What Should a HIPAA Sanctions Policy Consist Of?
A HIPAA sanctions policy should consist of appropriate sanctions against workforce members who fail to comply with privacy and security policies and procedures, or who fail to comply with the Privacy or Breach Notification Rules. The HIPAA Rules do not require regulated entities to impose any specific types of sanctions or implement any particular sanction methodology.
The requirement to implement and utilize a HIPAA sanctions policy appears in both the HIPAA Privacy Rule and the HIPAA Security Rule. The Privacy Rule requirement in §164.530(e) reads:
“A covered entity must have and apply appropriate sanctions against members of its workforce who fail to comply with the privacy policies and procedures of the covered entity or the requirements of this subpart [the Privacy Rule] or subpart D of this part [the Breach Notification Rule].”
The Security Rule requirement in §164.308(a) is similar inasmuch as it reads:
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“A covered entity or business associate must, in accordance with §164.306 [the Security Rule General Rules], apply appropriate sanctions against workforce members who fail to comply with the security practices and policies of the covered entity or business associate”.
Observations from the HIPAA Sanctions Policy Standards
There are two important observations from the HIPAA sanctions policy standards. The first is that covered entities are required to sanction members of the workforce who fail to comply with the Privacy Rule and Breach Notification Rule. This requirement applies even if the covered entity’s HIPAA training does not include training on the Privacy and Breach Notification Rules.
Under §164.530(b), covered entities are only required to provide HIPAA training “on policies and procedures […] as necessary and appropriate for members of the workforce to carry out their functions within the covered entity”. However, covered entities cannot foresee and develop a policy for every type of event in healthcare, and it is possible an individual could inadvertently violate the Privacy Rule due to a lack of knowledge.
The second observation is the inclusion of “in accordance with §164.306 [the Security Rule General Rules]” in the Security Rule standard. Among other requirements, §164.306 requires covered entities and business associates “to protect against any reasonably anticipated uses or disclosures of [electronic Protected Health Information] that are not permitted or required under Subpart E of this Part [the Privacy Rule].”
This implies that members of a business associate’s workforce can also be sanctioned for inadvertent violations of the Privacy Rule even though business associates are not required to provide any training on HIPAA compliance. The only HIPAA training requirement for business associates is that workforce members receive security awareness training. In theory, a business associate does not need to train its workforce on what is considered Protected Health Information (PHI) under HIPAA.
The Potential for HIPAA Violations due to a Lack of Knowledge
Although it would appear that the potential for HIPAA violations due to a lack of knowledge is significant, the potential is mitigated by standards in the Privacy and Security Rules that require each covered entity and business associate (where applicable) to:
“Reasonably safeguard Protected Health Information from any intentional or unintentional use or disclosure that is in violation of the standards, implementation specifications or other requirements of this subpart [the Privacy Rule]” (§164.530(c)) and “ensure compliance with this subpart [the Security Rule] by its workforce” (§164.506(a)).
These standards imply covered entities and business associates must take responsibility for members of the workforce understanding the Privacy and Security Rules. However, there are numerous examples of unintentional HIPAA violations that are attributable to workforce members having a lack of knowledge or a lack of awareness.
In the context of what a HIPAA sanctions policy should consist of, it is important to take this responsibility for workforce knowledge into account. Sanctioning members of the workforce for violations they did not know were violations – or applying sanctions on a “should have known” basis – can undermine an organization’s compliance program. It can also affect staff morale and ultimately lead to staffing issues.
What Should a HIPAA Sanctions Policy Consist Of?
There are no standards or implementation specifications in the HIPAA Rules that specify what sanctions must be imposed for a violation of HIPAA or what methodology should be used to develop a HIPAA sanctions policy. HHS has provided some guidance relating to what the objectives of a HIPAA sanctions policy should be and how a policy should be structured.
In October 2023, HHS published a newsletter discussing how Sanctions Policies can Support HIPAA Compliance. With regards to the objectives of a HIPAA sanctions policy, the newsletter refers to discussions in the preambles to the Privacy Rule and Security Rule which argue that “a negative consequence to noncompliance enhances the likelihood of compliance.”
The newsletter also suggests that a HIPAA sanctions policy should inform workforce members which actions are prohibited and punishable and clearly communicate what the employer’s compliance expectations are. To achieve these objectives, the newsletter listed seven considerations that covered entities and business associates may want to consider when developing a HIPAA Sanctions policy:
- Documenting or implementing sanction policies pursuant to a formal process.
- Requiring workforce members to affirmatively acknowledge that a violation of the organization’s HIPAA policies or procedures may result in sanctions.
- Documenting the sanction process, including the personnel involved, the procedural steps, the time-period, the reason for the sanction(s), and the outcome of an investigation.
- Creating sanctions that are appropriate to the nature of the violation.
- Creating sanctions that vary depending on factors such as the severity of the violation, whether the violation was intentional or unintentional, and whether the violation indicated a pattern or practice of improper use or disclosure of protected health information.
- Creating sanctions that range from a warning to termination.
- Providing examples of potential violations of policy and procedures.
The considerations do not account for violations attributable to a lack of knowledge. However, HHS notes the preamble to the Privacy Rule “leaves the details of sanction policies to the discretion of the covered entity . . . [that] will be familiar with the circumstances of the violation”. This would suggest that, if a covered entity (or business associate) fails to provide adequate HIPAA training to members of the workforce, this should be accounted for in the HIPAA sanctions policy.
Sample HIPAA Sanctions Policy
Covered entities and business associates are advised to develop and implement HIPAA sanctions policies that are applicable to their environments and the culture of compliance they are trying to create. However, when developing a HIPAA sanctions policy, it can be difficult to know where to start. Therefore, we have provided a sample HIPAA sanctions policy that organizations can use as a foundation for their own policies.
HIPAA Sanctions Policy
- Purpose
The purpose of this HIPAA Sanctions Policy is to ensure compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), including the HIPAA Privacy Rule, Security Rule, and Breach Notification Rule. This policy establishes a framework for applying appropriate sanctions against workforce members who fail to comply with HIPAA requirements, organizational policies, or procedures related to the protection of protected health information (PHI).
Scope
This policy applies to all members of the workforce of [Organization Name], including but not limited to:
- Employees
- Medical staff
- Volunteers
- Trainees and students
- Contractors and temporary staff
- Any other individuals whose conduct is under the direct control of the organization
This policy applies to violations involving PHI in any form, including electronic (ePHI), paper, and oral communications.
Policy Statement
[Organization Name] will take appropriate disciplinary action against workforce members who violate HIPAA regulations, organizational privacy and security policies, or applicable procedures. Sanctions will be applied in a manner that is:
- Consistent
- Proportionate to the severity of the violation
- Documented
- In accordance with applicable laws and human resources policies
No retaliation will be taken against individuals who report suspected HIPAA violations in good faith.
Definitions
- Protected Health Information (PHI): Individually identifiable health information as defined by HIPAA.
- Workforce Member: Any individual whose conduct is under the direct control of the organization, whether or not they are paid.
- Violation: Any act or omission that fails to comply with HIPAA or organizational policies related to privacy or security.
Types of Violations
HIPAA violations may include, but are not limited to:
- Unauthorized access to PHI (e.g., snooping in patient records)
- Unauthorized use or disclosure of PHI
- Failure to safeguard PHI (e.g., leaving records unattended)
- Sharing passwords or login credentials
- Failure to follow security procedures
- Improper disposal of PHI
- Failure to report a suspected breach or incident
- Retaliation against individuals who report compliance concerns
Sanction Levels
Sanctions will be determined based on factors such as intent, severity, harm, history of prior violations, and whether the violation was accidental or malicious.
Level 1 – Minor or Unintentional Violations
Examples:
- Inadvertent access without further use or disclosure
- First-time failure to follow procedures
Possible sanctions:
- Verbal counseling
- Retraining or re-education
- Written warning
Level 2 – Moderate Violations
Examples:
- Repeated minor violations
- Careless handling of PHI
- Failure to report a known incident
Possible sanctions:
- Written reprimand
- Mandatory retraining
- Suspension of system access
- Probation or temporary suspension
Level 3 – Serious Violations
Examples:
- Intentional or malicious access, use, or disclosure of PHI
- Disclosure for personal gain
- Significant harm to patients or the organization
Possible sanctions:
- Termination of employment or contract
- Reporting to licensing boards or professional authorities
- Civil or criminal referral when required by law
Investigation and Enforcement
All suspected HIPAA violations will be promptly investigated by the Privacy Officer, Security Officer, Human Resources, or other designated personnel. Investigations will be conducted confidentially to the extent possible.
The organization reserves the right to determine the appropriate sanction based on the findings of the investigation.
Violations that are determined to involve potential violations of federal law, state statutes, or professional licensing standards will be escalated to the appropriate authority as required by the applicable regulation. This may include, but is not limited to, notifications to law enforcement, state or federal oversight agencies, or professional licensing boards.
Documentation
All sanctions imposed under this policy will be documented and retained in accordance with organizational record retention policies and HIPAA documentation requirements.
Training and Awareness
Workforce members will receive training on HIPAA requirements and this Sanctions Policy upon hire and periodically thereafter. Workforce members are responsible for understanding and complying with this policy.
Reporting Violations
Workforce members must promptly report suspected or known HIPAA violations to:
- A supervisor
- The Privacy Officer
- The Compliance Hotline or other designated reporting mechanism
Reports may be made without fear of retaliation.
Policy Review and Updates
This policy will be reviewed periodically and updated as necessary to reflect changes in laws, regulations, or organizational practices.
Conclusion
A HIPAA sanctions policy can improve a regulated entity’s compliance with the HIPAA Rules. However, it can also undermine the regulated entity’s healthcare compliance program if sanctions are applied inconsistently or on members of the workforce who have not been adequately trained on HIPAA compliance.
Covered entities and business associates who require assistance developing, revising, or implementing a HIPAA sanctions policy. or providing adequate HIPAA training to workforce members, should seek professional compliance advice.
