United States: Cure Of Security Rule Violations Following Breach Of EPHI Cannot Save Covered Entities From $750,000 Settlement; Non-Breach Related Security Complaint Leads To $218,000 HIPAA Settlement

Last Updated: September 21 2015
Article by Jacquelyn Godin and Jennifer Pike

More than three years after the Cancer Care Group, P.C. ("CCG") notified the U.S. Department of Health and Human Services ("HHS") Office for Civil Rights ("OCR") of a breach of unsecured electronic protected health information ("ePHI"), the radiation oncology private practice settled and implemented a corrective action plan ("CAP") with OCR for $750,000. This settlement comes on the heels of another July 2015 settlement involving St. Elizabeth's Medical Center ("SEMC"), a tertiary care hospital in Brighton, Massachusetts. St. Elizabeth's entered in a settlement agreement and CAP with OCR for $218,400 arising from two HIPAA unrelated incidents, one non-breach incident in November 2012 and a breach in August 2014.

The enforcement actions related to both CCG and SEMC are discussed below and reinforce the importance of implementing appropriate safeguards and policies and procedures to secure ePHI.

CCG Settlement

On August 29, 2012, CCG notified OCR of a breach of unsecured ePHI that occurred on July 19, 2012, when a laptop bag containing a computer and computer server backup media were stolen from an employee's car. The computer did not contain ePHI but the unencrypted backup media contained ePHI of approximately 55,000 former CCG patients, including names, addresses, dates of birth, Social Security numbers, insurance information, and clinical data.

OCR's investigation revealed various Security Rule compliance issues: First, at the time of the breach, CCG had not conducted an accurate and thorough security risk assessment. Second, at the time of the breach, CCG did not have in place policies and procedures governing the secure "receipt and removal of hardware and electronic media that contain [ePHI] into and out of a facility, and the movement of these items within the facility" even though this was a common practice at CCG. Importantly, CCG's correction of both violations after the breach occurred – CCG conducted a risk assessment in November 2012 and implemented the missing policies in January 2013 – could not save CCG from OCR's investigation or the settlement and CAP that followed.

Similar to recent settlements for breaches involving unencrypted ePHI, under the three-year CAP, CCG is generally obligated to meet the following documentation requirements: (1) conduct a risk analysis "of security risks and vulnerabilities" for its electronic equipment, systems and other applications used to contain, store, transmit, or receive ePHI; (2) prepare a risk management plan with an appropriate timeline and process "to address and mitigate any security risks and vulnerabilities found in the [r]isk [a]nalysis;" (3) review and revise, as appropriate, its Security Rule policies and procedures to respond to the findings in the risk management plan; and (4) review and revise its Security Rule training program based on the findings of the risk assessments and changes to its policies and procedures to ensure compliance with the Security Rule. Under the CAP, CCG is further obligated to (1) notify HHS in writing within thirty days of its own determination that a workforce member has violated the policies and procedures (a "Reportable Event"), and (2) provide an annual report, with an attestation signed by an officer or owner of CCG, to OCR that will include, but is not limited to, descriptions of any updates or changes to the risk analysis and risk management plan, revisions to the policies and procedures and training program, and a summary of Reportable Events.

SEMC

OCR's settlement with SEMC, which resulted after OCR's investigation of two separate HIPAA incidents, further reinforces the importance of complying with the Security Rule.

First, on November 16, 2012, OCR received a complaint from SEMC workforce members alleging that SEMC was in violation of the Security Rule because it was using an internet-based sharing application to store documents containing ePHI of 498 or more individuals without having first analyzed the risks associated with such a practice. Separately, in August 2014, after OCR notified SEMC that it was investigating the 2013 complaint, SEMC notified OCR of a breach of unsecured ePHI stored on a former workforce member's personal computer and flash drive involving the data of 595 individuals. As a result, OCR initiated a separate investigation into this reported breach in November 2014.

OCR's investigations into the two incidents indicated that SEMC (1) disclosed the ePHI of at least 1,093 individuals; (2) failed to implement safeguards for the proper, secure transmission and storage of ePHI; and (3) did not respond in a timely way to a known security incident or take the appropriate mitigation and documentation measures required in the aftermath of the incident. Therefore, in addition to the monetary settlement, OCR and SEMC entered into a CAP to rectify the alleged violations and ensure future compliance with the Privacy, Security and Breach Notification Rules. The one-year CAP requires SEMC to, among other actions, (1) conduct a self-assessment of its workforce members' familiarity and compliance with SEMC policies and procedures, including those addressing transmitting and storing ePHI and removal of ePHI from SEMC; (2) allow OCR to make unannounced site visits to SEMC departments, interview 15 randomly selected SEMC workforce members, and inspect three or more portable devices as part of the self-assessment; (3) prepare a written report with the findings of the self-assessment to OCR. Depending on the results of the self-assessment, the CAP may also require SEMC to draft revisions to its policies and procedures and training materials, implement an oversight mechanism relating to the policies and procedures, and distribute security reminders and updates to workforce members relating to those training materials and policies and procedures for OCR's review. Additionally, for a period of 180 calendar days from July 8, 2015, SEMC is required to submit a written report to OCR if it has determined that a workforce member has failed to comply with its policies and procedures, and after one year, SEMC must provide OCR with an "Implementation Report" summarizing the status of SEMC's obligations under the CAP.

These recent settlements alert HIPAA-regulated entities to several issues. First, it is imperative that covered entities and business associates assess the risk of using internet or cloud-based applications to store ePHI before employing these applications. In response to the SEMC settlement, OCR Director Jocelyn Samuels stated, "[o]rganizations must pay particular attention to HIPAA's requirements when using internet-based document sharing applications." Previous OCR settlements have demonstrated the importance of a secure network and of performing security risk analyses. Further, as in the CCG settlement and in many OCR settlements involving stolen laptops, covered entities and business associates must ensure that they have implemented robust policies and procedures surrounding the secure use of portable devices, including laptops and USB flash drives, and restrictions on the devices that may be used when accessing ePHI. Director Samuels emphasized that fact when she stated in response to the CCG settlement that "[o]rganizations must complete a comprehensive risk analysis and establish strong policies and procedures to protect patients' health information." Additionally, HIPAA-regulated entities must consider the mechanisms used to encrypt or otherwise ensure the secure use of portable media and mobile devices to protect against a breach.

HIPAA regulated-entities should ensure their compliance with the Privacy and Security Rules before they are affected by a breach of unsecured ePHI. As the CCG settlement clearly shows, an entity's corrective actions following a breach may not be enough to save the entity from an investigation by, or settlement with, OCR. Further, entities should ensure their compliance before OCR resumes its random audits. Per a recent announcement by OCR Deputy Director Devin McGraw, OCR is set to begin the next round of audits after it submits information about its plans for public comment in late 2015 or early 2016.

For additional information on OCR's enforcement activities, visit the U.S. Department of Health and Human Services website.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
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