Health Law Informer

In response to the recent Ebola outbreak in West Africa and in light of patients being treated in several hospitals in the U.S., the HHS, OCR (OCR) recently issued a HIPAA Bulletin to remind us that HIPAA covered entities and business associates must maintain the privacy of protected health information (PHI) even in emergency situations (“Guidance”). According to the OCR, the Guidance serves as a reminder “that the protections of the [HIPAA] Privacy Rule are not set aside during an emergency.”

The OCR explains that the HIPAA Privacy Rule requires a balance between the protection of the privacy of PHI against the necessary uses and disclosures of such information “to treat a patient, to protect the nation’s public health, and for other critical purposes” during emergency situations.  Although the OCR introduces no new requirements under the HIPAA Privacy Rule, the Guidance lays out the circumstances under which patient information may be shared in emergencies, such as for/due to:

•  Disclosures to Family, Friends, and Others Involved in an Individual’s Care and for Notification
• Disclosures to the Media or Others Not Involved in the Care of the Patient/Notification
• Imminent Danger
• Public Health Activities (i.e., to a public health authority; at the direction of a public health authority, to a foreign government agency; and to persons at risk)
• Treatment

The OCR reminds us that most disclosures require covered entities to make “reasonable efforts to limit the information disclosed to that which is the ‘minimum necessary.’” Further, covered entities are also required to: (i) implement “reasonable” safeguards necessary to protect PHI from intentional/unintentional uses and disclosures that are impermissible under HIPAA; and (ii) continue to apply administrative, physical and technical safeguards to protect e-PHI under the HIPAA Security Rule.

Further, according to the OCR, under the Project Bioshield Act of 2004 and Section 1135(b)(7) of the Social Security Act, the Secretary of HHS may waive certain HIPAA Privacy Rule provisions during public health or other emergencies. Such limited waivers require both the President to declare an emergency or disaster and the Secretary of HHS to declare a public health emergency. Additional information regarding the limited waivers appears in the Guidance.

As Ebola remains an emergency of both national and international concern, it not surprising that federal agencies continue to publish updated Ebola guidance. This Guidance reminds all of us, especially covered entities and business associates, that even in emergency situations, patient privacy must be protected, unless the limited waiver is invoked, and if not, covered entities and business associates will face consequences for violating the HIPAA Privacy Rule. For additional information regarding the HIPAA Privacy Rule in the context of emergency situations, see the HHS website.  Also see similar guidance (Bulletin and Bulletin  published by HHS in 2005 in response to Hurricane Katrina.

12,915 complaints were reported in 2013 to the Department of Health and Human Services Office of Civil Rights (“OCR”) according to Illiana L. Peters, Senior Adviser for HIPAA Compliance and Enforcement.  Cozen O’Connor attended Ms. Peters’ presentation at the Safeguarding Health Information: Building Assurance through HIPAA Security conference on September 22-23, 2014.  The conference was hosted jointly by OCR and the National Institute of Standards and Technology (“NIST”).  Below are a few discussion points worth mentioning from the conference:

• Between September 2009 and August 31, 2014, OCR investigated 1176 reports involving breach of Protected Health Information (“PHI”) where more than 500 individuals were affected and approximately 122,000 reports affecting less than 500 individuals.
• According to Ms. Peters, 60% of the large breaches could have been prevented by encrypting the covered entities and business associates’ laptops and mobile devices.
• Theft and loss continues to be the most common cause of breaches but OCR expects that IT hacking will continue to rise as a significant breach risk.
• Since 2009, consumer complaints regarding HIPAA violations continue to rise.
• Covered entities and business associates should already have in place business associate agreements that have been updated for the Omnibus Rule.
• Business associates must comply with all of the HIPAA Security Rules applicable to covered entities, “PERIOD.”
• Given the known risks of hacking, theft and loss and the direct guidance from OCR, covered entities and business associates must recognize that inadequate security, inadequate physical and technical safeguards is not acceptable.
• OCR expects that covered entities and business associates will be familiar with recent corrective actions, resolution agreements such as Parkview, NYP/Columbia, Concentra, QCA, Skaget County, Adult & Pediatric Dermatology, P.C., and Affinity Health Plan, Inc.

Continue reading…

Daily news stories about data breaches and enforcement actions seem to be the new norm, so it’s no surprise that people may start to believe that hackers have won the war and that no personal health information is safe. But exactly how many breaches have been reported in the last several years? And were the breaches the result of nefarious plots or just plain incompetence? About how many HIPAA investigations has the government actually launched?

Rest assured, Congress has been asking similar questions as well. The HITECH Act requires the Department of Health and Human Services Office for Civil Rights (OCR) to submit annual reports to Congress that provide contextualized information about incident rates and government action; OCR published its most recent two reports on Breaches of Unsecured Protected Health Information (Breach Report) and HIPAA Privacy, Security, and Breach Notification Rule Compliance (HIPAA Compliance Report).  In addition to including cumulative data, the reports cover relevant activities that occurred between January 1, 2011, and December 31, 2012. Continue reading…

It has been 18 years in coming, and the time is finally here. All Controlling Health Plans (CHPs) must obtain a unique Health Plan Identifier (HPID). A CHP is a health plan that controls its own business activities, actions, or policies, or is controlled by entities that are not health plans. The HPID is a unique 10-digit, all-numeric identifier that will be assigned to every qualifying health plan.

The Health Insurance Portability and Accountability Act (HIPAA) first indicated the need for HPIDs back in 1996. Almost a decade later, the Department of Health and Human Services (HHS) issued a final rule mandating HPID adoption. Now the important part: the deadline for most providers to register for an HPID is November 5, 2014. (Small health plans, those with annual claims paid of $5 million or less, have until November 5, 2015 to register.)

The primary purpose of HPIDs is standardization, which should make the exchange of electronic data more efficient and more accurate. Among other improvements, HPIDs will drastically decrease the instances of misrouted transactions or rejected transactions due to insurance identification errors. HHS has said that universal adoption of HPIDs is expected to save $6 billion over the next ten years.

While CHPs are required to register, sub-health plan affiliates may register for a HPID or may choose to use the number of its CHP parent. Self-insured group health plans that fit the definition of a CHP will be required to have an HPID. If a health plan engages a business associate to conduct standard transactions on its behalf, the business associate must use the health plan’s HPID in every field where the health plan is identified.

In addition to registering for the HPID, CHPs must disclose their HPID when requested and communicate any changes to the required data elements in the HPID Enumeration System within 30 days of the change.

The HPID will be used for all “standard transactions,” as defined by HIPAA, as well as for other lawful purposes, including: identification on health plans’ internal files; health insurance cards; cross-referencing in health care fraud and abuse files; and identification of health plans on Health Information Exchanges, and federal and state insurance exchanges.

Health Plans can complete their HPID application here.

HHS provides videos to assist Health Plans in the application process and a 111-page User Manual published by CMS here.

The Department of Health and Human Services (HHS) Office for Civil Rights (OCR) is not the only government arm that enforces data breaches. The Federal Trade Commission (FTC) has broad authority to regulate the security of consumer information and hold companies liable for a failure to use adequate data security practices. In August 2013, the FTC targeted LabMD, a medical testing laboratory, which maintains personal financial and health information for nearly one million consumers. The FTC alleged that LabMD failed to “provide reasonable and appropriate security for personal information on its computer networks,” which resulted in the data of thousands of consumers being leaked on to the peer-to-peer file-sharing network LimeWire, the black-market and in the hands of illegal data brokers.

Until recently the FTC enforced its breach authority under the Act without pushback, so a company facing allegations would simply settle. However, LabMD became the second company to challenge the FTC’s enforcement of data breaches (a hotel chain company was the first to challenge the FTC’s authority). LabMD attempted to stop the investigation by filing appeals to federal district and appellate courts and the FTC. The appeals were based primarily on two arguments: (i) the FTC does not have the statutory authority to set data security standards for companies; and (ii) LabMD is already subject to the OCR’s enforcement authority under HIPAA’s security regulations, so it should not also be subject to the FTC’s enforcement authority.

Despite LabMD’s best efforts, two Eleventh Circuit judges refused to intervene before the FTC issued its final order, the FTC rejected LabMD’s motion to dismiss and it moved forward with the administrative proceedings. However, LabMD continues to fightback. Recently, LabMD filed a motion to dismiss with the FTC, and contended that the FTC had not proven that the data breach caused injury, specifically, that it did not present evidence that there was substantial harm or likely to be substantial harm to consumers as a result of the breach.

During trial, Michael Daugherty, CEO of LabMD, testified that the effect of the FTC’s allegations and subsequent probe has placed the company in a “very deep coma” and that he “can’t understate how damaging and confusing and sideswiping [the matter is] to the attitude, energy and morale of [LabMD’s] management staff.”

Interestingly, the trial has been on recess since May 30 when the administrative law judge delayed the proceeding until June 12 in response to an announcement that the House Committee on Oversight and Government Reform was investigating Tiversa Inc., the cyber-intelligence firm that played a central role in the FTC’s case against LabMD. In a separate lawsuit, LabMD is alleging that Tiversa provided the FTC with patient information files that it stole from LabMD.

When trial resumes on June 12, the focus will continue to be on whether LabMD’s data security standards that it used to protect consumers’ personal information were reasonable. It will be interesting whether developments from the Tiversa investigation impact the outcome of the trial. For more information about this proceeding go to the FTC website.

Practice Tip: Ensure that your security policies and procedures are being implemented and followed in accordance with HIPAA security requirements because inadequate security safeguards may lead to enforcement actions by the OCR and the FTC.

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.

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.