Baylor University Medical Center Proceedings April 2014, Volume 27, Number 2 | Page 91

What are the penalties involved for breaking the law? Four
categories are defined reflecting the increased severity of any
malfeasance: 1) violations in which the covered entity did not
know and, with reasonable diligence, would not have known
a violation had occurred; 2) violations due to reasonable cause
and not to willful neglect; 3) violations due to willful neglect but
corrected in a timely manner; and 4) violations due to willful
neglect and not corrected in a timely manner. At the low end,
each violation can be met with a fine of $100 to $50,000, with
$1.5 million for identical violations within a calendar year. For
the most severe category, a minimal penalty of $50,000 can
be levied with an annual maximum of $1.5 million for repeat
offenses. The severity of the penalty will be determined by the
nature of the violation and the resulting harm caused. Compared to 1996, the potential financial penalties are appreciably
higher, but prison time is no longer mentioned.
Presumably the income generated by violations will meet the
costs of conducting the program. Such penalties, even before
the 2013 law went into effect, have been considerable. Brach/
Eichler, a New Jersey legal firm that is involved in such matters,
keeps a tab on such penalties and includes many physicians on
their mailing list. Before the new law took effect, they noted a
$1.2 million penalty against Affinity Health Plans and a settlement with WellPoint, Inc. for $1.7 million as examples of recent
actions by the government.
In the end, this legislative voyage of discovery was pretty
disappointing. I was left pondering another Russian-related
metaphor, that uttered by Winston Churchill regarding his view
of the Soviets: “a riddle wrapped in a mystery inside an enigma.”
Most laws passed by Congress are flawed to some extent but,
once passed, they seem to develop a life of their own, persisting
within the body politic. Of course there are some really bad
ones, such as that ushering in prohibition, which was passed in
1919 and repealed in 1933. However, for most laws passed by

April 2014

Congress during the last couple of hundred years, repeal will not
happen. There is always some small but powerful constituency
that benefits even from a bad law, and congressional inertia can
be counted upon to keep it on the books.
James Madison, the father of the Constitution, warned us,
“It will be of little avail to the people that the laws are made
by men of their own choice if the laws be so voluminous that
they cannot be read or so incoherent that they cannot be understood.” Despite his concern at the beginning of the Republic,
we continue to witness legislative behemoths like HIPAA and
its reincarnations bearing down upon us with little hope for
revision or repeal.
Despite the worthy portions of these laws, their emphasis
on punishment for breaches only serves to inhibit the flow of
information necessary for efficient medical management and
erode the bonds of trust so essential to a proper doctor-patient
relationship. Stuart Graves, in writing about con