Monthly Archives: May 2014

Failure to Encrypt Mobile Devices = Nearly $2 Million in Settlements

Posted by Ryan Blaney on May 28, 2014
HIPAA / No Comments

The Department of Health and Human Services (HHS) Office for Civil Rights (OCR) settled for the collective amount of $1,975,220 with Concentra Health Services (Concentra) and QCA Health Plan, Inc. (QCA). The settlements stem from OCR investigations in 2011 and 2012 related to each of the companies reporting a single stolen laptop; Concentra also had a laptop stolen in 2009.

In its press release, HHS stated that after further investigating Concentra it found that Concentra was aware prior to the most recent laptop theft that not all of its laptops, desktop computers, medical equipment, tablets and other devices that contained ePHI were encrypted. But despite Concentra’s discoveries as a result of risk analyses that it had conducted, it failed to remedy the critical risks and did not encrypt all of the devices. OCR also found that Concentra had insufficient security management processes. OCR’s investigation of QCA revealed that in addition to the unencrypted laptop, QCA failed to comply with numerous HIPAA privacy and security requirements for several years.

Susan McAndrew, OCR’s Deputy Director of Health Information Privacy, reiterated the significance of encryption and the obligations of covered entities and business associates to adequately secure mobile devices when she stated that OCR’s message to covered entities and business associates is simple: “encryption is your best defense against these incidents.” Ms. McAndrew’s statement is significant and a shift from the view that although security is an obligation, encryption is not required under the HIPAA Security Rule. In light of these two settlements and the Deputy Director’s commentary it is evident that OCR views encryption as an essential security safeguard for laptops, desktop computers, medical equipment, tablets and other mobile devices. In light of these two settlements and the Deputy Director’s commentary it is evident that OCR views encryption as an essential security safeguard for laptops, desktop computers, medical equipment, tablets and other mobile devices.

Concentra has agreed to pay HHS a monetary settlement of $1,725,220 and QCA has agreed to pay $250,000. Both entities have also agreed to each undertake a corrective action plan (CAP),  which CAPs include risk analyses, development of risk management plans, policy and procedure revisions, staff training and certification of staff training. Concentra’s CAP contains more onerous requirements, including the continued submission of additional documents, reports and encryption status updates to HHS. Concentra’s CAP may be more extensive than QCA’s because it already had a laptop that contained ePHI stolen in 2009 and because it failed to remedy the encryption issue it discovered during the risk analyses it performed prior to the second laptop being stolen. OCR also noted that QCA did encrypt its devices after the laptop was stolen and it discovered the breach.

For more information about the settlements and the CAPs, see the Concentra Resolution Agreement and the QCA Resolution Agreement.

Practice Tip: Audit your encryption policies and practices for all mobile devices to adequately secure your company’s mobile devices.

Ryan Blaney

Ryan Blaney

Ryan Blaney joined Cozen O'Connor as a member of the firm's Health Law group. Ryan practices in the firm's Washington, D.C., office. He focuses his practice on representing clients in the health care and life sciences industries in a wide range of matters, including health care fraud and abuse, civil and criminal government investigations, qui tam and whistle-blower disputes under the False Claims Act and other federal and state laws and regulations, HIPAA privacy and data security, compliance and transactional services, and antitrust matters.

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“Cha-Ching” – HIPAA Settlement Reaches New Heights and Signals More To Come

Posted by Ryan Blaney on May 23, 2014
HIPAA / No Comments

In the largest HIPAA enforcement action to date, the Department of Health and Human Services (HHS) Office for Civil Rights (OCR) extracted $4.8 million from two leading New York institutions, New York-Presbyterian Hospital (NYP) and Columbia University (CU), despite NYP and CU’s self-disclosure of the breach. OCR charged NYP and CU jointly with failing to secure 6,800 patients’ electronic protected health information (ePHI), which resulted in a 2010 breach. NYP and CU did not learn of the breach until a complaint was filed by a representative of a deceased former NYP patient whose ePHI was found on the Internet. The patient data included status, vital signs, medications and laboratory results.

Larger, more frequent fines may be the new normal as OCR launches its major new audit program. In its press release, HHS wrote that “neither entity had conducted an accurate and thorough risk analysis that identified all systems that access NYP ePHI. As a result, neither entity had developed an adequate risk management plan that addressed the potential threats and hazards to the security of ePHI.” OCR has made clear that risk assessment will be a priority in the upcoming audits. OCR will not be satisfied with “glossy” HIPAA policies and procedures if they are not followed in practice.

To make the point even more explicit, Christina Heide, Acting Deputy Director of Health Information Privacy for OCR, said, “Our cases against NYP and CU should remind health care organizations of the need to make data security central to how they manage their information systems.”

OCR’s investigation began after NYP and CU self-disclosed an inadvertent leakage of certain ePHI to Internet search engines when a computer server was errantly reconfigured. The source of the breach was a CU physician who had tried to deactivate a personally owned computer server on the network containing information on hospital patients. NYP and CU failed to implement technical safeguards for the deactivation of computer servers, so the attempted deactivation resulted in ePHI being posted online.

NYP has agreed to pay HHS a monetary settlement of $3.3 million and CU has agreed to pay $1.5 million. Both entities have also agreed to each undertake a substantive corrective action plan (CAP), which includes a risk analysis, development of a risk management plan, policy and procedure revisions, staff training and regular progress reports. For more information about the settlements and the CAPs, see the NYP Resolution Agreement and the CU Resolution Agreement.

HIPAA Practice Tip: Now is the time to ensure that your HIPAA policies and procedures are being implemented and followed.

Ryan Blaney

Ryan Blaney

Ryan Blaney joined Cozen O'Connor as a member of the firm's Health Law group. Ryan practices in the firm's Washington, D.C., office. He focuses his practice on representing clients in the health care and life sciences industries in a wide range of matters, including health care fraud and abuse, civil and criminal government investigations, qui tam and whistle-blower disputes under the False Claims Act and other federal and state laws and regulations, HIPAA privacy and data security, compliance and transactional services, and antitrust matters.

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