5 million.
• Maximum penalty caps of up to $1.5 million for all violations of an identical provision during a calendar year.

Criminal Penalties:

• Offenses committed under false pretenses: Penalty of up to $100,000 fine, with up to 5 years in prison.
• Willful or malicious intent: Up to 10 years in prison.

In addition to financial penalties and even imprisonment, HIPAA violations can also result in loss of income, termination of employment contracts, and sanctions. It’s important to note that the Department of Health and Human Services’ Office for Civil Rights (OCR) may refer complaints to the Department of Justice for investigation if they describe actions that could be a violation of the criminal provision of HIPAA.

Criminal Charges

In addition to monetary penalties, some individuals who violate HIPAA Rules can go to jail for up to 10 years. The penalties for criminal violations of HIPAA are substantial, and the federal government is willing to prosecute HIPAA violations at every level.

Civil Lawsuits

HIPAA violations do not provide for a private cause of action, so patients cannot sue for a HIPAA violation. However, patients can sue healthcare providers or specific healthcare professionals for violations of state laws that involve HIPAA, or under ERISA, or under other legal theories or causes of action, such as tort law. Patients can bring a lawsuit and ask for money if there was a “harmful” violation of their medical history or medical privacy. Civil penalties for HIPAA violations can range from $100 for an “unknowing” violation to $1.5 million for “willful neglect”.

Loss of Medicare or Medicaid Certification

If a healthcare provider is found to have violated HIPAA regulations, they may lose their certification to participate in Medicare or Medicaid programs. This can be a significant loss for healthcare providers, as Medicare and Medicaid are major sources of revenue for many healthcare facilities. Losing certification can also damage the reputation of healthcare providers and make it difficult to attract new patients.

How can HIPAA Violations Hurt Patients?

HIPAA violations can hurt patients in several ways. Here are just a few:

Identity Theft

HIPAA violations can put patients’ private health information at risk, which can be used to harm the patients it belongs to. Patients may feel violated and exposed if their sensitive information is shared without their consent, and this unauthorized sharing may inadvertently lead to identity theft—something that can take years to remedy.

Loss of Trust

Patients may lose trust in their healthcare providers if they feel that their privacy has been violated. This can lead to patients being less likely to seek medical care or share important information with their healthcare providers.

Financial Loss

HIPAA violations can result in fines and penalties for healthcare providers, which can ultimately be passed on to patients in the form of higher healthcare costs.

Stigma

Individuals who violate HIPAA rules can go to jail for up to 10 years and the stigma associated with jail time can be incredibly detrimental to a future in medical practice and care. A patient with a long-standing relationship with you will be impacted by this loss and will be forced to find a new provider—not always an easy task. Overall, HIPAA violations can have serious consequences for patients, including privacy risks, loss of trust, financial harm, and legal consequences. It is important for healthcare providers to take steps to protect patient privacy and comply with HIPAA regulations to avoid these negative outcomes.

How are HIPAA Violations Discovered?

HIPAA violations can be discovered in several ways, including self-reporting by employees or third-party investigations. HIPAA-covered organizations conduct internal audits and report any violations they uncover. Employees also self-report HIPAA violations they or their coworkers commit. Additionally, HIPAA’s Breach Notification Rule requires organizations to provide individual notifications without unreasonable delay and no later than 60 days following the discovery of a breach.  HIPAA violations can continue for many months or even years before they are discovered, and the longer they persist, the greater the penalty will be when they are eventually discovered. Therefore, it is important for HIPAA-covered entities to conduct regular HIPAA compliance reviews to ensure HIPAA violations are discovered and corrected before they are identified by regulators. There are really three main ways that HIPAA violations are discovered: through internal audits, self-reporting, and third-party investigations. 

Tips for Preventing HIPAA Violations

Here are some tips for preventing HIPAA violations:

Train Staff Regularly

One of the best ways to avoid potential data breaches is to properly train your team on HIPAA compliance. Annual or biannual training is a great foundation for ensuring your team is up to date on any new policies and procedures.

Maintain Possession of Mobile Devices & Use Encryption

Never leave portable devices unattended, and keep all antivirus and antimalware software up to date. Use encryption and regularly change passwords on all important devices.

Implement Strong Password Policies

Never share passwords or login credentials.

Conduct Regular Audits

Conducting regular compliance audits is an important part of maintaining HIPAA compliance. OCR conducts periodic audits to ensure that covered entities and their business associates comply with the requirements of HIPAA’s regulations. In addition to OCR audits, healthcare organizations should perform regular self-audits to ensure compliance with HIPAA’s administrative, physical, and technical safeguards. HIPAA compliance is an ongoing process that requires regular monitoring, training, and assessment.

Dispose of PHI Properly

Proper disposal of PHI is an essential part of HIPAA compliance. You can do this by removing data stored on devices so it’s no longer accessible (make sure to use an industry-recommended secure-wipe procedure, when applicable), destroying all hard copies, training your employees on the subject, ensuring employees are aware of any depository or bin where media is to be placed while it awaits destruction, and making sure that your organization’s record disposal process is set up in such a way that unauthorized access is prevented.                                                                                                                            

Final Thoughts

HIPAA compliance is an ongoing journey. Understanding the ins and outs of how to prevent HIPAA violations is critical to protecting patient privacy and avoiding costly penalties. But it isn’t rocket science. The tips outlined in this article are straightforward and will ensure adherence. Remember the basics: train your team, maintain possession of mobile devices, limit access to devices and data, keep anything with patient information out of the public’s eye, double-check authorization requirements, and dispose of PHI properly.  Conducting regular audits is also important to maintain HIPAA compliance. Your practice should perform regular self-audits to ensure compliance with HIPAA’s administrative, physical, and technical safeguards. By remaining vigilant, healthcare organizations can prevent HIPAA violations and protect patient privacy. Here is an easy checklist to refer back to when you have questions. And, this white paper delves into greater detail about how to use Spruce in a HIPAA-compliant way.