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

Data thieves are feasting at the healthcare information and data buffet. The healthcare industry needs to act quickly to manage this problem.

Last year, the healthcare industry experienced more data breaches than any other industry. There were 269 incidents reported with more than 8.8 million healthcare records compromised, equaling 43.8% of breaches reported across relevant industries, according to the Identity Theft Resource Center (ITRC). So far in 2014, ITRC found that healthcare organizations are trending even higher representing 45.8% of breaches industrywide. And these statistics are only for breaches that have been reported.

The vulnerability of healthcare information and data is increasing. The FBI warned healthcare providers that their data security systems lag behind other industry sectors. This warning asserts that the healthcare industry is not as resilient to cyber intrusions compared to the financial and retail sectors. Therefore, the possibility of increased cyber intrusions is likely.

The results of risk analyses performed across the healthcare industry, including the results of the initial Office of Civil Rights (OCR) audit program, point to a lack of investment by healthcare in privacy and data security, a lack of attention to these issues at the executive level, and a tendency to spend only minimal resources to implement HIPAA/HITECH compliance plans. As the above statistics confirm, healthcare remains not only vulnerable but a preferred target for cyber criminals.

Why are cyber criminals focused on healthcare? Quite simply, that’s where the money is. The value of medical data is proving to be far more lucrative than other types of personal data. For example, a single person’s medical identity information can fetch hundreds of dollars compared to just a dollar or two or even less for a Social Security or credit card number, according to experts. Such medical identity information can provide access to prescriptions for drugs that can be re-sold, and can cover expensive medical treatment for the wrong party.

Healthcare data breaches are not only the work of shadowy hackers working out of foreign countries. In as many cases, the breaches are the work of healthcare providers’ own employees. Failure to invest in and implement verifiable privacy and security programs within the organization itself which include meaningful and appropriate workforce training programs is costing healthcare providers millions of dollars in sanctions and corrective action settlement agreements to combat carelessness such as loss of laptop computers and other devices with unencrypted data and unauthorized snooping into or copying patient records and data. Breach reports and complaints are patient and consumer driven and can be made directly to the Department of Health and Human Services (HHS) by disgruntled individuals. Breaches can also result from criminality by an employee acting on his or her own to steal healthcare data outright for personal gain.

Also, as electronic health records systems (EHRs) become more prevalent and sophisticated, the risk of medical identity theft continues to grow. Providers are accountable for data security efforts to remain on top of current threats, identify emerging problem areas and stay ahead of the myriad of new threats. Further, HITECH has pulled Business Associates and Business Associate sub-contractors into the HIPAA/HITECH regulatory realm.

Healthcare, as an industry, has a long way to go to match their counterparts in the financial and banking sectors, which have invested heavily in data privacy and security. These industries experienced only 3.7% of data breaches and less than 1% of compromised records. Excuses are no longer being tolerated by HHS, willful neglect (failure to demonstrate any effort at HIPAA/HITECH compliance) is being sanctioned at a rate of $1.5 M per year on top of corrective action settlements, and random audits by OCR are beginning again in October of 2014. Now is the time to act.

For assistance with your HIPAA/HITECH compliance efforts, contact Jim Wynne at jwynne@meritcd.com or by phone at 610-225-0193.

May 2014

The Department of Health and Human Services (HHS) entered into settlements totaling $4.8 million with New York-Presbyterian Hospital (NYP) and Columbia University Medical Center (CU) for failing to implement appropriate administrative and technical safeguards to secure the ePHI of approximately 6,800 patients^[i]. This is HHS’ highest financial sanction issued to date as a part of breach settlement agreements, confirming its commitment to enforce HIPAA compliance.

Breach Report, Investigation and Findings

NYP and CU received a complaint from an individual who found confidential health information (ePHI) including status, vital signs, medications, and laboratory results of a deceased relative, a former NYP patient, on the Internet. The HIPAA regulations require such ePHI be maintained in secure systems and kept confidential. In accordance with HIPAA requirements, they submitted a joint report of the complaint to HHS dated September 27, 2010 resulting in an investigation by HHS’ Office of Civil Rights (OCR).

OCR’s investigation found that NYP and CU have a joint healthcare services arrangement wherein CU faculty members work as attending physicians at NYP. To support the services, NYP and CU operate a shared data network including firewalls administered by employees of both entities with shared links to NYP patient information systems.

OCR identified the breach to have occurred when a CU physician employed to develop applications for both entities attempted to de-activate a networked server containing NYP patient ePHI. Due to a lack of technical safeguards in place on the network, the de-activation attempt resulted in NYP ePHI becoming accessible to internet search engines.

OCR found that neither NYP nor CU could demonstrate that its servers were secure or contained software protections prior to the breach. OCR found an additional lack of administrative safeguards, specifically that neither entity had conducted a risk analysis to identify all systems with access to NYP’s ePHI or had a risk management plan in place to address potential hazards or threats to the security of its ePHI.

Finally, OCR found that NYP failed to implement its own technical safeguards including procedures for authorizing access to its databases and information access management processes. In addition to the financial sanctions, NYP and CU agreed to a corrective action plan requiring implementation of the administrative and technical safeguards and to monitor compliance with regular reports back to HHS.

Increased HHS Enforcement of HIPAA Compliance

This action gives notice to Covered Entities and Business Associates that HHS has heightened its enforcement efforts since the enactment of HITECH and the HIPAA Omnibus Rule.

It is imperative that a healthcare organization ensure that its workforce understands the privacy and security regulations, not just completes rote training programs, and recognizes the impact that non-compliance - from even one employee - can have on an organization.

The mandated HIPAA safeguards must be in place to identify risks and threats to ePHI and patient information systems, including insider threats from its own workforce. The safeguards must be regularly monitored through risk analysis as a part of a comprehensive risk management program.

[i] See http://www.hhs.gov/news/press/2014pres/05/20140507b.html

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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