According to the rules of the US healthcare industry, every medical software, startup, and health organization needs to be HIPAA compliant.

Though, if you work in a health organization, whether it’s a hospital, doctors' clinic, dental office, or something else, chances are, you probably already know this.

The Health Insurance Portability and Accountability Act (HIPAA) was created to combat the abuse of healthcare insurance and delivery. It has since been amended with HIPAA privacy rules upon the rise of the use of technology in society.

If you disobey HIPAA or get fined, the maximum level of costs you can face is $25,000 per violation. While the minimum fine applicable is $100 per violation.

In 2021 alone, there have been 13 violation cases where fines averaged around $460,000, with multiple agencies monitoring HIPAA privacy laws.

Which leads many healthcare startups and organizations to wonder - How does this work? Who enforces HIPAA?

Which is why we’re going to break down how all this works below for health startups.

Here’s what we’ll cover:

  • What Is HIPAA For Health Startups And How Does It Work?
  • Who Enforces HIPAA In the Healthcare Industry?
  • What Happens If Your Healthcare Organization Violates Or Is Non-Compliant To HIPAA Rules?

What Is HIPAA For Health Startups And How Does It Work?

HIPAA compliance is something that all health businesses need to follow in order to continue operating.

HIPAA takes place at the federal and state government levels and is monitored with various penalties and fines imposed on different offenses. 

HIPAA was initially drafted in 1996 to protect the health care coverage of individuals who lost or changed jobs. Aside from combatting the abuse of healthcare insurance and healthcare delivery, it also provided tax breaks and covered pre-existing medical conditions.

After a couple of years, when technology became a more significant part of the world, HIPAA started to encourage the use of technology in the healthcare industry. The use of electronics was pushed so that the industry would become more efficient with administrative data.

On that note, see our guide to healthcare document management best practices to see how you could be managing your sensitive information more efficiently.

Implementation of HIPAA security standards

In 2003, the HIPAA security rule was introduced to ensure that a standard is upheld to protect every individual’s electronic personal health documents that are created, received, used, or maintained by a licensed healthcare entity.

This means that any information held by a licensed entity that concerns health status, provision of healthcare, or payment for healthcare that can be linked to an individual should be encrypted and kept in a secure facility. Whether it’s a document management system or in-house document storage.

How does HIPAA work?

Different agencies enforce HIPAA in the healthcare industry by ensuring that all licensed agencies adhere to its rules and to the Health Information Technology for Economic and Clinical Health Act (HITECH). 

Because of HITECH, all businesses operating in the healthcare industry must report suspected breaches to their governing bodies.

HIPAA compliance audits are also conducted in order to gather data on common vulnerabilities that can be addressed through training on preventative measure 

What does this mean for my health startup or organization?

Every document that your company generates, whether it’s through an API or a custom HTML will be filled up by your client. 

Your client’s personal information will then be under your company’s protection. And this is something you should be protecting immensely.

Therefore, everything in a document’s life cycle system, starting from document creation, storage, categorization, delivery or sharing, and review, all the way down to archiving and destruction, will need to follow HIPAA rules. 

This means that only the people who are allowed should only be the ones to see classified documents, otherwise it’s already a breach of security

HIPAA compliance is one of the most important things your business will need in order to continue to give your clients peace of mind.

This is also why you should treat your healthcare documents with important data security standards, so they don’t get out.

Now, if you’re wondering who is actually behind HIPAA.

Who Enforces HIPAA In the Healthcare Industry?

There are several agencies in this industry that enforce HIPAA at both the federal and state levels of the government. 

Typically, the main bodies that enforce HIPAA are as follows:

  • HIPAA officer.
  • Office of civil rights (OCR)
  • State attorney generals.
  • Centers for Medicare and Medicaid Services.

In this section, we’ll be going through the different people who ensure HIPAA compliance in detail and their responsibilities.

What is a HIPAA officer?

Every healthcare organization, regardless of its size, must have an appointed HIPAA officer or a Chief Privacy Officer (CPO)

This officer is the point person in your organization when it comes to HIPAA compliance. 

The HIPAA Officer is responsible for overseeing the development, maintenance, and implementation of HIPAA rules in your healthcare business’s system. 

The officer is also responsible for investigating breaches, training and orienting staff, and ensuring that the company is adhering to federal and state laws.

In case of an error on your CPO’s part,  you will be contacted by one of the agencies below.

Out-of-the-box PDF generation
The easiest way to automatically generate and manage paperless documents at scale.
Oops! Something went wrong while submitting the form.
By submitting this form, I confirm that I have read and understood Inkit's Privacy Policy.

The office of civil rights (OCR)

The OCR wields the power to penalize healthcare businesses that do not adhere to HIPAA rules. 

We’ll cover what happens if you violate HIPAA rules below and how the fines work, so, keep on reading.

An OCR reviews every reported breach and complaint, and then files for the necessary sanctions. This governing body also performs compliance audits

 If the OCR feels that a breach or a complaint warrants a criminal violation, it is then referred to the Department of Justice for investigation.

State attorney generals

Upon the implementation of the HITECH act, state attorney generals are given the authority to act on behalf of state residents to file civil action suits due to HIPAA violations

State Attorney Generals regularly collaborate with The Office of Civil Rights to take action against those breaking HIPAA rules

Finally, there’s one last HIPAA party you should be aware of.

Centers for Medicare and Medicaid Services

The Centers for Medicare and Medicaid Services (CMS) can administer compliance review programs on behalf of the Department of Health and Human Services (HHS).

The HHS can then exclude non-compliant healthcare businesses from participation in Medicare and Medicaid services. 

Now that you’ve got an idea of how HIPAA is enforced, let’s take a look at what happens if your healthcare company violates or disobeys it.

What Happens If Your Healthcare Organization Violates Or Is Non-Compliant To HIPAA Rules?

Non-compliance or violations of HIPAA privacy rules can have financial repercussions for you and your business. 

Data breaches and being unable to give clients access to their records, among others, can also make your business subject to penalties by the Office for Civil Rights

Some examples and common HIPAA violations to watch out for include:

  • Lack of data encryption.
  • Hacking or phishing.
  • Inadequate employee training.
  • Theft or loss of devices.
  • Unauthorized sharing of information.
  • Accessing data from unsecured locations.
  • Improper disposal of records.

For minor violations that are due to ignorance and with no harm done, the violation may be dealt with internally with warnings. In that case, further training on HIPAA compliance will be necessary.

For violations that are more serious, you may be reported to the licensing board and may have restrictions placed on your business or have your license revoked.

Listed below are the penalties that a business may incur if they do not follow HIPAA rules…

HIPAA civil violations

HIPAA civil violation penalties are split into 4 main categories depending on the severity of your healthcare company:

  1. For unknowingly violating HIPAA Rules, one will be penalized from 100 to 50,000 USD per violation with an annual maximum of 25,000 USD for repeat violations.
  2. Reasonable cause penalties can range from 1,000 to 50,000 USD per violation, with an annual maximum of 100,000 USD for repeat violations.
  3. Willful neglect, if corrected within the required period, imposes on the violator a penalty ranging from 10,000 to 50,000 USD per violation, with an annual maximum of 250,000 USD  for repeat violations.
  4. Willful neglect, but NOT corrected within the required time period (within 30 days), can mean a penalty of 50,000 USD per violation, with an annual maximum of 1.5 million USD.

HIPAA criminal penalties

Aside from civil violations, there are also criminal penalties that can be tried by the Department of Justice. 

These penalties are also split into multiple categories:

  1. Entities or individuals who “knowingly” obtain or disclose identifiable health information can face a penalty of up to 50,000 USD, as well as up to 1 year of imprisonment.
  2. Offenses committed under false pretenses can warrant a fine of up to 100,000 USD, as well as up to 5 years of imprisonment.
  3. Offenses committed with the intent to trade identifiable information for commercial advantage, to sell, or to use for personal gain can warrant a fine of up to 250,000 USD, as well as up to 10 years of imprisonment.

Where To Go From Here

Taking care of people’s health is a big enough job in itself, add in the extra work of managing documents and making HIPAA-compliant makes it an even bigger undertaking. 

When managing loads of sensitive customer information and documents, it’s essential you follow the best security practices, in addition to being HIPAA compliant.

Otherwise, you might face HIPAA fines or settlements of anywhere from $5M to $16M+.

One way to streamline your document generation and management as a healthcare organization is through a document management system (DMS).

A DMS helps you automate document generation, editing and collaboration, safe storage, and more. While at the same time employing the best cyber security practices such as:

  • AES 256 End-to-End Encryption.
  • Role-based access controls.
  • Document expiration and self-destruction.
  • 2FA support.
  • Full audit log.
  • Live document alerts.
  • SSO support.
  • One-time document viewing.
  • And more.

All this, is to ensure the healthcare documents you generate stay on the system and don’t get out. 

As an additional safeguard, you can also ensure that only specific, authorized people can access and edit sensitive documents.

Now, if you’re looking for the right document management system to stay HIPAA-compliant with secure document generation, be sure to see how Inkit Render helps healthcare organizations automatically generate and secure:

  • Patient information records.
  • Medical history checklists.
  • Insurance documents.
  • Patient billing records.
  • Hospital discharge forms.
  • Informed patient consent documents.
  • And other healthcare documents.
Out-of-the-box PDF generation
The easiest way to automatically generate and manage paperless documents at scale.
By submitting this form, I confirm that I have read and understood Inkit's Privacy Policy.
Oops! Something went wrong while submitting the form.
Up Next

Get Started With Inkit Today

Startups can now receive up to one year of complimentary access to Inkit.
Your work email address...
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.