Are You Ready for a HIPAA Audit?

Article excerpt


Time was when violating the Health Insurance Portability and Accountability Act (HIPAA) got you little more than a warning letter from the U.S. Department of Health and Human Services (HHS). But no more. HIPAA has grown sharp teeth in recent years, along with an inclination to use them, which means you and your practice need to be prepared for a visit from HIPAA investigators.

The catalyst for the change was the 2009 passage of the Health Information Technology for Economic and Clinical Health (HITECH) Act. In 2010, HHS began holding a series of training seminars for state attorneys general, so they could learn how to enforce HIPAA rules. That year also saw a 27% increase in the number of HIPAA-related complaint investigations to 4,229 from 3,336 the previous year. HHS has said it will begin doing random audits for HIPAA compliance in 2012.

The HITECH Act also replaced the aforementioned warning letters with mandatory fines for violations. The most serious of these- those classified as "willful neglect"- include breaches of unsecured protected health information (PHI), and can carry penalties of up to $1.5 million.

For the typical doctor's office, fines for HITECH ACT violations generally start at $100, which are for first-tier violations. A physician would generally have to be totally ignorant of HIPAA, and be able to prove it, to be cited just for a first- tier violation.

A second-tier violation is where most physicians would most likely find themselves, and the fines for those are $1,000 per violation. Fines can go as high as $25,000 per violation, and can be levied for multiple incidents. In short, HIPAA violations can really add up.


HHS defines a PHI breach as "an impermissible use or disclosure under the Privacy Rule that compromises the security or privacy of the protected health information such that the use or disclosure poses a significant risk of financial, reputational, or other harm to the affected individual."

Three types of incidents can trigger a HIPAA audit. (A random audit also is possible, although the odds are fairly low given the number of physicians in the United States compared to the number of HIPAA auditors.)

* A breach or a complaint of a breach. Any breaches of PHI that affect more than 500 individuals must be posted publicly on the HHS Web site: breachnotificationrule/postedbreaches.html

* A complaint of a privacy or security violation by anyone. By law, HHS is required to investigate all complaints of HlPAA violations. HHS has a Web site describing how patients may file a complaint:

* Filing for EHR reimbursements. U nd e r th e 2009 American Recovery and Reinvestment Act, physicians who are able to meet the criteria for demonstrating "meaningful use" of an electronic health record (EHR) system can qualify for up to $44,000 in Medicare incentives over a 5-year period.

When applying for the incentives, physicians must explain how their practice meets HIPAA compliance requirements. The EHR must be certified as HIPAA- compliant, as must all the physician's policies and procedure manuals, employees need to undergo appropriate training, and all annual audits must be documented.


If you are audited you will be required to provide documentation of your HIPAA compliance efforts. (For a complete list, see sidebar, "HIPAA audit documentation.") While the list may seem so long as to make compliance nearly impossible, most physician professional organizations can provide you with privacy and security manual templates. That's a place to begin.

Someone on your staff- generally someone designated as a privacy/security officer- will need to implement and maintain HIPAA compliance records on a regular basis in order to avoid violations and fines. …