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So, what penalties apply to violations of privacy rule requirements? The Department of Health and Human Services, Office for Civil Rights is responsible for administering and enforcing the standards and may conduct investigations and compliance reviews. There are civil penalties per violation, but the penalties can be stacked if there are multiple violations with respect to a single individual. The amount depends on the level of culpability and falls into one of four tiers, from the lowest, where the organization did not know and could not reasonably have known, to the highest, for willful neglect that was never corrected. These dollar amounts are set by law and adjusted every year for inflation. As of 2026, they range from a few hundred dollars per violation at the lowest tier to more than two million dollars per violation at the highest, with annual limits for repeated violations of the same requirement. Because the figures change each year, always check the current amounts rather than relying on a fixed number. There are also criminal penalties. Knowingly obtaining or disclosing PHI in violation of HIPAA can bring a fine and up to one year in prison. Doing so under false pretenses raises that to up to five years. And doing it with intent to sell PHI or for personal gain or malicious harm can bring fines up to $250,000 and up to ten years in prison. State laws can add their own penalties on top of the federal ones. In July of 2026, IBM found that the average cost of a healthcare breach was $6.64 million dollars. Unfortunately, 59% of these breaches were malicious or criminal attacks, 26% were due to IT failures, and 13% were due to human error. As a leader, you don't have to memorize each penalty or fine. You do need to remember that breaches have real-world costs to your company and that it is key that you and your team members take a proactive approach to protect your patients' data.
In this lesson, we're going to cover all things related to HIPAA violation penalties and what the true costs are to your business or practice if this should happen to you. At the end of the lesson, we'll provide you with a Word about what constitutes a HIPAA violation.
The United States Department of Health and Human Service's Office for Civil Rights is responsible for administrating and enforcing the HIPAA standards and may conduct investigations and compliance reviews whenever they see fit.
Should you be found to be in violation of any privacy rule requirements, your business or practice could be responsible for paying civil penalties. These penalties are for each violation and can be stacked if there are multiple violations with respect to a single individual.
Penalties also depend on the type of violation. Civil penalties, for instance:
Criminal penalties on the other hand:
Pro Tip: That's just the federal side of the penalty puzzle. State laws can also inflict their own set of fines to your business or practice.
Let's go over the details of the cost of a data breach to your business or practice. Here are a few costs you may be subjected to:
There is much talk of HIPAA violations in this course, but what actually constitutes a HIPAA violation?
A HIPAA violation has occurred when a HIPAA covered entity – or a business associate – fails to comply with one or more of the provisions of the HIPAA Privacy, Security, or Breach Notification Rules.
A violation may be deliberate or unintentional. An example of an unintentional HIPAA violation is when too much PHI is disclosed, and the minimum necessary information standard is violated.
When PHI is disclosed, it must be limited to the minimum necessary information to achieve the purpose for which it is disclosed. Financial penalties for HIPAA violations can be issued for unintentional HIPAA violations, although, as mentioned above, the penalties will often be at a lower rate than willful violations of HIPAA Rules.
An example of a deliberate violation is unnecessarily delaying the issuing of breach notification letters to patients and exceeding the maximum timeframe of 60 days following the discovery of a breach to issue notifications, which is a clear violation of the HIPAA Breach Notification Rule.
Many HIPAA violations are the result of negligence, such as the failure to perform an organization-wide risk assessment. Financial penalties for HIPAA violations have frequently been issued for risk assessment failures.
Penalties for HIPAA violations can potentially be issued for all HIPAA violations, although the Office for Civil Rights typically resolves most cases through voluntary compliance, issuing technical guidance, or accepting a covered entity or business associate's plan to address the violations and change policies and procedures to prevent future violations from occurring.
It should be noted that financial penalties for HIPAA violations are reserved for the most serious violations of HIPAA Rules.