What are the Penalties for HIPAA Violations in 2025?

Healthcare is becoming more digital every year, and in 2025, keeping patient data safe will be more important than ever. HIPAA violations are still a big problem, especially with more cyberattacks and data breaches. When organizations don’t follow HIPAA rules, the consequences can be serious, both for patients and the organizations themselves.

Just last year, Montefiore Medical Center faced a $4.75 million penalty and a two-year corrective action plan after potential security rule violations. That’s a clear sign that even big players can get hit hard.

More recently, Oracle Health revealed a breach that started in January 2025. It took 89 days before the Union Health System notified 263,000 people affected by the breach. That kind of delay can put people at risk and lead to lawsuits.

New rules are coming, too. The White House is considering updates that would require data breach notifications within 72 hours and annual compliance audits. This shows how seriously regulators are taking cybersecurity in healthcare.

In addition to all this, emerging tech like AI can unintentionally reveal patient information if not handled carefully, adding another layer of risk.

In this article, we’ll cover the types of HIPAA fines, categories of violations, practical ways to avoid violations, and real cases that show what can happen when compliance fails. Staying on top of these issues isn’t optional; it’s necessary.

What is a HIPAA Violation?

A HIPAA violation occurs when healthcare organizations fail to protect patient privacy or improperly handle Protected Health Information (PHI). This can involve unauthorized access, disclosure, or loss of PHI. Violations can be intentional or due to negligence and lead to severe legal and financial consequences. The Health Insurance Portability and Accountability Act (HIPAA) sets strict rules for safeguarding patient data. Verifying compliance with HIPAA regulations is essential to prevent these violations. Now that we understand what constitutes a PHI violation, let’s explore who is responsible for adhering to HIPAA standards.

Who Does It Apply To?

HIPAA applies to a wide range of entities within the healthcare industry, including the following:

• Healthcare Providers: This category includes hospitals, physicians, clinics, and any healthcare professionals who provide services to patients and handle PHI.
• Health Plans: Insurance companies, health maintenance organizations (HMOs), and other entities that offer healthcare plans and manage patient health data.
• Healthcare Clearinghouses: Organizations that process healthcare claims and other administrative functions, typically involving PHI.

Also read: What is HIPAA Compliance? What is the Key to Successful HIPAA Compliance?

• Business Associates: Any individual or entity that performs services for a covered entity and has access to PHI, such as contractors or vendors like IT service providers, billing companies, or law firms.

Understanding who is responsible for HIPAA compliance highlights why it’s essential to keep your organization audit-ready at all times. Regular internal audits help identify gaps early, reduce the risk of violations, and maintain ongoing adherence to HIPAA standards.

Read: Ascension Health Ransomware Attack: Impact, Lessons, and How to Strengthen Cybersecurity

How are HIPAA Violations Discovered?

HIPAA violations can be discovered through various methods, such as investigations, complaints, enforcement initiatives, and audits.

• Investigations: Breaches reported by Covered Entities and Business Associates trigger investigations under the HIPAA Breach Notification Rule.
• Complaints: Complaints from patients or employees often prompt the OCR to conduct investigations and determine if further actions are needed.
• Enforcement Initiatives: The OCR proactively focuses on specific compliance areas to uncover violations and guarantee that organizations are following HIPAA regulations.
• Regular Audits: The Department of Health and Human Services (HHS) regularly audits Covered Entities and Business Associates to assess compliance and identify any violations.

Once a violation is identified, it’s important to understand who has the authority to enforce penalties for non-compliance.

Who Issues the Penalties for Non-Compliance with HIPAA?

Several entities play a role in enforcing HIPAA compliance and issuing penalties for violations.

• Office for Civil Rights (OCR): The OCR is primarily responsible for investigating complaints, performing audits, and imposing civil penalties for HIPAA violations.
• Department of Health and Human Services (HHS): While the OCR leads enforcement efforts, HHS can also take action in certain situations, often in collaboration with the OCR.
• Department of Justice (DOJ): The DOJ handles criminal penalties, especially in cases of intentional or fraudulent violations involving PHI.
• State Attorneys General: State Attorneys General have the authority to investigate HIPAA violations within their jurisdiction and can impose civil penalties when state residents are affected.

Use our HIPAA Compliance Checklist to stay on track and ensure compliance with ease

After understanding who enforces penalties, let’s take a look at how these penalties are structured and what the penalty tiers are.

HIPAA Violation Penalty Tiers

HIPAA penalties are divided into different tiers based on the level of negligence or intent behind the violation. These tiers aim to distinguish between unintentional mistakes and intentional breaches of patient privacy.

Categories for Civil Penalties 

Civil penalties for HIPAA violations are assessed based on the level of negligence or awareness involved. This section breaks down the different categories associated with each tier.

Category 1: Reasonable Cause

• This category applies when the entity knew or should have known about the violation through reasonable due diligence but did not act with willful neglect. It reflects situations where the entity failed to investigate or address a potential issue even though it should have been aware of it. The violation was not deliberate, but there was a failure to act in a timely or sufficient manner to prevent it.

Category 2: Lack of Knowledge

• In this category, the entity was unaware of the violation and could not have known by exercising reasonable due diligence. It typically applies when the violation is unintentional, and the entity had no reason to suspect any breach of HIPAA rules. The entity’s efforts to comply were reasonable, but the violation occurred without any awareness of the rules being broken.

Category 3: Willful Neglect (Corrected within 30 Days)

• In this category, the violation was caused by willful neglect, meaning the entity intentionally disregarded its responsibility to comply with HIPAA regulations. However, the entity took corrective action to resolve the issue within 30 days of discovering the violation. This category reflects situations where the entity made an effort to fix the problem promptly after realizing the non-compliance.

Category 4: Willful Neglect (Not Corrected within 30 Days)

• This is the most severe category, where the violation was caused by willful neglect, and no corrective action was taken within 30 days. The entity either failed to recognize the seriousness of the breach or deliberately ignored the need for correction. This category involves non-compliance that continues without efforts to resolve the issue, leading to prolonged harm or risk.

Also read: Common HIPAA Violations to Avoid

Categories for Criminal Penalties

Criminal penalties apply to healthcare professionals who knowingly violate HIPAA regulations. The following are the categories of criminal penalties for intentional violations.

Tier 1: Wrongful Disclosure of PHI

This penalty applies when there is a violation without malicious intent. It could be due to a lack of knowledge or negligence, where the individual or organization did not realize they were violating HIPAA regulations.

Tier 2: Wrongful Disclosure Under False Pretenses

This tier includes violations where PHI is disclosed under false pretenses, such as misrepresenting or fraudulently obtaining patient information. It typically involves a deliberate attempt to deceive or misuse information.

Tier 3: Wrongful Disclosure with Malicious Intent

The most severe criminal violation, this tier applies when PHI is wrongfully disclosed with the intent to sell, transfer, or use it for personal gain, commercial advantage, or to cause harm. This is the highest level of violation under HIPAA.

Also read: What Is the Difference Between HIPAA and FERPA?

Now that we know how penalties are structured, let’s examine the specific penalties healthcare organizations face for HIPAA violations.

What Are the Penalties for HIPAA Violations?

The penalties for HIPAA violations in 2025 are severe and can vary depending on the nature and extent of the breach. In general, the penalties can range from minor fines to severe criminal charges. Here’s a breakdown:

Civil Penalties

Civil penalties for HIPAA violations involve fines based on the severity of the violation. This table outlines the fines associated with each tier of civil penalties under HIPAA.

Tier	Description	Minimum Penalty per Violation	Maximum Penalty per Violation	Annual Penalty Limit
Tier 1	Reasonable efforts	$1000	$100,000	$100,000
Tier 2	Lack of oversight	$100	$25,000	$25,000
Tier 3	Willful Neglect (Rectified within 30 days)	$10,000	$250,000	$250,000
Tier 4	Neglect (not rectified within 30 days)	$50,000	$1,000,000	$1,000,000

Also read: How to Get HIPAA Certified: Duration and Requirements

Criminal Penalties

Criminal penalties for HIPAA violations carry significant financial fines, depending on the intent behind the violation. In this section, we detail the financial consequences for criminal penalties related to PHI misuse.

Tier	Description	Maximum Fine	Maximum Prison Sentence
Tier 1	Simple violations with no intent to harm	$50,000	Up to 1 year
Tier 2	Violations committed under false pretenses	$100,000	Up to 5 years
Tier 3	Violations with intent to sell, transfer, or use PHI for personal gain	$250,000	Up to 10 years

To assist healthcare organizations in maintaining compliance, VComply’s PolicyOps can help you develop, review, and automate the distribution of HIPAA-compliant policies, making sure your team remains aligned with the latest security and privacy requirements.

Next, let’s examine the various types of HIPAA violations and their real-world examples to better understand the risk factors.

Types of HIPAA Violations with Examples

HIPAA violations can take many forms, and understanding the different types is crucial for preventing them:

1. Unauthorized Access

Unauthorized access occurs when individuals access a patient’s medical records without a valid reason or permission. This is a violation of patient privacy and can lead to serious breaches of confidentiality. Unauthorized access is often a result of poor access control measures, insufficient employee training, or lapses in monitoring systems.

Example: A nurse looks up a colleague’s personal health information out of curiosity, violating HIPAA guidelines by accessing information without a legitimate purpose.

2. Improper Disposal of PHI

Improper disposal happens when PHI is discarded without proper protection or in a manner that exposes it to unauthorized individuals. This can include throwing paper records in regular trash or leaving files in unsecured areas. Failing to practice secure disposal is a common compliance oversight that can lead to significant privacy violations.

Example: A healthcare provider disposes of old patient records in a public trash bin, allowing the information to be exposed to unauthorized individuals.

3. Data Breaches

Data breaches occur when PHI is accessed or disclosed without authorization, often due to cyberattacks or vulnerabilities in an organization’s security systems. These breaches can involve hacking, phishing, or technical flaws that compromise the security of sensitive patient data. Protecting against breaches requires strong cybersecurity measures, including encryption and monitoring.

Example: A cyberattack compromises a healthcare provider’s online database, stealing thousands of patient records and exposing them to unauthorized access.

Also read: Duration of HIPAA Certification: How Long It Lasts

4. Inadequate Training

Inadequate training can result in staff unknowingly violating HIPAA rules by mishandling sensitive information. Healthcare employees must understand their responsibilities regarding patient privacy and how to handle PHI securely. Without regular training, staff may inadvertently share sensitive data or fail to follow proper procedures for securing patient information.

Example: A receptionist inadvertently shares sensitive patient details over the phone with an unauthorized person due to a lack of training on confidentiality protocols.

5. Failure to Encrypt Data

When PHI is not properly encrypted, it becomes vulnerable to interception during storage or transmission, especially in the event of a cyberattack. Encryption is a fundamental security measure that protects sensitive data by guaranteeing it can only be accessed by authorized personnel. Healthcare organizations must make sure that all electronic health information is encrypted to meet HIPAA standards.

Example: A healthcare provider sends patient records via unencrypted email, exposing sensitive data to potential interception and a breach of confidentiality.

6. Improper Sharing of PHI

Improper sharing of PHI happens when sensitive information is disclosed to unauthorized individuals or entities without the patient’s consent or beyond what is necessary for treatment. This violation often occurs when employees are not properly trained on the limits of PHI sharing or when healthcare providers fail to obtain appropriate consent from patients.

Example: A physician shares a patient’s sensitive health information with a family member without obtaining proper consent or verifying authorization.

By identifying these violations and taking preventive measures, healthcare organizations can mitigate risks and maintain compliance. 

By identifying these violations and taking preventive measures, healthcare organizations can reduce risks and stay compliant. Automating risk assessments and tracking potential violations are key steps in maintaining strong data security and protecting patient privacy. Tools like RiskOps can help simplify these processes and keep your team aligned with HIPAA requirements.

After learning about the types of violations, let’s explore some real-world HIPAA violation cases that highlight the serious consequences of non-compliance.

5 HIPAA Violation Cases to Learn From

Here are some real-world HIPAA violations that highlight the importance of maintaining compliance:

1. Memorial Hermann Health System

Unauthorized staff members accessed a patient’s PHI and disclosed it to the media. The organization was fined $2.4 million to resolve the issue. This case shows how essential strict access controls and patient privacy protection are to maintain trust and avoid costly penalties.

2. Banner Health

In 2016, Banner Health experienced a massive data breach that affected 3.7 million individuals due to inadequate safeguards. After the breach was investigated, the organization was fined $200,000. This highlights the need for strong technical and administrative safeguards to prevent data breaches and maintain compliance.

3. Northcutt Dental

Northcutt Dental faced a violation when they failed to revoke a former employee’s remote access to patient data, allowing unauthorized access to PHI. The dental practice was fined $62,500 for this lapse in security.

Takeaway: Proper management of employee access and permissions is crucial to preventing unauthorized access to sensitive information.

Also read: The Best HIPAA Compliance Software in the Market in 2025

4. University of California, Los Angeles (UCLA)

UCLA’s medical center accessed the PHI of celebrities without permission. The center was fined $865,000 and required to implement corrective actions. This illustrates how non-compliance with access controls can lead to severe penalties, especially when private data is unnecessarily exposed.

5. The University of Texas MD Anderson Cancer Center

Unencrypted PHI was found on an employee’s laptop, leading to a $4.3 million fine and a review of the hospital’s data security practices. This case stresses the importance of verifying encryption and securely handling patient data, particularly on portable devices.

These HIPAA violation cases demonstrate the importance of safeguarding patient information through proper access control, encryption, regular audits, and staff training to prevent significant fines and reputational damage.

2024 HIPAA Violations: Lessons from the Front Lines

HIPAA violations in 2024 show how even big healthcare players can stumble. From stolen data to ransomware attacks, these cases remind us that protecting patient information is a daily job. Here are five key examples that highlight what went wrong and what we can learn.

1. Montefiore Medical Center – $4.75 Million Settlement

A former employee stole data from over 12,000 patients due to weak security checks and follow-up. The hospital paid $4.75 million in fines, proving that regular risk reviews are crucial.

2. UnitedHealth Group/Change Healthcare – Ransomware Attack

The BlackCat ransomware gang hit UnitedHealth’s payment processor, locking providers out and stealing sensitive patient information. UnitedHealth paid $22 million to regain control and an additional $80,000 to settle HIPAA allegations, but still faces lawsuits over the breach.

3. Children’s Hospital Colorado – $548,625 Penalty

Phishing attacks on employees exposed patient data, leading to a $548,625 penalty. This case highlights the need for strong staff training and cybersecurity measures.

4. Gulf Coast Pain Consultants – $1.19 Million Penalty

A fired contractor kept access to patient records and submitted fake Medicare claims, costing Gulf Coast Pain Consultants $1.19 million in fines. Immediate revocation of access is essential.

5. Inmediata Health Group – $250,000 Settlement

A database containing info on 1.5 million patients was left unsecured online, easily found via search engines. Inmediata Health Group paid $250,000 for this major oversight.

These cases show that protecting patient data isn’t a one-time fix; it’s ongoing work that demands vigilance, clear procedures, and constant training.

Avoiding HIPAA slip-ups comes down to sticking with some simple, solid best practices. Let’s go through the key things healthcare groups can do to keep patient info safe and out of trouble.

5 Key Practices to Prevent HIPAA Violations

HIPAA violations usually don’t happen out of nowhere. They come from everyday oversights and weak spots in how patient data is handled. Here are five solid practices that healthcare organizations should follow to avoid those costly mistakes.

1. Use Strong Encryption and Keep Security Current

Make sure patient data is always encrypted, both when stored and when being shared. Security threats change fast, so regularly updating your protections is critical. Multi-factor authentication and trusted cloud services aren’t extras; they’re essentials.

2. Train Your Team Often and Well

Training can’t be a one-and-done. Staff need ongoing, practical guidance on spotting scams, protecting patient info, and what to do if something seems wrong. The more prepared your team is, the less chance for human error to cause problems.

3. Monitor Who’s Accessing Patient Data

You should know exactly who’s looking at patient records and why. Set up monitoring to flag any unusual access quickly, and regularly review logs. Catching unauthorized activity early can save you from a major breach.

4. Have Clear, Easy-to-Follow Policies

Your policies should be straightforward and real, something everyone can understand and apply. If rules are confusing or ignored, breaches become more likely. Everyone, from leadership to new hires, must know their role in protecting patient info.

5. Regularly Check for Risks and Fix Them

Risk assessments aren’t just paperwork; they’re your best defense. Do them often, especially as systems and people change. Automate what you can, so nothing slips through the cracks.

Following these steps doesn’t guarantee a perfect record, but it builds a culture where patient data is respected and protected every day. That’s how real progress happens. Finally, let’s see how VComply can help healthcare organizations manage compliance and prevent HIPAA violations.

Keep HIPAA Risks in Check Without the Overwhelm

HIPAA compliance involves juggling a lot: policies, training, audits, and risk checks. Missing even one detail can lead to big problems. Managing all this smoothly is tough, especially when your team’s focus should be on patient care.

VComply brings everything together in one place, so managing compliance feels less like a headache and more like part of your daily routine. It helps you keep track of what matters, deadlines, training, and audits, without the chaos.

Here’s how it makes a difference:

• With ComplianceOps, you can keep your compliance tasks on track. Set reminders for audits, policy updates, and training so nothing slips through the cracks.
• RiskOps simplifies risk management by allowing you to see weak spots before they become serious issues.
• PolicyOps centralizes all your policies and training materials, making them easy to access and update, and lets you track who’s completed what.  
• CaseOps helps you manage incidents quickly and smoothly, from reporting to resolution, so issues can be fixed quickly and future risks shrink.

Audits become less stressful when all your compliance information is organized and ready, so you can face them confidently. With VComply, healthcare teams can maintain HIPAA compliance without getting overwhelmed by paperwork or endless meetings. It makes compliance manageable, helping keep patient data secure. Request a free demo today to see how VComply can simplify your HIPAA compliance process.

Wrapping Up

HIPAA compliance is no small task. Healthcare organizations cannot afford to lag behind as regulations change frequently and cyber threats increase. The penalties for violations, whether from missed audits, lax training, or weak security, are severe and can seriously damage both finances and reputation.

The key to avoiding these pitfalls is staying proactive. Regular risk assessments, consistent staff training, strong encryption, and clear policies are more than just best practices. They’re essential habits that keep patient information safe and compliance intact. By bringing everything together, automating reminders with ComplianceOps, highlighting risks early through RiskOps, managing policies smoothly with PolicyOps, and handling incidents effectively via CaseOps, VComply helps healthcare teams stay organized, reduce errors, and respond quickly to challenges.

HIPAA compliance doesn’t have to be overwhelming. With the right approach and support, you can focus on what matters most: delivering quality care while protecting your patients’ trust.

If you’re ready to make compliance simpler and more manageable, click here to start your free trial with VComply today.