The Health Insurance Portability and Accountability Act (HIPAA) is a set of complex federal rules and regulations that govern how medical institutions and their business associates treat your private health information, known as “PHI.” Penalties for HIPAA violations can be substantial, ranging from fines to criminal prosecution and imprisonment.
Penalties for Violations
Claims of HIPAA violations are investigated by the Office of Civil Rights (OCR), a division of the U.S. Department of Labor. The two most important HIPAA sections addressing violations are Federal Public Law Sections 104-191 and 1177.
Under HIPAA Law Section 104-191, “General Penalty for Failure to Comply with Requirements and Standards,” the U.S. Department of Labor can impose fines beginning at $100 on an individual for each day the violation continues, up to a maximum of $25,000 per year.
Under HIPAA Law Section 1177, “Wrongful Disclosure of Individually Identifiable Health Information,” the U.S. Department of Labor can impose fines beginning at $50,000 and/or up to a year in jail, all the way up to a fine of $250,000 and/or up to ten years in jail for an individual. Under HIPAA rules, an “individual” can be a medical entity, institution, or an executive of either.
HIPAA applies to the following four medical entities:
Health plan organizations
Health plans include HMOs, PPOs, Medicaid, Medicare, and other individuals or medical groups that pay the cost of medical care for their insured.
Health care clearinghouses
Health care clearinghouses include individuals or companies which are paid to process individuals’ personal health information (PHI). This includes billing service companies, health information systems, transaction facilitators, and other entities that handle PHI.
Health care providers
Health care providers include any person or organization that charges patients for providing treatment. This includes medical doctors, osteopathic doctors, dentists, chiropractors, nurses, lab technicians, and medical administrators supporting these providers.
Business associates are extensions of the previous three groups. Examples of business associates are CPAs whose accounting services include a review of PHI, attorneys whose legal services include access to PHI, and pharmacists with similar access to PHI.
Why We Need HIPAA Laws
HIPAA exists for two main reasons, to ensure you maintain health insurance when changing jobs, and to protect the privacy of your personal health information. Let’s discuss these protections, known as Title I and Title II.
Title one ensures that if you change jobs, you can maintain your health insurance without being penalized.
In the past, people with health problems were afraid if they left their jobs or were fired, they wouldn’t be able to get health insurance with their new employer, or if they were able to get insurance, their pre-existing condition would be excluded.
This meant if you started your new job with a pre-existing injury or illness, your new HMO or PPO could exclude coverage for that prior medical condition. Even if you were to find another health insurance company to cover your pre-existing condition, the premiums would be extremely high.
Today, health insurance companies cannot refuse to provide medical coverage based on a pre-existing condition. Nor can they charge higher premiums based on your condition.
Example: Pre-existing Condition Violation
Gerard worked for the last twenty years as a driver for a local delivery company, and had excellent coverage under his HMO. About ten years ago Gerard was diagnosed with cardio-myopathy, a disease of the heart that can be controlled by taking several expensive medications. Gerard’s HMO covered all his medical bills related to his cardio-myopathy.
Gerard’s employer went out of business, but he was able to get full-time work with another company that provided an excellent health insurance package through an HMO. A month after beginning his new job, Gerard received a letter from the HMO stating his pre-existing heart condition was excluded from coverage.
Gerard filed a complaint with the Office of Civil Rights (OCR). The OCR found the HMO to be in direct violation of HIPAA. They were fined $50,000, and ordered to immediately cover all the costs of treatment for Gerard’s cardio-myopathy.
Title two protects your personal health information from being released to third parties without your express consent.
HIPAA’s “Privacy Rule” covers a person’s private health information, which includes medical bills, claim information, prescriptions, lab results, medical opinions, and all other protected forms of PHI. Under this section, your PHI cannot be distributed without your written authorization.
It’s important to know the difference between patient consent and patient authorization. Consent generally means giving permission to have a medical procedure performed, or for medical information to be shared with doctors during treatment. Authorization generally means giving permission to have one’s PHI distributed to third parties, other than the original medical facility providing treatment.
To be a legitimate authorization, there must be a written document, signed by the patient, giving the named medical facility permission to use specific PHI for matters other than medical treatment, payment, or surgeries. The authorization applies when a patient’s PHI will be disclosed to a third party, such as an insurance company, billing company, or even another doctor.
The patient authorization must include a description of the specific PHI to be disclosed, the person or company to whom the PHI will be sent, an expiration date for the authorization, and the purpose of the disclosure. Disclosure of any portion of the patient’s PHI without authorization is a potential violation of HIPAA laws.
Example 1: Violation of HIPAA’s Privacy Rule
Susan went to her family doctor complaining of bloating, weight loss, jaundice, dark urine, and nausea. After several tests, her physician told her she was suffering from pancreatic cancer. Several days later, Dave called Susan’s physician’s office, identified himself as her husband, and asked about Susan’s test results. The receptionist told Dave his wife had been diagnosed with advanced pancreatic cancer.
This is a clear case of a violation of HIPAA’s Privacy Rule, even though Dave was Susan’s husband. The receptionist was prohibited from disclosing that information to Dave. Her breach of confidentiality may subject her and the doctor to HIPAA penalties.
Example 2: Violation of HIPAA’s Privacy Rule
Amy was going through a medical malpractice lawsuit against her doctor, and her attorney was preparing to take the depositions of the doctor and his staff. The doctor’s attorney sent a letter to Amy’s former doctor demanding he turn over her medical records, including all of the doctor’s notes regarding her predilection for opiate abuse, and repeated threats to sue him for medical malpractice.
Believing the attorney’s letter was “official,” the doctor advised his staff to make copies of all of Amy’s medical records and forward them to the attorney. He did so without contacting Amy or obtaining her express written authorization.
While in trial, the doctor’s attorney introduced into evidence Amy’s prior medical records, especially the doctor’s notes about her “drug seeking behavior,” and repeated threats of suing for medical malpractice. As a result, Amy’s case was doomed, and the jury ruled in favor of the doctor. Amy’s former doctor violated HIPAA’s Privacy Rule, and this breach of confidentiality subjects him to HIPAA fines and penalties.
Legal Recourse for HIPAA Rights Violations
Contrary to what many people believe, you cannot sue a medical entity for violating your HIPAA rights. Your only recourse against a HIPAA violation is to file a complaint with the Department of Labor’s Office of Civil Rights, after which an investigator will investigate your allegations and determine if a HIPAA violation took place. If so, the violator may be fined or subject to criminal prosecution.
To report a HIPAA violation, go to this webpage. There you can download the form to file your complaint by written mail, email, or via fax. Provide the name(s) of the medical entity that violated your HIPAA rights, and write a brief explanation of the facts surrounding the violation, including the evidence you having proving the violation occurred.
Private Legal Remedies
If the violation resulted in damages, meaning you suffered some kind of verifiable financial loss, you may have a civil claim against the individual who violated your HIPAA rights.
Example: Monetary Damages from HIPAA Violation
Jane was interviewing for a new job, and had already been selected for the position. She was negotiating the terms of her employment contract, when a background check turned up her family doctor’s contact information.
The background investigator then contacted Jane’s doctor, saying he was authorized to obtain copies of her medical records for her new employer. The doctor’s office released Jane’s records, which revealed she was being treated for HIV. Jane never authorized this information to be disclosed to any third parties, especially the background check company.
Days after the information was released, Jane’s offer of employment was suddenly withdrawn, citing another candidate as having better qualifications.
In this instance, Jane could sue her doctor for the damages caused by his HIPAA violation. She’d likely have the basis of a “tortious interference with contract” case. She’d need to prove that the withdrawal of the employment offer was directly related to the disclosure of her medical records. Jane’s damages would be the loss of income and benefits she would have been entitled to if she’d been hired.
Further, if after the OCR investigated her complaint, they found the doctor to have violated HIPAA laws, Jane could use that finding as strong evidence in the trial. Additionally, Jane could contact the State Medical Board and file a complaint of unethical practice.
If an unauthorized release of your PHI resulted in financial damages, you should consult an attorney with extensive experience in HIPAA law. In some cases, depending on your damages, an attorney may accept your case on a contingency fee basis, meaning you won’t have to pay any money until, and unless the attorney settles your case or wins it at trial.
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Visitor Questions on Hospital Malpractice
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