![]() ![]() HIPAA does not expressly create a private cause of action for injured individuals however, plaintiffs may attempt to use HIPAA to establish the standard of care owed in a negligence claim. 14 Reporting a HIPAA violation is bad enough given the costs of notice, responding to government investigations, and potential penalties, but the consequences for failure to report a known breach are likely worse: if discovered, such a failure would likely constitute willful neglect, thereby subjecting the covered entity or business associate to the mandatory civil penalties. ![]() 13 In 2013, the Omnibus Rule modified the Breach Notification Rule to eliminate the former harm analysis now a breach of PHI is presumed to be reportable unless the covered entity or business associate can demonstrate a low probability that the data has been compromised through an assessment of specified risk factors. The risk of penalties is compounded by the fact that covered entities must self-report HIPAA breaches of unsecured PHI to the affected individual, HHS, and, in certain cases, to the media. Covered Entities Must Self-Report HIPAA Breaches. Physicians, hospital staff members, and others have been prosecuted for improperly accessing, using or disclosing PHI.ģ. Up to $250,000 fine and ten years in prison If done with intent to sell, transfer, or use the PHI for commercial advantage, personal gain or malicious harm. Up to $100,000 fine and five years in prison Up to $50,000 fine and one year in prison Knowingly obtaining or disclosing PHI without authorization. Federal law prohibits any individual from improperly obtaining or disclosing protected health information (PHI) from a covered entity without authorization violations may result in the following criminal penalties 12: Prohibited Conduct 10 More importantly, if the covered entity or business associate does not act with willful neglect and corrects the violation within 30 days, the OCR may not impose any penalty timely correction is an affirmative defense. The good news is that if the covered entity does not act with willful neglect, the OCR may waive or reduce the penalties, depending on the circumstances. 8 Future regulations will allow affected individuals to recover a portion of any settlement or penalties arising from a HIPAA violation, thereby increasing individuals’ incentive to report HIPAA violations. 7 State attorneys general may also sue for HIPAA violations and recover penalties of $25,000 per violation plus attorneys’ fees. And the government is serious about the new penalties: the OCR has imposed millions of dollars in penalties or settlements since the mandatory penalties took effect. 6 Not surprisingly, penalties can add up quickly. 5 Similarly, if the violations were based on the failure to implement a required policy or safeguard, each day the covered entity failed to have the required policy or safeguard in place constitutes a separate violation. According to HHS, the loss of a laptop containing records of 500 individuals may constitute 500 violations. Mandatory fine of not less than $50,000 per violation Ī single action may result in multiple violations. Violation due to willful neglect and the violation was not corrected within 30 days after the covered entity knew or should have known of the violation Mandatory fine of $10,000 to $50,000 per violation Violation due to willful neglect but the violation is corrected within 30 days after the covered entity knew or should have known of the violation Violation due to reasonable cause and not willful neglect Up to $1,500,000 per identical violation per year 3 The following chart summarizes the tiered penalty structure 4: Conduct of covered entity or business associateĭid not know and, by exercising reasonable diligence, would not have known of the violation The Office for Civil Rights (“OCR”) is required to impose HIPAA penalties if the covered entity acted with willful neglect, i.e., with “conscious, intentional failure or reckless indifference to the obligation to comply” with HIPAA requirements. Civil Penalties Are Mandatory for Willful Neglect. 2 Covered entities must comply with HIPAA for the following reasons:ġ. The HIPAA Privacy, Security, and Breach Notification Rules 1 apply to healthcare providers who engage in certain electronic transactions, healthcare clearinghouses, and health plans, including employee group health plans with 50 or more participants or that are administered by a third party. ![]()
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