Data Breach

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The Department of Health and Human Services Office for Civil Rights (OCR) has shown once again that it is willing to enforce HIPAA against business associates, as seen in a recent settlement. The settlement highlights the importance of thorough risk analysis conducted by business associates and covered entities, as required by the HIPAA Security Rule, and serves as an indication that OCR remains ready to exercise its authority to enforce HIPAA’s requirements for business associates. Following the settlement, OCR released a fact sheet that provides guidance for HIPAA compliance and direct liability for business associates.

Recent Settlement

On May 23, 2019, OCR announced a settlement with a business associate relating to a 2015 data breach. The business associate provides software to healthcare providers that allows patients to access and manage their electronic health records through a patient portal. The company has agreed to pay OCR $100,000 to settle potential violations of HIPAA.

In July 2015, the company filed a breach report with OCR following discovery that hackers had used a compromised user ID and password to access the electronic protected health information (ePHI) of approximately 3.5 million individuals. The hackers gained access to a server containing names, addresses, usernames, passwords, and health insurance information. An investigation by OCR revealed that the company did not conduct a comprehensive risk analysis prior to the breach. In addition to a $100,000 settlement with OCR, the company will also undergo a two-year corrective action plan that includes a complete, enterprise-wide risk analysis. As part of the corrective action plan, the company has agreed to:

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After a relatively quiet start to 2018, the Office for Civil Rights within the U.S. Department of Health and Human Services (OCR) has had an incredibly busy week, with the announcement of a blockbuster settlement, an updated security risk assessment tool, and new priorities for the agency.

Anthem Settlement

In a record-breaking settlement, Anthem, one of the nation’s largest health benefits companies, has agreed to pay OCR $16 million and take substantial corrective actions to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) after self-reporting a series of cyberattacks that resulted in the largest health information data breach in U.S. history. Notably, the breach included electronic protected health information (ePHI) that Anthem maintained as a business associate acting on behalf of its affiliated health plans, making this week’s enforcement action by OCR one of the few involving a business associate.

In March of 2015, Anthem filed a breach report with OCR informing the agency of its discovery that cyberattackers had gained access to its information and technology (IT) systems through an undetected continuous and targeted cyberattack for the alleged purpose of extracting data. After filing the report, Anthem later discovered that the cyberattackers had infiltrated its IT systems through a phishing scam sent to one of its subsidiaries that was initiated by at least one employee responding to a malicious e-mail.

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A U.S. Department of Health and Human Services (“HHS”) administrative law judge (“ALJ”) ordered the University of Texas MD Anderson Cancer Center (“MD Anderson”) last month to pay a $4,348,000 civil monetary penalty because of violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).  While the vast majority of enforcement actions taken…

On April 4, 2018, the New Jersey Attorney General’s office announced a settlement with a large network of physicians affiliated with medical and surgical practices throughout New Jersey (the “Medical Group”) for health privacy and security violations related to a breach of more than 1,650 patient records.  The settlement for violations of the federal Health…