Cignet faces $4.3M fine for HIPAA violations

The U.S. Department of Health and Human Services (HHS) has imposed a $4.3 million fine on Cignet Health for violating the HIPAA Privacy Rule, making this the first-ever civil money penalty issued for a HIPAA Privacy Rule violation, the HHS announced.

The HHS Office for Civil Rights (OCR) has found that Cignet violated 41 patients' rights by denying them access to their medical records when requested between September 2008 and October 2009, according to the HHS.

These patients 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 civil money penalty for these violations is $1.3 million.

During the investigations, Cignet refused to respond to OCR's demands to produce the records, according to the HHS. Additionally, Cignet failed to cooperate with OCR's investigations of the complaints and produce the records in response to OCR's subpoena.

OCR filed a petition to enforce its subpoena in U.S. district court and obtained a 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, the HHS said.

OCR also found that Cignet failed to cooperate with OCR's investigations on a continuing daily basis from March 17, 2009, to April 7, 2010, and that the failure to cooperate was due to Cignet's willful neglect to comply with the privacy rule. Covered entities are required under law to cooperate with the department's investigations. The civil money penalty 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 adhere closely to all of HIPAA's requirements," OCR Director Georgina Verdugo said. "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."