The civil penalty for unknowingly violating HIPAA falls within the range of $137 and $68,928 per violation (January 2024) depending on whether the covered entity or business associate could not have avoided the violation with a reasonable amount of care, or should have known the violation was a possibility, but failed to adopt measures to prevent it. This range also includes the civil penalty for unknowingly violating HIPAA due to willful neglect.
It is not often HHS’ Office for Civil Rights issues a civil penalty for unknowingly violating HIPAA. In most cases the agency will offer technical assistance to prevent a repeat of the violation – or, if the violation is attributable to a culture of non-compliance in the workplace, will require the covered entity or business associate to comply with a corrective action plan. However, when the agency does issue a civil penalty for unknowingly violating HIPAA, it can be substantial.
How Civil Penalties for HIPAA Violations are Calculated
Civil penalties for HIPAA violations are calculated using a four-tier penalty structure which assigns minimum and maximum penalties per violation depending on the level of culpability. The penalty structure also sets annual limits on the maximum penalties that can be issued for violations of the same nature. Since 2016, the penalties have increased each year to account for inflation and the civil penalties for HIPAA violations in 2024 are:
In determining the amount of a civil penalty for a HIPAA violation, HHS’ Office for Civil Rights will take into account the number of individuals affected by the HIPAA violation, the amount of harm caused (i.e., identity theft), the covered entity’s or business associate’s prior history of compliance, and the level of cooperation provided during an investigation. Note: It is not necessary for a data breach to have occurred for HHS’ Office for Civil Rights to issue a civil penalty.
$2.5 Million Civil Penalty for Unknowingly Violating HIPAA
In 2017, HHS’ Office for Civil Rights reached a $2.5 million settlement agreement with the remote cardiac monitoring service CardioNet, who – it was alleged – had failed to understand the HIPAA requirements and had unknowingly violated HIPAA by failing to conduct “an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI” as required by §164.308 of the Security Rule.
As a result of unknowingly violating HIPAA, the company had failed to secure ePHI maintained on employees’ laptops and, when a laptop was stolen from an employee’s car, the PHI of 1,391 was disclosed impermissibly. The reason for the civil penalty for unknowingly violating HIPAA being above the maximum range was that the failure to conduct a risk assessment was not the only violation of HIPAA identified during the investigation into the data breach.
Penalties when Workforce Members Violate HIPAA Unknowingly
HHS’ Office for Civil Rights has no authority to issue civil penalties against workforce members who violate HIPAA and the penalties for HIPAA violations in the workplace should be stipulated in each covered entity’s or business associate’s sanctions policy. In most cases when a workforce member has violated HIPAA unknowingly, the penalty will be a verbal warning or additional HIPAA training depending on the nature of the violation and its consequences.
When a violation of HIPAA has serious consequences, the penalty may be increased to a written warning, suspension, or termination of contract; and, when a HIPAA violation is criminal in nature, the case may be referred to the Department of Justice to investigate. Criminal penalties for the wrongful disclosure of individually identifiable health information in violation of HIPAA can be up to up to ten tears in jail and/or a fine of up to $250,000.
How to Avoid a Civil Penalty for Unknowingly Violating HIPAA
For covered entities and business associates, the way to avoid unknowing violations of HIPAA is to ensure compliance with all applicable standards and implementation specifications of the HIPAA Administrative Simplification Regulations. This can be done by establishing a compliance team to conduct risk assessments, develop policies and procedures, implement technologies, and train members of the workforce – or by engaging the services of a compliance consultant
For members of the workforce, the way to avoid unknowing violations of HIPAA is to take responsibility for your HIPAA knowledge. While each member of the workforce should receive training on policies and procedures relevant to their roles – and all members of the workforce should receive security awareness training – sometimes the HIPAA training provided is not sufficiently comprehensive to put policies and procedures – or security awareness training – into context.