Is Your Firewall On? Are You Sure? Idaho State University Settles Privacy Rule Violations for $400,000

by Baker Donelson

The HHS Office of Civil Rights (OCR) recently announced a $400,000 settlement with Idaho State University (ISU) following a lengthy investigation of the privacy and security practices at ISU outpatient clinics. In addition to the monetary settlement ISU, was required to execute a two-year Corrective Action Plan (CAP) that requires ISU to identify itself as a “hybrid entity,” make substantial changes to its risk analysis and management efforts, and submit annual reports.

ISU’s troubles began in September 2011, when the university discovered that its server firewall had been disabled in August 2010 for maintenance and had never been restored. The university noted to local news media at the time that, although some “hackers” had accessed the server and used it to store pirated movie files, “there [was] no evidence that any of that medical information has been stolen or even accessed.” The security lapse, however, exposed approximately 17,500 patient medical records, and was properly reported to OCR.

As has been the case with all breaches involving more than 500 individuals, OCR opened an investigation into ISU’s HIPAA compliance. After determining that ISU failed to comply with requirements to properly assess the risk of a data breach and failed to properly monitor its systems, ISU and OCR reached the settlement described.

ISU’s Violations

OCR’s Resolution Agreement (RA) (which also attaches a copy of the CAP) [PDF] provides some detail regarding the categories of noncompliance it identified as justifying the monetary settlement and CAP:
  • ISU did not “conduct an analysis of the risk to the confidentiality of ePHI as part of its security management process from April 1, 2007 until November 26, 2012”;
  • ISU did not “adequately implement security measures sufficient to reduce the risks and vulnerabilities to a reasonable and appropriate level from April 1, 2007 until November 26, 2012”; and
  • ISU did not “adequately implement procedures to regularly review records of information system activity to determine if any ePHI was used or disclosed in an inappropriate manner from April 1, 2007 until June 6, 2012.”

The RA does not provide, of course, an explanation of the steps that ISU had taken, but seems to imply that ISU took no steps either to identify risks to its PHI or, perhaps more importantly, to actively monitor system activity to ensure that ePHI was not being improperly accessed. Similarly, the listing of violations does not cite to any specific regulation or standard to support OCR’s determination that a violation had occurred (mostly because the standards at work, “reasonableness,” “appropriateness,” and “sufficiency,” are not specifically defined in any regulation or guidance). That covered entities are required to both conduct an analysis of risks posed to its PHI (including ePHI) and actively monitor systems where ePHI is stored, however, is a relatively well-settled principle.


A settlement with OCR generally requires not only a cash payment but also a commitment to a (generally, two year) Corrective Action Plan. (For a detailed discussion of corrective action plans, see “Corrective Action Plans Can Mean Significant Compliance Monitoring Requirements.”) These plans are intended to ensure ongoing compliance much in the same fashion as Corporate Integrity Agreements are intended to ensure ongoing compliance following a settlement with the HHS OIG. The two agreements also obligate the provider to significant ongoing reporting and auditing responsibilities as well as potentially substantial costs related to a diversion of enterprise resources and the retention of (and satisfaction of) an outside auditor.

Given the scope of ISU’s breach, its CAP might be seen as more lenient than one might expect. Notably, the CAP requires that ISU properly identify itself as a hybrid entity (an entity with some business units subject to HIPAA, and some not), submit annual reports and correct its security deficiencies, but it does not require the engagement of an outside monitor, the submission of monitor reports, or the imposition of any (announced or unannounced) site inspections. As we have noted in other articles, The imposition of the latter obligations are not unusual and can prove a costly burden to providers subject to a CAP. (For a more detailed discussion of CAP requirements, see “$1.5 Million OCR HIPAA Settlement Provides Notice of Increased Enforcement Focus on Mobile Device Security and Encryption.”)

In the event that ISU fails to fulfill its responsibilities under the CAP, of course, it would remain subject not only to an additional investigation and any penalties resulting from the conduct that breached the CAP, but OCR would no longer be bound by the settlement’s release.

Ober|Kaler's Comments

ISU’s settlement, though unsurprising, is instructive in several ways:
  • Security assessment and monitoring (and the documentation of those activities) are key to compliance with the Security Standards and a clear focus in recent OCR investigations. Covered entities and business associates should by now understand that active monitoring of systems containing ePHI is mandatory, but it is equally important to note that security assessment and monitoring that isn’t well documented might as well not have happened. Every step in a provider’s security process should be clearly documented by the entity’s privacy or security officer (or a designee).
  • When it comes to HHS OCR, no news is not necessarily good news. By statute, OCR must post a notice regarding all breaches affecting 500 or more individuals, and does so on its dedicated web page. It is not a short list. By policy, OCR has investigated (or will investigate) all of these large breaches. That a breach occurred two (or more) years ago is no guarantee that an investigation won’t be undertaken or that penalties won’t be forthcoming. Providers who experience a breach involving more than 500 individuals’ PHI should expect an investigation and should be prepared to demonstrate the steps they have taken both before and since the breach to ensure and, where necessary, improve compliance.
  • Finally, although not discussed in any of the publicly available materials surrounding the ISU settlement, it would be difficult to believe that post-breach responses (and perhaps some skillful negotiation) didn’t play a large role in the settlement reached in this case. The ISU breach involved thousands of patients, went on for nearly a year, and was the direct result of a lack of basic system monitoring – yet the OCR settlement is far less burdensome than others that involved fewer patients and far less surprising security lapses. Entities facing a breach should keep in mind that their post-breach actions, including notices sent, remediation efforts undertaken, and policy revisions implemented, will be reviewed just as closely as the mistakes that led to the breach. They should also keep in mind that a settlement is just that – and all settlements involve a good deal of negotiating.

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.

© Baker Donelson | Attorney Advertising

Written by:

Baker Donelson

Baker Donelson 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.