First Civil Money Penalty Levied by HHS for HIPAA Privacy Rule Violation
For the first time ever, the U.S. Department of Health and Human Services (“HHS”) imposed a civil money penalty against a covered entity for violations of the Privacy Rule under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).
HHS issued a Notice of Final Determination (“NFD”) concluding that Cignet Health, located in Maryland, (“Cignet”) violated the Privacy Rule and imposed a civil money penalty (“CMP”) of $4,351,600.
According to the Notice of Proposed Determination issued on October 20, 2010 (“NPD”), Cignet violated the rights of 41 patients by denying each of them access to their medical records and 38 patients each individually filed complaints with the Office of Civil Rights (“OCR”). Moreover, the NPD states that Cignet did not respond to OCR’s written notification of the investigations, follow-up attempts to contact Cignet by telephone and Cignet did not respond to two letters (one from the OCR Manager of Region III and the other from the General Counsel’s Office of HHS). Finally, on February 4, 2010, Cignet did not appear at a hearing before the United States District Court for the District of Maryland, did not respond to the petition, and did not defend the action.
The HIPAA Privacy Rule requires that a covered entity provide patients with a copy of their medical records within 30 days, and no later than 60 days following the patient’s request. The CMP is based on violations occurring both before and after enactment of the Health Information Technology for Economic and Clinical Health (“HITECH”) Act. The HITECH Act amended the penalty amounts established under HIPAA and increased the range of CMPs from a maximum CMP of $25,000 for a calendar year to $50,000 for each violation with a maximum CMP of $1,500,000 during a calendar year. In this case, Cignet received a CMP of $1,351,600 for failure to provide patient access to medical records and a CMP of $3,000,000 for failure to cooperate with an investigation over a period of approximately 2 ½ years. Cignet’s failure to cooperate with an OCR investigation was deemed willful neglect and Cignet received the maximum CMP permitted by statute.
For details regarding this case, please review a copy of the NFD and NPD available online at:
http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/index.html
mmatthews
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