Increased Penalties for HIPAA Noncompliance

HHS has issued final regulations containing inflation adjustments to the civil penalties for violations of HIPAA's "administrative simplification" rules.

Background. The inflation adjustments are required under the Federal Civil Penalties Inflation Adjustment Act of 2015 (the "Act"). Among other things, the Act:

  • Provided an initial "catch-up" adjustment for civil monetary penalties.
  • Requires HHS to annually adjust the penalties for inflation by January 15 of each year.

In September 2016, HHS issued an interim final rule establishing an initial catch-up for its civil monetary penalties. The adjustments were required to take effect August 1, 2016, and HHS's interim final rule became effective September 6, 2016.

In February 2017, HHS published a final rule that provided an annual inflation adjustment to the civil monetary penalties.

2019 Inflation Adjustments. The latest inflation adjustments are effective November 5, 2019 and apply to penalties assessed on or after November 5, 2019, if the violation occurred on or after November 2, 2015. The penalty amounts in effect before September 6, 2016, apply if either: 1) the violation occurred before November 2, 2015; or 2) the penalty was assessed before September 6, 2016.

The inflation adjustment multiplier for 2019 is 1.02522. Accordingly, most penalties will increase by approximately 2.5%.

HHS's final rule, including a chart that includes the penalties, is available at: https://www.govinfo.gov/content/pkg/FR-2019-11-05/pdf/2019-23955.pdf