How Companies Can Fail HIPAA Initiative?

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Even though The Health Insurance Portability and Accountability Act (HIPAA) was passed in 1996 Security Rule, businesses still need to pay close attention to its standards. Failing to protect individuals’ electronic personal health information (PHI) can put companies at risk due to its costly consequences.

GlobalSCAPE shared that HIPAA compliance is one of the top 5 most difficult compliances to achieve. The complex healthcare laws that have a changing nature are the main reasons for that. The question that troubles companies is how they can fail HIPAA and what happens in the case of HIPAA noncompliance. The answer can be found in the following lines.

What Leads to Failing the HIPAA Initiative?

A company will fail the initiative if they don’t fulfill all the conditions and don’t pay all the necessary costs. The reason why this happens is that HIPAA compliance is costly as well as complex and time-consuming. It adds an additional burden to healthcare employees.

To avoid this complex and expensive procedure, some CEs opt for HIPAA certification instead of the actual compliance process. However, this idea can be the cause of greater problems since the average price of noncompliance is almost 3 times higher compared to the price of compliance.

Noncompliance will not only result in massive fines and penalties but it will also cost the companies the patients’ trust. Trying to find an easier alternative simply isn’t worth the risk,” shares Joshua Foster, a medical writer at TopEssayWriting, who has extensive experience in the health industry.

HIPAA compliance includes the following factors:

  • Type of organization
  • Organization’s size and culture
  • Organization’s current level of compliance
  • Workforce dedicated to HIPAA compliance

Companies whose factors lead to a high cost can tend to avoid compliance. There are also other costly specifications that CEs are required to implement such as security risk analyses, information technology security, staff training, internal audits, and policy development.

The main issue isn’t that the companies don’t want to budget for a comprehensive compliance program but they simply delay the process. However, the delay only maximizes the risk. HIPAA shouldn’t be viewed as an enemy to the budget. It should be looked at as a demonstration of the organization’s ethics.

The Consequences of HIPPA Noncompliance

Despite the tedious and overwhelming process that comes with HIPAA, CE can experience large financial damage if they don’t have a compliance program.

Noncompliance can have devastating consequences for companies. They can lead to numerous damaging outcomes such as:

  • Fines

A company can be charged with government audits and violation fines that can be from $100 to $50,000 per violation. A maximum fine can be as high as $1.5 million.

  • Penalties

Based on The Health Information Technology for Economic and Clinical Health (HITECH) Act attorneys general can issue financial penalties for HIPAA violations. Healthcare organizations can get penalties that can reach $6.8 million (According to SecurityMetrics).

  • Class-action lawsuits

On the grounds of negligence victims of breaches can pursue a class-action lawsuit. This can cost up to $1,000 per patient.

  • Civil lawsuits

Victims of breaches can also pursue monetary compensation individually through civil lawsuits. With a competent lawyer on their side, the victims won’t hesitate to

  • Settlement costs

The violation of HIPAA can also lead to settlement cases. An example of such a case is when a laptop containing PHI was stolen from an employee of CardioNet. Since CardioNet didn’t have to possess enough risk analysis and risk management they had to settle by paying $2.5 million.

  • Corrective action plans

The HIPAA violations that lead to the security risk or damage need to be corrected. The creation of corrective action plans cases numerous additional costs for staff, writing services like ClassyEssay and Studyker, introducing appropriate cybersecurity measures, and much more.

  • Business disruption

The legal system doesn’t treat favorably the cases of reactive compliance. Willful-neglect cases can reach up to the point where compliance officers and other offenders within an organization can even face jail time. While jail is a possibility, greater financial penalties are certainty in such cases.

  • Productivity losses

Noncompliance can negatively affect the organization’s reputation. Not only can it lead to a lack of patients but it can also avert high-quality staff to remain in the organization or join it.

  • Breaches and breach notifications

Compromised PHI that is a result of HIPAA breach can cost $7.79 million. Only breach notification can cost $1,000 or more and then the lost revenue, settlement, forensics, and lawsuits add to that.

Final Thoughts

What companies can do to avoid HIPAA noncompliance is to keep up with changes in healthcare regulations and inform the staff members with the policies. The easiest way of achieving that is to gather everything in one place with HIPAAReady. It is a HIPAA compliance software that can enable organizations to evaluate and assess the risks within their organization, perform internal audits, and seamlessly provide training across the organization. In short, HIPAAReady has been designed to easily manage all aspects of HIPAA compliance. Want to know more about HIPAAReady? Contact us today to get a 14 days free trial! 

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Matthew Bennett

The author leads the digital marketing team at M2SYS Technology and an occasional blogger. He is passionate about writing various government and enterprise biometric identity management technology adoption related topics and the changes it brings on the general people’s lives.

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