[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR160.402]

[Page 707]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 160_GENERAL ADMINISTRATIVE REQUIREMENTS--Table of Contents
 
              Subpart D_Imposition of Civil Money Penalties
 
Sec. 160.402  Basis for a civil money penalty.

    (a) General rule. Subject to Sec. 160.410, the Secretary will 
impose a civil money penalty upon a covered entity if the Secretary 
determines that the covered entity has violated an administrative 
simplification provision.
    (b) Violation by more than one covered entity. (1) Except as 
provided in paragraph (b)(2) of this section, if the Secretary 
determines that more than one covered entity was responsible for a 
violation, the Secretary will impose a civil money penalty against each 
such covered entity.
    (2) A covered entity that is a member of an affiliated covered 
entity, in accordance with Sec. 164.105(b) of this subchapter, is 
jointly and severally liable for a civil money penalty for a violation 
of part 164 of this subchapter based on an act or omission of the 
affiliated covered entity, unless it is established that another member 
of the affiliated covered entity was responsible for the violation.
    (c) Violation attributed to a covered entity. A covered entity is 
liable, in accordance with the federal common law of agency, for a civil 
money penalty for a violation based on the act or omission of any agent 
of the covered entity, including a workforce member, acting within the 
scope of the agency, unless--
    (1) The agent is a business associate of the covered entity;
    (2) The covered entity has complied, with respect to such business 
associate, with the applicable requirements of Sec. Sec. 164.308(b) and 
164.502(e) of this subchapter; and
    (3) The covered entity did not--
    (i) Know of a pattern of activity or practice of the business 
associate, and
    (ii) Fail to act as required by Sec. Sec. 164.314(a)(1)(ii) and 
164.504(e)(1)(ii) of this subchapter, as applicable.