Health plan pays for failing to erase data on leased equipment: two takeaways for companies handling electronic PHI


The Office for Civil Rights (OCR) has announced a settlement between the US Department of Health and Human Services and Affinity Health Plan, Inc. to address potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Affinity, a not-for-profit managed care plan serving the New York metropolitan area, paid more than US$1.2 million as part of the settlement, even though it was not clear that any protected health information (PHI) was actually misused or retained as a result of the breach. 

Affinity notified OCR of a potential breach on April 15, 2010, after discovering that copiers it had leased and then returned still contained electronic PHI on their hard drives.  At least one recipient of the leased equipment, CBS Evening News, reported this to Affinity, which in turn reported the incident to OCR.  Presumably,   CBS Evening News recognized the sensitive nature of the information and did not retain or further disclose the information.  However, the risk of compromise was relatively high – Affinity had returned multiple photocopiers to its leasing agents that together contained information on as many as 344,579 individuals.

OCR concluded that Affinity impermissibly disclosed the PHI of these individuals when it returned the photocopiers to the leasing agents without erasing data contained on the copier hard drives.  However, this alone does not explain outcome of this case.  OCR found it significant that Affinity failed to account and plan for the storage of electronic PHI on photocopier hard drives in its analysis of risks and vulnerabilities, as required by the HIPAA Security Rule.  OCR further found it significant that Affinity failed to implement policies and procedures when returning the photocopiers to its leasing agents.

In addition to the settlement payment, OCR instituted a corrective action plan (CAP) requiring Affinity to use best efforts to retrieve all hard drives that were contained on the photocopiers that were in the possession of the leasing agent and to take certain measures to safeguard all electronic PHI.

Two important instructions

This settlement provides at least two important instructions for companies that handle electronic PHI:

(1) When you are performing gap or risk analyses, don’t overlook printers, copiers, scanners and other equipment with memory.

(2)  Address the deletion of any and all PHI stored on such equipment in your written policies and procedures.

The HHS Resolution Agreement and CAP can be found on the OCR website here.  For more information on safeguarding sensitive data stored in the hard drives of digital copiers, see this page. The National Institute of Standards and Technology has also issued guidance on media sanitation, available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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