State HIPAA Fines Add to Growing 2020 Fine Totals

October 23, 2020

The Office for Civil Rights (OCR) has left practices taking hit after hit after hit when it comes to HIPAA fines this year, but two recent multi-state HIPAA fines have added just as many $$$ to this year’s enforcement totals. While the OCR certainly makes headlines, state enforcement and state-specific HIPAA regulations are just as important to adhere to as federal laws. In fact, depending on the incident and patients affected, many states require their attorney general be notified of a breach and have the option to pursue the HIPAA violation in addition to the investigation at the federal level. 

Driving the point home for us, two healthcare organizations found themselves emptying their pockets for a second time in the past few weeks – agreeing to multi-million dollar settlements with multiple states for HIPAA violations already settled with the OCR. These fines are the latest in over $66 million collected by states as part of HIPAA enforcement actions. 

Anthem, Inc. 

The health insurance provider Anthem went one round with the HIPAA police in 2018, and suffered their first loss against the Office for Civil Rights (OCR) with a $16 million settlement relating to a breach that exposed almost 79 million patients records back in 2014. The results of round 2 have just come in, and it’s a K.O. – Anthem, Inc. has just settled with 43-states and California relating to the same HIPAA breach, with a whopping $48.2 million in total fines. 

If you aren’t able to recite every HIPAA fine from memory (it’s ok, we’re probably the only ones that would win that trivia contest) the original incident resulted from a cyberattack that exposed almost 79 million individuals records. OCR investigation revealed Anthem was missing an enterprise-wide security risk analysis, various technical safeguards, and the proper response to suspected or known security incidents – resulting in the first place trophy for largest HIPAA settlement ever.

Community Health System (CHS)

Just last month, the OCR settled a $2.3 million fine with a business associate, Community Health System (CHS), who exposed 6.1 million patients records as a result of another 2014 cyber attack. While most of us wish we could fast forward to 2021 and escape 2020, we’re sure CHS probably feels that way more than anyone after the announcement of another $5 million added to their tab in a 28-state settlement of the same incident.

These recent fines are starting to feel like deja-vu, so here’s more on the announcement to help jog your memory. Not surprisingly, in their investigation the OCR found CHS was missing a security risk analysis, had no proper security incident procedures in place, and failed to implement necessary access controls.  

While the breaches themselves may be old news, the latest settlements are a fresh reminder of how healthcare practices must take notice of state HIPAA enforcement. Both state fines mentioned above, though split among all the states listed in each settlement, actually totalled more than the amount the OCR fined each organization. 

Having a complete HIPAA compliance program with necessary safeguards in place will not only reduce your risk of being targeted by a hacker, as was the case in both these incidents, but will also keep your chances of federal and state-level fines to a minimum. Federal HIPAA requirements certainly put enough on your plate, but having a HIPAA partner that can provide all your state-specific HIPAA requirements for you makes complying that much easier – and helps avoid costly state audits. 

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What OSF Healthcare’s Ransomware Fine Teaches Every Practice About SRAs

August 5, 2026 No comments yet

August 5, 2026 The latest HIPAA fine is another clear reminder that ransomware attacks are, unfortunately, here to stay in the healthcare industry. A settlement involving the OSF Healthcare System was recently announced by the Office for Civil Rights (OCR). As an enterprise healthcare provider in the midwest, the organization serves 174 locations, including 16 hospitals – a prime target for a ransomware attack.    So, what happened?  In April 2021, OSF discovered that they joined the unlucky club of ransomware victims when a malicious actor deployed Nephilim, a ransomware strain made to target larger organizations. Once the ransomware infected OSF systems, the hacker demanded payment or patient Protected Health Information (PHI) would be leaked online. In this attack, sensitive information like financial account information, driver’s license numbers, medical record numbers, and more, were all exposed. Over 53,000 patient records were exposed in this attack.  When ransomware attacks in healthcare have soared 278% in recent years, it’s more of a when then an if your organization doesn’t have the right safeguards in place.  While the breach was discovered in April, OSF healthcare reported the breach to the OCR in October. The OCR took it from there, digging into what precautions (or lack thereof) let this happen.  What did the OCR discover? If you’ve read any of our other fine breakdowns, you already know where this is going: another missing Security Risk Analysis (SRA).  The SRA is a required document every HIPAA-regulated entity (ie: every practice and their Business Associates that handle patient information) needs to complete. The SRA is a thorough review of the physical, technical, and administrative safeguards in place to prevent PHI ending up in the wrong hands. While the OCR didn’t specify exactly how the ransomware got into OSF’s system, a technical safeguard vulnerability was very likely the entry point. A proactive SRA could have flagged that gap before it turned into a major breach. In addition to missing this required documentation, OSF also took too long to report the breach to the OCR and notify affected patients. This is a direct violation of the Breach Notification Rule, which requires organizations to notify patients within 60 days of a discovered breach. Moreover, since the breach impacted more than 500 patients, OSF was also required to report this breach to the OCR within 2 months as well. Time is of the essence in every component of a breach, from securing systems to ensuring affected parties are aware to protect themselves and an over five month delay was unacceptable in the eyes of the OCR.    What was the result?  OSF’s settlement tops the list as the largest fine of the year, coming in at $552,250, plus government monitoring for the next two years.  It’s very important to note that this breach occurred in 2021, meaning that over five years were spent from the initial breach, to investigations, to the public press releases. Also, the average cost of a healthcare breach is over 7 million dollars –  from implementing secure systems, notifying patients, legal fees, and more. The Takeaway While the settlement payment and Corrective Action Plan (CAP) are just the cherries on top, this experience was a tremendous cost of time, money, and resources, highlighting the importance of making sure everything is secure before a situation occurs.  So, when was the last time you looked at your SRA? It’s time to seriously analyze your current compliance posture. Ransomware groups don’t check whether you’re a small dental office or a 16-hospital health system before they attack, they check whether the door was left open. Time and again, OCR’s findings come back to the same root cause: organizations can’t secure what they haven’t even identified as a problem. Looking to review your current compliance standings? Meet with our team of experts for a complimentary educational consultation. 

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Spencer Gifts HIPAA Settlement: Ransomware, Risk Analysis, and What Comes Next

June 19, 2026 No comments yet

June 19, 2026   Quick Guide:  The Office for Civil Rights issued a major fine towards Spencer Gifts benefits plan. This fine reinforces that all HIPAA-regulated entities must have a thorough compliance program.    The Stats You Need to Know 76%: The percentage of large healthcare breaches now caused by hacking/IT incidents. $450,000: Financial settlement of this enforcement. 10,023: The number of individuals were impacted in this breach.  264%: The increase in ransomware-related breaches reported to the OCR since 2018.   When you think about Spencer’s, you likely picture the staple mall store with pop culture novelty gifts, not the latest HIPAA settlement enforcement headline.  Spencer Gifts LLC Flexible Benefits and Welfare Benefit Plans, or their employee benefits plan, reached a settlement with the Office for Civil Rights for $450,000 and a 2 year Corrective Action Plan (CAP).  This fine is a reminder that Covered Entities include all parties that create and utilize patient data, including health care plans. While they might not see patients traditionally, they still are responsible for keeping Protected Health Information (PHI) secure.    What Happened?   In response to employee complaints regarding access to their employee benefits portal, Spencer Gifts Health Plan discovered their systems were infiltrated with ransomware in November 2021. Malicious actors encrypted over 10,000 individuals’ PHI and demanded a ransom. The exposed data included names, phone numbers, social security numbers, and more, putting employees at risk.  The breach was reported in January 2022. After years of investigation, it was settled that the plan failed to meet basic HIPAA Security Rule requirements proactively.    The Compliance Gaps A common misconception is that an organization faces a financial penalty due to a breach. While the breach serves as the catalyst for the investigation, the OCR is looking to see if an organization has a thorough compliance program in place and made a genuine effort to protect patient data.  For instance, the health plan did not complete a Security Risk Analysis (SRA). This required assessment identifies all technical, administrative, and physical safeguards (and vulnerabilities) across your organization. By completing this document, your organization can address concerns before they become an issue. There’s no way to know where risks are unless they are properly reviewed.  Additionally, the plan did not have sufficient policies and procedures, nor trained staff adequately. Without sufficient policies and training, staff are left without the tools to recognize and respond to HIPAA threats before they escalate. As a result, Spencer Gifts now faces $450,000 in penalties and two years of government monitoring to ensure those missing requirements are finally implemented. And that figure doesn’t account for the years of investigation, legal fees, breach notification costs, and operational disruption that preceded the settlement.   The Biggest Takeaway This case isn’t only a lesson for retail organizations’ health plans, but it’s a warning for every HIPAA-regulated entity. The OCR can and will investigate any organization exposed for failing to meet HIPAA requirements, including small medical practices To be prepared before a cyberattack occurs, make sure your organization has: A completed and current Security Risk Analysis. A trained workforce that knows how to handle PHI Accessible policies and procedures staff can actually reference. An up-to-date compliance program.  Ready to strengthen your compliance program? Schedule a free educational consultation with our team today.

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OCR Ransomware Settlements: 4 Massive HIPAA Fines from April 2026 & How to Avoid Them

May 4, 2026 No comments yet

May 4, 2026   Quick Guide:  The Office for Civil Rights (OCR) just issued a massive wake-up call, announcing four simultaneous settlements totaling $1,165,000. The Stats You Need to Know 76%: The percentage of large healthcare breaches now caused by hacking/IT incidents. 427,000+: Total number of patients impacted across these four recent settlements. 264%: The increase in ransomware-related breaches reported to the OCR since 2018. The Office for Civil Rights (OCR) just announced a flurry of investigation settlements. At the root of the four that were announced: ransomware. Ransomware attacks continue to target healthcare facilities. As of last year, the OCR discovered that 76% of large breaches are due to hacking and IT shortcomings. Unfortunately, healthcare information is a goldmine for hackers, exposing sensitive data that can lead to identity theft, financial fraud, and compromised patient care. Breakdown & Lessons Learned Regional Women’s Health Group (Axia) The first settlement was regarding the Regional Women’s Health Group (Axia), an OBGYN network across five states. In this case, the organization submitted a breach report following a cyberattack that exposed over 37,000 patients. The settlement resulted in a $320,000 fine and a 2-year Corrective Action Plan (CAP). The Lesson: The OCR didn’t just fine them for being hacked; they reached a settlement because the healthcare organization failed to conduct a “thorough and accurate” Security Risk Analysis (SRA). If you don’t know where your vulnerabilities are, you can’t patch them. Unfortunately, hackers counted on this negligence and exploited it.  Assured Imaging This was the largest of the four fines, affecting a staggering 244,813 individuals. When a ransomware infection hit their servers, Assured Imaging, a medical imaging enterprise, reported a breach to the OCR. After a long investigation (the initial cyberattack occurred in 2020), and resulted in a $375,000 settlement and a 2-year CAP.  The Lesson: Beyond the initial ransomware attack, it was discovered that Assured had never completed an SRA. Additionally, the organization did not notify patients within 60 days of discovery of the breach. This is a direct violation of the Breach Notification Rule, which aims to allow patients to take control and mitigate risks as quickly as possible.  Consociate Health Consciate Health is the only Business Associate (BA) fine in the four. BAs continue to be under the OCR’s microscope, such as potentially needing to follow stricter requirements when handling patient data. Their breach started with a phishing attack that eventually led to the encryption of systems holding data for over 136,000 people. The BA discovered the ransomware six months after the initial phishing attack. Upon the OCR’s further investigation, the SRA was found to be insufficient. The organization paid a $225,000 settlement and entered into a 2-year CAP.  The Lesson: Human error (phishing) is the most common entry point for ransomware. Constant employee training is just as important as a strong firewall. Additionally, just because a BA doesn’t directly work with patients doesn’t mean it isn’t their responsibility to keep patient data secure.  SG Health Plan Even employee benefit plans are regulated under the Health Insurance Portability and Accountability Act (HIPAA). SG Health Plan, associated with a Connecticut energy provider, reported that the data of 9,316 members were exposed following a ransomware attack. It was discovered that the organization did not complete an extensive SRA. The benefit plan entered a settlement with the OCR for $245,000 and a 2-year CAP.  The Lesson: This settlement highlights that HIPAA applies to corporate health plans just as much as it does to traditional healthcare providers. Additionally, every organization that handles Protected Health Information (PHI) must complete an SRA.  The Bottom Line The OCR isn’t fining practices for ransomware attacks, but for being ill-prepared.  However, it is easier said than done to ensure your organization is secure in protecting patient data and complying with HIPAA.  Proactively implementing the HIPAA Security Rule is your opportunity to mitigate the impacts of a cyberattack. Waiting until the ransom note appears on your screen is a million-dollar mistake. Want to see what you might be missing?  Run a 5-Minute HIPAA Gap Assessment and protect your practice today!