HIPAA security violations result in $1.7 million settlement

by Saul Ewing LLP
Contact

Summary

On July 8, 2013, WellPoint, Inc., a managed care company (“WellPoint”), agreed to pay a $1.7 million fine to settle a self-reported breach of HIPAA, a key federal health privacy law, that led to the unauthorized disclosure of the electronic protected health information (“ePHI”) of approximately 612,000 individuals. The breach occurred because WellPoint did not adequately secure its information systems when making changes. The settlement with the U.S. Department of Health and Human Services (“HHS”) Office of Civil Rights (“OCR”) reminds all entities covered by HIPAA to use caution when updating their information systems.

What happened?

The OCR’s investigation was triggered by WellPoint’s self-reporting of a breach of the Health Information Portability and Accountability Act of 1996 (“HIPAA”). The OCR’s subsequent investigation revealed that from October 23, 2009 through March 7, 2010:

  • WellPoint did not adequately implement policies and procedures for protecting access to the online application database under HIPAA’s Security Rule;
  • WellPoint did not perform an appropriate technical evaluation in response to its software upgrade to determine compliance with the Security Rule; and
  • WellPoint did not implement technology to verify the identity of individuals accessing ePHI it maintained on the database.

To settle the matter, HHS-OCR entered into a Resolution Agreement with WellPoint. (Read the agreement at http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/wellpoint-agreement.pdf ) In announcing this Agreement, HHS noted in its press release that, “This case sends an important message to HIPAA-covered entities to take caution when implementing changes to their information systems, especially when those changes involve updates to Web-based applications or portals that are used to provide access to consumers’ health data using the Internet.”

Other examples of HIPAA enforcement

The WellPoint Resolution Agreement is the latest of a series of actions by OCR with respect to HIPAA violations:

  • In June 2013, the Shasta Regional Medical Center agreed to a fine of $275,000 for HIPAA violations. The OCR investigation was prompted by a newspaper article in which representatives of Shasta Regional Medical Center met with the media to discuss services provided to a patient without a valid written authorization.
  • In May 2013, Idaho State University (“ISU”) agreed to pay $400,000 to settle alleged HIPAA Security Rule violations. ISU self-reported a breach of unsecured ePHI for approximately 17,500 patients.
  • In December 2012, the Hospice of North Idaho (“HONE”) agreed to pay $50,000 to settle alleged HIPAA Security Rule violations. HONE self-reported a breach of an unencrypted laptop that was stolen and this resulted in the first settlement involving a breach of unsecured ePHI affecting fewer than 500 individuals.

HIPAA compliance challenges

Health care providers, health plans and other HIPAA-covered entities face complex challenges in complying with HIPAA, particularly in light of ever-changing technological advancements. Required breach disclosures under HIPAA heighten the stakes to ensure compliance.

Covered entities must be mindful that on September 23, 2013, the revised HIPAA regulations released in January 2013 shall go into effect. These revised rules will impact covered entities and business associates. Given the regulatory changes, OCR’s enforcement efforts, and mandatory HIPAA breach reporting pursuant to the Health Information Technology for Economic and Clinical Health (“HITECH”) Act, it is essential for all covered entities and business associates to ensure that they are HIPAA compliant at all times, including when implementing changes to information systems.

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.

© Saul Ewing LLP | Attorney Advertising

Written by:

Saul Ewing LLP
Contact
more
less

Saul Ewing LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!