The U.S. Department of Health and Human Services Office for Civil Rights (HHS) recently announced that it had reached an agreement with Skagit County, Washington to settle potential HIPAA violations involving the County Public Health Department. The settlement arose from a 2011 incident involving the unauthorized disclosure of electronic protected health information (ePHI) of over 1,500 individuals. The settlement also covered what HHS deemed to be the County's "general and widespread non-compliance" with HIPAA. Skagit County has approximately 118,000 residents and the Health Department provides essential services to many individuals who would not otherwise be able to afford healthcare. This is HHS’ first settlement with a county government and is designed to send a strong message about meaningful HIPAA compliance to local and county governments, regardless of size.
HHS began its investigation after receiving notice from the County of a breach involving the ePHI of 7 individuals. Upon investigation, it was determined that the County had violated the HIPAA Privacy, Security and Data Breach Notification Rules. HHS investigators found that the County:
- Provided access on the County's web server to the ePHI of 1,581 individuals;
- Never notified the affected individuals of the breach;
- From 2005 to the present, did not implement policies and procedures to detect and prevent security violations or provide security training to its workforce members, including its Information Security members; and
- From 2005 until June 2012, did not implement and maintain policies and procedures that were reasonably designed to ensure compliance with the Security Rule.
Although the settlement was not an admission of liability, the County agreed to pay HHS $215,000 and is required to implement an extensive corrective action plan (CAP). Because the County had not previously developed and adopted many of the policies and procedures required under HIPAA, the CAP imposed significant additional obligations, including the development and submission to HHS for approval many policies and procedures that are required under HIPAA, such as a comprehensive HIPAA compliance plan and procedures for accounting for disclosures. The County is also required to provide substitute breach notification, submit for approval hybrid entity documents that detail the covered healthcare components of its operations, conduct a thorough risk analysis of the ePHI security risks associated with the covered healthcare components of its operations, and conduct appropriate training and submit annual reports for three years regarding the County's compliance with the CAP. Because the County had never adopted or implemented many of the required policies and procedures, the costs of complying with the CAP are likely to be significant and are in addition to the $215,000 settlement payment.
Even though the bulk of HIPAA's requirements have been in place for a decade or more, this settlement indicates there are covered entities or business associates that may not be fully compliant with applicable provisions of HIPAA. The increased enforcement activities by HHS highlight the importance for covered entities and business associates, whether private or public, to take appropriate steps to minimize the chances of impermissible disclosures of ePHI and any resulting enforcement action by HHS. At minimum, a covered entity or business associate should:
- Ensure their privacy and security policies and procedures reflect the requirements of the HITECH Act and the HIPAA Omnibus Rule that was effective September 23, 2013 and that workforce members are trained to implement and follow these policies and procedures;
- At least annually conduct a thorough risk analysis to identify and mitigate security risks and vulnerabilities associated with ePHI and adopt or revise policies accordingly;
- In the event of a suspected privacy breach, timely comply with breach investigation and notification requirements; and
- Determine whether existing general liability or professional liability policies provide coverage for data breach incidents and if not, contact their insurance broker about obtaining such coverage.