The penalties for not maintaining HIPAA compliance can include fines ranging from $100 to $50,000 per violation, with an annual maximum of $1.5 million for each violation category, as well as possible criminal charges leading to fines up to $250,000 and up to 10 years imprisonment for willful neglect, making it necessary for covered entities and business associates to adhere to the regulations to protect patient’s sensitive health information. These HIPAA penalties are designed to incentivize covered entities and business associates to take their responsibilities seriously in safeguarding patients’ PHI.
Four Tiers of Penalties
There are four categories of violations under HIPAA, each with its corresponding penalty tiers based on the level of culpability. See the table below.
| Violation Tier | Description | Penalty Range |
|---|---|---|
| Tier 1 | covered entity or business associate was unaware of the violation, could not reasonably avoid it | $100 per violation, up to $50,000 annual maximum for all violations of this type |
| Tier 2 | Violation due to reasonable cause; covered entity or business associate knew or should have known about the violation but did not act with willful neglect | $1,000 per violation, up to $50,000 annual maximum for all violations of this type |
| Tier 3 | Willful neglect that the covered entity or business associate promptly corrected | $10,000 per violation, up to $50,000 annual maximum for all violations of this type |
| Tier 4 | Willful neglect that the covered entity or business associate did not promptly correct | $50,000 per violation, up to $1.5 million annual maximum for all violations of this type |
These penalties can add up quickly, especially in cases where multiple HIPAA violations occur. A single data breach or mishandling of PHI can lead to multiple violations, amplifying the financial impact on the organization.
Criminal Penalties
HIPAA violations can also result in criminal charges, particularly in cases of willful neglect. Criminal penalties are divided into two categories based on the severity of the offense: Misdemeanor and Felony. Misdemeanor includes violations committed under false pretenses, with fines of up to $100,000 and a maximum of one year in prison. A felony involves violations committed for personal gain or with malicious intent, with fines of up to $250,000 and a maximum of ten years in prison. The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) enforces the HIPAA law. OCR conducts investigations in response to complaints and can also conduct audits to assess compliance with the law.
To avoid these penalties and ensure HIPAA compliance, healthcare organizations must implement robust administrative, physical, and technical safeguards to protect PHI. This includes conducting regular risk assessments, implementing access controls, training employees on HIPAA policies, and maintaining strict protocols for data breach notifications. The penalties for not maintaining HIPAA compliance can be severe and include fines and potential criminal charges. Therefore, healthcare professionals and organizations must prioritize the protection of patients’ sensitive health information to avoid legal and financial repercussions. By implementing compliance measures, healthcare entities can demonstrate their commitment to safeguarding patient privacy and security while maintaining the trust and integrity of the healthcare system.