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The Dire Consequences of HIPAA Violations

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John Black John Black
HIPAA Compliance
November 4, 2022
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law in the United States that was enacted to protect the privacy of medical records and other personal health information. The law has been amended several times to make it clearer and easier to enact. Confidentiality is the cornerstone of HIPAA and it’s imperative that healthcare providers, health plan sponsors, insurance companies, medical answering services, and any other player involved in healthcare protect the privacy of patients.  HIPAA provides a set of federal standards for protecting certain health information. It is important to note that HIPAA does not apply to all types of health information. For example, if a patient shares their medical history with their friend in an email, HIPAA does not apply to that conversation. But other instances that involve sharing medical information can lead to risks, including outsourcing phone calls at your medical practice. Unfortunately, a low cost answering service has its consequences and your business could be negatively affected. These cheap answering services sound good because they’re low cost, but they usually have very transient staff who are not properly trained. Turn-over rates in call centers are high, so choose wisely when deciding to save a few dollars now or potentially pay the price in hefty fines, patient distrust and a damaged reputation. Medical answering services are required to ensure that they are in compliance with HIPAA regulations. Medical answering services must be aware of HIPAA guidelines and follow them to the letter in order to avoid fines, penalties, and other legal ramifications.

The consequences of violating HIPAA

The consequences of HIPAA violations are severe, as they can result in criminal penalties, including fines and imprisonment. The potential consequences for violating HIPAA depend on the type of violation that was committed. In severe cases, violating HIPAA can even bankrupt medical practices and other types of healthcare companies. This is especially true for small and medium sized medical businesses. Any violation of HIPAA may result in hefty fines per incident (along with possible imprisonment) and/or criminal penalties. In general, a fine will be assessed for an individual or organization when they willfully violate the HIPAA rules. Additionally, the penalties can include criminal penalties including imprisonment for individuals in management.

Violations can be categorized into four tiers:

  • Tier 1, Culpability level: reasonable efforts.
    • The minimum penalty for this type of violation is $127, and the maximum penalty for a single tier 1 violation is $63,973. The annual fine limit for tier 1 HIPAA violations is $1,919,173.
  • Tier 2, Culpability level: lack of oversight.
    • The minimum penalty for this type of violation is $1,280, and the maximum penalty for a single tier 2 violation is $63,973. The annual fine limit for tier 2 HIPAA violations is $1,919,173.
  • Tier 3, Culpability level: neglect – rectified within 30 days.
    • The minimum penalty for this type of violation is $12,794, and the maximum penalty for a single tier 3 violation is $63,973. The annual fine limit for tier 3 HIPAA violations is $1,919,173.
  • Tier 4, Culpability level: neglect – not rectified within 30 days.
    • The minimum penalty for this type of violation is $63,973, and the maximum penalty for a single tier 4 violation and annual fine limit for this type of violations is  $1,919,173. 

Why is patient confidentiality so important?

Patient confidentiality is the privacy of a patient’s medical records and all their sensitive information. It is one of the most important aspects of healthcare, and violating this privacy can cause harm to the patient, as well as jeopardize their trust in the doctor and the medical system. The purpose of patient confidentiality is to provide protection for patients, who are often vulnerable and may not be able to protect themselves. Seeking healthcare is an inherently vulnerable act, and patients often don’t feel secure enough to voice their concerns about confidentiality. Ensuring a patient’s privacy allows them to talk freely about their health concerns without fear that the information will be shared inappropriately or used against them. It also helps protect against discrimination, because it prevents employers, insurers and other institutions from discriminating any patients based on medical conditions, treatments, or their personal and family history. Patient confidentiality also helps doctors when they need to talk with patients about their diagnosis or treatment plan without worrying that another person might overhear them and misinterpret what they are saying. These are just some of the reasons why keeping a confidential physician-patient relationship is so vital to a good patient experience.

HIPAA-compliant medical answering services

There are many reasons why any practice should use a reputable HIPAA compliant answering service. One of the most important reasons is that your patient’s privacy should be safeguarded.  As a healthcare provider, you want your patients to feel safe and not worry about their information being compromised. You also want them to feel comfortable with you and your staff and know that their privacy is intact. A medical answering service can significantly increase their comfort level while they’re under your medical care, which can boost their satisfaction and lead to more recommendations. Medical practices may feel tempted to hire a cheap cost answering service as a new way of communicating with their patients. However, these low-quality services can also turn into a new way of exposing medical practices to HIPAA violations. The more affordable the service is, the more likely it is to have some drawbacks. One of the most common drawbacks for these services is that they expose medical practices to HIPAA violations. As we mentioned above, any type of HIPAA violation can lead to hefty fines and regrettable legal consequences for your practice.  
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