HHS Publishes Long-Awaited Final Omnibus Rules for HIPAA

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The U.S. Department of Health and Human Services, Office for Civil Rights (OCR) published today the final regulations for the HIPAA Privacy, Security, Enforcement and Breach Notification Rules (the Omnibus Rules). The Omnibus Rules include significant changes that will impact all covered entities and business associates. Our initial impressions of the Omnibus Rules are as follows:

  • Business associates, as well as their subcontractors that create, receive, maintain or transmit protected health information (PHI), will now have direct liability under HIPAA and must comply with its security and privacy standards.
  • The definition of a data “breach” was changed. The Omnibus Rules replaced the more subjective “harm standard” with a more objective test that requires the covered entity to determine (based on a four-factor risk assessment) whether protected health information has been “compromised.”
  • Covered entities are restricted from using PHI for marketing and fundraising purposes, and are prohibited from selling PHI without prior authorization, with limited exceptions.
  • Penalties have been increased for violations under HIPAA based on the level of negligence, with maximum penalties of $1.5 million per violation.

The Omnibus Rules, when read in the context of recent OCR guidance and press releases, suggests increased enforcement in this area is likely.

Snell & Wilmer’s health care, employee benefits and data privacy attorneys will be distributing a variety of educational materials and resources on the Omnibus Rules in the coming weeks. Stay tuned for more details.