United States: More Than A Family Affair: Six-Figure HIPAA Penalty Upheld For Unrepentant Home Care Agency Due To PHI Access By Spurned Spouse Of Employee

Last Updated: March 14 2016
Article by Jared L. Facher and Brian T. McGovern

Most Read Contributor in United States, September 2017


The Health Insurance Portability and Accountability Act of 1996, Public Law 104-191 and the regulations promulgated thereunder ("HIPAA") should be now well-known to health care providers and health plans.  Under HIPAA's "Privacy Rule," covered entities must take steps to "reasonably safeguard" protected health information ("PHI") from any "intentional or unintentional use or disclosure that is in violation of the standards, implementation specifications or other requirements" of the Privacy Rule.  What is also becoming painfully clear is the growing financial and reputational risks to covered entities (and business associates) from a breach of HIPAA's Privacy or Security Rules stemming from unauthorized access or disclosure of PHI.

A recent ruling by a U.S. Department of Health and Human Services Administrative Law Judge ("ALJ") in the case of Director of the Office for Civil Rights v. Lincare, Inc., (Decision No. CR4505, Jan. 13, 2016), underscores the substantial penalties that a health care provider can face, even for relatively small-scale HIPAA violations, particularly if the provider determines to not settle with the Office of Civil Rights ("OCR") and instead contests the claimed violations.  In Lincare, a home care agency was found to have violated the Privacy Rule when an unauthorized person (the husband of a home health employee) was able to access patient records after the employee had removed records from the agency and taken them into the field as part of her job.  Specifically, the ALJ upheld a civil monetary penalty ("CMP") of $239,800 imposed by OCR – only the second time the OCR has sought CMPs for violations of HIPAA's Privacy Rule.  In a unique twist, OCR was alerted to the improper disclosures when the "estranged husband" of an employee of the home care agency complained to OCR that his wife allowed him to access documents containing PHI when she moved out of the marital home and left patient records behind.


Lincare Home Care Agency.  The respondent Lincare, Inc., d/b/a United Medical ("Lincare") supplies respiratory care, infusion therapy, and medical equipment to patients in their homes.  Lincare operates more than 850 branch locations in 48 states.  As Lincare explained, because its employees provide services in the homes of patients, they often remove patient records containing PHI from its branch locations.  Additionally, according to Lincare, managers of the various Lincare branch offices are required to maintain in their vehicles copies of Lincare's "Emergency Procedures Manual," which contains PHI of Lincare patients, so that employees could access patient contact information if an office was destroyed or otherwise inaccessible. 

PHI at Issue.  Faith Shaw was a Lincare branch manager in Wynne, Arkansas from October 2005 until July 2009 and maintained the "Emergency Procedures Manual," with PHI of 270 Lincare patients, as well as patient-specific documents of eight Lincare patients.  The patient records and Manual were apparently hard copies, and not electronically secured through encryption or authentication. 

Disclosure of the PHI.  Ms. Shaw kept the records containing PHI in her car and in her marital home, where her husband lived.  After a falling out with her husband Richard in August 2008, Ms. Shaw moved out of the marital home and left the documents containing the PHI behind in her home and car.  In November of 2008, Mr. Shaw, who was concededly not authorized to access the Lincare PHI, reported to Lincare and OCR that he had in his possession the Emergency Procedures Manual and the eight patient files left behind by his wife. 

OCR's Investigation and Action.  Following its investigation, OCR determined that Ms. Shaw:  (a) kept the PHI either in her vehicle or home, to which Mr. Shaw had access; (b) maintained the PHI without proper safeguards, (c) knew or reasonably should have known that the manner in which she kept the PHI did not reasonably safeguard such PHI, and (d) knew or reasonably should have known that Mr. Shaw had ready access to the PHI.  While acknowledging that the provision of home care services may require providers to remove PHI from their offices, OCR found that Lincare's policies and procedures did not adequately instruct its employees how to maintain PHI taken off the premises in a safe and secure manner and that Lincare did not properly record or track removed PHI.  Unlike the majority of HIPAA violations cited by OCR against providers, Lincare did not settle with OCR and instead determined to contest OCR's charges. 

In the absence of a settlement, OCR cited the following "aggravating" factors for imposing a substantial CMP against Lincare:

  • The length of time Lincare allowed employees to transport PHI away from the office without appropriate and reasonable safeguards; and
  • Lincare's failure to promptly review and enhance its HIPAA policies for safeguarding PHI taken off premises even after it was notified of the improper disclosure.

Accordingly, OCR sought to impose a CMP totaling 239,800 for Lincare's alleged violations of HIPAA's Privacy Rule, broken down as follows:

  • Impermissibly disclosing PHI:  OCR determined that Lincare had improperly disclosed PHI of 278 patients in November of 2008, which then carried a penalty of $100 per patient.  OCR imposed a penalty of $25,000 – the maximum penalty that could be applied in the 2008 calendar year.
  • Failure to safeguard PHI:  OCR determined that the failure to safeguard the PHI lasted from February 1, 2008 through November 17, 2008, which carried a penalty of $100 per day.  OCR imposed an additional penalty of $25,000 – the maximum penalty that could be applied in the 2008 calendar year.
  • Failure to implement policies and procedures to ensure compliance with the Privacy Rule:  OCR determined that Lincare's failure continued from (a) February 1, 2008 through December 31, 2008, at a penalty of $100 per day, with a maximum of $25,000 per calendar year, (b) January 1, 2009 through February 17, 2009, at a penalty of $100 per day, which totaled $4,800, and (c) from February 18, 2009 through July 28, 2009, during which time, penalty amounts were increased pursuant to the adoption of the HITECH Act, and which OCR determined to be $1,000 per day, totaling $160,000.

Significantly, in effectively stacking CMPs for separate HIPAA violations, one on top of another—although arising from the same breach or continued breach—OCR was able to multiply the aggregate size of penalties to $239,800.  At the same time, OCR determined that there was no basis to waive the imposition of the CMP because there was no evidence that the payment of a CMP would be excessive relative to the violations that it found. 

Lincare appealed OCR's determination before an ALJ.  OCR moved for summary judgment, arguing that there was no genuine issue of material fact concerning the HIPAA violations and that it was entitled to impose the aggregate CMP as a matter of law.  

The ALJ's Analysis

The ALJ granted OCR's motion for summary judgment, finding that the evidence established that Lincare had violated HIPAA, and upheld the CMP of $239,800. 

Theft is No Defense to Improper Disclosures:  In its defense, Lincare claimed that it was not responsible for the improper disclosure because it was the victim of a theft.  Specifically, Lincare claimed that Mr. Shaw "stole" the PHI from his wife and "attempted to use it as leverage to induce his estranged wife to return to him."  The ALJ rejected this argument, concluding that Lincare was obligated to take "reasonable steps to protect its PHI from theft."  The ALJ explained that Lincare violated this obligation when Ms. Shaw took documents out of the office and left them in in her car or home, allowing her husband to access them; and then completely abandoned them.

Lincare's Policies Did Not Properly Address the Removal of PHI:  The ALJ also found that Lincare's privacy policy failed to properly address the security of records removed from the office for use in the field, and monitor removed records to ensure their return.  When asked about specific guidelines for safeguarding PHI taken out of its offices, Lincare's Corporate Compliance Officer replied that Lincare personnel "considered putting a policy together that said thou shalt not let anybody steal your protected health information."  The ALJ did not "consider this a serious response." 

Key Takeaways

Consider Settling with OCR to Avoid a CMP:  The OCR's imposition of a CMP, and the ALJ's decision to affirm this penalty, represents only the second time a CMP has been imposed for a violation of the HIPAA Privacy Rule, and the first one in which an ALJ ruled on the merits.  Typically, OCR attempts to resolve HIPAA violations informally, but could not reach such a resolution with Lincare in this case.  Had a resolution been reached, the OCR would likely not have sought and secured such a substantial CMP based on "aggravating factors," with the resultant fine likely to have been significantly lower. 

Consider Encryption or other Means for Accessing PHI Remotely:  Employees of home care agencies often need to access PHI in the field when providing services.  However, the provider should consider restricting access only through electronic devices, with appropriate encryption and user authentication, to prevent unauthorized users from accessing these records.

Update Policies and Procedures:  Policies and procedures should detail for employees when patient records can be removed from the office and taken into the field, and under what circumstances; and identify how such records containing PHI should be safeguarded from disclosure. 

Implement a System to Track Removed PHI:  Similarly, a system should be implemented to record and track the removal of records containing PHI so as to allow the health care provider to account for and maintain oversight over removed documents.

Regularly Train Employees:  Having detailed policies and procedures is not enough; all employees should be regularly trained on the HIPAA Privacy and Security Rules, and the agency's corresponding HIPAA policies and practices.  To reinforce training, to the extent any PHI is removed from the premises, employees should be continually reminded not to allow unauthorized persons—including a spouse or other family or friends—to access the records.

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.

In association with
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.