HITECH Act 42 Compliance Guide: Breach Notification, Enforcement, and Penalties

Breach Notification Requirements

When notification is required

A breach notification is required when there is an impermissible use or disclosure of Protected Health Information (PHI) that compromises its security or privacy and involves unsecured data. An Unsecured PHI Breach is one where PHI was not rendered unusable, unreadable, or indecipherable to unauthorized individuals (for example, not properly encrypted or destroyed).

Before concluding that a breach occurred, you must conduct a risk assessment considering: the nature and extent of PHI involved; the unauthorized person who used or received it; whether the PHI was actually viewed or acquired; and the extent to which any risk was mitigated. Limited statutory exceptions apply, such as inadvertent disclosures between authorized workforce members or situations where the recipient could not reasonably retain the information.

Who must be notified

• Affected individuals: Notify each person whose unsecured PHI was breached.
• Department of Health and Human Services (HHS): Notify the HHS Office for Civil Rights (OCR) as required by breach size and timing rules.
• Media: If a breach involves 500 or more residents of a single state or jurisdiction, notify prominent media outlets serving that area.
• Covered entity and business associate coordination: Business associates must notify the covered entity and supply the identities of affected individuals and relevant facts.

Timing and method

Provide notice without unreasonable delay and no later than 60 calendar days after discovery. Use first-class mail or email if the individual has agreed to electronic notice. If contact information for 10 or more individuals is insufficient, provide substitute notice, such as a website posting and toll-free call center.

Content of the notice

• A brief description of what happened, including dates of the breach and discovery.
• The types of PHI involved (for example, names, diagnoses, Social Security numbers).
• Steps individuals should take to protect themselves.
• What you are doing to investigate, mitigate harm, and prevent further incidents.
• Contact information for questions and assistance.

Law enforcement delay and documentation

If a law enforcement official states that notification would impede a criminal investigation or damage national security, you may delay notice for the time specified. Maintain written risk assessments, incident logs, and all notices sent; OCR will request this documentation if it investigates.

Tiered Penalty System

HIPAA Violation Tiers and ranges

HITECH created four HIPAA Violation Tiers that scale Civil Monetary Penalties (CMPs) to your level of culpability. Per-violation amounts typically range from $100 to $50,000, with higher penalties for egregious conduct. The tiers are:

• No knowledge: You did not know and, by exercising reasonable diligence, would not have known of the violation.
• Reasonable cause: You should have known of the violation by exercising reasonable diligence.
• Willful neglect—corrected: The violation was due to willful neglect, but you corrected it within the required timeframe.
• Willful neglect—uncorrected: The violation was due to willful neglect and not timely corrected; this carries the highest CMPs.

Annual caps may apply to each tier; OCR also considers factors such as the number of individuals affected, the duration of noncompliance, the sensitivity of PHI involved, prior violations, and the entity’s financial condition.

Affirmative defenses and cure periods

OCR may not impose CMPs if a violation is not due to willful neglect and you cure it within 30 days of when you knew or should have known of the issue (extensions may be granted). Willful neglect, however, must result in a penalty.

Criminal Penalties

When criminal liability applies

Criminal Prosecution can arise when a person knowingly obtains or discloses PHI in violation of HIPAA. Penalties escalate for offenses committed under false pretenses or with intent to sell, transfer, or use PHI for commercial advantage, personal gain, or malicious harm. Individuals—such as employees, contractors, or executives—can be prosecuted.

Penalty levels

• Basic offense: Up to 1 year imprisonment and fines (commonly referenced up to $50,000).
• False pretenses: Up to 5 years imprisonment and higher fines (commonly referenced up to $100,000).
• Intent to profit or harm: Up to 10 years imprisonment and the highest fines (commonly referenced up to $250,000).

Cases are typically investigated in coordination with HHS and referred to the Department of Justice for charging decisions.

State Attorneys General Enforcement

Authority and remedies

HITECH authorizes State AG HIPAA Enforcement actions on behalf of state residents. State attorneys general may seek injunctions, monetary relief, and attorneys’ fees for violations of HIPAA/HITECH. Many AGs also leverage state consumer protection laws to obtain broader remedies in parallel with HIPAA claims.

Coordination with HHS

State AGs notify HHS of filed actions, and OCR may intervene or coordinate investigations. Settlements commonly require corrective action plans, reporting, and payments, reinforcing consistent national standards while addressing state-level harms.

Reporting Procedures

Step-by-step for covered entities

1. Contain and investigate: Activate your incident response plan, secure systems, and preserve logs and evidence.
2. Assess reportability: Complete the four-factor risk assessment to determine whether unsecured PHI was compromised.
3. Identify affected individuals: Confirm scope, data elements, and populations (patients, employees, dependents).
4. Draft notifications: Prepare individualized notices with clear guidance and resources (for example, credit monitoring where appropriate).
5. Notify individuals and, if required, the media: Send notices without unreasonable delay and within 60 days of discovery.
6. Notify HHS: Use the HHS breach portal to report breaches affecting 500+ individuals within 60 days; log smaller breaches and submit them within 60 days after the end of the calendar year.
7. Remediate: Patch vulnerabilities, retrain staff, adjust policies, and document all corrective actions.

Business associate obligations

Business associates must notify the covered entity without unreasonable delay (no later than 60 days) and provide sufficient detail to support individual notifications, including identification of each affected person and a description of the incident.

Compliance Best Practices

Preventive controls

• Encrypt PHI at rest and in transit to gain the safe harbor against Unsecured PHI Breach notification.
• Limit access using role-based controls, multi-factor authentication, and least privilege.
• Harden systems with patching, endpoint protection, email security, and data loss prevention.
• De-identify or minimize data where possible; retain only what you need.

Governance and oversight

• Conduct an enterprise risk analysis, update it regularly, and implement a risk management plan.
• Maintain current policies, procedures, and sanction standards; train and test your workforce annually and upon role changes.
• Vet vendors with security questionnaires, contract Business Associate Agreements, and ongoing monitoring.
• Drill your incident response and breach notification playbooks, including executive and legal escalation paths.

Enforcement Process

How OCR investigates

OCR initiates enforcement through complaints, breach reports, or referrals. You may receive a data request (desk audit) or an onsite review. OCR evaluates policies, risk analyses, training, technical safeguards, and your response to the incident.

Outcomes and resolutions

Many matters close with technical assistance or voluntary compliance. Where significant noncompliance exists, OCR may negotiate a resolution agreement and corrective action plan with monitoring, or impose Civil Monetary Penalties. You may contest CMPs through an administrative hearing process.

Factors that influence penalties

OCR weighs the number of individuals affected, sensitivity of data, duration of noncompliance, level of culpability, prior history, financial condition, and mitigation steps taken. Prompt containment, transparent reporting, and durable remediation can materially reduce exposure.

Key takeaways

• Encrypt PHI to avoid Unsecured PHI Breach notifications and reduce risk.
• Move fast: investigate, assess, and notify within required timelines.
• Document everything; your records will anchor OCR reviews and outcomes.
• Align with HIPAA Violation Tiers to calibrate risk, and correct issues within cure periods whenever possible.

FAQs.

What are the breach notification timelines under HITECH Act 42?

You must notify affected individuals without unreasonable delay and no later than 60 calendar days after discovering a breach of unsecured PHI. For breaches affecting 500 or more individuals, notify HHS within 60 days as well; for fewer than 500, report to HHS within 60 days after the end of the calendar year. Media notice is required within 60 days when 500+ residents of a state or jurisdiction are affected.

What penalties apply for willful neglect violations?

Willful neglect triggers the highest civil penalties. If corrected within the required timeframe, penalties are substantial; if uncorrected, they reach the maximum per-violation amount, with annual caps applied by tier. OCR also considers aggravating and mitigating factors, so swift remediation and strong corrective action can influence final amounts.

How do state attorneys general enforce HITECH Act provisions?

State attorneys general may file civil actions on behalf of residents to enforce HIPAA/HITECH, seeking injunctions, monetary relief, and attorneys’ fees. They coordinate with HHS OCR and often pair HIPAA claims with state consumer protection laws to obtain broader remedies and corrective action commitments.

What constitutes a reportable breach under this Act?

A reportable breach occurs when there is an impermissible acquisition, access, use, or disclosure of unsecured PHI that compromises security or privacy, and a risk assessment does not show a low probability of compromise. Exceptions include certain inadvertent disclosures between authorized personnel and situations where the recipient could not reasonably retain the information.