First HIPAA Breach Settlement Involving Less Than 500 Patients Announced



In a move that signals just how seriously the federal government is taking its enforcement of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the U.S. Department of Health and Human Services (HHS) announced that the Hospice of North Idaho (HONI) has agreed to pay HHS $50,000 to settle potential violations of the HIPAA Security Rule.  This is the first settlement involving a breach of electronic protected health information (ePHI) affecting fewer than 500 individuals.

An examination of the facts surrounding the settlement should concern every health care provider. All must be aware that the federal government is on the lookout for providers who do not meet HIPAA’s privacy, security and breach notification requirements. Failure to comply comes with fines.

The HIPAA Breach Notification Rule requires covered entities to report any impermissible use or disclosure of protected health information. A breach affecting less than 500 individuals must be reported to the HHS on an annual basis.

The HHS Office for Civil Rights (OCR) began its investigation after HONI reported to HHS that an unencrypted laptop computer containing the electronic protected health information (ePHI) of 441 patients had been stolen in June 2010.  Laptops containing ePHI are regularly used by the members of the organization as part of their field work.

For providers who have not taken HIPAA’s requirements seriously, OCR’s basis for the sanction should be alarming. Over the course of the investigation, OCR discovered that HONI had not conducted a risk analysis to safeguard the ePHI.  Further, HONI did not have in place policies or procedures to address mobile device security as required by the HIPAA Security Rule.  Providers large and small who have not properly safeguarded ePHI and all other PHI are now on notice: the federal government is serious about protecting patient confidentiality, and is not afraid to punish any provider who fails to comply.

The Resolution Agreement can be found here:

Mike Igel is is Chairman of Trenam Kemker’s Health Care Audit Defense Team