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HIPAA Violation Penalties and Fines
At TLD Systems, we understand the critical importance of HIPAA compliance for medical professionals, particularly in small practices. Dr. Michael Brody, our founder, is a sole practitioner who runs his own small practice, which gives us a unique insight into the intricacies of small medical offices. In this article, we delve into the world of HIPAA violation fines, shedding light on the penalties imposed by the Department of Health and Human Services’ Office for Civil Rights (OCR) and state attorneys general for non-compliance with HIPAA regulations.
Understanding HIPAA Violation Fines: HIPAA violation fines are a serious matter, and it's crucial for medical professionals to be aware of the potential consequences. The majority of these fines result from settlements where covered entities and business associates acknowledge potential failures to comply with specific HIPAA Rules. In such cases, a settlement amount is agreed upon, accompanied by a corrective action plan to address the identified HIPAA failures. It's worth noting that OCR issues fines, while state attorneys general may pursue financial penalties under state laws.
Navigating HIPAA compliance can be complex, especially for small medical practices. TLD Systems is here to help you understand and meet the HIPAA Security Standard. Explore our services to ensure your practice is safeguarded.
Penalty Structure for HIPAA Violations
The penalty structure for HIPAA violations is categorized into four tiers based on the level of culpability. The amounts are adjusted annually to reflect the cost of living increases. As of October 6, 2023, the updated penalty structure is as follows:
| Penalty Tier | Level of Culpability | Minimum Penalty per Violation | Maximum Penalty per Violation | Annual Penalty Limit |
| Tier 1 | Reasonable Efforts | $137 | $68,928 | $2,067,813 |
| Tier 2 | Lack of Oversight | $1,379 | $68,928 | $2,067,813 |
| Tier 3 | Neglect – Rectified within 30 days | $13,785 | $68,928 | $2,067,813 |
| Tier 4 | Neglect – Not Rectified within 30 days | $68,928 | $2,067,813 | $2,067,813 |
Notice of Enforcement Discretion
In April 2019, OCR issued a Notice of Enforcement Discretion, altering the annual penalty limits in certain tiers. Despite the reduction in caps for tier 1, tier 2, and tier 3 penalties, the maximum annual penalty for tier 4 remains unchanged at $1,500,000. Please note that these caps are subject to inflation increases and are detailed in the table below.
| Annual Penalty Limit | Minimum Penalty per Violation | Maximum Penalty per Violation | Annual Penalty Cap | |
| Tier 1 | Lack of Knowledge | $137 | $34,464 | $34,464 |
| Tier 2 | Reasonable Cause | $1,379 | $68,928 | $137,886 |
| Tier 3 | Willful Neglect | $13,785 | $68,928 | $344,638 |
| Tier 4 | Willful neglect (not corrected within 30 days | $68,928 | $68,928 | $2,067,813 |
*Table last updated on October 6, 2023.
State Attorneys General Fines: State attorneys general can impose fines for HIPAA violations, with a maximum of $25,000 per violation category per year. This maximum penalty is adjusted annually to align with inflation.
Explore our HIPAA Compliance Services: For a comprehensive approach to HIPAA compliance tailored to small medical practices, consider TLD Systems. Our team of specialists is here to guide you through the intricacies of HIPAA regulations, ensuring affordability and peace of mind. Request a free consultation today.