What action is required if a breach of PHI occurs?

When a breach of Protected Health Information (PHI) occurs, the covered entity is required to notify affected individuals. This obligation is rooted in the HIPAA Privacy Rule, which emphasizes the importance of transparency and the rights of individuals regarding their health information. Notification allows affected individuals to take steps to protect themselves from potential harms, such as identity theft or unauthorized access to their sensitive information.

In addition to notifying the individuals, covered entities must also assess the breach's scope and severity and may have further responsibilities to report the incident to federal authorities and take corrective actions. However, informing the affected individuals is a fundamental requirement aimed at ensuring their awareness and ability to respond accordingly.

The other choices do not align with HIPAA regulations, as ignoring a breach can exacerbate risks and lead to further violations, closing a facility is not a standard response for a breach, and only informing federal authorities neglects the essential need to inform those directly affected.