HIPAA Violation Examples: Penalties, Fines, and How to Avoid Them

Data breaches in healthcare are becoming a too-frequent news headline, which is why there’s never a bad time to look at how effectively you’re protecting your patients’ data and privacy. HIPAA—the Health Insurance Portability and Accountability Act—is the foundation for safeguarding sensitive patient information. HIPAA compliance isn’t just a regulatory box to check; it’s a critical component of providing quality care and protecting patient trust. In the behavioral healthcare industry, where the nature of treatment often involves highly personal and sensitive information, adherence to HIPAA guidelines is non-negotiable. 

Violating HIPAA regulations can have far-reaching consequences, from hefty fines to reputational damage and even criminal charges. The financial penalties alone can be staggering, with fines reaching up to $1.5 million per violation category per year. Beyond the financial toll, breaches erode patient trust, jeopardize the integrity of healthcare providers, and undermine the therapeutic relationship crucial in behavioral health settings. 

Understanding common HIPAA violation penalties and examples is essential for healthcare professionals and organizations to mitigate risks and uphold compliance standards. From unauthorized disclosures to inadequate data protection measures, knowing the potential pitfalls can help prevent inadvertent breaches and protect patient confidentiality. 

Fortunately, by proactively educating staff and implementing robust security measures, healthcare organizations can reduce the likelihood of HIPAA violations. Training programs, strict access controls, encryption technologies, and regular audits are just a few strategies that can bolster data security and ensure HIPAA compliance. 

Here are six of the more common violations to keep in mind: 

1. Unauthorized Disclosure of Protected Health Information (PHI): This is one of the most common HIPAA violations, as PHI includes any individually identifiable health information, such as medical records, billing information, and health insurance information. This includes: 

• Sharing patient information with unauthorized individuals, such as friends or family members. 
• Discussing patient cases in public areas where others can overhear. 
• Sending patient information via unencrypted email or fax without proper security measures. 
   

2. Accessing Patient Records Without Authorization: Healthcare professionals should only access patient records when necessary for treatment, payment, or healthcare operations. Unauthorized access to patient records is a violation of HIPAA. Examples include: 

• Healthcare employees accessing the medical records of friends, family, or celebrities without a legitimate reason. 
• Employees accessing patient records out of curiosity or for personal gain. 
   

3. Lack of Patient Consent: HIPAA requires healthcare providers to obtain patient consent before disclosing their PHI for purposes other than treatment, payment, or healthcare operations. Common violations here include: 

• Sharing patient information with third-party vendors or marketing companies without obtaining patient consent. 

• Disclosing PHI for research purposes without obtaining proper authorization from the patient. 
   

4. Insufficient Security Measures: HIPAA mandates that healthcare organizations implement appropriate security measures to protect PHI from unauthorized access or disclosure. Violations here often are a result of: 

• Storing patient records in unsecured locations, such as unlocked file cabinets or shared network drives without password protection. 
• Failing to encrypt electronic PHI stored on computers or mobile devices, increasing the risk of data breaches. 
• Neglecting to implement policies and procedures for safeguarding PHI, such as regular data backups and employee training on security protocols. 
   

5. Breach Notification Failures: HIPAA requires covered entities to notify affected individuals and the Department of Health and Human Services (HHS) in the event of a data breach involving PHI; failing to do so is a violation of HIPAA. Examples include: 

• Delaying notification of a data breach to patients, allowing unauthorized individuals to access PHI for an extended period. 
• Failing to provide sufficient details in breach notifications, such as the type of information compromised and steps individuals can take to protect themselves. 
   

6. Improper Disposal of PHI: HIPAA requires healthcare organizations to properly dispose of PHI to prevent unauthorized access. This can include: 

• Throwing patient records into regular trash bins without shredding or rendering them unreadable. 
• Failing to wipe electronic devices, such as computers or smartphones, before disposing of them, potentially exposing PHI to unauthorized individuals. 

While some of these can be chalked up to simple mistakes or bad oversight, any violation can carry severe consequences. HIPAA violation fines and penalties can add up. Federal civil penalties can range from $100 to $50,000 per violation, while federal criminal penalties can bring fines from $50,000 to $250,000 and imprisonment for up to 10 years. Additionally, state attorney generals can also bring civil and criminal charges.  

Beyond the civil and criminal charges, violations can also result in severe reputational damage. What patient would want to go to your clinic if they can’t trust that their sensitive data is safe?  

Fortunately, we’ve got a few tips and best practices for you to help prevent potential violations. Take a look: 

• Implement Robust Data Security Measures: Make sure you’re using encryption for sensitive data both at rest and in transit, and implement access controls to ensure that only authorized personnel have access to patient information. Don’t forget to keep software and systems updated regularly to patch vulnerabilities. Firewalls and intrusion detection systems can monitor and protect network traffic, and secure messaging systems can help you communicate patient internally without being in violation.  
• Conduct Regular Staff Training on HIPAA Compliance: Make sure that all staff members, including healthcare providers, administrative staff, and IT personnel, get comprehensive HIPAA training. It’s important for staff to understand their responsibility in protecting patient privacy, and periodic refresher training sessions can help to reinforce compliance principles and address any updates or changes to HIPAA regulations. 
• Establish Clear Procedures for Handling Patient Information: Develop documented policies and procedures for accessing, storing, transmitting, and disposing of patient information, and make sure that staff are aware of and understand the policies. Make sure there’s documentation around disposing of paper records, electronic devices, and other media containing patient information. And, in case the worst happens, be sure there are procedures in place for responding to data breaches or suspected HIPAA violations, including reporting requirements and notification procedures. 

Throughout and beyond those measures, there are a few other things to do to help maintain HIPAA adherence. Make sure that staff can only access patient information necessary to their job duties; EHR access should be restricted based on job roles and responsibilities. Take advantage of password managers, which can help to create strong passwords easily, and use multi-factor authentication. Secure systems should also prompt you to change your password at regular intervals. 

Those are things that you and your organization can control but what about things you can’t–like how systems and vendors are storing data. Look to vendors that have industry standard security certificates or rankings. For example, HITRUST is a widely recognized security framework for healthcare organizations, and our certification demonstrates that we meet stringent requirements for data safeguarding and privacy. This certification is particularly crucial in the healthcare industry, where patient data confidentiality and integrity are paramount. It provides assurance to clients, partners, and regulators that we have implemented strong security measures to mitigate risks and maintain the highest standards of data protection.  

In addition, the software you use can be a big help in avoiding violations. Many EHR solutions are now designed with HIPAA compliance features, including access controls, audit logs, and encryption. Not only do they make patient records more secure, they also track access to sensitive information. Encrypted communications platforms help to secure communication between healthcare professionals and with patients, including communication about patients. Look for systems that provide end-to-end encryption to protect sensitive patient information.  

HIPAA, especially in the digital age, is a critical tool in protecting patients as they’re cared for, and beyond. It’s important to understand the ins and outs of the policy, and run your practice in compliance with it. By effectively placing the right systems and solutions in place, and educating your staff on how to comply with HIPAA, you’ll be positioning yourself as a trustworthy provider who takes patient data security seriously. Visit us at kipuhealth.com today for more information and resources.  

The blog is available for informational purposes only and is not considered legal advice on any subject matter. By viewing blog posts, the reader understands there is no attorney-client relationship between the reader and Kipu. The blog should not be used as a substitute for legal advice from a licensed professional attorney, and readers are urged to consult their own legal counsel on any specific legal questions concerning a specific situation.

About the Authors

Sally Abu-Moustafa