Healthcare Cybersecurity

2022 Healthcare Data Breach Report

For the first time since 2015, there was a year-over-year decline in the number of data breaches reported to the Department of Health and Human Services’ Office for Civil Rights (OCR), albeit only by 1.13% with 707 data breaches of 500 or more records reported. Even with that reduction, 2022 still ranked as the second-worst-ever year in terms of the number of reported breaches.

As the year drew to an end, data breach numbers started to decline from a high of 75 data breaches in October. Time will tell whether this trend will continue in 2023, although the lull in data breaches appears to have continued so far this year with an atypically low number of breaches currently showing on the OCR data breach portal this month.

In addition to the slight reduction in reported data breaches, there was also a drop in the number of breached records, which fell by 13.15% from 54.09 million records in 2021 to 51.9 million records in 2022.

The theft of protected health information places patients and health plan members at risk of identity theft and fraud, but by far the biggest concern is the threat to patient safety. Cyberattacks on healthcare providers often cause IT system outages, which in many cases have lasted several weeks causing considerable disruption to patient care. While there have not been any known cases of cyberattacks directly causing fatalities, the lack of access to patient data causes diagnosis and treatment delays that affect patient outcomes. Multiple studies have identified an increase in mortality rates at hospitals following ransomware attacks and other major cyber incidents.

 

These cyberattacks and data breaches result in huge financial losses for healthcare organizations. The 2022 IBM cost of a data breach report indicates the average cost of a healthcare data breach increased to an all-time high of $10.1 million in 2023, although data breaches can be significantly more expensive. In addition to the considerable breach remediation costs, security must be improved, cyber insurance premiums increase, and it is now common for multiple class action lawsuits to be filed following data breaches. There is also a risk of financial penalties from regulators.

The largest ever healthcare data breach, suffered by Anthem Inc in 2015, affected 78.8 million members and cost the health insurer around $230 million in clean-up costs, $115 million to settle the lawsuits, $39.5 million to settle the state attorneys general investigation, and $16 million to resolve the OCR investigation. Even much smaller data breaches can prove incredibly costly. Scripps Health suffered a data breach of 1.2 million records in 2021 due to a ransomware attack. The attack caused losses in excess of $113 million due to lost business ($92 million) and the clean-up costs ($21 million). There are also several lawsuits outstanding and there could be regulatory fines.

Largest Healthcare Data Breaches in 2022

There were 11 reported healthcare data breaches of more than 1 million records in 2022 and a further 14 data breaches of over 500,000 records. The majority of those breaches were hacking incidents, many of which involved ransomware or attempted extortion. Notable exceptions were several impermissible disclosure incidents that resulted from the use of pixels on websites. These third-party tracking technologies were added to websites to improve services and website functionality, but the data collected was inadvertently transmitted to third parties such as Meta and Google when users visited the websites while logged into their Google or Facebook accounts. The extent to which these tracking technologies have been used by healthcare organizations prompted OCR to issue guidance on these technologies, highlighting the considerable potential for HIPAA violations.

Name of Covered Entity State Covered Entity Type Individuals Affected Type of Breach
OneTouchPoint, Inc. WI Business Associate 4,112,892 Ransomware attack
Advocate Aurora Health WI Healthcare Provider 3,000,000 Pixel-related impermissible disclosure via websites
Connexin Software, Inc. PA Business Associate 2,216,365 Hacking incident and data theft
Shields Health Care Group, Inc. MA Business Associate 2,000,000 Hacking incident and data theft
Professional Finance Company, Inc. CO Business Associate 1,918,941 Ransomware attack
Baptist Medical Center TX Healthcare Provider 1,608,549 Malware infection
Community Health Network, Inc. as an Affiliated Covered Entity IN Healthcare Provider 1,500,000 Pixel-related impermissible disclosure via websites
Novant Health Inc. on behalf of Novant Health ACE & as contractor for NMG Services Inc. NC Business Associate 1,362,296 Pixel-related impermissible disclosure via websites
North Broward Hospital District d/b/a Broward Health (“Broward Health”) FL Healthcare Provider 1,351,431 Hacking incident and data theft
Texas Tech University Health Sciences Center TX Healthcare Provider 1,290,104 Hacking incident and data theft
Doctors’ Center Hospital PR Healthcare Provider 1,195,220 Ransomware attack
Practice Resources, LLC NY Business Associate 942,138 Hacking incident and data theft
Wright & Filippis LLC MI Healthcare Provider 877,584 Ransomware attack
Partnership HealthPlan of California CA Health Plan 854,913 Hacking incident and data theft
MCG Health, LLC WA Business Associate 793,283 Hacking incident and data theft
Yuma Regional Medical Center AZ Healthcare Provider 737,448 Ransomware attack
SightCare, Inc. AZ Health Plan 637,999 Hacking incident and data theft
CommonSpirit Health IL Business Associate 623,774 Ransomware attack
Metropolitan Area EMS Authority dba MedStar Mobile Healthcare TX Healthcare Provider 612,000 Ransomware attack
Wolfe Clinic, P.C. IA Healthcare Provider 542,776 Ransomware attack
Morley Companies, Inc. MI Business Associate 521,046 Ransomware attack
Adaptive Health Integrations ND Healthcare Provider 510,574 Adaptive Health Integrations
Christie Business Holdings Company, P.C. IL Healthcare Provider 502,869 Hacking incident and data theft
Health Care Management Solutions, LLC WV Business Associate 500,000 Hacking incident and data theft
OakBend Medical Center / OakBend Medical Group TX Healthcare Provider 500,000 Ransomware attack

While 2022 saw some very large data breaches reported, the majority of reported data breaches were relatively small. 81% of the year’s data breaches involved fewer than 50,000 records, and 58% involved between 500 and 999 records.

Hacking incidents dominated the breach reports with 555 of the 707 reported breaches (71.4%) classified as hacking/IT incidents, which accounted for 84.6% of all breached records in 2022. The average breach size was 79,075 records and the median breach size was 8,871 records. There were 113 reported unauthorized access/disclosure breaches reported in 2022, accounting for 14.5% of the breached records. The average breach size was 66,610 records due to some large pixel-related data breaches, and the median breach size was 1,652 records.

Theft (23 breaches) and loss (12 breaches) incidents were reported in relatively low numbers, continuing a downward trend from these once incredibly common data breaches. The downward trend is due to better control of devices and the use of encryption. The average breach size was 13,805 records and the median breach size was 1,704 records. There were four incidents involving the improper disposal of devices containing PHI and physical records. The average breach size was 1,772 records and the median was 1,021 records.

The high number of hacking incidents is reflected in the chart below, which shows the location of breached protected health information. Compromised email accounts remain a major source of data breaches, highlighting the importance of multi-factor authentication and training employees on how to recognize the signs of phishing.

Which Entities Suffered the Most Data Breaches?

The raw data on the OCR breach portal does not accurately reflect the extent to which business associate data breaches are occurring. When you factor in business associate involvement it is possible to gain a more accurate gauge of the extent to which data breaches are occurring at business associates. In 2022, 127 data breaches were self-reported by business associates, but there were 394 reported data breaches where business associates were involved – That’s a 337% increase since 2018. Last year, data breaches at business associates outnumbered data breaches at healthcare providers for the first time.

Several major business associate data breaches were reported to OCR in 2022, with some of the data breaches affecting several hundred healthcare organizations. A data breach at the debt collections company, Professional Finance Company, affected 657 of its healthcare clients and involved more than 1.91 million healthcare records. Eye Care Leaders, a provider of electronic health records to eye care providers, suffered a cyberattack that affected at least 41 eye care providers and exposed the data of almost 3.65 million patients.

The graph below shows the sharp increase in data breaches at business associates in recent years. There are several reasons for the increase. Hackers have realized the value of conducting attacks on business associates. One successful attack can provide access to the data, and sometimes networks, of all of the vendor’s clients. Healthcare organizations are now using more vendors to manage administrative functions and risk increases in line with the number of vendors. As more vendors are used, it becomes harder to monitor cybersecurity at the vendors. Managing third-party risk is one of the biggest challenges for healthcare organizations in 2023.

Data breaches by HIPAA-regulated entity type, 2009 to 2022

 

Where Did the Data Breaches Occur?

Healthcare data breaches were reported by HIPAA-regulated entities in 49 states, Washington D.C., and Puerto Rico in 2022. Alaska was the only state to survive the year with no reported data breaches. In general, the most populated states suffer the most data breaches. In 2022, the 10 most populated U.S. states all ranked in the top 15 worst affected states, although it was New York rather than California that topped the list with 68 reported breaches.

State Breaches
New York 68
California & Texas 52
Florida & Pennsylvania 38
New Jersey 27
Georgia 26
Michigan, Virginia & Washington 24
Ohio 23
Illinois & North Carolina 22
Tennessee 17
Arizona & Maryland 16
Massachusetts & Wisconsin 15
Colorado 14
Connecticut, Indiana & Missouri 13
Alabama 11
Kansas, Oklahoma & South Carolina 9
Arkansas, New Hampshire & West Virginia 8
Nebraska & Oregon 7
Minnesota 6
Utah 5
Delaware, Nevada & Rhode Island 4
Hawaii, Kentucky, Louisiana, Mississippi, Montana, South Dakota, % Vermont 3
Iowa, Idaho, Maine, New Mexico, and Washington D.C. 2
North Dakota & Wyoming 1
Alaska 0

HIPAA Enforcement in 2022

HIPAA is primarily enforced by OCR, with state attorneys general also assisting with HIPAA enforcement. OCR imposed more financial penalties for HIPAA violations in 2022 than in any other year to date, with 22 investigations resulting in settlements or civil monetary penalties.

OCR has limited resources for investigations but does investigate all breaches of 500 or more records. That task has become increasingly difficult due to the increase in data breaches, which have tripled since 2010. Despite the increase in data breaches, OCR’s budget for HIPAA enforcement has hardly increased at all, aside from adjustments for inflation. As of January 17, 2022, OCR had 882 data breaches listed as still under investigation. 97% of all complaints and data breach investigations have been successfully resolved.

Some investigations warrant financial penalties, and while the number of penalties has increased, the penalty amounts for HIPAA violations have been decreasing. Most of the financial penalties in 2022 were under $100,000.

HIPAA Settlements and Civil Monetary Penalties 2008-2022

Since 2019, the majority of financial penalties imposed by OCR have been for HIPAA right of access violations, all of which stemmed from complaints from individual patients who had not been provided with their medical records within the allowed time frame. OCR continues to pursue financial penalties for other HIPAA violations, but these penalties are rare.

2022 HIPAA Settlements and Civil Monetary Penalties

Regulated Entity Penalty Amount Type of Penalty Reason
Health Specialists of Central Florida Inc $20,000 Settlement HIPAA Right of Access failure
New Vision Dental $23,000 Settlement Impermissible PHI disclosure, Notice of Privacy Practices, releasing PHI on social media.
Great Expressions Dental Center of Georgia, P.C. $80,000 Settlement HIPAA Right of Access failure (time/fee)
Family Dental Care, P.C. $30,000 Settlement HIPAA Right of Access failure
B. Steven L. Hardy, D.D.S., LTD, dba Paradise Family Dental $25,000 Settlement HIPAA Right of Access failure
New England Dermatology and Laser Center $300,640 Settlement Improper disposal of PHI, failure to maintain appropriate safeguards
ACPM Podiatry $100,000 Civil Monetary Penalty HIPAA Right of Access failure
Memorial Hermann Health System $240,000 Settlement HIPAA Right of Access failure
Southwest Surgical Associates $65,000 Settlement HIPAA Right of Access failure
Hillcrest Nursing and Rehabilitation $55,000 Settlement HIPAA Right of Access failure
MelroseWakefield Healthcare $55,000 Settlement HIPAA Right of Access failure
Erie County Medical Center Corporation $50,000 Settlement HIPAA Right of Access failure
Fallbrook Family Health Center $30,000 Settlement HIPAA Right of Access failure
Associated Retina Specialists $22,500 Settlement HIPAA Right of Access failure
Coastal Ear, Nose, and Throat $20,000 Settlement HIPAA Right of Access failure
Lawrence Bell, Jr. D.D.S $5,000 Settlement HIPAA Right of Access failure
Danbury Psychiatric Consultants $3,500 Settlement HIPAA Right of Access failure
Oklahoma State University – Center for Health Sciences (OSU-CHS) $875,000 Settlement Risk analysis, security incident response and reporting, evaluation, audit controls, breach notifications, & the impermissible disclosure of the PHI of 279,865 individuals
Dr. Brockley $30,000 Settlement HIPAA Right of Access
Jacob & Associates $28,000 Settlement HIPAA Right of Access, notice of privacy practices, HIPAA Privacy Officer
Dr. U. Phillip Igbinadolor, D.M.D. & Associates, P.A., $50,000 Civil Monetary Penalty Impermissible disclosure on social media
Northcutt Dental-Fairhope $62,500 Settlement Impermissible disclosure for marketing, notice of privacy practices, HIPAA Privacy Officer

HIPAA enforcement by state attorneys general is relatively rare. Only three financial penalties were imposed in 2022 by state attorneys general. In these cases, penalties were imposed for violations of the HIPAA Rules and state laws.

State Regulated Entity Penalty Penalty Type Reason
Oregon/Utah Avalon Healthcare $200,000 Settlement Lack of safeguards and late breach notifications
Massachusetts Aveanna Healthcare $425,000 Settlement Lack of safeguards against phishing
New York EyeMed Vision Care $600,000 Settlement Multiple security failures

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Hackers are Using AI Tools such as ChatGPT for Malware Development

There are many benefits of using AI in healthcare, including the acceleration of drug development and medical image analysis, but the same AI systems that benefit healthcare could also be used for malicious purposes such as malware development. The Health Sector Cybersecurity Coordination Center (HC3) recently published an analyst note summarizing the potential for artificial intelligence tools to be used by hackers for this purpose and evidence is mounting that AI tools are already being abused.

AI systems have evolved to a stage where they can be used to write human-like text with a very high degree of fluency and creativity, including valid computer code. One AI tool that has proven popular in recent weeks is ChatGPT. The OpenAI-developed chatbot is capable of producing human-like text in response to queries and had more than 1 million users in December. The tool has been used for a myriad of purposes, including writing poems, songs, reports, web content, and emails.

In response to the incredible popularity of ChatGPT, security researchers started testing its capabilities to determine how easily the tool could be used for malicious purposes. Multiple security researchers found that despite the terms of use prohibiting the chatbot from being used for potentially harmful purposes, they were able to get it to craft convincing phishing emails, devoid of the spelling mistakes and grammatical errors that are often found in these emails. ChatGPT and other AI tools could be used for phishing and social engineering, opening up these attacks to a much broader range of individuals while also helping to increase the effectiveness of these attacks.

One of the biggest concerns is the use of AI tools to accelerate malware development. Researchers at IBM developed an AI-based tool to demonstrate the potential of AI to be used to power a new breed of malware. The tool, dubbed DeepLocker, incorporates a range of ultra-targeted and evasive attack tools that allow the malware to conceal its intent until it reaches a specific victim. The malicious actions are then unleashed when the AI model identifies the target through indicators like facial recognition, geolocation, and voice recognition.

If you ask ChatGPT to write a phishing email or generate malware, the request will be refused as it violates the terms and conditions, but it is possible to make seemingly innocuous requests and achieve those aims. Researchers at Check Point showed it was possible to create a full infection flow using ChatGPT. They used ChatGPT to craft a convincing phishing email impersonating a hosting company for delivering a malicious payload, used OpenAI’s code-writing system, Codex, to create VBA code to add to an Excel attachment, and also used Codex to create a fully functional reverse shell. “Threat actors with very low technical knowledge — up to zero tech knowledge — could be able to create malicious tools [using ChatGPT]. It could also make the day-to-day operations of sophisticated cybercriminals much more efficient and easier – like creating different parts of the infection chain,” said Sergey Shykevich, Threat Intelligence Group Manager at Check Point.

Hackers are already leveraging OpenAI code to develop malware. One hacker used the OpenAI tool to write a Python multi-layer encryption/decryption script that could be used as ransomware and another created an information-stealer capable of searching for, copying, compressing, and exfiltrating sensitive information. While there are many benefits of AI systems, these tools will inevitably be used for malicious purposes. Currently, the cybersecurity community has yet to develop mitigations or a way to defend against the use of these tools for creating malware, and it may not even be possible to prevent the abuse of these tools.

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Vulnerability Management and Remediation Deficiencies Identified at Alabama VA Medical Center

An inspection of information security at Tuscaloosa VA Medical Center in Alabama by the VA Office of Inspector General (OIG) uncovered deficiencies in three of the four assessed security control areas. The OIG inspection covered configuration management, contingency planning, security management, and access controls, with deficiencies identified in configuration management, security management, and access controls.

Configuration management controls are required to identify and manage security features for all hardware and software components of an information system. OIG found deficiencies in vulnerability management, flaw remediation, and database scans. The Office of Information and Technology (OIT) routinely scans for vulnerabilities, and while OIG and OIT used the same vulnerability-scanning tools, OIT failed to identify all vulnerabilities. OIG identified 119 critical-risk vulnerabilities that OIT failed to detect. OIG also identified 301 vulnerabilities that had not been mitigated within the required 30- or 60-day windows, with 134 critical-risk vulnerabilities identified on 14% of devices, and 134 high-risk vulnerabilities found on 46% of devices. One of the high-risk vulnerabilities had remained unpatched for seven years.

Several devices were discovered to be missing important security patches, which were available but had not been applied, which placed VA systems at risk of unauthorized access, alteration, or destruction. While database scans are performed every quarter, OIT was only able to provide scans for half of the databases, as it was not possible to reach all databases due to a port-filtering issue. Without those completed scans, OIT would be unaware of security control weaknesses that could impact the security posture of databases.

Security management controls were assessed, and OIG found one deficiency: several plans of actions and milestones were discovered to be missing or lacked sufficient details to be actionable. Four access control deficiencies were identified related to network segmentation, audit and monitoring controls, environmental controls, and emergency power. Network segmentation is required for medical devices and special-purpose systems, which should be placed on isolated networks for protection. Several network segments that contained medical and special-purpose systems did not have network segmentation controls in place. 19 network segments containing 221 medical devices and special-purpose systems did not have access control lists applied, which allowed any user to access those devices. Logs need to be monitored to evaluate the effectiveness of security controls, recognize attacks, and investigate during or after any attacks. Half of the databases supporting the Tuscaloosa VAMC were found to be missing. The missing logs were for the databases that had not been subjected to vulnerability scanning.

Several communication rooms were found to lack temperature or humidity controls, which could have a significant adverse impact on the availability of systems, and uninterruptible power supplies were also discovered to be missing, which means infrastructure equipment would cease to function during power fluctuations or outages, resulting in interruption of data flow and disruption of access to network resources.

OIG made 8 recommendations to address the deficiencies, 6 to the assistant secretary for information and technology and chief information officer related to the security issues and 2 to the Tuscaloosa VAMC director, who must ensure communication rooms have adequate environmental controls and uninterruptible power supplies for infrastructure equipment.

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Ransomware Appears to be in Decline, but Don’t Lower your Guard

While it is difficult to obtain accurate data on the number of ransomware attacks being conducted on healthcare organizations, the available data suggest there has been a decline in attacks across all industry sectors compared to the high number of attacks reported in 2021. Emsisoft recently reported that attacks are leveling off or declining in the industry sectors it tracks, and now a new survey appears to confirm that decline.

The survey was conducted by Censuswide on behalf of Delinea on 300 IT decision-makers across a broad range of industries in the United States, with the responses suggesting there has been a 60% decline in attacks between 2021 and 2022. In 2021, the survey revealed 64% of organizations had experienced a ransomware attack in the past 12 months, compared to 25% of organizations in 2022.

Ransomware attacks have been reported by small and large healthcare organizations, with the Hive ransomware group known to target smaller medical practices that provide telehealth services, but ransomware gangs appear to still favor attacks on larger organizations, with the Delinea survey revealing 56% of organizations that suffered a ransomware attack in the past 12 months had 100 or more employees.

In 2021, the Conti ransomware operation was the major ransomware player, but in early 2022 the group was disbanded, with its members moving to smaller ransomware operations. While these groups are conducting many attacks, Delinea suggests the shutdown of this large ransomware operation may explain, in part, the decline in attacks. According to GuidePoint Security, there was a 53% decline in attacks by the two main ransomware gangs – Conti and LockBit – last year, yet overall attacks only decreased by around 7%.

Another suggested reason for the decline in attacks is ransomware-preventing security controls are proving to be effective at thwarting attacks. It should also be noted that several ransomware gangs have also started conducting extortion-only attacks, where data are stolen and threats are issued to publish data if the ransom is not paid, but file encryption does not occur. While these attacks are conducted by ransomware gangs, they may not be classed as ransomware attacks, and this could be reflected in the survey data.

In 2022, messages between members of the Hive ransomware gang were intercepted that suggested the group was not having problems compromising organizations but was struggling to force attacked organizations to pay up. The Delinea survey confirmed that fewer organizations are paying up, with 68% of organizations saying they paid the ransom following an attack in 2022 compared to 82% in 2021. The survey also confirmed some of the negative consequences of ransomware attacks, with 56% of companies saying they lost revenue as a result of a successful ransomware attack, with 50% of companies saying they lost customers, although fewer organizations than last year said they suffered reputational damage as a result of an attack – 51% in 2021 compared to 43% in 2022.

Attitudes to ransomware attacks also appear to be changing. In 2021, 88% of organizations said they believed it should be illegal to pay a ransom to cybercriminals following a ransomware attack, but in 2022, 63% of surveyed companies felt that way and believed they should have the choice about whether or not to pay for the keys to recover their data and prevent data exposure.

The reduction in attacks is certainly good news, but it does not mean that they will not increase again. It is therefore concerning that Delinea found investment in ransomware defenses is declining. In 2021, 93% of surveyed organizations said they had allocated funding to combat ransomware attacks, whereas that percentage fell to 68% in 2022. The survey also revealed that only half of the surveyed organizations had implemented best practices to prevent ransomware attacks, such as enforcing password best practices (51%) and multi-factor authentication (50%). There was also a notable decline in the number of companies that had an incident response plan specifically for ransomware attacks, which fell from 94% in 2021 to 71% in 2022.

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HC3 Shares Intelligence on BlackCat and Royal Ransomware Operations

The Health Sector Cybersecurity Coordination Center (HC3) has shared threat intelligence on two sophisticated and aggressive ransomware operations – Blackcat and Royal – which pose a significant threat to the healthcare and public health (HPH) sector.

In 2021 and early 2022 the ransomware threat landscape was dominated by Conti, a large, professional ransomware-as-a-service (RaaS) operation; however, the operation was disbanded in 2022. While the Conti RaaS no longer operates under that name, the members of that group are still active but are now spread across several smaller semi-autonomous and autonomous ransomware groups. These smaller ransomware operations are more agile, harder to track, and attract less attention from law enforcement.

The BlackCat ransomware operation, also known as AlphaV, was first detected in November 2021 and is believed to be the successor to Darkside/BlackMatter ransomware, with the BlackCat admin believed to be a former member of the infamous REvil threat group. BlackCat is a RaaS operation that engages in triple extortion, involving data theft, file encryption, and distributed denial of service (DDoS) attacks on victims. The group leaks stolen data on its data leak site and conducts DDoS attacks when victims fail to pay the ransom or end negotiations. The group primarily targets organizations in the United States.

Unlike some ransomware operations that actively encourage attacks on the healthcare sector, BlackCat has operating rules that prohibit affiliates from conducting attacks on hospitals, medical institutions, and ambulance services, although private clinics and pharmaceutical companies are not off-limits. HC3 has warned that while these operating rules exist, they are not set in stone, and ransomware gangs that have similarly prohibited attacks on healthcare organizations have broken their promises in the past. While the operation is far smaller than Conti, the group has conducted a high number of attacks, with 60 organizations attacked in the first 4 months of operation.

Royal is a more recent addition to the ransomware threat landscape, having first been observed conducting attacks in early 2022. The group is similarly believed to include former Conti members. Initially, Royal used the same encryptor as BlackCat, then switched to its own encryptor in September 2022. Royal is now the most active ransomware operation, having surpassed Lockbit. Royal engages in double extortion tactics involving data theft and file encryption and threatens to publish stolen data if the ransom is not paid. Like Conti, Royal is known to conduct callback phishing attacks to gain initial access to networks. Callback phishing starts with a benign email containing a telephone number, and social engineering techniques are used to convince the victim to call the provided number and grant access to their device.  The group is also known to conduct attacks using an encryptor that masquerades as healthcare patient data software housed on legitimate-looking software download sites. In contrast to BlackCat, the healthcare industry is not off-limits, and several attacks have been conducted on healthcare organizations. Consequently, Royal poses a significant threat to the HPH sector

HC3 has shared detailed information for network defenders on the tactics, techniques, and procedures used by both operations, along with Indicators of Compromise (IoCs), Yara rules, and recommended mitigations.

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December 2022 Healthcare Data Breach Report

The number of reported healthcare data breaches declined for the second successive month, with 40 data breaches of 500 or more healthcare records reported to the Department of Health and Human Services’ Office for Civil Rights (OCR) in December 2022 – The lowest monthly total of the year and 29.7% fewer data breaches than the average monthly for 2022. The year ended with 683 data breaches, which is a year-over-year reduction of 4.3%. Only one other year has seen a fall in recorded data breaches (2014).

2022 Healthcare data breaches

The worst month of 2022 for breached records was followed by the best, with 2,174,592 healthcare records exposed or compromised in December, well below the 2022 average of 3,986,025 records per month and 68.5% fewer breached records than in November. While this is certainly great news, even with this reduction, 2022 was the second worst-ever year for healthcare data breaches with more than 47 million records exposed or compromised from January 1 to December 31, 2022.

2022 Breached healthcare records

Largest Healthcare Data Breaches in December 2022

December saw 13 data breaches of 10,000 or more healthcare records reported to OCR. HIPAA Journal has been unable to obtain information on two of those breaches. Ransomware attacks continue to plague the healthcare industry, with 5 of the 13 largest breaches in December confirmed as involving ransomware, two of which involved the protected health information of more than 600,000 patients. Ransomware attacks on the healthcare industry more than doubled between 2016 and 2021 according to one recent analysis, although it is becoming increasingly difficult to obtain reliable data on the extent to which ransomware is used in cyberattacks due to the lack of standardized reporting. While healthcare organizations of all sizes are being attacked, ransomware gangs tend to focus their efforts on larger healthcare organizations, according to a recent report by Delinea.

Name of Covered Entity State Covered Entity Type Individuals Affected Cause of Breach
CommonSpirit Health IL Business Associate 623,774 Ransomware attack with business associate involvement
Metropolitan Area EMS Authority dba MedStar Mobile Healthcare TX Healthcare Provider 612,000 Ransomware attack
Avem Health Partners OK Business Associate 271,303 Hacking Incident at a business associate
Southwest Louisiana Health Care System, Inc. d/b/a Lake Charles Memorial Health System LA Healthcare Provider 269,752 Ransomware attack
Fitzgibbon Hospital MO Healthcare Provider 112,072 Ransomware attack
Monarch NC Healthcare Provider 56,155 Hacking Incident – No information released
Ola Equipment LLC HI Business Associate 39,000 Hacking Incident – No information released
The Elizabeth Hospice CA Healthcare Provider 35,496 An employee sent PHI to a personal email account
Legacy Operating Company d/b/a Legacy Hospice AL Healthcare Provider 21,202 Compromised email accounts
Employee Group Insurance Benefits Plan of Acuity Brands, Inc. GA Health Plan 20,849 Hacking incident (data theft confirmed)
San Gorgonio Memorial Hospital CA Healthcare Provider 16,846 Hacking incident (data theft confirmed)
Hawaiian Eye Center HI Healthcare Provider 14,524 Ransomware attack
Foundcare, Inc. FL Healthcare Provider 14,194 Compromised email account

Causes of December 2022 Healthcare Data Breaches

Hacking and other IT incidents continue to dominate the breach reports and typically involve many more records than other types of data breaches. In December, 28 incidents were classified as hacking/IT incidents – 70% of the month’s total breaches. 1,965,032 healthcare records were exposed or impermissibly disclosed in those incidents– 90.4% of the month’s breached records. The average breach size was 70,180 records and the median breach size was 4,152 records. 20 of the month’s breaches involved compromised network servers, with 12 incidents involving hacked email accounts.

Causes of December 2022 Healthcare data breaches

The risk of email-related data breaches can be greatly reduced by providing regular security awareness training to the workforce, as is required by the HIPAA Security Rule, and by implementing multi-factor authentication, with FIDO-based MFA providing the greatest level of protection. HIPAA-regulated entities should also ensure that their password management practices are kept up to date. A recent audit of the Department of the Interior identified many password management failures, which are all too common in the healthcare industry.

There were 10 unauthorized access/disclosure-related data breaches in December involving 168,386 records. The average breach size was 16,839 records and the median breach size was 1,739 records. There has been a decline in these types of data breaches in recent years as HIPAA training and monitoring of medical record access have improved. There were two loss/theft incidents reported involving 41,174 records. Both of these incidents involved computers/other electronic devices and could have been prevented by encrypting the devices.

December 2022 healthcare data breaches - location of breached PHI

December Data Breaches by HIPAA Regulated Entity

Healthcare providers were the worst affected type of HIPAA-regulated entity, with 24 breaches reported of 500 or more records. Business associates reported 11 data breaches and 5 data breaches were reported by 5 health plans. Two of the data breaches reported by healthcare providers had business associate involvement but were reported by the healthcare provider. The chart below shows the breakdown based on where the breach occurred.

December 2022 healthcare data breaches - HIPAA-regulated entity type

States Affected by December 2022 Data Breaches

Healthcare data breaches were reported by HIPAA-regulated entities in 22 states. California was the worst affected with 4 reported breaches.

State Reported Data Breaches
California 4
Florida, New York, Texas & Washington 3
Georgia, Hawaii, Illinois, Massachusetts, Missouri, South Dakota & Virginia 2
Alabama, Connecticut, Louisiana, Maryland, North Carolina, Nebraska, Oklahoma, Rhode Island, Wisconsin & West Virginia 1

HIPAA Enforcement Activity in 2022

OCR closed the year with two financial penalties to resolve alleged HIPAA violations. Health Specialists of Central Florida’s case stemmed from an investigation into a HIPAA Right of Access violation over the failure to provide a woman with a copy of her deceased father’s medical records. The records were provided, but there was a 5-month delay. Health Specialists of Central Florida settled the case and paid a $20,000 financial penalty. This was the 42nd financial penalty to be imposed under OCR’s HIPAA Right of Access enforcement, which was launched in 2019.

New Vision Dental in California was one of just two healthcare providers to settle a HIPAA violation case with OCR in 2022 that did not involve a HIPAA Right of Access violation. OCR investigated New Vision Dental in response to complaints that patient information was being impermissibly disclosed online in response to negative reviews on Yelp. OCR also identified a Notice of Privacy Practices failure. The case was settled for $23,000. Including these two penalties, OCR resolved 22 HIPAA violation cases with settlements and civil monetary penalties in 2022, more than any other year since OCR was given the authority to impose financial penalties for HIPAA violations.

State Attorneys General also have the authority to impose financial penalties for HIPAA violations. In December, a joint investigation by Oregon and Utah resulted in a financial penalty for Avalon Healthcare over a phishing attack. Avalon Healthcare was determined to be in violation of the HIPAA Security and Breach Notification Rules and state laws due to a lack of appropriate safeguards to protect against phishing attacks and an unreasonable delay in sending breach notification letters, which were issued 10 months after the breach was detected. The case was settled for $200,000. This was one of three enforcement actions by state attorneys general in 2022 to resolve HIPAA violations.

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Leading Healthcare CISOs Join Forces to Solve Third Party Risk Management Challenges

A group of 20 security and risk executives from 20 leading healthcare provider organizations have come together to share their insights and guidance with less well-resourced healthcare organizations to improve information risk management in the healthcare industry, including addressing one of the most urgent healthcare cybersecurity challenges – third-party risk management.

Cyberattacks on vendors have increased sharply with these attacks impacting many healthcare organizations. In 2023, virtually all of the top ten data breaches occurred at vendors. An attack on a vendor can give a threat actor access to the networks and data of many different healthcare organizations, and many vendors have insufficient security measures in place.

A recent survey conducted for the Healthcare and Public Health Sector Coordinating Councils (HSCC) found that healthcare organizations of all sizes are struggling to manage third-party risks, especially small- and medium-sized healthcare organizations, which typically have limited budgets and resources to devote to third-party risk management. The HSCC survey revealed the focus of many third-party risk management programs is new vendors during the onboarding process, with existing vendors often failing to be monitored and assessed. Gartner reports that only 23% of security and risk leaders monitor third parties for cybersecurity exposure in real-time.

The group includes security professionals from leading healthcare organizations such as Amerisource Bergen, Centura Health, CVS, HCA Healthcare, Healthix, Highmark Health, Humana, Premera Blue Cross, St. Lukes Health System, and UPMC, who have created the Health 3rd Party Trust (Health3PT) Initiative, which builds on the Provider Third Party Risk Management (PTPRM) initiative of 2018.

The Health3PT initiative aims to evaluate, identify, and implement actionable and practical solutions that healthcare organizations can adopt to provide more reliable assurances, consistent information security program reporting, and gain better visibility into downstream relationships with third parties.

Currently, the methods used to manage third-party risk are time-consuming, cumbersome, and inadequate, with no standardized set of practices to follow. Vendors can use vastly different methods for risk management, and often conduct processes manually, which can result in blind spots on risk. Across the industry, there is inadequate follow-through on the remediation of identified risks, complacency regarding continuous monitoring, and insufficient assurance programs to prove that the right security controls are in place.

One of the primary goals of Health3PT is to develop a set of common practices for healthcare organizations to adopt to manage vendor risk, with the group planning to develop risk management tools and methodologies that can be easily adopted by organizations of all sizes. Initially, the group plans to benchmark the current state of the industry, and this will be one of the first deliverables from the group in Q1, 2023.

“Managing third-party risk in a comprehensive and sustainable way requires collaboration between healthcare organizations and their suppliers to find solutions that are efficient and effective for both sides. That’s why the Health3PT is so important to Centura Health and our partnerships. In order for this to work, we need more healthcare organizations to adopt common, standardized processes,” said Shenny Sheth, Deputy CISO for Centura Health, and Health3PT member.

Health3PT will create a standardized and measurable standard for assessing third parties quickly and efficiently, which will serve as the cornerstone of third-party risk management programs across the entire healthcare ecosystem to better protect against the increasing number of supply chain attacks. Health3PT also plans to form working groups and will host a summit for vendors, stakeholders, and assessor organizations to collect and share ideas.

“It’s clear that [third-party risk management] is broken in the healthcare industry. We need to come together as an industry to establish a sustainable approach to third-party risk management. The common process of sending and receiving self-attested proprietary questionnaires is inefficient and potentially unreliable,” John Chow, CISO for Healthix, Inc., and Health3PT member. “We need a practical pathway to supplier assurances that are reliable and not self-attested, have inadequate controls or overburdening for the risk posed. The lack of standardization today results in vendor confusion due to the different question sets and requirements, resulting in confusion, frustration, and eventually…lack of response.”

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Healthcare Organizations Failing to Assess and Mitigate Supply Chain Risks

Healthcare organizations can put a host of cybersecurity measures in place to secure their networks and prevent direct attacks by malicious actors, but significant challenges are faced securing the supply chain. Healthcare organizations use vendors to provide services that cannot be handled in-house, and while they provide important services they also create risks that need to be effectively managed. Vendors often require privileged access to networks to perform their functions, which means an attack on a vendor can allow a threat actor to gain access to a healthcare organization’s network through the backdoor.

Cybercriminals have been increasingly attacking healthcare vendors because they are a much less secure part of the supply chain and in 2022, many of the largest healthcare data breaches reported involved vendors. Shields Health Care Group, which provides medical imaging services to more than 50 healthcare facilities, suffered a breach of more than 2 million records, Professional Finance Company, which provides a debt collection service to healthcare organizations, suffered a breach affecting many of its clients and exposed the data of 1.91 million patients, there was also an attack on the electronic medical record vendor, Eye Care Leaders, that affected at least 41 eye care providers and more than 3.6 million patients, to name but a few. While efforts need to continue to secure healthcare networks from direct attacks, urgent action is required to secure the supply chain.

A recent survey conducted by the Ponemon Institute on behalf of the Healthcare and Public Health Sector Coordinating Councils (HSCC) explored the current state of supply chain risk in healthcare and confirmed that a great deal needs to be done, with many healthcare organizations found to experience significant challenges in securing their supply chains. The survey, which was conducted on 400 U.S. healthcare organizations, confirmed that there continues to be significant capability and budget gaps between large and small healthcare organizations when it comes to managing and reducing supply chain risk, but organizations of all sizes are failing at the basics of supply chain risk management.

To accurately measure and address risk, healthcare organizations must have a full inventory of all suppliers that they use, yet the survey revealed that only 20% of the 400 surveyed organizations had a complete inventory of all of their suppliers, and smaller healthcare organizations were three times more likely to have no inventory at all. One common approach taken by healthcare organizations is to focus their supply chain risk management programs on new vendors as they are onboarded, yet they fail to assess and manage risk for their existing suppliers, which was the case for almost half (46%) of surveyed organizations. 35% of surveyed organizations were not evaluating supplier risks related to patient outcomes, with smaller healthcare organizations twice as likely to have this gap than larger organizations, and only 41% of organizations had integrated their cyber risk programs with their procurement and contracting teams. Smaller healthcare organizations were found to lack the budgetary resources to properly manage supply chain risk, with 57% of smaller organizations having supply chain risk management budgets of $500,000 or less, compared to 51% of large organizations that had supply chain risk management budgets of between $1 million and $5 million.

The National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) includes supply chain risk management practices that can – and should – be adopted – but doing so can be a challenge for small- and medium-sized healthcare organizations.  To make supply chain risk management more straightforward, the HSCC has tailored this resource and developed a free toolkit (HICSCRiM) specifically for small to mid-sized healthcare organizations which typically have more limited budgets and resources for managing supply chain risk.

“The healthcare supply chain team is under an increasing amount of pressure to move quickly while managing a multitude of risks during the procurement process,” said Ed Gaudet, CEO, and Founder of Censinet and HSCC Supply Chain Cybersecurity Task Group Member. “As cyberattacks like ransomware become more sophisticated, this survey hammers home the urgent need for automation and actionable risk insights to help supply chain leaders effectively manage inventory, cyber risk, fraud, and supplier redundancy.”

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Study Identifies Healthcare Ransomware Attack Trends

Healthcare ransomware attacks have at least doubled in the past 5 years, data recovery from backups has decreased, and it is now common for data to be stolen and publicly released following a successful attack, according to a new analysis recently published in the JAMA Health Forum.

Healthcare ransomware attacks can be difficult to accurately track, as ransomware is not always specified in breach reports and press releases, and ransomware gangs typically do not publicly disclose their attacks when ransoms are paid, which makes it difficult to determine the extent to which attacks are increasing or decreasing. With more detailed reporting of cyberattacks, legislators would have accurate data to inform their policy decisions.

The data for the analysis was collected from the Tracking Healthcare Ransomware Events and Traits (THREAT) database, which includes data collected from a variety of sources such as the HHS’ Office for Civil Rights breach portal, HackNotice, press releases from victims, media reports, and dark web monitoring. The researchers accept that due to the lack of accurate reporting, the number of attacks has likely been underestimated, with omissions most likely due to the reporting of ransomware attacks as malware incidents, with no mention of ransom demands. These attacks could naturally not be included in the data. Even so, the researchers believe their database is the most accurate record of healthcare ransomware attacks. “To be missing from the THREAT database, a ransomware attack would have needed to go unreported to HHS OCR, remain undetected by HackNotice web crawler surveillance and monitoring of dark web forums, and have received no press coverage in local news or health care trade publications,” explained the researchers.

The analysis revealed there were 374 documented ransomware attacks on healthcare organizations between 2016 and 2021, with those attacks involving the personal or protected health information of at least 41,987,751 individuals. Attacks more than doubled from 43 in 2016 to 93 in 2021, and there was an 11-fold increase in impacted records, from around 1.3 million records in 2016 to around 16.5 million records in 2021. It should be noted that there was no data available on the extent to which PHI exposure occurred in more than one-fifth of attacks (22.5%).

Out of the 374 confirmed ransomware attacks, only 20.6% of healthcare organizations said they were able to restore data from backups, and in 15.8% of attacks, at least some of the stolen data were posted publicly on the clear web or on dark net data leak sites. It should be noted that the double-extortion ransomware trend where data are stolen prior to file encryption only started in 2020.

While ransomware attacks are often attempted on hospitals and large health systems, clinics suffered the most ransomware attacks, followed by hospitals, other delivery organization types, ambulatory surgical centers, mental/behavioral health organizations, dental practices, and post–acute care organizations. As HIPAA Journal has previously reported, the breach reporting requirements of the HIPAA Breach Notification Rule are frequently violated, with many breached organizations unable to issue notifications about ransomware attacks within the 60-day reporting deadline. The analysis revealed late reporting in 54.3% of attacks.

The impact of these attacks on patients is often difficult to determine. The researchers were unable to determine the extent to which ransomware disruptions affected patients seeking care during an attack but found evidence that care delivery operations were disrupted in 44.4% of attacks. The disruption continued for at least 2 weeks in 8.6% of attacks, most commonly due to IT system downtime, canceled appointments, and ambulance diversion. This disruption to care threatens patient safety and outcomes.

The researchers concluded that ransomware attacks on healthcare organizations have increased in both sophistication and frequency, with attacks now more likely to affect multiple facilities, prevent access to patient data, disrupt healthcare delivery, and expose patient data. The researchers have called for policymakers to focus their efforts on the specific needs of healthcare organizations due to the implications on the quality and safety of patient care.

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