Data Privacy & Security

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 Insurance Portability and Accountability Act and its associated regulations (“HIPAA”) and New Jersey state law requires the Medical Group to pay $417,816 and implement a corrective action plan, including a comprehensive and thorough risk assessment, to improve its data privacy and security practices.

The breach occurred when its medical transcription company, an unrelated subcontractor with whom the Medical Group maintained a HIPAA business associate agreement, updated a file transfer protocol (“FTP”) site used for medical information storage.  In the process of implementing the update, the medical transcription company mistakenly removed password protection and allowed sensitive patient records to be accessed on the open internet.  Without the password protection in place, patient records could be accessed through Google searches for terms contained in the records themselves, as a web crawler from Google crawled and indexed the FTP site using an algorithmic process.

A patient discovered the breach when she found portions of her own medical records through a Google search.  The Medical Group then launched an internal investigation and notified state and federal law enforcement authorities.

The State of New Jersey has made it clear that it holds the Medical Group responsible for the breach, even though it was caused by a subcontractor.  The Acting Director of the New Jersey Division of Consumer Affairs stated:

Although it was a third-party vendor that caused this data breach, [Medical Group] is being held accountable because it was their patient data and it was their responsibility to protect it….This enforcement action sends a message to medical practices that having a good handle on your own cybersecurity is not enough.  You must fully vet your vendors for their security as well.

It is no longer sufficient, if it ever was, for a covered entity (or upstream business associate) to rely solely on “satisfactory assurances” obtained pursuant to a written HIPAA business associate agreement that the business associate (or downstream business associate) will appropriately safeguard the health information shared with it.  This settlement clearly signals the need to vet a new vendor’s security practices and to continue ongoing vendor management and oversight during the course of the business relationship.

Venable’s healthcare practice group is continuously monitoring these issues and tracking the latest developments.  Please contact your Venable attorneys with any questions.

Under the HIPAA Breach Notification Rule, Covered Entities must report to the Secretary of the U.S. Department of Health and Human Services (HHS) breaches of unsecured protected health information  affecting fewer than 500 individuals (“small breaches”) no later than 60 days after the end of the calendar year in which the breaches were discovered. This year’s small breach reporting deadline is Thursday, March 1, 2018. Covered Entities must submit their reports of small breaches discovered in 2017 electronically on the HHS Office for Civil Rights website (located here) if they have not done so already.

Recent enforcement actions highlight the importance of the timely reporting of small breaches to HHS and impacted individuals. For example, in a resolution agreement announced in 2017, a large healthcare system agreed to settle potential violations of the HIPAA Breach Notification Rule by paying $475,000 and implementing a two-year corrective action plan following one large breach and several small breaches. Moreover, earlier this month, a large kidney dialysis provider entered into a $3.5 million resolution agreement and a two-year corrective action plan with HHS to settle potential HIPAA violations stemming from five separate small breaches. (For more information regarding the settlement with the large dialysis provider, click here.)

Covered Entities should take note of the significance HHS places on timely breach reporting—even for breaches that are “small.”

Late last week, the U.S. Department of Health and Human Services Office for Civil Rights (OCR) announced a $3.5 million settlement with a large provider of kidney dialysis services (the “Provider”) for multiple violations of the Health Insurance Portability and Accountability Act and its associated regulations (HIPAA).  In early 2013, the Provider filed five separate breach reports for incidents that occurred in 2012 and involved several of its facilities.  These breaches involved, among other things, theft of desktop computers from a medical office, theft of a USB drive from a workforce member’s car, loss of a computer hard drive, and theft of a laptop from a parked car.

As part of its settlement with OCR, the Provider entered into a corrective action plan (CAP) that requires the company to improve its policies and procedures for the protection of patient health information.  The CAP specifically requires the Provider to conduct a thorough, system-wide risk analysis of potential risks to and vulnerabilities of the confidentiality, integrity, and availability of its ePHI; review and revise its policies and procedures, including those concerning device and media controls and facility access controls; and revise and enhance its health privacy training program.

This settlement once again emphasizes the importance of a comprehensive, up-to-date risk analysis.  It also highlights the fact that mobile device privacy and security continue to be important issues for a range of healthcare providers.  Moreover, it is a reminder that OCR can, and does, take interest in smaller breaches.  Each of the five reported breaches affected fewer than 500 individuals.  Contact a member of Venable’s health law team to discuss how your organization can stay ahead of the curve in today’s enforcement environment.

Please find the OCR press release here.

encrypted dataAfter roughly seven months since the last announced settlement, the Office for Civil Rights (OCR) of the U.S. Department of Health and Human services has announced a settlement of alleged violations of the Health Insurance Portability and Accountability Act (HIPAA). The first OCR settlement of 2018 concerns a HIPAA security breach of electronic data. At the same time, a recently announced settlement of a private class action against Aetna highlights the importance of HIPAA privacy and the continuing relevance of paper records.

The settlement concerns 21st Century Oncology, Inc. (21CO), a large oncology practice with treatment centers in 17 states and overseas. In 2015, 21CO was notified by the Federal Bureau of Investigation that its patient records had been compromised and were being sold illegally. In total, the records of 2,213,597 patients were affected. The information breached included names, social security numbers, diagnoses, treatments, and insurance information.

Continue Reading The First Health Privacy Settlements of 2018 Highlight the Ongoing Importance of HIPAA Privacy and Security

Last week, the U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) released new guidance related to the sharing of mental health, behavioral health, and substance abuse disorder treatment information. The guidance focuses on how such information may be shared with the patient’s family and other caregivers under the Health Insurance Portability and Accountability Act (HIPAA) and 42 C.F.R. Part 2 (the regulations governing the use and disclosure of substance abuse treatment records) in various scenarios.

The guidance includes both fact sheets and decision-trees and highlights several scenarios related to caregiver relationships, such as parents of teenage or adult children with mental health or substance abuse issues, parents serving as “personal representatives,” when parents can access minor children’s mental health information, and how to access treatment information about a loved one. The guidance additionally touches on opioid addiction, which is a key focus under the Trump Administration. Within its corresponding press release, HHS reported that it will work to develop model training programs and materials for healthcare providers, patients, and their families pertaining to permitted uses and disclosures of mental and behavioral health information.

Venable’s Healthcare team has significant experience in health information privacy and security and will address any additional questions pertaining to the above. Please contact any of the authors if you have any questions.

No two health care companies are alike, but many face similar challenges when managing their data risk. Many of these challenges arise due to the competing desires with which every modern organization now struggles—one between innovation and growth on the one hand and compliance and legal risk on the other.

Specifically, the following five issues are top of mind:

  1. The tension between data growth and analytics and data minimization;
  2. Handling connected devices and mobile apps;
  3. Creating effective cross-functional privacy and security teams;
  4. The data implications of acquisitions; and
  5. Effective and tiered vendor management.

We discuss these issues and offer practical guidance on each.

Continue Reading Top Five Privacy and Data Security Issues Facing Healthcare Companies