Increases Generally Apply to Civil Penalties Assessed After August 1, 2016

The U.S. Department of Health and Human Services (HHS) has published an interim final rule adjusting for inflation the civil monetary penalties assessed for violations of the Administrative Simplification Rules under the Health Insurance Portability and Accountability Act (HIPAA). The increases generally apply to civil penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015.

Background
HIPAA requires national standards to be established for electronic health care transactions, as well as "code sets," unique health identifiers, and security. These standards--called the Administrative Simplification Rules--apply to health care providers, clearinghouses, and covered health plans with 50 or more participants that are not self-administered.

Increased Penalties
The interim final rule imposes the following penalty increases for violations of the Administrative Simplification Rules:

• For a covered entity that did not know of the violation and, by exercising reasonable diligence, would not have known of the violation, the minimum penalty is 0 per violation (formerly 0);
• For a violation due to reasonable cause and not willful neglect, the minimum penalty is ,100 per violation (formerly ,000);
• For a violation due to willful neglect and corrected during the 30-day period beginning on the first date the covered entity or business associate knew, or, by exercising reasonable diligence, would have known that the violation occurred, the minimum penalty is ,002 per violation (formerly ,000); and
• For a violation due to willful neglect and not corrected during the 30-day period beginning on the first date the covered entity or business associate knew, or by exercising reasonable diligence, would have known that the violation occurred, the minimum penalty is ,010 per violation (formerly ,000).

Violations occurring on or before November 2, 2015, and assessments made prior to August 1, 2016, whose associated violations occurred after November 2, 2015, will continue to be subject to the civil monetary penalty amounts set forth in existing regulations or statutes if the amount has not yet been adjusted by regulation.

Note: HHS is expected to publish annual adjustments to these penalties not later than January 15 of every year.

Click here to read the interim final rule in its entirety.

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