This is false.
Source: Works for a company that has mandatory HIPAA training for every employee every six months.
citation please. Here's mine:
> Criminal penalties
>
> Covered entities and specified individuals, as explained below, who "knowingly" obtain or disclose individually identifiable health information, in violation of the Administrative Simplification Regulations, face a fine of up to $50,000, as well as imprisonment up to 1 year.
>
> Offenses committed under false pretenses allow penalties to be increased to a $100,000 fine, with up to 5 years in prison.
>
> Finally, offenses committed with the intent to sell, transfer or use individually identifiable health information for commercial advantage, personal gain or malicious harm permit fines of $250,000 and imprisonment up to 10 years.
Source: American Medical Association
https://www.ama-assn.org/practice-management/hipaa/hipaa-vio...
To me that trumps a non-lawyer’s interpretation of a non-legal web site.
That they have a different company risk profile doesn't necessarily change the facts at hand. And, TBH, they don't have to tell you the truth if it helps achieve their immediate goals. (They can tell you you'd be personally and criminally liable. It might make you do what they want better. It might also not be true.) Or it may all be in good faith. But what you describe doesn't square with anything I've ever worked with, at multiple clients and employers.
My guess as to why the draconian position is more about the internal process. You have to identify and disclose breaches in a timely way; if you don’t the company is at risk.
From HHS summary of the rules:
(See: https://www.hhs.gov/hipaa/for-professionals/privacy/laws-reg... ) (it’s also laid out in the regulation which I don’t have time to find.)
“Criminal Penalties. A person who knowingly obtains or discloses individually identifiable health information in violation of the Privacy Rule may face a criminal penalty of up to $50,000 and up to one-year imprisonment. The criminal penalties increase to $100,000 and up to five years imprisonment if the wrongful conduct involves false pretenses, and to $250,000 and up to 10 years imprisonment if the wrongful conduct involves the intent to sell, transfer, or use identifiable health information for commercial advantage, personal gain or malicious harm.”
And your "nightmare" scenario of (civil) liability flowing from programming bugs already exists in the investment world and it hasn't come apart at the seams. Google Axa Rosenberg. A coding error in their trading algorithm went undiscovered for two years. Negligent for sure, but not why the SEC went after them. The problem was they didn't promptly disclose the error to investors and they didn't promptly correct it. Algorithmic trading firms should have mechanisms to catch errors, correct errors, and disclose those errors to investors. And after seeing Axa Rosenberg's $250 million fine and Rosenberg's lifetime ban from the industry guess what they all implemented?