What occurs when a covered entity fails to comply with HIPAA?

When a covered entity fails to comply with HIPAA, it may incur fines or penalties, making this choice the correct one. The Health Insurance Portability and Accountability Act (HIPAA) establishes strict regulations regarding the protection of health information. Violations of these regulations can lead to various consequences, including financial penalties. These penalties can vary significantly depending on the severity of the violation, ranging from the level of negligence to willful neglect.

The enforcement of HIPAA is managed by the Office for Civil Rights (OCR), which has the authority to investigate complaints and conduct compliance reviews. If a covered entity is found to be non-compliant, they may face civil and, in some cases, criminal penalties, depending on the nature of the violation. This framework ensures that the privacy and security of health information are taken seriously, encouraging compliance among healthcare providers, insurers, and other entities that handle patient data.

The other options suggest scenarios that do not align with the consequences of non-compliance. For example, stating that there are no consequences fails to recognize the legal and financial repercussions. Similarly, the claim that a covered entity is automatically exempt from the law or eligible for federal funding in the event of a violation is inaccurate and does not reflect the framework established by HIPAA