The HIPAA/HITECH Final Rule Has Been Released

by BakerHostetler

The long awaited HIPAA/HITECH Final Rule is out. The final rule is effective March 26, 2013, but covered entities (CEs) and business associates (BAs) will have 180 days beyond the effective date to come into compliance. While we are still conducting a comprehensive review of this 563-page document, below are a few of the changes we have found so far:

  • BAs are now directly liable for compliance with certain HIPAA Privacy and Security Rule requirements: impermissible uses and disclosures; failure to provide breach notification to the covered entity; failure to provide access to a copy of electronic protected health information to either covered entity, the individual, or the individual's designee; failure to disclose PHI where required by the Secretary to investigate or determine the business associate's compliance with the HIPAA Rules; failure to provide an accounting of disclosures; and for failure to comply with the requirements of the Security Rule.
  • Insurers may need a business associate agreement (BAA) with a covered entity if it is performing risk management or assessment activities or legal services for the covered entity which involve access to PHI.
  • Additional guidance has been provided regarding the assessment of civil monetary penalties (CMPs): number of individuals affected and time period during which violations occurred will be considered. As noted below, OCR's presentation to the State Attorneys General shows how quickly CMPs can reach very high numbers.
  • Reputational harm is a fact-specific inquiry and does not arise solely from the sensitivity of the diagnosis. Instead, OCR will look at whether there were adverse affects on employment, standing in the community, or personal relationships.
  • When assessing CMPs, an organization's history of compliance and non-compliance will be considered.  A mere complaint does not constitute an indication of non-compliance.
  • There are significant changes to treatment and care communications when the covered entity receives financial remuneration for promoting a third party's goods and services.
  • Individuals must have a right to access and to obtain a copy of PHI within 30 days (with a one-time 30 day extension after written notice for the delay and when the records will be provided).
  • The definition of breach has been modified to clarify that an impermissible use or disclosure of PHI is PRESUMED to be a breach unless the CE or BA demonstrates that there is a low probability that the PHI has been compromised. Documentation sufficient to meet this burden of proof must be maintained.
  • Breach notification is not required if a CE or BA demonstrates through a risk assessment that there is a low probability that the PHI has been compromised--the focus is no longer on the harm to the individual.
  • The probability of harm must be assessed by considering at least: (1) the nature and extent of PHI involved; (2) the unauthorized person who used the PHI or to whom the disclosure was made; (3) whether PHI was actually acquired or viewed; (4) the extent to which the risk to PHI has been mitigated (e.g. assurances from trusted third-parties that the information was destroyed). Most of these factors were likely considered previously by CEs.
  • Notification does not require an analysis of risk because the occurrence of a breach is presumed.
  • Notification, in situations where the use or disclosure is so inconsequential, is not warranted because it may cause the individual unnecessary anxiety or even eventual apathy if notifications of these types of incidents are sent routinely. An example is provided of a misdirected fax to the incorrect physician who immediately calls to report the error. This is nothing new, just a clear expression of what many have already believed.
  • Substitute notice or media notice may at times occur after the 60-day period dependin g on circumstances.
  • Breaches under 500 must be reported no later than 60 days after the calendar year in which they were discovered, not when they occurred.
  • Notification to the Secretary must occur contemporaneously with notice to individuals for breaches over 500.

We also notice some things remain:

  • HITECH only preempts state law to the extent HITECH is more stringent. HITECH is only a Federal floor of privacy protection.
  • The revised penalty structure remains. A presentation by the OCR to state Attorneys General shows how aggressive OCR may be in assessing civil monetary penalties (CMPs).
  • "The goal of enforcement is to ensure that violations do not recur without impeding access to care." P. 79. An entity's financial condition will still be considered.
  • The addressable standard remains. HHS does "not mandate the use of specific technologies, or require uniform policies and procedures for compliance, because [they] recognize the diversity of regulated entities and appreciate the unique characteristics of their environments." P. 102.
  • The "minimum necessary" standard applies directly to BAs.
  • Certain provisions of the Privacy Rule do not apply to BAs unless the CE delegates that responsibility: designating a privacy officer, providing a notice of privacy practices (NPP).
  • BAAs are still required to help clarify and limit permissible uses and disclosures.
  • A decedent's PHI will require protection for 50 years.
  • The requirement for return or destruction of PHI by the BA at the termination of the contract (if feasible) does extend to sub-BAAs.
  • HHS will not establish or endorse a certification process for HIPAA compliance by BAAs and sub-BAAs.
  • Timeliness and content of notification have not changed.
  • A CE retains the ultimate obligation for proper notification. Notification by the BA can be delegated.
  • Media notification and notification to HHS has not changed.
  • Law enforcement delays remain available.
  • There are no changes to the circumstances permitting preemption of state law of HITECH.

We will continue to assess these changes and post updates as our analysis develops and the impact of these changes is further considered.


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.

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