In the first instance of a state attorney general exercising the new powers granted by the Health Information Technology for Economic and Clinical Health Act ("HITECH Act"), Connecticut Attorney General Richard Blumenthal (and recently announced candidate for the U.S. Senate) filedsuit today against Health Net of Connecticut, Inc. for failing to secure private patient medical records and financial information involving 446,000 enrollees in Connecticut and for failing to promptly notify consumers of the security breach. AG Blumenthal is also seeking a court order to require Health Net to encrypt any protected health information (“PHI”) contained on a portable electronic device.

The AG’s suit stems from events that occurred in May 2009, when he alleges Health Net learned that a portable computer disk drive disappeared from a company office. The disk contained protected health information, Social Security numbers, and bank account numbers for approximately 446,000 of its past and present Connecticut enrollees. AG Blumenthal further alleges that Health Net failed to promptly notify his office or other Connecticut authorities of this missing information. The missing information is said to include 27.7 million scanned pages of over 120 different types of documents, including insurance claim forms, membership forms, appeals and grievances, correspondence and medical records.

According to an investigative report by Kroll Inc., a computer forensic consulting firm hired by Health Net, the data was not encrypted or otherwise protected from access and viewing by unauthorized persons or third parties, but rather was viewable through the use of commonly available software. The Connecticut Attorney General alleges that it was not until six months after Health Net discovered the breach that it posted a notice on its website, and then sent letters to consumers on a rolling mailing basis beginning on November 30, 2009.