How To Catch-Up in a Revised HIPAA World

by Smith Anderson

The HIPAA final omnibus rule (Omnibus Rule) made sweeping changes to the HIPAA Privacy, Security, Breach Notification and Enforcement Rules earlier this year. Although the compliance deadline of September 23, 2013 has come and gone, if you are like many organizations, your HIPAA compliance efforts are ongoing.  

Whether you’re still in “where do I start” mode or seeing light at the end of the tunnel, consider the following HIPAA compliance action items if you haven’t already.[1]

1. Consider Contractor Relationships in Light of Business Associate Changes

The Omnibus Rule has expanded the scope of business associates (BAs) to include downstream subcontractors that create, receive, maintain or transmit PHI on behalf of another BA. The new rules have also clarified that those who merely maintain or store PHI, such as cloud service providers also qualify as BAs. 

Those who meet the legal definition of a BA are now directly subject to HIPAA and face direct enforcement by HHS. Even with this additional layer of legal exposure, the requirement to enter into a BA agreement remains intact. Thus, covered entities are still required to execute BA agreements with their BAs, and BAs are required to execute BA agreements with their subcontractors.     

Action: Evaluate your organization’s contractor relationships to ensure that appropriate BA agreements are in place. 

2. Revise Content of Business Associate Agreements

The Omnibus Rule includes new content requirements for BA agreements, including, for example:

  • Representations regarding compliance with the Security Rule;
  • Commitments to provide PHI in electronic format in response to individual requests; and
  • Restrictions on the sale of PHI and uses and disclosures of PHI for fundraising and marketing purposes. 

BA agreements with downstream subcontractors should impose the same restrictions and obligations as the BA agreements with any upstream covered entity or BA. Note that most existing BA agreements will need to be updated as a result of the Omnibus Rule. Existing BA agreements entered before January 25, 2013 (and not renewed or modified from March 26, 2013 to September 23, 2013) will not need to be updated until the earlier of (a) the date the BA agreement is renewed or modified, or (b) September 22, 2014. 

Action: Review BA agreements to determine whether updates are needed to incorporate new content requirements and to make sure they appropriately allocate risk through the use of insurance requirements, indemnity provisions, damages exclusion and liability cap provisions. 

3. Review and Revise Policies and Provide Updated Training

The Omnibus Rule imposes new restrictions regarding certain uses and disclosures of PHI, including requiring specifically-worded authorizations for marketing and selling PHI, and providing certain opt-out rights for fundraising activities. In addition, the breach notification rule has changed. The standard under the old rule requiring notification if the breach posed a “significant risk of harm” to affected individuals has been eliminated. Now, any use or disclosure of PHI not permitted by the Privacy Rule is presumed to be a reportable breach. This presumption can be overcome if a multi-factor risk analysis shows a “low probability” that PHI has been compromised.  

Action: Review privacy policies to determine whether updates to reflect these changes are needed and plan to conduct updated workforce training sessions for any policy revisions.  

4. Address Security Compliance

BAs, including subcontractors, are now responsible for compliance with the full Security Rule. The Security Rule generally requires protection of the confidentiality, integrity and availability of electronic PHI.  

The requirements of the Security Rule are designed to be technology-neutral and scalable to the size of the organization. Certain safeguards are “required” and some “addressable,” the latter allowing flexibility based on an organization’s size and capabilities, cost and nature of the security risk. If an addressable safeguard is not implemented, you must document the rationale for why the safeguard is not reasonable and appropriate and implement an equivalent alternative safeguard. 

Action: Evaluate your organization’s security policies and procedures for full Security Rule compliance and assess the status of physical, technical and administrative safeguards by conducting risk assessments regarding electronic PHI on a regular basis. 

5. Appoint Privacy and Security Officers

Action: If you haven’t already done so, now is the time to appoint a Privacy Officer and a Security Officer. These individuals are generally responsible for implementing policies and training, responding to and investigating allegations of non-compliance and potential breaches of PHI and staying informed of HIPAA changes and HHS guidance. 

6. Update Notice of Privacy Practices (NPP) - Covered Entities Only

The Omnibus Rule requires covered entities to include a number of new statements in their NPPs. Examples include:

  • A statement that uses and disclosures of PHI for marketing purposes and disclosures that constitute the sale of PHI require an authorization;
  • A statement that the covered entity is required by law to notify affected individuals following a breach of unsecured PHI;
  • A statement that maintained “psychotherapy notes” will only be used and disclosed with the individual’s authorization; and
  • A statement acknowledging an individual’s right to restrict certain PHI from disclosure to health plans where the individual pays out of pocket in full for the care and requests such a restriction. 

Action: Determine whether these updates are applicable to your covered entity operations, revise your existing NPP accordingly and distribute your modified NPP in accordance with the new rules.  

7. Sensitize Workforce to Increased HHS Enforcement and Penalties

HHS is now required to conduct compliance reviews and investigate complaints when a preliminary review of the facts indicates a violation due to willful neglect. Depending on the level of culpability, penalties can range from $100 to $50,000 per violation of each individual HIPAA provision. The annual penalty cap is $1.5 million per violation of an identical provision of HIPAA. If a violation of one provision exists, there are likely other violations, resulting in the possibility of multi-million dollar penalties in a calendar year. 

Action: The threat of enforcement and penalties are just two of the reasons that your workforce should pay close attention to HIPAA compliance. Sensitize your teams to financial and reputational considerations and the significant impact that non-compliance can have on an organization. 

8. Explore Insurance Coverage

Certain insurance policies are tailored to HIPAA-related losses. For example, cyber liability policies can cover expenses related to forensic investigations, notification costs, credit monitoring, public relations assistance and the cost of retaining counsel to evaluate obligations in response to a breach of unsecured PHI.

Action: Review your organization’s insurance coverage with respect to HIPAA-related losses. If existing insurance policies do not cover losses relating to breaches of unsecured PHI or other HIPAA violations, consider the potential cushioning effect of a tailored policy. 

[1] This Client Alert is not a comprehensive summary of all Omnibus Rule requirements and necessary actions.  For the complete Omnibus Rule, please see Modifications to the HIPAA Privacy, Security, Breach Notification and Enforcement Rules under the Health Information Technology for Economic and Clinical Health Act and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules, 78 Fed. Reg. 5566 (Jan. 25, 2013) (codified at 45 C.F.R. Parts 160 and 164). 

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.

© Smith Anderson | Attorney Advertising

Written by:

Smith Anderson

Smith Anderson 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 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.