The Who and How of HIPAA Enforcement

Travis Good, MD

Co-founder & Chief Technology Officer

July 20, 2017  tag HIPAA

When people talk or write about HIPAA, it’s always presumed that there’s an enforcement aspect, though enforcement is rarely explicitly discussed.

As much as people and organizations value the privacy and security of the personal health information of their customers (patients, members, users/consumers), the fear of HIPAA violation fines and other penalties are the major drivers of compliance and security efforts. Penalties, whether fines or otherwise, are quantifiable and expose organizations to very real financial risk if proper controls, both tech and policy, aren’t put into place and followed.

HHS sets the rules for HIPAA, and enforcement is carried out by The Office of Civil Rights (OCR) within HHS. OCR is tasked with the responsibility of investigating complaints. Based on an investigation, the OCR determines if the covered entity or the business associate of a covered entity was in compliance with the HIPAA security and privacy rule. The investigation branches at whether an organization is in violation of HIPAA rules or not. If the organization is not in violation, the findings are documented and the case is closed. HIPAA is not always prescriptive, and has terms like “reasonable,” so there is some interpretation and gray area at this stage.

In a recent report by the OCR, the HIPAA Security Rule accounted for the majority, or 60%, of violations, followed by HIPAA Privacy Rule violations and then HIPAA Breach Notification violations. That recent report also cited a lack of complete or accurate risk assessments as a widespread problem, with up to two thirds of entities lacking full and timely risk assessments. Risk assessments are incredibly valuable and should inform much of your security and privacy posture as an organization.

If the OCR finds an organization to be in violation, the following actions may take place:

  • Voluntary compliance;
  • Corrective action; and/or
  • Resolution agreement.

There are monetary penalties associated with HIPAA violations, and the amounts of such violations were raised considerably last year as part of the HIPAA Omnibus Rule included in the HITECH act. The current financial penalties are listed below.

(image: penalties.png)

Previous to these new rules, the fine associated with each HIPAA violation was capped at $25,000. This number is now $1.5 million per violation.

In certain extreme HIPAA cases, individuals can be exposed to criminal risk as well. When criminal action is involved with HIPAA, the OCR hands the case off to The Department of Justice. Individuals are at risk of HIPAA enforcement and penalties if they “knowingly” obtain, disclose, or use PHI “in violation” of HIPAA rules. You can read a very detailed, legal opinion on what constitutes legal vs civil in the case of HIPAA. There is a lengthy discussion of the terms “knowingly” and “in violation” in that document, which is why we put them in quotes.

It’s not always clear who enforces HIPAA compliance and violations. The HIPAA privacy rule is enforced by the OCR, the Department of Justice to a lesser extent, and, recently, the FCC has waded into HIPAA enforcement for the privacy of health data through its mandate to protect consumers. The financial penalties from the FCC are lower than those from the OCR; but, the FCC has the power to require annual privacy audits, as it has done with companies like Google and Facebook, and these audits, over time, have the potential to be very expensive for companies. This move by the FCC is new, and still making its way through the courts, so it’s still uncertain how the FCC will fit with HIPAA enforcement.

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