What is HIPAA Compliance? [2021 HIPAA Compliance Guide]

“HIPAA” is a commonly recognized term, but the complexities surrounding what HIPAA Compliance entails and how it can impact you are not commonly understood.

Some people are unsure of what it stands for, and others are unclear on what it requires, who it applies to, what benefits it offers and more. When most people think of HIPAA, they think of the privacy agreement made by a doctor to their patients. But it’s important to understand every aspect of HIPAA to avoid unknowingly violating it.

what is hipaa compliance main image

This guide will take a deep dive into HIPAA, and provide clarity around one of the most common uncertainties surrounding it: “What is the civil penalty for unknowingly violating HIPAA?” We’ll also touch on solutions for preventing accidental violation, talk about why HIPAA is so important and more.

Free Download: HIPAA Risk Assessment Template

What is HIPAA Compliance?

HIPAA is an acronym for “Health Insurance Portability and Accountability Act.” The act created a federal law in 1996 to protect sensitive patient health information from being disclosed without the patient’s knowledge or consent.

According to the Department of Health Care Services, HIPAA does the following:

  • Reduces health care abuse and fraud
  • Mandates industry-wide standards for health care information on electronic billing and other processes
  • Provides the ability to transfer and continue health insurance coverage for American workers and their families when they change or lose their jobs
  • Requires the protection and confidential handling of protected health information

Why is HIPAA Compliance important?

Let’s start by discussing the importance of HIPAA for patients. It serves the greatest benefits for patients because it ensures multiple safeguards to Protected Health Information (PHI).

According to the HIPAA Journal, “without HIPAA there would be no requirement for healthcare organizations to safeguard data – and no repercussions if they failed to do so.” HIPAA also benefits patients by giving them control over who their information is released to and shared with.

Prior to the enactment of HIPAA, there was no requirement for healthcare organizations to release copies of patients’ health information. HIPAA allows patients to play an active role in their healthcare. Even the greatest healthcare providers make mistakes; when patients can obtain copies of their medical information, they are able to check for errors and correct mistakes when needed. Another benefit it provides is allowing information to be passed between providers, eliminating the need for repeat tests. This way, healthcare providers have their patient’s entire health history at their disposal.

HIPAA is also important to healthcare organizations. If you’re a healthcare professional, HIPAA provides benefits like streamlining administrative functions, improving efficiency and eliminating silos between specialists. It has been instrumental in facilitating the industry’s transition from paper to electronic records.

How does someone violate HIPAA?

HIPAA is federally regulated by the U.S. Department of Health & Human Services (HHS). HIPAA violations are penalized whenever the HHS finds that the acquisition, access, use or disclosure of PHI is done in a way that poses a risk to the involved patient.

It’s important to be clear on whether or not you are subject to the HIPAA Privacy Rule, one of the most important requirements of HIPAA.

According to the CDC, the following entities are subject to the Privacy Rule and should have a comprehensive understanding of the regulatory concerns:

  • Healthcare providers
  • Health plans
  • Healthcare clearinghouses
  • Business associates

If you are subjected to the Privacy Rule, you may be at risk of violating it unintentionally. One example of an unintentional HIPAA violation could be losing a USB flash drive that contains private health information on it. Nobody intended for that information to be released or illegally stolen, but it is a breach of HIPAA nonetheless.

Of course, there are times when HIPAA is violated intentionally. A common example of this is a doctor discussing PHI with a colleague in a public area of a hospital. This is a known violation and therefore is considered an intentional breach of HIPAA.

Bonus Material: Download our Free HIPAA Compliance Checklist

What is the civil penalty for unknowingly violating HIPAA?

The type of penalty that is issued when someone unintentionally violates HIPAA (that is, it can be proven that there was no malintent) is called civil penalty. Civil penalties are often given out when the violating party is neglectful or unaware that their actions were wrong.

Here are the details of the civil penalty for unknowingly violating HIPAA:

  • $100 per violation
  • If there was reasonable cause and the individual did not act with willful neglect, they’re fined a minimum of $1,000
  • If the individual was acting with willful neglect, but then fixed the issue, they’re fined a minimum of $10,000 per violation
  • If the individual was acting with willful neglect and did not fix the issue, they’re fined a minimum of $50,000 per violation

How to prevent accidental HIPAA violations

Risk management in healthcare is an integral part of ensuring HIPAA compliance. To serve their patients and staff best, hospitals and other medical organizations must assess and control risks with regulations like HIPAA. Staying on top of these risks demands a powerful and flexible program.

LogicManager’s integrated healthcare risk management, compliance and governance solutions are designed to meet the needs of healthcare professionals.

Every organization has unique processes, circumstances, and potential problems.

Our customizable software allows you to accomplish the following:

  • Prioritize resource allocation by identifying the most critical areas and functions of your business
  • Record key performance metrics such as rates of readmission and HACs
  • Relate metrics directly to the business processes that drive them to reveal dependencies and fill gaps in your program
  • Track all regulatory compliance requirements including the Joint Commission, HIPAA, Medicare and Medicaid, the Affordable Care Act and more in our pre-built risk library

What Is HIPAA Compliance: Conclusion

LogicManager has everything you need to make your risk management process a painless one. Our software is designed to alleviate the pain points in your company’s risk management processes, so you can focus on aligning and achieving operational and strategic goals across your organization.

Much like HIPAA, LogicManager eliminates silos, prevents duplicative work, improves efficiencies and streamlines tasks. Implementing a risk-based framework and methodology is critical in preventing accidental HIPAA violations and allows healthcare organizations to dedicate more time to what matters most: providing quality care.

See how your organization can benefit today by requesting a free demo of our HIPAA Compliance software.