With the HHS Office for Civil Rights expected to begin random HIPAA audits in 2015, covered entities should take another look at the expanded penalties for privacy and security violations under the updated HIPAA Omnibus rule that went into effect in September 2013.

Of particular concern is the issue of audited or investigated organizations having done little or nothing to become HIPAA compliant, such as failing to be able to produce policies and procedures that govern a compliance program, or not being aware of the need for compliance. “On this point, ignorance is not bliss,” said Lorretta Duncan, senior medical practice consultant at liability insurer Volunteer Mutual Insurance Co., during a presentation at the MGMA Annual Convention in Las Vegas.

Increased fines under the Omnibus rule cover four areas of neglect: (Did Not Know: $100 to $50,000), (Reasonable Cause: $1,000 to $50,000), Willful Neglect Corrected ($10,000 to $50,000) and (Willful Neglect Not Corrected ($50,000). However, fines can be assessed for multiple violations under any of these categories with a maximum fine of up to $1.5 million per violation per year.

Stolen laptops are a major cause of data breaches and a hot issue for HHS/OCR, Duncan warned. “You need to be paying attention to mobile devices—where data is and if it is encrypted,” she said. If data is not encrypted, an organization must justify and document the reasons why.

The Omnibus rule also authorizes criminal penalties that include fines and possible jail time, enforced under the Department of Justice, Duncan told the MGMA audience. These cover snooping, lying to obtain protected health information, and accessing PHI for personal gain or malicious harm. “Your staff needs to know they can go to jail and go through a lot of money,” she added.

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