On April 27, 2015, the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) announced that Cornell Prescription Pharmacy (“Cornell Pharmacy”) had entered into a resolution agreement to settle, without an admission of liability or wrongdoing, potential HIPAA violations. As part of the resolution agreement Cornell Pharmacy will pay $125,000 and enter into a two-year corrective action plan (“CAP”) focused on correcting the alleged deficiencies in its HIPAA compliance program.

Cornell Pharmacy is a small, single store pharmacy located in Denver, Colorado that specializes in compound medications and providing services for local hospice agencies. OCR began an investigation into the pharmacy after it received a media report from a Denver news agency that protected health information (“PHI”) belonging to Cornell Pharmacy was apparently disposed of and found in an unlocked, publically accessible dumpster. The documents were not shredded and contained the PHI of approximately 1,610 of Cornell Pharmacy’s patients.   After conducting its investigation, OCR concluded that Cornell Pharmacy failed to implement any written policies and procedures as required by HIPAA’s Privacy Rule, and further failed to provide training on the Privacy Rule to its workforce members.

This settlement is instructive as OCR again highlights the importance of having updated and comprehensive HIPAA policies and procedures in place, including policies on the proper disposal of PHI, and on training all staff on those policies and procedures.   Further, in this year of massive cyber-attacks and other breaches of electronic data, this HIPAA settlement serves to remind covered entities and business associates not to forget about protecting their paper records as well.   As stated by OCR in its press release, “Even in our increasingly electronic world, it is critical that policies and procedures be in place for secure disposal of patient information, whether that information is in electronic form or on paper.” As discovered by Cornell Pharmacy, a breach or other improper disclosure of paper PHI can also result in significant consequences.