resolution agreement

OCR Announces Two Significant HIPAA Breach Settlements

Posted by Gregory M. Fliszar on March 21, 2016
HHS, OCR / No Comments

shutterstock_62667685On consecutive days, the Office of Civil Rights (“OCR”) of the Department of Health and Human Services (“HHS”) recently announced two large HIPAA breach settlements. On March 16, 2016, OCR announced that it entered into a Resolution Agreement with North Memorial Health Care of Minnesota for $1.55 million plus a two-year corrective action plan. On March 17, 2016 OCR followed by announcing that Feinstein Institute for Medical research, a New York biomedical research institute, agreed to pay to OCR $3.9 million and enter into a three-year corrective action plan to settle potential HIPAA violations. Both cases resulted from the all too familiar scenario of breaches resulting from stolen, unencrypted laptops.

In the Minnesota hospital breach, the unencrypted laptop containing the PHI of over 9,000 individuals was stolen from the locked car of an employee of a business associate of the hospital. According to the OCR’s investigation, the hospital failed to have a business associate agreement in place with that particular business associate. OCR also alleged that the hospital had not previously performed a risk analysis to identify and address potential risks and vulnerabilities to the ePHI it maintained, accessed or transmitted.

In the New York research corporation breach, OCR alleged that the institution did not have policies and procedures in place, including a policy on encryption and one that addressed use and access of electronic devices (e.g., the removal of the devices from the institution’s facility), nor did it have in place a security management process that sufficiently addressed potential security risks and vulnerabilities to ePHI, namely, its confidentiality, vulnerability or integrity. Notably, the stolen, unencrypted laptop contained the PHI of approximately 13,000 individuals.

As above, both OCR settlements also include multiple year corrective action plans requiring the hospital and research facility to conduct risk analyses/assessments, train their employees, and have HIPAA compliant policies and procedures in place. The Resolution Agreement for the Minnesota hospital breach is available here, and the Resolution Agreement for the New York research institute breach is available here.

Takeaways: The OCR’s 2016 breach enforcement is off to a very strong start with two high dollar settlements. Lessons learned from both breaches include the significance of encrypting electronic devices, conducting and updating on a regular basis security risk assessments and analyses, having adequate safeguards in place to protect PHI, having business associate agreements with all business associates, and having and implementing HIPAA policies and procedures to protect the security and privacy of PHI, including for example, policies related to encryption, authorized access to ePHI/PHI, and removal of electronic devices from facilities.

 

For more information, contact Greg Fliszar, J. Nicole Martin, or a member of Cozen O’Connor’s Health Law team.

 

Gregory M. Fliszar

Greg focuses his practice on health law and handles a variety of health law litigation and regulatory and compliance matters for a number of different types of health care providers, including hospitals, hospices, mental health providers and physician groups. He has significant experience with HIPAA and privacy issues and has counseled insurance company clients on understanding their obligations under the Medicare Secondary Payer Act.

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OCR Announces Another HIPAA Settlement and Warns Not to Forget About Paper Records

Posted by Gregory M. Fliszar on May 04, 2015
HHS, HIPAA, OCR / No Comments

On April 27, 2015, the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) announced that Cornell Prescription Pharmacy (“Cornell Pharmacy”) had entered into a resolution agreement to settle, without an admission of liability or wrongdoing, potential HIPAA violations. As part of the resolution agreement Cornell Pharmacy will pay $125,000 and enter into a two-year corrective action plan (“CAP”) focused on correcting the alleged deficiencies in its HIPAA compliance program.

Cornell Pharmacy is a small, single store pharmacy located in Denver, Colorado that specializes in compound medications and providing services for local hospice agencies. OCR began an investigation into the pharmacy after it received a media report from a Denver news agency that protected health information (“PHI”) belonging to Cornell Pharmacy was apparently disposed of and found in an unlocked, publically accessible dumpster. The documents were not shredded and contained the PHI of approximately 1,610 of Cornell Pharmacy’s patients.   After conducting its investigation, OCR concluded that Cornell Pharmacy failed to implement any written policies and procedures as required by HIPAA’s Privacy Rule, and further failed to provide training on the Privacy Rule to its workforce members.

This settlement is instructive as OCR again highlights the importance of having updated and comprehensive HIPAA policies and procedures in place, including policies on the proper disposal of PHI, and on training all staff on those policies and procedures.   Further, in this year of massive cyber-attacks and other breaches of electronic data, this HIPAA settlement serves to remind covered entities and business associates not to forget about protecting their paper records as well.   As stated by OCR in its press release, “Even in our increasingly electronic world, it is critical that policies and procedures be in place for secure disposal of patient information, whether that information is in electronic form or on paper.” As discovered by Cornell Pharmacy, a breach or other improper disclosure of paper PHI can also result in significant consequences.

For further information please contact the author, Gregory M. Fliszar (Philadelphia, PA), or other members of Cozen O’Connor’s healthcare team.

Gregory M. Fliszar

Greg focuses his practice on health law and handles a variety of health law litigation and regulatory and compliance matters for a number of different types of health care providers, including hospitals, hospices, mental health providers and physician groups. He has significant experience with HIPAA and privacy issues and has counseled insurance company clients on understanding their obligations under the Medicare Secondary Payer Act.

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