HIPAA Settlement Emphasizes Importance of Accurate Hybrid Entity Designations

by Saul Ewing Arnstein & Lehr LLP

Saul Ewing LLP


On November 22, 2016, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR), announced that University of Massachusetts Amherst (UMA) agreed to settle allegations relating to the HIPAA Privacy and Security Rules for $650,000 and enter into a corrective action plan (CAP). This is the 13th settlement announced by OCR in 2016. The fines imposed by OCR this year from these settlements total almost $24 million.

In June 2013, UMA reported that a workstation in its Center for Language, Speech and Hearing (Center) was infected with malware. UMA determined that the malware was a generic remote access Trojan that was able to infiltrate UMA’s information technology system because UMA did not have a firewall in effect. The malware resulted in the impermissible disclosure of electronic protected health information (ePHI) of approximately 1,670 individuals.

OCR stated that its investigation of the UMA malware incident revealed the following:

  • UMA did not include each necessary HIPAA covered component in its hybrid entity designation, including the Center.  Because the Center was not included within the hybrid entity designation, UMA did not implement policies and procedures for HIPAA Privacy and Security compliance at the Center;
  • UMA did not conduct an accurate and thorough risk analysis of the potential risks and vulnerabilities to the confidentiality, integrity and availability of all of its ePHI; and
  • UMA did not implement technical security measures at the Center to ensure that firewalls were in place.

The CAP entered into by UMA as part of the Resolution Agreement provides that UMA will do each of the following:

  • conduct a comprehensive risk analysis of its ePHI that will be shared with OCR for OCR’s approval;
  • develop an enterprise-wide risk management plan to address and mitigate security risks and vulnerabilities identified in the risk analysis that will be shared with OCR for its approval;
  • review and revise, as necessary, the Center’s HIPAA written policies and procedures and share them with OCR for its approval; and
  • distribute the Center’s revised HIPAA policies with the Center’s workforce and provide training for these individuals with respect to these policies.  

The Resolution Agreement, CAP and OCR press release may be found here.

Important Takeaways and Next Steps

It is critically important for universities and other entities that have diverse (HIPAA and non-HIPAA governed) activities to ensure that they have appropriately created their hybrid entity designations and that each HIPAA covered component is included in the hybrid entity designation.  Universities should not overlook “smaller” clinics and health care operations on the university campus in designating their covered components. The hybrid entity designated components must be updated as appropriate.  

OCR continues to prioritize the importance of HIPAA Security Rule compliance in recent settlements.  Malware can affect any institution – no matter its size.  In order to protect ePHI, covered entities and business associates should regularly review HIPAA Privacy, Security and Breach Notification policies, undertake an enterprise-wide risk analysis, and thereafter implement and maintain an appropriate risk management plan.

OCR’s announcement of settlements with covered entities and business associates have averaged more than one per month during 2016.  OCR inferred in its press release that it would have required a higher settlement payment from UMA were it not for the fact that UMA operated at a financial loss in 2015. 


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 Arnstein & Lehr LLP | Attorney Advertising

Written by:

Saul Ewing Arnstein & Lehr LLP

Saul Ewing Arnstein & Lehr 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.
Custom Email Digest
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 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.