With all the talk about HIPAA over the past decade, most people in the U.S. now expect their confidential health care information and records (collectively “PHI”) to be just that…confidential. We expect our providers to assure its privacy and security. But this is not always the case. Read about this incident.

In September 2008, Parkview Hospital in Ohio took custody of approximately 5,000 to 8,000 patient records pertaining to a retiring physician’s medical practice. Parkview was considering purchasing some of the physician’s practice and was assisting the retiring physician to transition her patients to new providers. By taking custody of the PHI, Parkview assumed the responsibility for the private and secure management of the retiring physician’s PHI. However, on June 4, 2009, despite having custody of the records and with knowledge that the retiring physician was not at home at the time of the incident, Parkview employees left 71 cardboard boxes of medical records on the driveway of the physician’s home, within 20 feet of the public road and a short distance away from a heavily trafficked public shopping venue. This action exposed the PHI to unauthorized access and constituted a HIPAA breach.¹

The retiring physician reported the breach to the Department of Health and Human Services (HHS), resulting in an investigation by its Office of Civil Rights (OCR). Parkview cooperated with the OCR investigation. The outcome was an $800,000 civil money sanction and a corrective action plan requiring the revision of Parkview’s policies and procedures, staff training and regular reports to OCR on compliance with the corrective action plan. The extended regulatory oversight and related costs for auditors can be a greater sanction and intrusion into daily operations than any sanction check that has to be written.

HIPAA and HITECH mandate that healthcare providers and managing healthcare entities are responsible for the privacy and security of PHI from the time it is created until the time it is securely destroyed. This includes implementing and monitoring PHI policies and procedures as well as training and monitoring staff compliance with them. Failure to do so can subject healthcare providers or entities to sanctions and regulatory oversight through corrective action plans. HIPAA regulations have been in effect since 2003. HITECH regulations, enacted in 2009, have heightened sanctions for failing to protect PHI, including added sanctions up to $1.5M per year for willful neglect levied against covered entities that can demonstrate no reasonable efforts towards HIPAA/HITECH compliance.

It’s hard to believe that breaches such as the above incident are still taking place. But the OCR confirms that it is quite busy with similar investigations. It is starting up its random audit program again in October 2014 to get the message across that HIPAA/HITECH compliance is mandatory. The message from HHS is that sanctions will increase when non-compliance is identified such as in the case cited above and those noted on its Wall of Shame at www.hhs.gov.

¹See $800,000. HIPAA Fine- Blatant Violations Continue to Occur, www.Medlaw.com, posted June 25, 2014

In this era of HIPAA enforcement, it is important to understand the fundamental role of the privacy regulations. Privacy outlines the big picture for compliance. Failing to understand and implement privacy's administrative, technical and physcial safeguards can be a costly miscalculation.

Privacy regulations have been in effect since 2003 and are updated regularly on the Department of Health and Human Services’ (HHS) website.

These regulations list compliance requirements for protected health information (PHI) in all formats (oral, paper or electronic). Security regulations are a subset of privacy limited to PHI in electronic format (ePHI). Privacy encompasses the big picture for compliant access, use, and disclosure of all PHI, including ePHI. Investing the staff, resources and time necessary to meaningfully implement privacy regulations is the entrée to compliance and a prudent business decision.

Prior to 2009, regulated organizations were primarily self-monitoring. The lack of outside accountability precipitated the major investment of staff and resources allocated for HIPAA compliance being directed towards building and supporting electronic health records systems. Fewer resources were dedicated to the less concrete, yet more comprehensive, role of privacy. Responsibility for patients’ and clients’ rights; uses and disclosures of PHI; role-based access issues; business associates; and other privacy issues were disbursed over many departments. This resulted in insufficient compliance, lax oversight and a high occurrence of violations.

HITECH’s enactment in 2009 refocused HIPAA enforcement on the privacy regulations.

HITECH mandates the implementation of complaint and breach report procedures, requires accountability for management of PHI, establishes higher sanctions for violations including a new category for willful neglect, and initiated a random audit program for an expanded list of regulated organizations by HHS’ Office of Civil Rights (OCR).

More federal and state regulatory agencies, including FTC and states’ attorney generals, now coordinate with HHS’ enforcement actions. Their websites regularly post results of enforcement actions as notice and guidance for regulated organizations. Most violations settle with corrective action plans (CAPs); some include fines tipping millions of dollars.

Many CAPs require hiring auditors to monitor and report to HHS on CAP compliance, particularly revising policies and procedures and workforce training programs (basic privacy administrative safeguards) over a period of years. As the following three cases from HHS’ website confirm, HHS is serious about privacy compliance.

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