Accretive Health Data Breach Leads To Twenty-Year Settlement With The FTC

by Akerman LLP - Health Law Rx

On December 31, 2013, the Federal Trade Commission ("FTC") announced that Accretive Health, Inc., ("Accretive") agreed to settle charges that the company's inadequate data security measures exposed sensitive consumer information to the risk of theft or misuse. Accretive provides medical billing and revenue management services to hospitals around the country. Accretive experienced a data breach in 2011 when one of its unencrypted laptops containing the personal information of 23,000 patients at Minnesota hospitals was stolen from the car of an Accretive employee. 

The FTC complaint alleges that Accretive failed to provide reasonable and appropriate security for the personal information of consumers resulting in the 2011 data breach. The complaint also alleges that Accretive created unnecessary risks of unauthorized access to personal information by transporting laptops containing personal information in a manner that made them vulnerable to theft and failing to adequately restrict access to personal information based on an employee's need for the information.

Under the terms of the settlement with the FTC, Accretive must establish and maintain a comprehensive information security program designed to protect the security, confidentiality, and integrity of personal information collected about or from consumers. Accretive must have the program evaluated initially and then every two years by a certified third-party. The settlement will be in force for twenty years. The settlement is open for public comment until January 30, 2014.

Previously, the Minnesota Attorney General sued Accretive over the breach and debt collection activities the breach investigation revealed. The Attorney General alleged violations of HIPAA and Minnesota privacy laws and debt collection laws. Accretive settled with the Attorney General in July 2012, agreeing to pay $2.5 million, cease business operations in Minnesota, and not reenter the state for six years without the agreement of the Attorney General. 

The FTC also advised Accretive that it was closing its investigation into Accretive's conduct in collecting defaulted debts in hospital emergency rooms and would not be pursue a claim that the company violated the Fair Debt Collection Act. In reaching its decision, the FTC considered the settlement agreement with the State of Minnesota mentioned above, which effectively bans Accretive from doing business in that state for up to six years.

The Accretive case offers several key takeaways for covered entities and business associates:

1. Encrypt PHI that is stored on portable devices, including laptops and USB drives. This is a point of emphasis of HHS Office for Civil Rights.

2. Expect enforcement activity not just from the HHS Office for Civil Rights, but other enforcers such as state Attorneys General and the FTC. 

3. Anticipate that when investigators show up due to a data breach they may uncover other potential wrongdoing such as questionable debt collection practices or improper billing and coding, leading to additional enforcement actions. 

4. To avoid potentially lengthy, i.e., twenty years, government oversight, covered entities and business associates should review and update their HIPAA privacy and security policies and procedures now.

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.

© Akerman LLP - Health Law Rx | Attorney Advertising

Written by:

Akerman LLP - Health Law Rx

Akerman LLP - Health Law Rx 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):

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.


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 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:

- 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.