Understanding Penalties for HIPAA Non-Compliance: A Comprehensive Guide

HIPAA compliance penalties can range from monetary penalties to civil lawsuits to criminal charges. The monetary penalties range from $127 to $250,000 depending on the nature of the HIPAA violation.

The HIPAA law enforces penalties on organizations processing PHI when instances of non-compliance are discovered.

In this article, we talk about the types of penalties for HIPAA non-compliance, the penalties associated with civil non-compliance instances, and criminal instances.

What are the HIPAA violation categories?

There are 4 four categories of HIPAA violations that the HHS (US Department of Health and Human Services) and the OCR (Office of Civil Rights) have listed in their memorandum. Two types are for covered entities and business associates, while the other 2 for cases that are categorized as ‘wilful neglect’.

Each of these violation categories has a capped minimum and maximum penalty value and based on the decision of the OCR and judiciary, the value of the fine is determined. We’ll cover more on the values further along the article.

Category 1	Unaware of the HIPAA violation-Would not have known of the violation even after due diligence
Category 2	There is reasonable cause to believe that the covered entity/business associate would have known of the violation after due diligence.
Category 3	Wilfully neglected HIPAA, but corrective measures were deployed within 30 days.
Category 4	Wilfully neglected HIPAA, but no corrective measures were implemented even after 30 days from the date of discovery.

What are the Penalties for HIPAA Violations?

When the HIPAA non-compliance fines were rolled out initially, they were not a strong deterrent. Since the revamp of the violation of the penalties in 2015, the fines have increased significantly.

Also, note that the penalties listed below are adjusted to inflation by the authorities, and an updated version of the fines is expected in 2023.

Furthermore, HIPAA violation penalties are classified as civil penalties and criminal penalties.

Civil Penalties

Civil Penalties are usually issued to organizations under category 1 or 2 of the HIPAA violation categories mentioned earlier.

The cost of HIPAA violations/ penalties range from:

• A minimum fine of $127 could go up to $63,000 per year when the entity was unaware that HIPAA rules were being violated. 

• A minimum fine of $1000 could go up to $100,000 per year when there is a reasonable cause, and wilful neglect is not demonstrated.

• A minimum fine of $10,000 that could go up to $250,000 per year when there is wilful neglect but has worked to implement corrective measures immediately after discovery.

• A minimum fine of $50,000 could go up to $1.5 million per year when there is wilful neglect, but no corrective measures were implemented after discovery.

Also check: HIPAA Compliance Checklist: The Ultimate Guide

Criminal Penalties

Criminal penalties in HIPAA are levied when individuals or entities knowingly gain access to PHI using unauthorized means or when they use PHI without authorization.

Criminal penalties are further classified into three tiers. They are:

Tier Type	Classification Criteria	Penalty
Tier 1	Deliberately obtaining and disclosing PHI without authorization	Monetary fine of $50,000 and up to one year in jail
Tier 2	Obtaining PHI under false pretenses	Monetary fine of $100,000 and up to five years in jail
Tier 3	Obtaining PHI for personal gain or with malicious intent	Monetary fine of $250,000 and up to 10 years in jail

Also check out: All you need to know about HIPAA violations

How can Sprinto help you avoid HIPAA non-compliance fines?

Sprinto enables organizations to become HIPAA compliant by offering them the complete visibility they need to monitor their business environment effectively. Organizations leverage Sprinto’s dashboard to monitor their compliance and gain insights on avenues that are failing compliance. Organisations also use Sprinto’s integrated training module to enable their employees with the best practices of processing PHI and securing patient data.

Talk to our experts today to know how breezy your HIPAA compliance journey could be with Sprinto.

By being non-compliant with HIPAA, organisations are subject to monetary penalties of up to $250,000, jail time of up to 5 years, and lawsuits (civil and criminal). When a HIPAA company’s non-compliance becomes public information, the company faces irreparable reputation damage too.

FAQ

What are the two types of penalties for violations of HIPAA?

The two major classifications of HIPAA penalties are civil lawsuits and criminal lawsuits. The nature of these lawsuits are determined based on the nature of the non-compliance incident and the course correction implemented upon discovery. These penalties have organizations pay monetary HIPAA fines ranging from $127 to $250,000.

What have been the most common HIPAA non-compliance penalties in the past?

The most common penalties for HIPAA non-compliance have been for unauthorized sharing of PHI and the penalties dictated were monthly fines up to $50,000 or jail time of up to one year or both in a few instances. 

What is the maximum penalty for a HIPAA violation?

The maximum penalty for HIPAA violation is $1,919,173. This figure represents the maximum fine per violation type and if found guilty of more violations, the figure can be much more.