United States: Omnibus HIPAA Rule, Including Significant Breach Notification Rule Changes, Released by HHS

Last Updated: January 24 2013
Article by Stephen L. Page and Carol Brass

The long-awaited final rule modifying the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules (the Rule) was released on January 17, 2013 by the Department of Health and Human Services (HHS). The Rule goes into effect on March 26, 2013, after which covered entities and business associates have until September 22, 2013 to transition to full compliance with its new requirements.

One of the most significant changes to the Breach Notification Rule relates to the replacement of the "harm threshold" standard with the new "low probability" standard with respect to notifications for breaches of patient information. This standard, which is used to determine whether a disclosure constitutes a breach, is of particular importance because covered entities and business associates are responsible for sending breach notification letters to all individuals whose information is compromised and reporting detailed, publicly reported information about the incident to the Office of Civil Rights (OCR). This change is not unexpected, given that various members of Congress have stated their opposition to the very concept of a "harm threshold." Covered entities and business associates need to examine and update their current policies and procedures to ensure that they respond to potential data breaches in an appropriate and compliant manner. Some of the most significant changes in the Rule are highlighted below.

Impermissible uses and disclosures are presumed to be breaches

If protected health information (PHI) is used or disclosed in a way that is not permitted under HIPAA, covered entities and business associates now have the burden of showing that a breach has not occurred. In other words, covered entities and business associates must perform a risk assessment (or send breach notification letters, which typically must be done within 60 days for breaches involving less than 500 individuals) to analyze impermissible uses or disclosures. Certain other exceptions to the definition of a breach continue to apply, including: (1) good faith disclosures to workforce members acting within the scope of their authority; (2) inadvertent disclosures by workforce members authorized to disclose PHI to other workforce members at the same entity;  and (3) disclosures where there is a good faith belief that the party receiving the PHI could not reasonably retain the PHI. If covered entities and business associates do not perform a risk assessment and none of the other exceptions apply, the incident is automatically presumed to be a breach.

"Low Probability" is in, "Harm Threshold" is out

In the course of performing a risk assessment, the covered entity or business associate can demonstrate that an impermissible use or disclosure is not a breach if it shows that there is a "low probability" that PHI was compromised. This concept replaces the old "harm threshold" analysis which exempted from the definition of a breach those incidents which posed an insignificant risk of reputational or financial harm. Exempting incidents which pose a very low risk of harm to individuals is intended to prevent undue alarm to individuals and oversaturation with breach notification letters relating to incidents that are unlikely to cause any harm. In its commentary to the Rule, HHS stated that "some persons may have interpreted the risk of harm standard in the interim final rule as setting a much higher threshold for breach notification than we intended to set." Therefore, this "low probability" concept will yield covered entities and business associates less latitude in making internal determinations that exclude certain incidents from the definition of a breach and from the associated breach notification requirements.

The new four-factor risk assessment requirement

A consequence of the prior "harm threshold" system was that two different covered entities faced with the same set of facts could make different determinations as to whether a breach had occurred. HHS is shifting away from a system of subjective, non-uniform determinations towards a more objective system. In an attempt to begin this transition, HHS adopts a new risk assessment system that consists of a list of four required factors that must be included in any risk assessment. The four factors are:

  1. The nature and extent of the PHI involved in the breach, including the types of identifiers and the likelihood of re-identification of the PHI involved in the breach (e.g., was the information of a type that is likely to identify the individual to an outsider?)
  2. The unauthorized person who used the PHI or to whom the disclosure was made (e.g., was the disclosure was made to another covered entity subject to HIPAA obligations?)
  3. Whether the PHI was actually acquired or viewed by the inappropriate recipient of the PHI
  4. The extent to which the risk to PHI has been mitigated (e.g., has the disclosing entity received receipt of assurances from the recipient that the PHI has not been used inappropriately?)

Going forward, it is mandatory that risk assessments include analysis specifically addressing each of these four factors.

Penalties for failure to perform appropriate risk assessments are increasingly likely

In comparison to the "harm threshold" system, it is not clear that the new metric will result in more uniform determinations or more objective analyses of risk. The nature of data breaches is that they are each unique and any risk assessment determining the probability of compromise will be highly fact-dependent and will by necessity incorporate a fairly high degree of subjectivity. Further, the four factors are virtually identical to the types of factors that have been analyzed by covered entities and business associates in the past when they performed harm threshold analyses. Therefore, it appears that the new risk assessment system is unlikely to remove subjectivity from risk analyses.

Nevertheless, these new requirements are significant in that they provide a specific structure for the risk assessment which, if not adequately performed and documented, could provide a basis for imposition of penalties. In the course of a data breach investigation by the Office of Civil Rights (OCR), it is certain that OCR will request the risk assessment document and analyze whether it appropriately addresses each of the four factors listed above. These assessments need to be timely performed for all potential data breaches. Those assessments that clearly show analysis of all four factors and come to a reasonable conclusion will be sufficient, while those that do not demonstrate appropriate consideration of each of the four factors will be insufficient and may provide grounds for the imposition of penalties.

More guidance may be coming in the future

HHS will likely continue to attempt to make the breach determination process more uniform. HHS notes in the commentary to the Rule that it will be issuing additional guidance to "aid covered entities and business associates in performing risk assessments with respect to frequently occurring scenarios." If such guidance is issued, there will be a significantly lower degree of subjectivity available to covered entities in performing their risk assessments. Until that further guidance is issued, it is crucial that covered entities and business associates update their policies and procedures ensuring that all potential data breaches are analyzed promptly and appropriately.

A comprehensive discussion of all substantive changes to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules will be forthcoming.

For further information visit Waller

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Dickinson Wright PLLC
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Dickinson Wright PLLC
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions