Health care regulations exist to help protect private information and to ensure proper records are maintained. 21 CFR part 11 and Health Insurance Portability and Accountability Act (HIPAA) are two examples of such regulations. The Food and Drug Administration (FDA) requires records to be kept and FDA regulation 21 CFR part 11 allows them to be created and maintained electronically. When the electronic records and electronic signatures are in keeping with the FDA requirements laid out in 21 CFR part 11, they are considered equivalent to, and as reliable and trustworthy as, paper records and signatures. Electronic documentation and record keeping are more cost effective than traditional paper methods and can expedite the FDA approval process.
HIPAA creates a national standard for protecting a patient's confidential medical information, prevents group health plans from denying coverage to someone with a preexisting condition, and governs how health care information can be used and distributed. The penalties for noncompliance with HIPAA can be severe with civil fines of up to $50,000 per incident and criminal penalties of up to $250,000 and 10 years in jail. While the punishment is harsher is the noncompliance was purposeful, accidental noncompliance is penalized as well.