The HIPAA Privacy Rule - HIPAA Violation and Case Study

A HIPAA violation is a failure to comply with any part of the HIPAA Privacy or Security Rules. There are four violation categories or tiers. This four-tier categorization system takes into account whether the violation was accidental or intentional, as well as the organization’s actions in response to the violation.

Category 1: The covered entity (CE) or business associate (BA) did not know about the violation and would not have known about it, even by exercising reasonable diligence.
Category 2: The CE knew about the violation or should have known about it by exercising reasonable diligence, which constitutes reasonable cause.
Category 3: The violation was due to willful neglect of the HIPAA rules, and the CE corrected it within 30 days of learning of the violation.
Category 4: The violation was due to willful neglect, and the CE did not correct it within 30 days of learning of the violation.

Status of All Privacy Rule Complaints - May 31, 2023

Total Complaints Received: 331,100
Complaints Remaining Open: 7,810 about 2%
Complaints Resolved: 323,290 about 98%

Total Investigated Resolutions - May 31, 2023

Total Complaints Investigated: 44,713
Corrective Action Obtained (Change Achieved): 30,194, about 68%
No Violation: 14,519, about 32%

Penalties for HIPAA Violations 2008-2023

Real World HIPAA Violation Cases

In July 2022, health insurance giant Anthem agreed to pay $115 million to settle a class action lawsuit over a 2014 data breach that exposed the personal information of nearly 79 million people. It was the largest data breach settlement in U.S. history at the time.

The settlement resolved lawsuits that accused Anthem of failing to adequately protect customer data. Hackers had gained access to Anthem's systems and obtained names, birthdays, social security numbers, addresses, and other sensitive information.

The settlement established a $115 million fund to provide victims of the breach with credit monitoring services and cash payments for damages related to identity theft. Anthem also agreed to strengthen its cybersecurity practices as part of the deal.

Memorial Healthcare System (MHS) is a hospital network based in South Florida.

In 2014, MHS suffered a data breach involving the protected health information (PHI) of over 115,000 patients. The breach occurred when employees of MHS improperly accessed patient records without authorization over several years.

In June 2021, MHS agreed to pay $5.5 million to settle a class action lawsuit related to this internal data breach.

The settlement resolved allegations that MHS failed to properly safeguard patient medical records as required by HIPAA regulations. Under the settlement, affected patients could receive up to $500 each for unauthorized access to their health data. MHS also agreed to implement stronger controls and employee training programs to better protect patient privacy going forward.

This case highlights the threat of insider data breaches at healthcare organizations and the importance of access controls for electronic medical records.

What lessons we could learn from these cases?

There are some key lessons we can learn from major HIPAA violation cases like the Anthem data breach and Memorial Healthcare System internal breach:

The financial penalties for non-compliance are substantial. Both cases involved multi-million dollar settlements, demonstrating the high cost of HIPAA violations.
Breaches can originate externally and internally. Anthem's breach was from external hackers, while Memorial's was due to insider actions. Organizations need safeguards against both threats.
Regular audits and access controls are essential. Unauthorized access, whether external or internal, often stems from lax monitoring of activity and inadequate controls.
Security awareness training is important. Many breaches involve human error or ignorance. Training staff on policies and best practices can prevent violations.
Tightly limit access to PHI. Access should only be granted based on strict need-to-know requirements for staff roles.
Report breaches in a timely manner. Transparency and promptly notifying affected individuals is looked upon favorably.
Have a thorough HIPAA compliance program. This can help prevent violations and also demonstrate good faith efforts in the event of a breach.

In summary, major HIPAA cases highlight vulnerabilities organizations must address, especially around access controls, auditing, encryption, training, and compliance programs. Learning these lessons can help healthcare entities improve their privacy and security posture.

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