Table of contents
What are HIPAA violations?Key aspects and termsExamplesConsequences and penaltiesViolation categoriesViolation tiersCovered entitiesMisunderstandingsHosting environmentHow to avoid violationsFAQsNext stepsAdditional resources
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HIPAA violations: What they are, what they cost, and how to avoid them

Costly HIPAA violations are an all too common occurrence. Even for organizations that believe they’ve done their due diligence on security, inadvertently sharing private medical information can come with extremely expensive—and sometimes legal—repercussions.

Implementing your online solution using HIPAA audited data centers and hosting services is an essential step to take in protecting your business from violating HIPAA rules and regulations.

So what is HIPAA? And what does it mean for you and your business? 

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What are HIPAA violations?

A HIPAA violation is a failure to comply with the standards and requirements outlined in the Health Insurance Portability and Accountability Act (HIPAA). These violations usually involve the improper use, access, or disclosure of protected health information (PHI).

Violations can be intentional or accidental. They may result from weak data security, careless handling of patient information, or outright malicious activity. Regardless of intent, all violations are treated seriously and can lead to severe consequences for both organizations and individuals.

Key aspects and terms

To better understand HIPAA violations, it’s important to know a few key terms that shape how they’re defined and enforced.

Protected health information (PHI)

Protected Health Information (PHI) refers to any individually identifiable health data that relates to a patient’s past, present, or future health condition, treatments, or payments. This includes names, addresses, medical records, billing details, and even IP addresses if linked to health information.

Unauthorized access/disclosure

Unauthorized access or disclosure occurs when PHI is accessed, shared, or viewed by someone who is not authorized to see it. Unauthorized disclosure might be intentional—like an employee selling patient data—or unintentional, such as emailing patient records to the wrong recipient.

“Knowingly”

HIPAA makes a distinction between accidental and deliberate actions. A violation becomes more severe if it is done “knowingly,” meaning the person understood what they were doing was a violation but went ahead with it anyway.

HIPAA violation examples

HIPAA violations take many forms, ranging from technical missteps to human error. Common examples include:

  • Leaving patient records unsecured in public areas
  • Sharing PHI on social media or with unauthorized parties
  • Failing to use encryption on databases or email systems containing PHI
  • Improper disposal of medical files or hard drives
  • Accessing PHI out of curiosity (e.g., looking up a celebrity’s medical record)
  • Losing a device that stores PHI, such as an unencrypted laptop or phone

HIPAA violation consequences and penalties

HIPAA violations come with serious consequences that can affect both organizations and individuals. These can include:

  • Financial penalties ranging from hundreds to millions of dollars
  • Criminal charges for intentional violations
  • Loss of professional licenses or certifications
  • Mandatory corrective action plans enforced by regulators
  • Damage to reputation and loss of patient trust

HIPAA violation categories: civil vs criminal

Violations fall into two main categories depending on intent and severity.

Civil HIPAA violations

Civil violations occur when an organization fails to comply with HIPAA requirements without malicious intent. Examples include not encrypting emails or failing to provide patients access to their medical records within the required timeframe. Penalties are usually financial and depend on the level of negligence.

Criminal HIPAA violations

Criminal violations happen when someone knowingly uses PHI for personal gain, malicious harm, or fraud. Examples include selling patient records or using stolen PHI for identity theft. Criminal penalties can include fines up to $250,000 and imprisonment for up to 10 years.

HIPAA violation tiers

The Office for Civil Rights (OCR) uses a tiered penalty system to assess fines based on the nature and intent of the violation.

Tier 1 violations

These involve situations where the organization did not know, and could not reasonably have known, about the violation. Fines can start at $100 per violation.

Tier 2 violations

These occur when the organization should have been aware of the violation but did not act with willful neglect. Penalties are higher, starting at $1,000 per violation.

Tier 3 violations

These involve willful neglect, but the organization makes corrective efforts. Fines start at $10,000 per violation.

Tier 4 violations

The most severe tier, these violations involve willful neglect with no corrective action. Penalties can reach up to $50,000 per violation, with annual maximums in the millions.

Covered entities: who is responsible for HIPAA compliance?

HIPAA applies to specific organizations known as “covered entities.” These include healthcare providers, health plans, and healthcare clearinghouses, as well as business associates who process PHI on their behalf.

Entities like schools or employers are not automatically responsible for HIPAA compliance unless they are directly handling PHI through healthcare-related functions.

Common HIPAA violation misunderstandings

Many violations happen because of misconceptions. Common misunderstandings include:

  • Believing HIPAA only applies to doctors and hospitals
  • Assuming verbal conversations can’t violate HIPAA
  • Thinking small businesses or independent practitioners are exempt
  • Believing cloud storage providers don’t need HIPAA compliance agreements

HIPAA compliance and your hosting environment

Your hosting environment plays a huge role in maintaining HIPAA compliance. Poor hosting setups can easily create vulnerabilities that lead to violations. Risks include:

  • Storing PHI on unencrypted servers
  • Using hosting providers that don’t sign a Business Associate Agreement (BAA)
  • Failing to use proper firewalls and intrusion detection systems
  • Sharing servers with non-compliant tenants (multi-tenant hosting risks)
  • Not maintaining proper backups and disaster recovery measures

Your hosting environment plays a huge role in maintaining HIPAA compliance. Poor hosting setups can easily create vulnerabilities that lead to violations. Risks include:

How to avoid HIPAA violations

  1. Mind your technology. Tech has made sharing information easier than ever before, but it comes with substantive risks. Sharing login credentials or passwords, leaving mobile devices unattended, and texting patient information are easy ways to get hit with a HIPAA violation. Use caution when discussing or viewing confidential information on devices and be sure to use HIPAA-compliant texting for therapists, providers, and other healthcare-specific industries—instead of regular text messaging.
  2. Watch where you discuss patient information. Medical facilities are lively buildings abuzz with personnel who sometimes find it easier to relay patient information in passing to a coworker while dashing down a hallway. The medical professional may not realize patient families and other pertinent personnel could overhear PHI.
  3. Double-check authorizations. Before the use or disclosure of information (other than treatment, payment, surgery, or Privacy Rule exemptions), always ensure that written consent was obtained from the patient beforehand, especially when providing information to coworkers not caring for the patient.
  4. Avoid connecting with patients and other caregivers on social media. Professional boundaries should be strictly enforced to avert the disclosure of confidential patient information.

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HIPAA violation FAQs

The most common breach is unauthorized access or disclosure of PHI, often caused by employee mistakes or curiosity.

It can be. Criminal HIPAA violations, such as selling PHI for profit, may be classified as felonies.

The Office for Civil Rights (OCR) under the U.S. Department of Health and Human Services (HHS) is primarily responsible for HIPAA enforcement.

A PHI violation is any improper use, access, or disclosure of protected health information that violates HIPAA standards.

Violations can be reported to the OCR through their online complaint portal, by mail, or via fax.

Additional resources

What is HIPAA-compliant hosting? →

A complete beginner’s guide

Scaling a compliant cloud →

How to scale up without compromising security

HIPAA guide for small business →

A complete resources for medical SMBs

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