Final answer:
c. Sanction Policy.
The hospital has most likely not complied with the Sanction Policy, as Dr. Watson's repeated misuse of passwords is ignored, and there are no enforced consequences.
Step-by-step explanation:
The hospital in the scenario provided most likely has not complied with a Sanction Policy. A Sanction Policy is a component of HIPAA compliance that outlines the consequences staff members face if they fail to adhere to security policies and procedures, especially when it comes to protecting patient information. The fact that Dr. Watson frequently fails to remember his password and uses other staff members' passwords without consequences, combined with the security officer's lack of action due to Dr. Watson's position, indicates the hospital is not enforcing a Sanction Policy. This is a violation of standard security practices, as individual user authentication is a critical aspect of safeguarding electronic Protected Health Information (ePHI).