State Attorneys General can also impose financial penalties on HIPAA-covered entities and business associates for violations of the HIPAA Rules. Willful neglect (not corrected within 30 days This discrepancy is expected to be addressed through further rulemaking to make the new penalty structure permanent. It did not change the maximum penalty for a violation, which means that the maximum penalty for a tier 1 violation is higher than the annual penalty cap, but for as long as the notice of enforcement discretion is in effect, the maximum penalty per year applies. The Notice of Enforcement Discretion only applied a cap to each violation tier. Taking this into account, the figures OCR is working with are detailed in the table below and will apply indefinitely, until the next increase to account for inflation. Under the Notice of Enforcement Discretion, the maximum annual penalty for a violation will be capped at $25,000 for tier 1, $100,000 for tier 2, and $250,000 for tier 3. In April 2019, OCR reexamined the HITECH Act and determined the language had been misinterpreted and issued a Notice of Enforcement Discretion stating the maximum annual penalties in each penalty tier would be changed to reflect the seriousness of the violations. The last update to the HIPAA violation penalty amounts applies to cases assessed on or after October 6, 2023, as detailed in the table below: Penalty Tier The above penalties were implemented as demanded by the HITECH Act of 2009 and are increased annually in line with inflation. The maximum financial penalty, for willful neglect of the HIPAA Rules, is $2,067,813 per violation category, per year. The figures listed above represent the fines that can be imposed by OCR.
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