What are the Sanctions Requirements Under the HIPAA Privacy Rule?

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Introduction

This article discusses the HIPAA Privacy Rule's sanctions requirement, under which covered entities must have and apply appropriate sanctions against members of the workforce who fail to comply with their privacy policies and procedures of the covered entity or the requirements of the Privacy Rule or Breach Notification Rule.

When Does the Sanctions Requirement Apply?

Under the sanctions requirement, 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 the Privacy Rue or the Breach Notification Rule. This sanctions rule does not apply to a member of the covered entity's workforce with respect to actions that are covered by and that meet the conditions of Privacy Rule section 164.502(j) or paragraph (g)(2) of Privacy Rule section 164.530. These sections pertain to whistleblowers, workforce members who are victims of a crime, and the prohibition on intimidation or retaliation against someone for exercising rights protected by HIPAA.

What Function Does Imposing Sanctions Serve?

As HHS notes in a Cybersecurity Newsletter, sanctions policies can improve a regulated entity’s compliance with the HIPAA Rules. Imposing consequences on workforce members who violate a regulated entity’s policies or the HIPAA Rules can be effective in creating a culture of HIPAA compliance because of the knowledge. Training workforce members on an entity’s sanctions policy can also promote compliance by informing workforce members in advance which “actions are prohibited and punishable. A sanctions policy that clearly communicates an entity’s entity’s expectations should ensure that workforce members understand their individual compliance obligations and consequences of noncompliance. 

What Should a Sanction Policy Look Like?

Because covered entities and business associates are varied in terms of installed technology, size, resources, and relative risk, the HIPAA Rules allow for a flexibility of approach to achieve compliance. This flexibility extends to sanction policies. Indeed, the Privacy Rule preamble states that “we leave the details of sanction policies to the discretion of the covered entity . . . [that] will be familiar with the circumstances of the violation . . . .”  

The Privacy Rule does not require regulated entities to impose any specific penalty for any individual violation, or to implement any particular sanction methodology (63 FR 8347).

Rather, in any individual case “[t]he type and severity of sanctions imposed, and for what causes, must be determined by each covered entity [or business associate] based upon its security policy and the relative severity of the violation.” https://www.govinfo.gov/content/pkg/FR-2003-02-20/pdf/03-3877.pdf#page=43 (63 FR 8347).

Entities may structure their sanction policies in the manner most suitable to their organization. Regulated entities may want to consider the following when drafting or revising their sanction policies: 

1. Documenting or implementing sanction policies pursuant to a formal process (65 FR 82562).
2. Requiring workforce members to affirmatively acknowledge that a violation of the organization’s HIPAA policies or procedures may result in sanctions.
3. Documenting the sanction process, including the personnel involved, the procedural steps, the time-period, the reason for the sanction(s), and the final outcome of an investigation. NOTE: These records should be retained for at least six years.
4. Creating sanctions that are “appropriate to the nature of the violation.”
5. 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.”
6. Creating sanctions that “range from a warning to termination.”
7. Providing examples of potential violations of policy and procedures.

By making these considerations, regulated entities can craft a thoughtful and well-documented sanction policy that informs workforce members of the regulated entity’s expectations, deters misconduct, and promotes HIPAA compliance through greater understanding and transparency of the policies and procedures that protect the privacy and security of PHI.    

A Word About Consistency

According to the Cybersecurity Newsletter, how a regulated entity implements its sanction policy is just as important as the policy’s content. It is important for a regulated entity to consider whether its sanction policies align with its general disciplinary policies, and how the individuals or departments involved in the sanction processes can work in concert, when appropriate. Entities should also consider how sanction policies can be fairly and consistently applied throughout the organization, to all workforce members, including management.