HHS Reconsiders Penalty Structure for HIPAA Violations, Imposes Annual Limits based on “Level of Culpability”

On Friday, April 26, 2019, the U.S. Department of Health and Human Services (“HHS”) filed a Notice of Enforcement Decision (the “Notice of Enforcement”), confirming the agency’s reconsideration of its prior interpretation of the Health Information Technology for Economic and Clinical Health Act’s (the “HITECH Act’s”) penalty structure. In doing so, HHS announced the abandonment of a previous annual penalty cap that did not vary based on an entity’s level of culpability. Effective immediately, the maximum penalty that the HHS Office for Civil Rights (“OCR”) will impose for a particular violation of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) that occur within a single calendar year has been generally, and significantly reduced. Except for violations that are due to a regulated entity’s willful neglect and have not been timely corrected (which maintain the…

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