The Health Insurance Portability and Accountability Act (HIPAA) is the most important data protection regulation for healthcare providers in the USA. It covers health insurers, clinics, hospitals, private practices, and developers of health apps, care settings, and pharmacies.
If you handle patient records, you need to be HIPAA-compliant. For your convenience, we have created a handy HIPAA compliance checklist for covered organizations. However, this blog looks at another critical HIPAA-related issue: the different types of violations and the penalties for breaching HIPAA rules.
Violations matter. Poor compliance causes customers to lose trust in your data protection policies. It’s only a matter of time before patients move their business elsewhere. Regulators can also issue significant financial penalties or even jail offenders in the most extreme cases.
This makes protecting sensitive data a critical task for health companies and their partners. So let’s explore the issue in-depth and explain everything you need to know about HIPAA violations.
What qualifies as a HIPAA Violation?
Before talking about HIPAA penalties, we need a clear understanding of what exactly constitutes a HIPAA violation. Fortunately, the legal definition of a violation is extremely clear.
HIPAA violations take place when either a covered entity (CE) or a business associate (BA) of a covered entity breach HIPAA Security, Private, or Breach Notification Rules.
HIPAA has three main rules. Here is a quick summary of what you need to know about them:
The HIPAA Privacy Rule sets out protections for private health data. CEs must keep data confidential and prevent unauthorized disclosure. They must also make health records available if patients desire.
The HIPAA Security Rule states that healthcare organizations must keep patient records secure. This includes physical, administrative, and electronic safeguards. You could see this rule as putting the privacy rule into practice.
The HIPAA Breach Notification Rule requires CEs to inform patients about any actual or potential data breaches. Notification must occur within 60 days of the breach.
Covered entities must become familiar with these rules when creating a compliance strategy. If you suffer a penalty, ignorance of HIPAA guidelines is not a valid defense. Covered entities must be aware of their responsibilities under the law.
Business associates, third parties your company uses also need to be part of compliance strategies. If partners can access your network assets, they could potentially cause a data breach.
Deliberate versus accidental violations
The first thing to note is that violating HIPAA can be deliberate or accidental. Covered entities need policies to cover both types of violations.
Deliberate breaches could include nurses passing the health records of a celebrity to media contacts or selling records on the Dark Web. But they also extend to simply sharing patient data without the consent of the individual concerned. In these cases, penalties tend to be severe.
Deliberate breaches also include offenses where organizations fail to act when they should do so. For instance, companies may refuse to issue breach notifications to customers within the required 60-day limit.
Company policies that clash with HIPAA rules are often deemed deliberate breaches if regulators decide that the covered entity knew about the issue and was able to remove the conflict.
Accidental breaches of HIPAA rules carry less severe penalties. They could include the absence of encryption on mobile devices or failure to train staff in cybersecurity practices.
For example, physicians could click on phishing links disguised as communications from pharmaceutical partners. There is probably no deliberate or malicious breach here. But the covered entity would be liable due to poor security training and policies.
Broadly speaking, if companies fail to take action to conform to HIPAA rules, this will qualify as a breach. That’s why having a comprehensive HIPAA compliance strategy is essential.
Criminal versus civil violations
It’s also important to understand the difference between criminal and civil HIPAA breaches.
Criminal cases are mounted by the Department of Justice and are much less common than civil penalties. They deal with deliberate violations and can lead to prison sentences for individuals at the organizations involved. Offenses leading to criminal charges include:
Wrongful disclosure of Protected Health Information (PHI)
Wrongful disclosure of PHI under false pretenses (e.g. seeking access to medical records of patients not under the care of a physician)
Wrongful disclosure of PHI under false pretenses with malicious intent (to sell or otherwise benefit from stealing PHI)
Most of the time, you or your staff won’t risk criminal charges. Instead, the challenge is to minimize the risk of civil cases.
Civil cases may involve behavior that is deliberate, but not malicious. Instead, civil offenses tend to involve poor risk assessment processes or simply ignorance of what HIPAA requires.
In these cases, the OCR or Attorneys General will seek a financial penalty under the HIPAA enforcement rule. Civil violations are covered by four tiers, which we will look at in more detail below.
4 types of HIPAA violations
In most instances, the Office for Civil Rights (OCR) receives complaints and decides whether organizations have violated HIPAA regulations. When the OCR deliberates, its regulators use a four-tier system to categorize potential violations.
The four tiers differ in terms of severity, with rising financial penalties. They also differ in terms of culpability. In some cases, organizations are not aware of HIPAA violations. In others, breaches are wilful and systematic.
The size of the financial penalty is related to various factors. Regulators consider:
How long the violation has existed
How many individuals are affected
The value and amount of the data at risk
Whether the organization willingly collaborates with OCR
Whether the organization has a clean regulatory history
Tier 1 – Accidental violation
At this tier, organizations are not aware of HIPAA breaches. The organization also had no way to avoid the violation, even with complete adherence to HIPAA regulations. At this level, covered entities must show evidence of compliance. This proves that the breach could not be avoided.
Highest penalty: $100 per incident, with a limit of $50,000
Tier 2 – Aware of violation, but no remediation possible
At tier 2, organizations know about HIPAA violations before OCR is informed. In this category, staff should have been aware of the fault. But the organization could not avoid violating HIPAA rules, even while administering adequate levels of care. This level falls short of the definition of “wilful neglect.”
Highest penalty: $1,000 per incident, with a limit of $100,000
Tier 3 – Wilful neglect with remediation
At tier 3, organizations commit “wilful neglect”. This means they were aware of the violation. the covered entity could have taken action to remedy the breach but failed to do so. However, there is a caveat here. Tier 3 penalties are lower because the organization involved has taken action to remediate the issue.
Highest penalty: $10,000 per incident, with a limit of $250,000
Tier 4 – Wilful neglect without remediation
At tier 4, organizations are also guilty of “wilful neglect”. The violation was known and the organization failed to take remedial action. Breaches in this category could continue for months or years, with serious consequences for patient welfare and data protection. For these reasons, Tier 4 penalties are far higher than other categories.
Highest penalty: $50,000 per incident, with a limit of $1.5 million
The consequences of a HIPAA violation
According to US law, if a covered entity breaks the HIPAA regulations, it may face a penalty of up to $50,000 and up to one-year imprisonment. The actual consequences depend on the type and severity of the HIPAA violation, and whether they were committed by a healthcare employee or an employer, i.e., covered entities.
There are two types of violations: civil and criminal. Each category has tiers to determine penalties for a specific breach.
Civil HIPAA penalties
HIPAA violations committed without malicious intent fall into the category of civil penalties. What’s the most common reason for these violations? Most of the time, it’s because healthcare employees or covered entities don’t know the HIPAA Privacy Rule. Yet, unawareness or negligence of HIPAA standards is not an excuse for escaping a penalty.
Criminal HIPAA penalties
Intentional HIPAA violations, such as disclosing or selling personal health information, are a crime. The criminal penalties for these violations can be severe and restitution may be also paid to the victims. A covered entity that committed a HIPAA violation must settle it with OCR and state attorneys general.
The height of the criminal penalties depends on the following factors:
the seriousness of HIPAA violations
the length of time that the violation has been taking place
the number of violations identified.
Who issues penalties?
HIPAA is a Federal regulation. So you might assume that penalties are issued exclusively by the Federal Government. However, the actual situation is more complex. Covered entities should be familiar with all regulatory bodies in their specific business sector.
The Office for Civil Rights (OCR)
To start with, the Office for Civil Rights processes most HIPAA violations and issues penalties. OCR is part of the Department of Health and Human Services (HHS), and it has a general bias towards negotiation instead of penalizing organizations.
As a rule, before mandating penalties, OCR will issue technical assistance and monitor voluntary compliance agreements with covered entities. However, if breaches persist, OCR will launch civil cases to demand HIPAA violation penalties. This is particularly likely if covered entities have a previous history of repeat violations.
OCR has the power to launch civil proceedings. But it can also pass HIPAA cases to the Department of Justice (DOJ) to handle criminal violations. So a violation at the federal level can lead to jail time alongside large financial penalties.
State-level Attorneys General
HIPAA penalties may also be issued at a state level by Attorneys General. Attorneys General can use powers granted by the 2009 HITECH Act to launch lawsuits against organizations breaching HIPAA rules. These suits are civil cases, so they do not lead to prison sentences. But they can result in large financial penalties.
Additionally, HIPAA violations can stretch across state boundaries. In these situations, covered entities may face lawsuits from numerous Attorneys General. This multiplies the financial cost of non-compliance.
Internal penalties
Proactive organizations may also create policies to penalize staff members when they violate HIPAA regulations. This could be developed autonomously, or in collaboration with the Office for Civil Rights as part of compliance strategies.
Internal penalties tend to range in severity and seek to deter unsafe behavior when handling patient data. They are an important data security measure, especially when deployed with mandatory security training.
How can NordLayer solutions mitigate HIPAA risks?
Violating HIPAA suggests that your data protection measures are below the standard needed in today’s digital marketplace. That’s why organizations need modern security solutions that easily adapt to the complexities of today’s hybrid working environments and HIPAA rules. All locations, users, devices, apps, and data must have the same advanced level of protection.
With Nordlayer’s solutions, you can secure access to sensitive information, prevents reputational, legal, and financial damage, and helps achieve HIPAA compliance. Whatever area of healthcare you work in, Nordlayer is ready to help you succeed. Get in touch and discuss your options today.
Partnership Will Drive Increased Adoption of Portnox’s Cutting-Edge NAC Solution Purpose-Built for Large Distributed Organizations in the Region
LONDON — Portnox, which supplies network access control (NAC), visibility and device risk management to organizations of all sizes, today announced that it has partnered with Distology for the sole distribution and resell of its cloud-delivered NAC-as-a-Service solution in the United Kingdom and Ireland.
We chose to partner with Distology because of their successful history of IT security solution distribution in the UK and Irish markets, said Portnox CEO, Ofer Amitai. Were confident this collaboration will yield tremendous growth for both parties, as Portnox has a unique value proposition and Distology has the market enablement expertise to effectively evangelize our network security offering.
We have a long-established relationship with Portnox and it speaks volumes that the team have decided to choose Distology as their sole UK&I distributor. The technology Portnox brings to the market is incredibly exciting and complements our existing vendor stack effortlessly, said Stephen Rowlands, Head of Sales for Distology. Were especially looking forward to representing and promoting Portnox Clear to our growing partner base, as this brand-new cloud-based technology has potential to completely disrupt the market and we foresee masses of growth potential in this innovative product.
Portnox introduced its cloud-delivered NAC-as-a-Service solution to the UK & Irish markets less than two years go. As the first to bring NAC to the cloud, Portnox has quickly gained a foothold in the region, particularly among large distributed enterprises in the retail, construction and utilities industries.
The adoption of our NAC-as-a-Service product in the UK has been very strong to date, said VP of Products, Tomer Shemer. This is a testament to the fact that the UK is one of the markets leading the trend of cloud security adoption. We expect to see continued growth in the coming years in this area of Europe.
Portnox is set to exhibit at this week’s RSA 2020 Conference (booth #4234) in San Francisco, February 24-28. Additionally, Portnox (booth #G108) and Distology (booth #C40) will both be exhibiting at InfoSec Europe 2020, Europes largest event for information and cyber security, in London, June 2-4.
About Version 2
Version 2 is one of the most dynamic IT companies in Asia. The company develops and distributes IT products for Internet and IP-based networks, including communication systems, Internet software, security, network, and media products. Through an extensive network of channels, point of sales, resellers, and partnership companies, Version 2 offers quality products and services which are highly acclaimed in the market. Its customers cover a wide spectrum which include Global 1000 enterprises, regional listed companies, public utilities, Government, a vast number of successful SMEs, and consumers in various Asian cities.
About Portnox
Portnox provides simple-to-deploy, operate and maintain network access control, security and visibility solutions. Portnox software can be deployed on-premises, as a cloud-delivered service, or in hybrid mode. It is agentless and vendor-agnostic, allowing organizations to maximize their existing network and cybersecurity investments. Hundreds of enterprises around the world rely on Portnox for network visibility, cybersecurity policy enforcement and regulatory compliance. The company has been recognized for its innovations by Info Security Products Guide, Cyber Security Excellence Awards, IoT Innovator Awards, Computing Security Awards, Best of Interop ITX and Cyber Defense Magazine. Portnox has offices in the U.S., Europe and Asia. For information visit http://www.portnox.com, and follow us on Twitter and LinkedIn.。
About Distology
Distology is a Market Enabler and offers true value for the distribution of disruptive IT Security solutions. The vendors we work with represent innovative and exciting technology that continues to excite and inspire their reseller network. Our ethos is based on trust, relationships, energy and drive and offers end to end support in the full sales cycle providing vendor quality technical and commercial resource.
These days, cybercrime is rampant. It’s no longer a matter of “if” you’re going to suffer an attack but “when” it will happen. All companies want to be ready for any crisis. And this is where a business continuity plan comes into play.
But what is a business continuity plan exactly? Why is it important? What should one include? Today, we’re exploring all these questions in-depth.
What is a business continuity plan?
A business continuity plan (BCP) is a document that sets guidelines for how an organization will continue its operations in the event of a disruption, whether it’s a fire, flood, other natural disaster or a cybersecurity incident. A BCP aims to help organizations resume operations without significant downtime.
Unfortunately, according to a 2020 Mercer survey, 51% of businesses across the globe don’t have a business continuity plan in place.
What’s the difference between business continuity and disaster recovery plans?
We often confuse the terms business continuity plan and disaster recovery plan. The two overlap and often work together, but the disaster recovery plan focuses on containing, examining, and restoring operations after a cyber incident. On the other hand, BCP is a broader concept that considers the whole organization. A business continuity plan helps organizations stay prepared for dealing with a potential crisis and usually encompasses a disaster recovery plan.
Importance of business continuity planning
The number of news headlines announcing data breaches has numbed us to the fact that cybercrime is very real and frequent and poses an existential risk to companies of all sizes and industries.
Consider that in 2021, approximately 37% of global organizations fell victim to a ransomware attack. Then consider that business interruption and restoration costs account for 50% of cyberattack-related losses. Finally, take into account that most cyberattacks are financially motivated and the global cost of cybercrime topped $6 trillion last year. The picture is quite clear — cybercrime is a lucrative venture for bad actors and potentially disastrous for those on the receiving end.
To thrive in these unpredictable times, organizations go beyond conventional security measures. Many companies develop a business continuity plan parallel to secure infrastructure and consider the plan a critical part of the security ecosystem. The Purpose of a business continuity plan is to significantly reduce the downtime in an emergency and, in turn, reduce the potential reputational damage and — of course — revenue losses.
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Business Continuity Plan Example
[Company Name]
[Date]
I. Introduction
Purpose of the Plan
Scope of the Plan
Budget
Timeline
The initial stage of developing a business continuity plan starts with a statement of the plan’s purpose, which explains the main objective of the plan, such as ensuring the organization’s ability to continue its operations during and after a disruptive event.
The Scope of the Plan outlines the areas or functions that the plan will cover, including business processes, personnel, equipment, and technology.
The Budget specifies the estimated financial resources required to implement and maintain the BCP. It includes costs related to technology, personnel, equipment, training, and other necessary expenses.
The Timeline provides a detailed schedule for developing, implementing, testing, and updating the BCP.
II. Risk Assessment
Identification of Risks
Prioritization of Risks
Mitigation Strategies
The Risk Assessment section of a Business Continuity Plan (BCP) is an essential part of the plan that identifies potential risks that could disrupt an organization’s critical functions.
The Identification of Risks involves identifying potential threats to the organization, such cybersecurity breaches, supply chain disruptions, power outages, and other potential risks. This step is critical to understand the risks and their potential impact on the organization.
Once the risks have been identified, the Prioritization of Risks follows, which helps determine which risks require the most attention and resources.
The final step in the Risk Assessment section is developing Mitigation Strategies to minimize the impact of identified risks. Mitigation strategies may include preventative measures, such as system redundancies, data backups, cybersecurity measures, as well as response and recovery measures, such as emergency protocols and employee training.
III. Emergency Response
Emergency Response Team
Communication Plan
Emergency Procedures
This section of the plan focuses on immediate actions that should be taken to ensure the safety and well-being of employees and minimize the impact of the event on the organization’s operations.
The Emergency Response Team is responsible for managing the response to an emergency or disaster situation. This team should be composed of individuals who are trained in emergency response procedures and can act quickly and decisively during an emergency. The team should also include a designated leader who is responsible for coordinating the emergency response efforts.
The Communication Plan outlines how information will be disseminated during an emergency situation. It includes contact information for employees, stakeholders, and emergency response personnel, as well as protocols for communicating with these individuals.
The Emergency Procedures detail the steps that should be taken during an emergency or disaster situation. The emergency procedures should be developed based on the potential risks identified in the Risk Assessment section and should be tested regularly to ensure that they are effective.
IV. Business Impact Analysis
The Business Impact Analysis (BIA) section of a Business Continuity Plan (BCP) is a critical step in identifying the potential impact of a disruption to an organization’s critical operations.
The Business Impact Analysis is typically conducted by a team of individuals who understand the organization’s critical functions and can assess the potential impact of a disruption to those functions. The team may include representatives from various departments, including finance, operations, IT, and human resources.
V. Recovery and Restoration
Procedures for recovery and restoration of critical processes
Prioritization of recovery efforts
Establishment of recovery time objectives
The Recovery and Restoration section of a Business Continuity Plan (BCP) outlines the procedures for recovering and restoring critical processes and functions following a disruption.
The Procedures for recovery and restoration of critical processes describe the steps required to restore critical processes and functions following a disruption. This may include steps such as relocating to alternate facilities, restoring data and systems, and re-establishing key business relationships.
The Prioritization section of the plan identifies the order in which critical processes will be restored, based on their importance to the organization’s operations and overall mission.
Recovery time objectives (RTOs) define the maximum amount of time that critical processes and functions can be unavailable following a disruption. Establishing RTOs ensures that recovery efforts are focused on restoring critical functions within a specific timeframe.
VI. Plan Activation
Plan Activation Procedures
The Plan Activation section is critical in ensuring that an organization can quickly and effectively activate the plan and respond to a potential emergency.
The Plan Activation Procedures describe the steps required to activate the BCP in response to a disruption. The procedures should be clear and concise, with specific instructions for each step to ensure a prompt and effective response.
VII. Testing and Maintenance
Testing Procedures
Maintenance Procedures
Review and Update Procedures
This section of the plan is critical to ensure that an organization can effectively respond to disruptions and quickly resume its essential functions.
Testing procedures may include scenarios such as natural disasters, cyber-attacks, and other potential risks. The testing procedures should include clear objectives, testing scenarios, roles and responsibilities, and evaluation criteria to assess the effectiveness of the plan.
The Maintenance Procedures detail the steps necessary to keep the BCP up-to-date and relevant.
The Review and Update Procedures describe how the BCP will be reviewed and updated regularly to ensure its continued effectiveness. This may involve conducting a review of the plan on a regular basis or after significant changes to the organization’s operations or threats.
What should a business continuity plan checklist include?
Organizations looking to develop a BCP have more than a few things to think through and consider. Variables such as the size of the organization, its IT infrastructure, personnel, and resources all play a significant role in developing a continuity plan. Remember, each crisis is different, and each organization will have a view on handling it according to all the variables in play. However, all business continuity plans will include a few elements in one way or another.
Clearly defined areas of responsibility
A BCP should define specific roles and responsibilities for cases of emergency. Detail who is responsible for what tasks and clarify what course of action a person in a specific position should take. Clearly defined roles and responsibilities in an emergency event allow you to act quickly and decisively and minimize potential damage.
Crisis communication plan
In an emergency, communication is vital. It is the determining factor when it comes to crisis handling. For communication to be effective, it is critical to establish clear communication pipelines. Furthermore, it is crucial to understand that alternative communication channels should not be overlooked and outlined in a business continuity plan.
Recovery teams
A recovery team is a collective of different professionals who ensure that business operations are restored as soon as possible after the organization confronts a crisis.
Alternative site of operations
Today, when we think of an incident in a business environment, we usually think of something related to cybersecurity. However, as discussed earlier, a BCP covers many possible disasters. In a natural disaster, determine potential alternate sites where the company could continue to operate.
Backup power and data backups
Whether a cyber event or a real-life physical event, ensuring that you have access to power is crucial if you wish to continue operations. In a BCP, you can often come across lists of alternative power sources such as generators, where such tools are located, and who should oversee them. The same applies to data. Regularly scheduled data backups can significantly reduce potential losses incurred by a crisis event.
Recovery guidelines
If a crisis is significant, a comprehensive business continuity plan usually includes detailed guidelines on how the recovery process will be carried out.
Business continuity planning steps
Here are some general guidelines that an organization looking to develop a BCP should consider:
Analysis
A business continuity plan should include an in-depth analysis of everything that could negatively affect the overall organizational infrastructure and operations. Assessing different levels of risk should also be a part of the analysis phase.
Design and development
Once you have a clear overview of potential risks your company could face, start developing a plan. Create a draft and reassess it to see if it takes into account even the smallest of details.
Implementation
Implement BCP within the organization by providing training sessions for the staff to get familiar with the plan. Getting everyone on the same page regarding crisis management is critical.
Testing
Rigorously test the plan. Play out a variety of scenarios in training sessions to learn the overall effectiveness of the continuity plan. By doing so, everyone on the team will be closely familiar with the business continuity plan’s guidelines.
Maintenance and updating
Because the threat landscape constantly changes and evolves, you should regularly reassess your BCP and take steps to update it. By making your continuity plan in tune with the times, you will be able to stay a step ahead of a crisis.
Level up your company’s security with NordPass Business
A comprehensive business continuity plan is vital for the entire organization’s security posture. However, in a perfect world, you wouldn’t have to use it. This is where NordPass Business can help.
Remember, weak, reused, or compromised passwords are often cited as one of the top contributing factors in data breaches. It’s not surprising, considering that an average user has around 100 passwords. Password fatigue is real and significantly affects how people treat their credentials. NordPass Business counters these issues.
With NordPass Business, your team will have a single secure place to store all work-related passwords, credit cards, and other sensitive information. Accessing all the data stored in NordPass is quick and easy, which allows your employees not to be distracted by the task of finding the correct passwords for the correct account.
In cyber incidents, NordPass Business ensures that company credentials remain secure at all times. Everything stored in the NordPass vault is secured with advanced encryption algorithms, which would take hundreds of years to brute force.
If you are interested in learning more about NordPass Business and how it can fortify corporate security, do not hesitate to book a demo with our representative.
About Version 2
Version 2 is one of the most dynamic IT companies in Asia. The company develops and distributes IT products for Internet and IP-based networks, including communication systems, Internet software, security, network, and media products. Through an extensive network of channels, point of sales, resellers, and partnership companies, Version 2 offers quality products and services which are highly acclaimed in the market. Its customers cover a wide spectrum which include Global 1000 enterprises, regional listed companies, public utilities, Government, a vast number of successful SMEs, and consumers in various Asian cities.
About NordPass
NordPass is developed by Nord Security, a company leading the global market of cybersecurity products.
The web has become a chaotic space where safety and trust have been compromised by cybercrime and data protection issues. Therefore, our team has a global mission to shape a more trusted and peaceful online future for people everywhere.
