What are the Penalties for HIPAA Violations?

Penalties for HIPAA violations can be issued by the Department of Health
and Human Services’ Office for Civil Rights (OCR) and state attorneys
general. In addition to financial penalties, covered entities are required to
adopt a corrective action plan to bring policies and procedures up to the
standards demanded by HIPAA.
The Health Insurance Portability and Accountability Act of 1996 placed a number of requirements on HIPAA-covered entities to safeguard the Protected Health Information (PHI) of patients, and to strictly control when PHI can be divulged, and to whom. Since the Enforcement Final Rule of 2006, OCR has had the power to issue financial penalties (and/or corrective action plans) to covered entities that fail to comply with HIPAA Rules.
Financial penalties for HIPAA violations were updated by the HIPAA Omnibus Rule, which introduced charges in line with the Health Information Technology for Economic and Clinical Health Act (HITECH). The Omnibus Rule took effect from March 26, 2013.
Since the introduction of the Omnibus Rule, the new penalties for HIPAA violations apply to healthcare providers, health plans, healthcare clearinghouses and all other covered entities, as well as business associates (BAs) of covered entities that are found to
have violated HIPAA Rules. Financial penalties are intended to act as a deterrent to prevent the violation of HIPAA laws, while also ensuring covered entities are held accountable for their actions – or lack
of them – when it comes to protecting the privacy of patients and the confidentiality of health data, and providing patients with access to their health records on request.
The penalty structure for a violation of HIPAA laws is tiered, based on the knowledge a covered entity had of the violation. The OCR sets the penalty based on a number of “general factors” and the seriousness of the HIPAA violation. Ignorance of HIPAA Rules is no excuse for failing to comply with HIPAA Rules. It is the responsibility of each covered entity to ensure that HIPAA Rules are understood and followed. In cases when a covered entity is discovered to committed a willful violation of HIPAA laws, the maximum fines apply.