The true cost of HIPAA violation – what you need to know
When we think about the cost HIPAA violation, much of the emphasis is on avoiding Office of Civil Rights (OCR) fines and penalties. It is understandable that most of the healthcare organizations are quite skeptical about the threat of an HIPAA audit happening to their company. However, the true cost of HIPAA violation can extend well beyond these fines and penalties. Once you calculate these costs, you may want to reconsider the need for a well-executed HIPAA compliance plan.
Hefty Fines
Non-compliance in the US costs companeis over $14 million annually on average. But for larger governing bodies, like HIPAA, fines could range from $100 to $1.5 million depending on the nature of the violation. Violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) can also lead to sanctions, and even criminal penalties.
Legal Trouble & Fines
HIPAA violations are not only costly, they are also quite time consuming. Court processes can last anywhere from 3 to 5 years or a decade. There’s no cap on legal fees or settlement costs you can incur. Failure to comply with HIPAA can also result in civil and criminal penalties.
Terminated Employees
Although not all HIPAA violations are equal, they do require proper investigation and corrective actions from the healthcare organization. After proper investigation and analysis, depending on the nature of involvement of any employee authorities may decide to train, suspend or even terminate the employee. It’s estimated that the cost of replacing an employee is about 6-9 months of that role’s starting annual salary.
Risk of Cloud Disaster
Cloud Disasters like data breach, fire, vandalism, natural disaster or system failure are some of the most expensive consequences. A data breach could cost your organization around $8.4 million in the US. That’s why every healthcare organization should have a solid HIPAA disaster recovery plan – a document that specifies the resources, actions, workplace safety plan, personnel and data that are required to protect and reinstate healthcare information.
Reputation
As they say, reputation takes a lifetime to build and a mere second to destroy. Before the age of digital and social media, most concerns around HIPAA violations were somewhat limited to some of the traditional media announcements in terms of reputation. But now this kind of news spreads like wildfire, causing loss of your clients trust could be devastating to your organization.
Lost Revenue of Business
Financial penalty and damaged reputation causes significant loss of revenue. It’s like a slow burn with long-lasting impact on your employee retention, stakeholder interest, or ability to operate correctly.
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