For years, many questioned whether the HIPAA privacy and security rules would be enforced. The agency responsible for enforcement, Health and Human Services’ Office for Civil Rights (OCR), promised it would enforce the rules, but just after a period “soft” enforcement and compliance assistance. That period appears to be ending. During the first seven months of 2016, OCR has announced nearly $15,000,000 in settlement payments to the agency relating to a wide range of compliance failures alleged against covered entities and business associates. At the same time, OCR is conducting audits of covered entities around the country, and plans similar audits of business associates later this year. If you have been waiting to tackle HIPAA compliance, it is probably a good time to get it done.
Below is a summary of the circumstances that led to some of the settlements and civil monetary penalties:
- Stolen laptop, vulnerable wireless access. Following notification to OCR of a breach involving a stolen laptop (not an uncommon occurrence!), OCR investigated and reported discovering that electronic protected health information (ePHI) on the covered entity’s network drive was vulnerable to unauthorized access via its wireless network – users could access 67,000 files after entering a generic username and password. OCR also cited among other things failures to implement policies and procedures to prevent, detect, contain, and correct security violations, to implement certain physical safeguards. Settlement $2.75M
- Vulnerabilities identified must be timely addressed. In another case, a covered entity had conducted a number of risk analyses since 2003, but the OCR claimed these analyses did not cover all ePHI at the entity. OCR also reported that the covered entity did not act timely to implement measures to address documented risks and vulnerabilities, nor did it implement a mechanism to encrypt and decrypt ePHI or an equivalent alternative measure, despite having identified this lack of encryption as a risk. Settlement $2.7M.
- Not-for-profits serving underserved communities not immune. A data breach affecting just over 400 persons caused by the theft of a company-issued iPhone triggered an OCR investigation. The iPhone was unencrypted and was not password protected, and contained extensive ePHI including SSNs, medical diagnosis, and names of family members and legal guardians. According to OCR, among other things, the covered entity had no policies addressing the removal of mobile devices containing PHI from its facility or what to do in the event of a security incident. In its public announcement, OCR acknowledged that the $650,000 settlement was after considering that the covered entity provides unique and much-needed services to elderly, developmentally disabled individuals, young adults aging out of foster care, and individuals living with HIV/AIDS.
- No business associate agreement. When a covered entity’s business associate experienced a breach affecting over 17,000 patients, OCR again investigated. It claimed no business associate agreement was in place, leaving PHI without safeguards and vulnerable to misuse or improper disclosure. Settlement $750,000.
- Civil monetary penalties against home care provider. In only the second time OCR has sought civil penalties under HIPAA, a judge awarded $239,800 in penalties due to privacy and security compliance failures. In this case, a patient complaint led to an OCR investigation – the patient complained that an employee of the covered entity left PHI in places where an unauthorized persons had access and in some cases abandoned the information altogether. Other compliance issues included covered entity’s maintaining inadequate policies and procedures to safeguard PHI taken offsite, and storing PHI in employee vehicles for extended periods of time.
It is true that these are only a handful of cases with large settlement amounts. But the agency does seem to be sending a message – that is, it wants to see compliance and it is not afraid to seek significant settlement amounts from covered entities or business associates, large or small. In some cases, relatively simple steps such as making sure to have business associate agreements in place, can help avoid these kinds of enforcement actions.