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Blog January 1, 2020

You CAN’T Afford It – What HIPAA Violations Really Cost

Civil violations and criminal penalties should be enough to spur every covered entity to tightly manage their HIPAA requirements. However, even today there are many organizations that are leaving themselves open for extensive costs that transcend monetary penalties.

Why? Simply because they assume that their hosting provider is complying with regulatory requirements. For many hosting providers and even some covered entities, gambling in this area may seem like a viable plan when it comes to HIPAA compliance — what are the chances of a compromise exploiting security lapses or an audit by the Office for Civil Rights (OCR) uncovering non-compliance?

Before you put HIPAA requirements “out of sight, out of mind”, your organization needs to seriously consider the repercussions of not maintaining compliance. Failing to adhere to HIPAA compliance can cost you much more than you’ve imagined, and more than you should ever be willing to pay.

Recap: Covered Entities

HIPAA rules define covered entities quite clearly and you can see the entire breakdown on the government website. However, as a general rule of thumb, the regulations cover any entity that falls within the following:

  • Any health care provider that furnishes, bills, or is paid for health care in the normal course of business.
  • Health plan billing services and providers.
  • Health care clearinghouses.
  • Pharmacies and prescription drug card sponsors.

Basically any organization, of any size who electronically transmits health information in connection with any transaction. If you fall within these guidelines and you haven’t given your HIPAA compliance its due diligence, you could personally be held liable and financially responsible.

In accordance with “corporate criminal liability,” the directors, officers, and even some employees can be charged with conspiracy or aiding and abetting. Not to mention being held directly criminally liable.

Monetary Costs

For civil violations, some “unknowing” violators may find themselves lucky to receive a penalty of as little as $100 per incident, but serious transgressors can be hit with fines as high as $50,000.

Actions defined as “Willful Neglect” with appropriate correction will be charged $10,000 – $50,000 per violation with repeat violations garnering them as much as $250,000 per year. Those that fail to enact proper correction of these “Willful Neglect” issues will pay $50,000 per violation with an annual maximum of $1.5 million.

Things can take a much more serious turn if the Department of Justice gets involved due to criminal violations. Anyone that falls under the compliance regulation requirements that “knowingly” discloses or even obtains individually identifiable health information can face a $50,000 fine and up to 1 year in prison.

Things get turned up several more notches if it is determined that the offenses were committed under false pretenses. Fines double to $100,000 per violation and up to 5 years imprisonment.

Those that get caught violating HIPAA regulations intending to sell, transfer or use health information for personal gain, commercial advantage, or malicious harm, will see the biggest punishment of course. With fines of $250,000 and imprisonment up to 10 years.

Fines of $100 to $250,000 and a decade in prison may seem pricey enough, but that’s not where the true costs of HIPAA violations end.

Costly Repercussions

The fines and lengthy prison sentences outlined above should certainly be deterrent enough for most organizations, prodding them to ensure that they are within compliance across the board. However, unknowingly failing to adhere to HIPAA requirements and being hit with even a mere $100 fine can have an unexpected domino-effect that can cost you dearly.

Virtually everyone has seen news headlines regarding data breaches and hacks of companies of all sizes, from well-established companies like Target to smaller companies such as cryptocurrency exchanges. When news like this hits the digital grapevine and social media, the news spreads fast and far.

This “bad press” results in these organizations experiencing a measurable decline in visitors, sales, new customers, and some have even lost partnership and investor opportunities. While you may think that this kind of repercussions are likely limited to incidents dealing with financial information, that couldn’t be further from the truth.

Consumers around the world understand that more and more of their personal data is transferred and stored online, generally in more ways than one.  These individuals demand that their personal information remain private and they have every reason to expect that it will. Those organizations that fail to maintain HIPAA compliance standards and suffer a breach or purposeful internal transgression can and will experience a deep loss of trust.

Friend to friend, neighbor to neighbor, and word of mouth can actually be worse than mainstream media reports. When any sort of violation of trust is experienced, you can almost lay bets on blogs, vlogs, and company reviews appearing almost overnight that reflect negatively on your operations.

Potential customers, as well as clients, can and do peruse these types of reviews and it can severely affect your bottom line.

HIPAA regulations are in place to protect your patients, clients, and customers, as well as your entire operation. Failing to secure responsible, reliable HIPAA hosting while leveraging the expertise of industry professionals is leaving your organization and even yourself open for the possibility of severe repercussions.

Reducing Risk

At Connectria, we help covered entities maintain compliance with HIPAA security standards. When it comes to the storage of Protected Health Information (PHI), we have three different solutions:

  • Public cloud.
  • Private cloud.
  • On-premise environments.

Our highly experienced team understands which components are supported in a HIPAA environment and which are not. Furthermore, we know how to implement the perfect solution across a wide range of IT environments to meet your required compliance standards.

Visit our website for more information on our Security & Compliance service offerings or simply contact us and we’ll be happy to discuss the available solutions to your HIPAA concerns.

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