What is a HIPAA Violation? Fines and Penalties for Failed HIPAA Compliance

Complying with HIPAA is tricky, as it consists of multiple rules and requirements. However, following them is a must if you want to secure your data and avoid penalties. In this article, we discuss common types of HIPAA violations and the penalties you could face for breaking this law. Find out below how to ensure HIPAA compliance for your healthcare organization and the security of patient information you collect.

Key takeaways:

• Covered entities, such as healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates and subcontractors, must meet HIPAA requirements.
• Civil penalties for HIPAA violations range from $141 to $71,162 per violation. Criminal penalties and prison terms may also apply.
• In 2024 alone, the Office for Civil Rights collected nearly $12.8 million in civil penalties. For instance, Warby Parker was fined $1.5 million in 2025 for a breach precipitated by attacks against customer accounts.
• Unauthorized access, lack of risk analysis, delayed breach notifications, improper disposal of PHI, and cybersecurity incidents, such as those caused by phishing or ransomware, are common causes of HIPAA violations.
• Healthcare entities can meet and maintain HIPAA compliance by implementing access controls, user activity monitoring, third-party oversight, regular audits, and incident response measures.

What is HIPAA, and why does it matter?

The Health Insurance Portability and Accountability Act (HIPAA) is a US law that establishes privacy standards for patients’ medical records and health information. It was enacted in 1996 to protect patients, medical institutions, and healthcare providers. 

HIPAA is a vital part of maintaining patient confidence in the healthcare system. HIPAA’s safeguards protect patients from identity theft, fraud, and unauthorized use of their medical information while reinforcing the credibility of healthcare providers.

The act defines how medical institutions, providers, and business associates must collect, store, and share patient health information. HIPAA violations can result in severe penalties and legal action; thus, it is essential for healthcare entities to understand and follow this law diligently.We’ll take a closer look at the consequences of HIPAA violations later in this article, but first, let’s examine the act’s major rules that set the foundation for compliance.

Achieving HIPAA Compliance with Syteca

Five key HIPAA rules

HIPAA standards allow patients to securely access their medical records, give them control over how their personal health information is used, and determine who can view and read it.

HIPAA has five key rules that establish policies and procedures for data security:

Privacy

The privacy rule establishes standards for securing Protected Health Information (PHI). This rule applies to all healthcare institutions and companies that retain PHI, as well as to their business associates. The rule defines safeguards to protect the privacy of PHI and sets limits and conditions on when such information may be used without authorization from a patient. The privacy rule also gives patients the right to access their own health information.

Security

The security rule extends the privacy rule by establishing standards for handling electronic Protected Health Information (ePHI). This rule defines security measures and access policies for data at rest and in transit. Similar to the privacy rule, the security rule applies to any entity in possession of ePHI.

Breach notification

The breach notification rule defines the procedures that covered entities and business associates must follow when a breach of PHI occurs. It ensures transparency by requiring timely notification to impacted individuals, federal regulators, and, in certain cases, the public. The goal is to give patients the opportunity to protect themselves from the potential misuse of their data.

Omnibus

Omnibus rule expands the responsibilities of business associates. It grants patients the right to access and receive electronic copies of their health information and prohibits the use of PHI for marketing and fundraising without authorization. The rule also updates breach notification requirements to ensure that individuals are informed when their data may have been compromised.

Enforcement

The enforcement rule sets penalties for non-compliance with HIPAA’s privacy and security rules. It also describes the procedures for investigations and public hearings related to data breaches that expose PHI.

There are countless ways to break HIPAA rules, depending on the type of institution, the nature of stored data, and the protection methods implemented or not implemented. Let’s take a look at four tiers of HIPAA violations.

HIPAA violation tiers and penalties explained

There are four tiers of HIPAA violations, each with set minimum and maximum fines for every violation, as well as yearly limits for repeatedly violating the same requirement. 

The minimum and maximum penalties for HIPAA violations are adjusted annually for inflation by the U.S. Department of Health and Human Services (HHS). Here’s the breakdown of four official inflation-adjusted civil penalty tiers (as of August 2024):

As you can see, Tiers 1–3 carry graduated penalties for noncompliance with HIPAA. If an entity can prove that it was unaware of the violation or had a reason not to fix it, it can avoid major penalties. It’s up to the Office for Civil Rights (OCR) to determine appropriate HIPAA violation fines within the appropriate range.

The OCR considers a number of factors when determining penalties, such as:

• The length of time the violation was allowed to persist
• The number of people affected
• The nature of the data exposed
• The entity’s willingness to assist OCR in the investigation
• Prior history of violations
• The entity’s financial condition
• The amount of harm caused by the violation

Severe HIPAA violations with grave impacts may result in criminal charges in addition to civil penalties. While civil penalties generally apply to covered entities and their business associates, criminal enforcement can target individuals.

Here’s the tiered system of criminal HIPAA violation fines based on the circumstances of violations:

The Department of Justice (DOJ) handles criminal HIPAA cases, and the final penalties are decided by courts.

Key statistics on healthcare data breaches and HIPAA violations

Healthcare is one of the most frequently breached industries, according to Verizon’s 2025 Data Breach Investigations Report. 

Due to the high value of private records, healthcare breaches also result in the highest average costs — $7.42 million per breach, according to the Cost of a Data Breach Report 2025 by IBM Security. 

According to the December 2024 Healthcare Data Breach Report by the HIPAA Journal, in 2025, the OCR conducted 22 healthcare data breach investigations and collected $12,841,796 in penalties and settlements. 

In 2024, the OCR’s largest civil penalty in the amount of $548,265 was issued to Children’s Hospital Colorado Health System following two data breaches. The first one, on July 11, 2017, occurred when a physician’s email account was accessed after the IT help desk disabled two-factor authentication (2FA) for the account. The second breach, between April 6 and 13, 2020, involved unauthorized access to three employees’ email accounts. Although those accounts were protected with 2FA, the safeguards were bypassed when employees mistakenly approved 2FA requests they had not made.

The HIPAA Journal defines the ten most common types of HIPAA violations that lead to financial penalties:

3 Real-life examples of non-compliance with HIPAA in 2025

Understanding HIPAA requirements is important in theory, but it’s also vital to know how violations occur in practice and realize the real consequences of violating HIPAA. Examples of healthcare entities that violated HIPAA and were penalized for it reveal the most common mistakes organizations make, the amount of penalties they face, and the lessons you can learn to avoid similar outcomes.

Below are three cases from 2025 where the OCR imposed penalties on covered entities for HIPAA violations:

Warby Parker, Inc.

On February 20, 2025, OCR announced a $1.5 million penalty against Warby Parker, the New York–based eyewear manufacturer and online retailer. The penalty was connected to an incident that occurred between September 25 and November 30, 2018, when unauthorized third parties gained access to Warby Parker customer accounts. The attackers used usernames and passwords that had been stolen from unrelated website breaches, taking advantage of customers who reused the same login credentials across platforms. The breach affected 197,986 individuals.

PIH Health

OCR announced a $600,000 settlement with PIH Health on April 23, 2025. The violations originated from a phishing attack that took place in June 2019 and compromised forty-five email accounts of PIH Health’s employees. As a result, the incident exposed unsecured electronic protected health information (ePHI) of 189,763 individuals.

BayCare Health System

On May 28, 2025, OCR issued an $800,000 settlement agreement with BayCare Health System, a Florida health care provider. In 2018, OCR received a complaint from a patient who reported being contacted by an unknown individual with photographs and a video of her medical records. The investigation revealed that the records had been accessed with credentials of a non-clinical former employee of a physician’s practice that shared BayCare’s electronic system to coordinate patient care.

Implementing risk analysis, risk management, access management, and activity monitoring within systems that store ePHI is complex. Yet these measures are a core HIPAA requirement. Failing to adopt them exposes you to fines and reputational harm, while compliance helps protect both your patients and your business.

There may be times when you’d prefer not to disclose a breach to avoid reputational damage. However, avoiding breach notifications only increases legal exposure and reputational harm.

These cases show how costly and damaging HIPAA violations can be for healthcare organizations. To avoid similar outcomes, it’s essential to understand the safeguards your healthcare entity can take to protect medical data and ensure ongoing compliance.

How to protect medical data and stay HIPAA-compliant

So what’s the best way to protect your data and prevent HIPAA violations?

HIPAA enforces three sets of safeguards that keep PHI from getting into the wrong hands:

Administrative safeguards

Administrative safeguards define a set of actions, procedures, and policies you need to implement within your organization. They include:

• Establishing a security management process
• Creating risk analysis, management, and mitigation procedures
• Implementing an insider threat protection program
• Appointing people responsible for handling data breaches
• Increasing security awareness
• Conducting a periodic review of implemented measures

At first, these requirements may seem like paper pushing. But in fact, administrative measures help to establish continuous security practices. They also define how your employees must act when they discover a data breach. When it happens, there’s not a moment to waste, and an agreed plan of action helps to save precious time.

Physical safeguards

Physical safeguards concentrate on securing physical access to PHI. Physical safeguards describe measures that should be implemented in offices and institutions that store hard copies of PHI. They also define policies for workstations:

• Workstation security. Workstations have to be protected from unauthorized access, both physically and digitally. You can choose any security measure you like to ensure the security of workstations, from controlling and limiting user access to storing critical data in a physical safe.
• Workstation use. Each workstation, whether in-house or remote (including those of third-party companies and subcontractors) must be protected with strong credentials, antivirus software, a firewall, and other cybersecurity measures.

Technical safeguards

Technical safeguards refer only to ePHI. This set of safeguards focuses on the following measures:

• Access control. The list of individuals (or job titles) with rights to read, write, or edit ePHI should be strictly limited. Establish the means to control the level of access for each user, both in-house and remote.
• Authentication. Make sure to verify that a person trying to access data has the right to do it.
• Audit control. Internal audits and incident investigations help you adjust your cybersecurity policies to meet new threats. Implement a tool that records any activities with ePHI, such as a monitoring system.

Managing Privileged Access with Syteca

How Syteca helps you stay HIPAA compliant

Syteca can help you comply with HIPAA’s technical safeguards by providing powerful privileged access management and user activity monitoring capabilities. The following functionality enables you to secure your inside perimeter and protect sensitive health information from cybersecurity threats:

• Privileged access control empowers your security team to provide granular access permissions to users, safeguard remote user access, and automatically identify and manage privileged accounts within your IT environment.
• Real-time user activity monitoring enables you to receive notifications about potential policy violations or cybersecurity threats and oversee user sessions live. Sensitive data masking can blur PHI and other personal information, making the monitoring process compliance-friendly.
• Endpoint access management helps you prevent unauthorized access to endpoints with multifactor authentication, one-time passwords, and manual login approval, as well as distinguish between the users of shared admin accounts with secondary authentication. 
• Password management allows you to secure login credentials for privileged and regular workforce accounts. Vault secrets to avoid exposure, automatically rotate them to prevent account compromise, and limit the use of secrets to one user at a time.
• User session recording lets you capture employees’ and third parties’ on-screen activity as video records indexed with rich metadata. Records can be searched through using multiple parameters, allowing you to trace any activity, establish its context, and determine the true intent behind users’ actions.
• User activity reporting enables you to visually represent data on security events and policy violations. Analyzing this data helps you investigate incidents and perfect your cybersecurity policies. Also, you can export data in a tamper-proof file for forensic activities.
• Incident response lets you configure rule-based alerts and automated responses to security violations and abnormal activities within your IT environment. With them, you can immediately detect and disrupt cybersecurity threats and prevent healthcare data breaches. 

Syteca is simple to deploy and manage, even for healthcare organizations with limited IT resources. You can also benefit from flexible pricing to match every organization’s needs.

Build a safer future for your patients’ health information

HIPAA is a strict but essential law designed to protect sensitive health information. Non-compliance usually means financial penalties, ongoing HIPAA violation fines for failing to correct issues within specified terms, and lasting damage to your organization’s reputation. 

Adopt Syteca as your HIPAA compliance solution and strengthen your healthcare entity’s compliance posture by monitoring user activity, managing access, overseeing third parties, and streamlining incident investigations. Built in accordance with NIST standards, Syteca helps ensure that your organization not only avoids penalties but also exercises robust health data protection.