Civil Money Penalty

Cignet Health Fined a $4.3M Civil Money Penalty for HIPAA Privacy Rule Violations 

The U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) has issued a  Notice of Final Determination finding that a covered entity, Cignet Health of Prince George’s County, MD (Cignet), violated the Privacy Rule of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  HHS has imposed a civil money penalty (CMP) of $4.3 million for the violations, representing the first CMP issued by the Department for violations of the HIPAA Privacy Rule. The CMP is based on the violation categories and increased penalty amounts authorized by Section 13410(d) of the Health Information Technology for Economic and Clinical Health (HITECH) Act.

“Today the message is loud and clear:  HHS is serious about enforcing individual rights guaranteed by the HIPAA Privacy Rule and ensuring provider cooperation with our enforcement efforts,” said OCR Director Georgina Verdugo.

In a Notice of Proposed Determination issued October 20, 2010 (NPD), OCR found that Cignet violated 41 patients’ rights by denying them access to their medical records. These patients, each of whom made a request to obtain their record between September 2008 and October 2009, individually filed complaints with OCR initiating investigations of each complaint. The HIPAA Privacy Rule requires that a covered entity provide a patient with a copy of their medical records within 30 (and no later than 60) days of the patient’s request. The CMP for these violations is $1.3 million.    

During the investigations, Cignet refused to respond to OCR’s repeated demands to produce the records.  Additionally, Cignet failed to cooperate with OCR’s investigations of the complaints, including failure to produce the records in response to OCR’s subpoena.  OCR filed a petition to enforce its subpoena in United States District Court and obtained default judgment against Cignet on March 30, 2010.  On April 7, 2010, Cignet produced the medical records to OCR, but otherwise made no efforts to resolve the complaints through informal means. 

Covered entities are required under law to cooperate with the Department’s investigations. OCR found that Cignet’s failure to cooperate with OCR’s investigations was due to willful neglect.  The CMP for these violations is $3 million.

“Covered entities and business associates must uphold their responsibility to provide patients with access to their medical records, and seriously consider their compliance with all of HIPAA’s requirements,” said Director Verdugo. “The U.S. Department of Health and Human Services will continue to investigate and take action against those organizations that knowingly disregard their obligations under these rules.”

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