Compliance with the Health Insurance Portability and Accountability Act (HIPAA) is a concern for healthcare organizations and business associates handling protected health information (PHI). Failure to adhere to HIPAA regulations can result in financial penalties, known as HIPAA violation fines.
The HIPAA penalty structure is designed to hold covered entities and business associates accountable for HIPAA violations. The penalties are categorized into four tiers, with the level of culpability determining the minimum and maximum fines per violation, as well as the annual penalty limit.
This tier applies to violations where the covered entity or business associate was unaware of the infringement and could not have reasonably avoided it, even with a reasonable amount of care. The minimum penalty per violation is $137, with a maximum of $68,928 and an annual penalty limit of $2,067,813.
Violations in this tier are those that the covered entity or business associate should have been aware of but could not have avoided, even with a reasonable amount of care. The minimum penalty per violation is $1,379, with a maximum of $68,928 and an annual penalty limit of $2,067,813.
This tier covers violations resulting from "willful neglect" where the covered entity or business associate has attempted to correct the issue. The minimum penalty per violation is $13,785, with a maximum of $68,928 and an annual penalty limit of $2,067,813.
The most severe tier applies to violations of HIPAA attributable to willful neglect, where no attempt has been made to correct the violation. The minimum penalty per violation is $68,928, with a maximum of $2,067,813 and an annual penalty limit of $2,067,813.
Notably, the penalty amounts are adjusted annually to account for cost-of-living increases, and the Office of Management and Budget (OMB) sets the inflation multiplier each year.
Read also: What are the penalties for breaching HIPAA
The Office for Civil Rights (OCR) within the Department of Health and Human Services (HHS) is the primary enforcement agency for HIPAA violations. Over the years, OCR has issued a number of fines and settlements for various HIPAA infractions. Let's examine some of the most notable cases in recent years.
In 2024, OCR levied a $240,000 civil monetary penalty against Providence Medical Institute for failing to restrict access to electronic protected health information (ePHI) and lacking a business associate agreement. Cascade Eye and Skin Centers faced a $250,000 settlement for risk analysis and system activity review failures, while American Medical Response was fined $115,200 for delayed access to medical records.
The year 2023 saw several high-profile HIPAA settlements, including a $1.3 million agreement with L.A. Care Health Plan for risk analysis, security, and system activity review deficiencies, as well as a $350,000 settlement with MedEvolve Inc. for an impermissible disclosure of PHI.
In 2022, OCR continued its focus on HIPAA right of access enforcement, reaching settlements with numerous healthcare providers for delays or denials in providing patients with timely access to their medical records. Notable examples include a $240,000 settlement with Memorial Hermann Health System and a $100,000 civil monetary penalty against ACPM Podiatry.
State attorneys general have also been active in pursuing HIPAA-related violations, often using state laws to impose financial penalties. In 2024, the attorneys general of New York, New Jersey, and Connecticut secured a $3.5 million settlement with Enzo Biochem and Enzo Clinical Labs for violations of the HIPAA security rule and state laws.
Read more: The biggest healthcare data breaches
The determination of HIPAA violation fines is influenced by the nature and severity of the infraction, the covered entity's or business associate's level of culpability, and the potential harm caused to individuals whose PHI was compromised.
The specific HIPAA rule or regulation that was violated, as well as the scope and duration of the infringement, contribute to the penalty assessment. Violations that result in the impermissible disclosure of PHI or a breach of sensitive information tend to incur harsher penalties.
As outlined in the penalty structure, the covered entity's or business associate's level of culpability is a factor. Violations resulting from reasonable efforts, lack of oversight, willful neglect with correction, or willful neglect without correction are classified accordingly and subject to different penalty tiers.
The potential harm caused to individuals whose PHI was compromised is also considered. Violations that expose sensitive information, such as medical diagnoses or financial data, are generally viewed as more egregious and may result in higher fines.
All information on HIPAA violation cases is provided by the Department of Health and Human Services (HHS) Office for Civil Rights (OCR) in their HIPAA Resolution Agreements overview. For the full list of HIPAA breaches and fines, you can visit OCR's Breach Portal.
The HHS (Department of Health and Human Services) and state attorney generals cite “failure to implement proper access controls” for protecting patient information as one of the most common HIPAA violations by healthcare services.
See also: HIPAA Compliant Email: The Definitive Guide