If you handle protected health information (PHI), the Health Insurance Portability and Accountability Act (HIPAA) requires you to keep that information private and secure. When you fail to become HIPAA compliant, you can face serious penalties, including large fines, corrective action plans, and even criminal charges in cases of intentional misuse. Understanding common HIPAA violation penalties helps you know exactly what is at stake when PHI is mishandled.
What Are the Most Common HIPAA Violation Penalties?
Most HIPAA violations happened due to mistakes, poor security practices, or employees acting outside the rules. Even unintentional violations can result in employers receiving large fines from the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR). Below are the violations OCR enforces most often and what typically happens when you commit them.
1. Improper Use or Disclosure of Personal Health Information
If you access or share PHI without a valid reason, you can trigger major HIPAA privacy violation penalties. This includes accessing or sharing information outside the permitted scope of TPO (Treatment, Payment, and Healthcare Operations). Snooping in charts, looking up a friend’s medical history, or sharing patient information in a non-authorized way all fall under this category.
When this happens, you can expect consequences such as:
- Disciplinary action or termination, since unauthorized access is a clear privacy violation.
- Civil monetary penalties against your organization that may reach tens of thousands of dollars per violation, depending on intent and negligence.
- Criminal charges if you intentionally misuse PHI for personal gain or harm.
OCR has issued settlements for improper disclosures that ranged from $25,000 to more than $200,000, though these amounts reflect example past settlements, not standard penalty ranges. Your penalty will depend on how many patients were affected and how serious the HIPAA breach was.
2. Failure To Provide Patients Timely Access to Their Records
Under HIPAA’s Right of Access, you must give patients access to their records within 30 days. OCR has made enforcement of this rule a top priority. Those who have failed to meet the deadline have faced:
- HIPAA violation fines ranging from $5,000 to more than $200,000
- A required Corrective Action Plan (CAP) to fix your access processes and track future HIPAA compliance.
Even small practices have been penalized for delays, showing that OCR treats this rule seriously.
3. Missing or Non-Compliant Business Associate Agreements (BAAs)
HIPAA requires a signed BAA anytime you share PHI with a vendor. If you share data with a billing company, IT contractor, cloud provider, or other partner without a proper agreement in place, OCR may respond with penalties.
These HIPAA breach penalties often include:
- Civil fines that increase if the lack of a BAA leads to a breach.
- Corrective Action Plans that require your organization to review and update all vendor contracts.
- Settlements that have reached the six-figure range when vendor failures exposed PHI.
A missing or outdated BAA is one of the most common oversights OCR finds during investigations.
4. Failure To Perform a HIPAA-Required Risk Analysis
A complete risk analysis is required under the HIPAA Security Rule. If you fail to perform one or ignore the risks your analysis identifies, you may face severe penalties for HIPAA violations, including:
- Fines ranging from hundreds of thousands to several million dollars, especially when missing risk assessments lead to breaches.
- CAPs requiring detailed, organization-wide security improvements.
Large enforcement actions almost always cite an incomplete or outdated risk analysis as a root cause of the HIPAA violation or resulting breach. To ensure your processes are continuously reviewed, you should designate a responsible HIPAA officer.
5. Failure to Secure PHI (Unencrypted Devices, Poor Safeguards, Etc.)
Losing an unencrypted laptop, allowing unauthorized access to patient charts, or failing to implement reasonable safeguards can lead to significant HIPAA security violation penalties. Even though encryption is not mandatory, choosing not to encrypt means you must use an equally strong alternative.
If PHI is left unprotected, you may face:
- Civil penalties that have reached hundreds of thousands to over $3 million in cases involving stolen or lost unencrypted devices.
- CAPs requiring stronger security controls and workforce training.
Many of the largest settlements in HIPAA history involve basic failures to secure PHI. This shows how crucial it is for every covered entity to maintain strict security protocols.
6. Improper Disposal of PHI
Throwing patient records into regular trash or leaving labeled specimen containers in public areas violates HIPAA’s disposal requirements.
Penalties for HIPAA disposal violations often include:
- Fines of $300,000 or more
- Required policy changes and ongoing monitoring to ensure compliance.
OCR views improper disposal of PHI as a major breakdown in HIPAA privacy protection.
7. Failure To Report or Notify of a Breach
If a HIPAA breach affected 500 or more individuals, you must notify both the individuals concerned and HHS within 60 days. You still must report minor breaches, but they can be sent to HHS annually.
When organizations delay or fail to report a breach, OCR treats the delay itself as a violation. HIPAA breach notification penalties can include:
- Fines exceeding $2 million for large or prolonged reporting failures.
- Multi-year CAPs requiring strict oversight of your incident-response procedures.
OCR considers delayed breach reporting a sign of poor internal controls and inadequate HIPAA compliance practices.
What Is the Maximum Penalty for Violating HIPAA?
When determining who can be punished for a HIPAA violation and how serious it is,
HIPAA uses four tiers of civil penalties. Each tier is based on how much responsibility or negligence was involved:
- Violations where the organization did not know and could not reasonably have known of the issue.
- Violations due to reasonable cause.
- Violations caused by willful neglect that are corrected within the required timeframe.
- Violations caused by willful neglect that are not corrected.
Instead of a single set penalty amount, each tier includes:
- A minimum penalty
- A maximum penalty per violation
- A yearly cap for repeated violations of the same provision
These amounts are adjusted annually for inflation, so the exact numbers change each year. To understand how high these HIPAA violation fines can go, you need to understand how the upper limits work:
- Lower-tier violations, such as those where you reasonably couldn’t have known about the issue, can result in fines ranging from a few hundred to a few thousand dollars per violation.
- Higher-tier violations, especially those involving willful neglect that wasn’t corrected, can reach over $80,000 per violation after inflation adjustments.
- Annual caps for repeated violations of the same requirement can exceed $2 million per year, depending on the tier and current HHS enforcement discretion.
Some enforcement actions involve multiple HIPAA violations or large breaches, which can push total penalties much higher. The largest HIPAA settlement to date is $16 million after a major healthcare breach affecting millions of patients.
Overall, HIPAA’s maximum penalties are designed to scale with the seriousness of the violation, your level of awareness, and how quickly (or whether) you took action to correct the problem.
What Are the Criminal Penalties for Violating HIPAA?
Criminal HIPAA penalties come into play when someone knowingly misuses PHI, such as selling patient information, using PHI for identity theft, or accessing someone’s medical records to harass or harm them. These cases target individuals, not organizations, and are handled by the Department of Justice.
The level of punishment for a HIPAA violation depends on what the person intended to do with the information. Here’s how the law breaks down the three criminal tiers:
- If you knowingly access or disclose PHI without authorization, you may face up to 1 year in prison and fines up to $50,000.
- If you obtain or disclose PHI under false pretenses, the penalty increases to up to 5 years in prison and fines up to $100,000.
- If you access or share PHI for personal gain, commercial advantage, or to cause harm, the offense is treated most seriously. Penalties can reach up to 10 years in prison and fines up to $250,000.
These amounts all represent statutory maximums, but federal sentencing law may permit higher fines. Severe penalties exist to deter intentional privacy violations and protect the integrity of patient information.
How Compyl Helps Organizations Avoid HIPAA Violation Penalties
Compyl offers organizations a smarter, more efficient way to prevent the issues that lead to HIPAA violation penalties. Many violations happen because teams lack visibility into risks or rely on manual, inconsistent processes. Compyl centralizes compliance into one automated platform to help you stay ahead of requirements that protect PHI.
With continuous monitoring, automated evidence collection, streamlined risk assessments, and built-in policy management, Compyl reduces the chances of common HIPAA violations. Instead of reacting after a problem occurs, organizations can proactively maintain strong security and compliance practices year-round.
To see how Compyl can help you achieve HIPAA compliance with less effort and more confidence, request a demo today.
