California's Lucile Packard Children's Hospital has appealed a US$250,000 (AU$270,000) fine for tardily reporting a data breach to the relevant authority.
The breach occurred after a laptop was believed to have been stolen from the hospital, which threatened to expose 532 patients' details, it reported in a statement late last week.
Due to its reporting delay, the California Department of Public Health (CDPH) had slapped the hospital with a hefty fine.
The hospital defended its belated alert to the department on the grounds that it was investigating with police what had happened to the computer.
After determining that it could not retrieve the device, the hospital then informed the department, it said.
The hospital said that a now-former employee had removed the computer from the hospital premises, adding that it had filed theft charges against the person.
Packard Children's chief information officer Ed Kopetsky said the hospital used "very sophisticated tools" to investigate missing computers.
"We are able to detect if the missing computer connects to a network that has access to the internet and we've been monitoring this activity regularly to determine if this computer has been online anywhere. It has not," he said.