HIPAA Compliance News

Systemic Noncompliance with HIPAA Results in $1.5 Million Financial Penalty for Athens Orthopedic Clinic

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The HHS’ Office for Civil Rights has announced a settlement has been reached with Athens Orthopedic Clinic PA to resolve multiple violations of the Health Insurance Portability and Accountability Act (HIPAA) Rules.

OCR conducted an investigation into a data breach reported by the Athens, GA-based healthcare provider on July 29, 2016.  Athens Orthopedic Clinic had been notified by Dissent of Databreaches.net on June 26, 2026 that a database containing the electronic protected health information (ePHI) of Athens Orthopedic Clinic patients had been listed for sale online by a hacking group known as The Dark Overlord. The hackers are known for infiltrating systems, stealing data, and issuing ransom demands, payment of which are required to prevent the publication/sale of data.

Athens Orthopedic Clinic investigated the breach and determined that the hackers gained access to its systems on June 14, 2016 using vendor credentials and exfiltrated data from its EHR system. The records of 208,557 patients were stolen in the attack, including names, dates of birth, Social Security numbers, procedures performed, test results, clinical information, billing information, and health insurance details.

OCR accepts that it is not possible to prevent all cyberattacks, but when data breaches occur as a result of the failure to comply with the HIPAA Rules, financial penalties are appropriate.

“Hacking is the number one source of large health care data breaches. Health care providers that fail to follow the HIPAA Security Rule make their patients’ health data a tempting target for hackers,” said OCR Director Roger Severino.

The OCR investigation into the breach revealed systemic noncompliance with the HIPAA Rules. Athens Orthopedic Clinic had not conducted an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI, in violation of 45 C.F.R. § 164.308(a)(1)(ii)(B).

Security procedures had not been implemented to reduce the potential risks to ePHI to a reasonable and appropriate level, in violation of 45 C.F.R. § 164.308(a)(1)(ii)(A).

From September 30, 2015 to December 15, 2016, Athens Orthopedic Clinic failed to implement appropriate hardware, software, and procedures for recording and analyzing information system activity, in violation of 45 C.F.R. §§ 164.312(b).

It took until August 2016 for HIPAA policies and procedures to be maintained, in violation of 45 C.F.R. § 164.530(i) and (j), and prior to August 7, 2016, the clinic had not entered into business associate agreements with three of its vendors, in violation of 45 C.F.R. § 164.308(b)(3).

Prior to January 15, 2018, Athens Orthopedic Clinic had not provided HIPAA Privacy Rule training to the entire workforce, in violation of 45 C.F.R. § 164.530(b).

As a result of the compliance failures, Athens Orthopedic Clinic failed to prevent unauthorized access to the ePHI of 208,557 patients, in violation of 45 C.F.R. §164.502(a)).

In addition to the financial penalty, Athens Orthopedic Clinic has agreed to adopt a corrective action plan covering all aspects of noncompliance discovered during the OCR investigation. The clinic settled the case with no admission of liability.

This is the sixth HIPAA settlement to be announced by OCR in September and the 9th HIPAA penalty of 2020. Earlier this month, OCR announced five settlements had been reached with HIPAA-covered entities under its HIPAA Right of Access initiative for failing to provide patients with a copy of their health information.

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HHS Releases Updated Security Risk Assessment Tool

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The Department of Health and Human Services’ Office for Civil Rights (OCR) has announced that a new version of its Security Risk Assessment (SRA) Tool has now been released.

The SRA tool was developed by the Office of the National Coordinator for Health Information Technology (ONC) in collaboration with OCR to help small- to medium-sized healthcare providers comply with the security risk assessment requirements of the HIPAA Security Rule and the Centers for Medicare and Medicaid Service (CMS) Electronic Health Record (EHR) Incentive Program.

A security risk assessment is conducted to identify all risks to the confidentiality, integrity, and availability of protected health information (PHI). The risk assessment should identify any unaddressed risks, which can then be addressed by implementing appropriate physical, technical, and organizational safeguards.

HIPAA compliance audits and investigations of data breaches have revealed healthcare providers often struggle with the risk assessment. Risk assessment failures are one of the most common reasons why HIPAA penalties are issued.

ONC and OCR last updated the SRA Tool in October 2018, when changes were made to improve usability and make the tool apply more broadly to the risks to the confidentiality, integrity, and availability of PHI.

“The tool diagrams the HIPAA Security Rule safeguards and provides enhanced functionality to document how your organization implements safeguards to mitigate, or plans to mitigate, identified risks,” explained ONC.

Further enhancements have now been made based on feedback received from healthcare providers that have used the SRA Tool, including improvements to navigation throughout the assessment sections, new options for exporting reports, and enhanced user interface scaling.

The latest version (v3.2) of the SRA Tool is available for Windows and Mac OS on this link.

ONC and OCR will be hosting a webinar on September 17 at 10:30 AM E.T. to introduce the new SRA tool and to provide an overview of the improvements that have been made. You can register for the webinar on this link.

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HIPAA Right of Access Failures Result in Five OCR HIPAA Fines

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The Department of Health and Human Services’ Office for Civil Rights has announced five settlements have been reached to resolve HIPAA violations discovered during the investigation of complaints from patients who had experienced problems obtaining a copy of their health records.

The HIPAA Privacy Rule gives individuals the right to have timely access to their health records at a reasonable cost. If an individual chooses to exercise their rights under HIPAA and submit a request for a copy of their health records, a healthcare provider must provide those records without reasonable delay and within 30 days of receiving the request.

After receiving multiple complaints from individuals who had been prevented from obtaining a copy of their health records, OCR launched its HIPAA right of access initiative in 2019 and made compliance with the HIPAA right of access one of its enforcement priorities.

Two settlements were reached with HIPAA covered entities in 2019 over HIPAA right of access failures. Bayfront Health St Petersburg and Korunda Medical, LLC were each ordered to pay a financial penalty of $85,000 to settle the case and adopt a corrective action plan to ensure that access requests were processed in a timely manner in the future.

The latest 5 settlements were agreed with Beth Israel Lahey Health Behavioral Services, Housing Works, Inc., All Inclusive Medical Services, Inc., King MD, and Wise Psychiatry, PC. The financial penalties ranged from $3,500 to $70,000, with OCR considering several factors when determining an appropriate penalty.

The settlements are intended to send a message to healthcare organizations that compliance with the HIPAA right of access is not optional. When complaints are received alleging non-compliance, they will be investigated, and a financial penalty may be deemed appropriate.

“Patients can’t take charge of their health care decisions, without timely access to their own medical information,” said OCR Director Roger Severino. “Today’s announcement is about empowering patients and holding health care providers accountable for failing to take their HIPAA obligations seriously enough.”

Beth Israel Lahey Health Behavioral Services

Beth Israel Lahey Health Behavioral Services (BILHBS) is the largest provider of mental health and substance use disorder services in eastern Massachusetts. In April 2019, OCR received a complaint alleging BILHBS had failed to respond to a request from a personal representative seeking a copy of her father’s medical records. The complainant requested the records in February 2019, but they had still not been provided two months later.

In response to the OCR investigation, the patient received her father’s medical records in October 2019. OCR determined there had potentially been a violation of the HIPAA Right of Access. BILHBS agreed to settle the case for $70,000 and has adopted a corrective action plan and will be monitored by OCR for one year.

Housing Works

Housing Works, Inc. is a New York City based non-profit healthcare organization that provides healthcare, homeless services, advocacy, job training, re-entry services, and legal aid support for people living with and affected by HIV/AIDS.

In June 2019, a patient requested a copy of his medical records from Housing Works, Inc. In July 2019, a complaint was filed with OCR alleging Housing Works had not provided those records. OCR investigated and provided technical assistance on the HIPAA right of access and closed the case. However, the complainant was still not provided with a copy of his medical records and filed a second complaint with OCR in August 2019.

OCR reopened the investigation and determined that the failure to provide those records was in violation of the HIPAA right of access and a financial penalty was warranted. Housing Works provided the complainant with his medical records in November 2019. The case was settled for $38,000 and Housing Works agreed to adopt a corrective action plan. OCR will monitor Housing Works for one year.

All Inclusive Medical Services, Inc.

All Inclusive Medical Services, Inc. (AIMS) is a Carmichael, CA-based multi-specialty family medicine clinic that provides a range of services including internal medicine, pain management, and rehabilitation.

In January 2018, a patient requested a copy of her medical records, but AIMS allegedly refused to provide those records. The patient sent a complaint to OCR in April 2018 and an investigation was launched. OCR determined the failure to allow the patient to inspect and receive a copy of her medical records was in violation of the HIPAA right of access. The patient was sent a copy of her records in August 2020.

AIMS was ordered to pay OCR $15,000 to settle the case and adopt a corrective action plan. OCR will monitor AIMS for compliance for 2 years.

King MD

King MD is a small provider of psychiatric services in Virginia. OCR received a complaint in October 2018 from a patient who had not been provided with a copy of her medical records within two months of submitting the request. OCR contacted King MD and provided technical assistance on the HIPAA right of access; however, in February 2019, OCR received a second complaint as King MD had still not provided the patient with her medical records. Those records were finally provided in July 2020.

OCR agreed to settle the case for $3,500. King MD has adopted a corrective action plan and will be monitored by OCR for two years.

Wise Psychiatry, PC.

Wise Psychiatry is a small provider of psychiatric services in Colorado.  In November 2017, a personal representative submitted a request for a copy of her minor son’s medical records. Those records had still not been provided by February 2018 and a complaint was filed with OCR. OCR investigated and provided technical assistance on the HIPAA right of access and closed the case.

A second complaint was received in October 2018 from the same individual who still had not been provided with her son’s records. Those records were finally provided in May 2019 as a result of the OCR investigation. The case was settled for $10,000 and Wise Psychiatry agreed to adopt a corrective action plan and will be monitored by OCR for one year.

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OCR Publishes New Resources for MHealth App Developers and Cloud Services Providers

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The Department of Health and Human Services’ Office for Civil Rights has announced it has published additional resources for mobile health app developers and has updated and renamed its Health App Developer Portal.

The portal – Resources for Mobile Health Apps Developers – provides guidance for mobile health app developers on the HIPAA Privacy, Security, and Breach Notification Rules and how they apply to mobile health apps and application programming interfaces (APIs).

The portal includes a guidance document on Health App Use Scenarios and HIPAA, which explains when mHealth applications must comply with the HIPAA Rules and if an app developer will be classed as a business associate.

“Building privacy and security protections into technology products enhances their value by providing some assurance to users that the information is secure and will be used and disclosed only as approved or expected,” explained OCR. “Such protections are sometimes required by federal and state laws, including the HIPAA Privacy, Security, and Breach Notification Rules.”

The portal provides access to the Mobile Health Apps Interactive Tool developed by the Federal Trade Commission (FTC) in conjunction with the HHS’ Office of the National Coordinator for Health IT (ONC) and the Food and Drug Administration (FDA). The Tool can be used by the developers of health-related apps to determine what federal rules are likely to apply to their apps. By answering questions about the nature of the apps, developers will discover which federal rules apply and will be directed to resources providing more detailed information about each federal regulation.

The portal also includes information on patient access rights under HIPAA, how they apply to the data collected, stored, processed, or transmitted through mobile health apps, and how the HIPAA Rules apply to application programming interfaces (APIs).

The update to the portal comes a few months after the ONC’s final rule that called for health IT developers to establish a secure, standards-based API that providers could use to support patient access to the data stored in their electronic health records. While it is important for patients to be able to have easy access to their health data to allow them to check for errors, make corrections, and share their health data for research purposes, there is concern that sending data to third-party applications, which may not be covered by HIPAA, is a privacy risk.

OCR has previously confirmed that once healthcare providers have shared a patients’ health data with a third-party app, as directed by the patient, the data will no longer be covered by HIPAA if the app developer is not a business associate of the healthcare provider. Healthcare providers will not be liable for any subsequent use or disclosure of any electronic protected health information shared with the app developer.

A FAQ is also available on the portal that explains how HIPAA applies to Health IT and a guidance document explaining how HIPAA applies to cloud computing to help cloud services providers (CSPs) understand their responsibilities under HIPAA.

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Radiology Groups Issue Warning About PHI Exposure in Online Medical Presentations

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The American College of Radiology, the Society for Imaging Informatics in Medicine, and the Radiological Society of North America have issued a warning about the risk of accidental exposure of protected health information (PHI) in online medical presentations.

Healthcare professionals often create presentations that include medical images for educational purposes; however, care must be taken to ensure that protected health information is not accidently exposed or disclosed. Medical images contain embedded patient identifiers to ensure the images can be easily matched with the right patient but advances in web crawling technology is now allowing that information to be extracted, which places patient privacy at risk.

The web crawling technology used by search engines such as Google and Bing have enabled the large-scale extraction of information from previously stored files. Advances in the technology now allow information in slide presentations that was previously considered to be de-identified to be indexed, which can include patient identifiers. Source images can be extracted from PowerPoint presentations and PDF files, for example, and the technology can recognize alphanumeric characters that are imbedded in the image pixels.

As part of the indexing process, that information becomes associated with the images and search engine searches using a search term containing the information in those images will result in the files being displayed in the search engine results.

If a patient performs a search using their name, for example, an image from a diagnostic study conducted several years previously could be displayed in the search engine results. A click on the image would direct the patient to a website of a professional imaging association that had stored a PowerPoint presentation or Adobe PDF file that was used internally in the past for education purposes.

The professional imaging association would likely be unaware that the image contained any protected health information, the author of the file would be unlikely to be aware that the PHI had not been sufficiently de-identified when the presentation was created, and that saving the presentation as an Adobe PDF file had not ensured patient privacy.

The radiology organizations have offer guidance to healthcare organizations to help them avoid accidental PHI disclosures when creating online presentations containing medical images for educational purposes.

When creating presentations, only medical images that do not include any patient identifiers should be used. If medical images have embedded patient identifiers, screen capture software should be used to capture the part of the medical image that displays the area of interest, omitting the part of the image that contains patient identifiers. Alternatively, an anonymization algorithm embedded in the PACS should be used prior to saving a screen or active window representation or patient information overlays should be disabled before exporting the image.

The radiology organizations warn against the use of formatting tools in the presentation software – PowerPoint, Keynote, Google Slides etc – for cropping the images so as not to display any patient identifiers, as this practice will not permanently remote PHI from the images. They also warn that the use of image editing software such as Adobe Photoshop to blackout patient identifiers is also not a safe and compliant practice for de-identification.

After patient identifiers have been removed, a final quality control check is recommended to ensure that the images have been properly sanitized before they are made public.

You can view the guidance on the removal of PHI from medical images prior to creating medical image presentations on this link.

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HHS Announces Limited HIPAA Privacy Rule Waivers Due to Hurricane Laura and the Californian Wildfires

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The Secretary of the HHS, Alex Azar, has declared a public health emergency exists in the states of Louisiana and Texas as a result of the consequences of Hurricane Laura, and in California due to ongoing wildfires.

During public health emergencies the HIPAA Rules are not suspended; however, the HHS Secretary may choose to waive certain provisions of the HIPAA Privacy Rule under the Project Bioshield Act of 2004 (PL 108-276) and section 1135(b)(7) of the Social Security Act.

In addition to the declaration of public health emergencies, the HHS Secretary has declared that sanctions and penalties against hospitals will be waived for the following provisions of the HIPAA Privacy Rule.

  • The requirements to obtain a patient’s agreement to speak with family members or friends involved in the patient’s care. See 45 CFR 164.510(b).
  • The requirement to honor a request to opt out of the facility directory. See 45 CFR 164.510(a).
  • The requirement to distribute a notice of privacy practices. See 45 CFR 164.520.
  • The patient’s right to request privacy restrictions. See 45 CFR 164.522(a).
  • The patient’s right to request confidential communications. See 45 CFR 164.522(b).

Sanctions and penalties for noncompliance with the above provisions of the HIPAA Privacy Rule have only been waived for hospitals in the emergency areas and only for the time period stated in the public health emergency declarations.

The waivers only apply to hospitals that have instituted their disaster protocol, and only for up to 72 hours from the time the disaster protocol is instituted.  Once either the Presidential or Secretarial declaration terminates, the HIPAA waivers will no longer be in effect and hospitals must then ensure they comply with all provisions of the HIPAA Privacy Rule. That applies even if the 72 hour period has not elapsed.

During public health emergencies, the HIPAA Privacy Rule allows patient information to be shared for treatment, payment, and healthcare operations.

Patient information can also be shared for public health activities to allow public health authorities to carry out their public health mission. Patient information can be shared with a public health authority such as the Centers for Disease Control and Prevention for the purpose of preventing or controlling disease, injury or disability.

The HIPAA Privacy Rule also permits the sharing of patient information at the direction of a public health authority to a foreign government agency and to persons at risk of contracting or spreading a disease or condition if permitted by other laws, which authorize a covered entity to notify such persons to prevent or control the spread of the disease or otherwise to carry out public health interventions or investigations.

Disclosures can also be made to family members, friends, and others involved in an individual’s care and for notification, and healthcare providers may disclose patient information with anyone as necessary to prevent or lessen a serious and imminent threat to the health and safety of a person or the public – consistent with applicable law, and the provider’s standards of ethical conduct.

Limited disclosures to the media and others not involved in the care of a patient are permitted, if a request is received and the name of the patient is provided, but should be restricted to limited facility directory information to acknowledge an individual is a patient at the facility and basic information about the status of the patient (e.g., critical or stable, deceased, or treated and released).

In all cases, the minimum necessary rule applies. Disclosures should be restricted to the minimum amount of information necessary to achieve the purpose for which the information is being disclosed.

Public Health Emergency Declarations

Louisiana and Texas PHE

California PHE

HIPAA Waivers

HIPAA Bulletin Louisiana and Texas

HIPAA Bulletin California

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OCR Highlights the Importance of Creating and Maintaining a Comprehensive IT Asset Inventory

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The risk analysis is one of the most important requirements of the HIPAA Security Rule, yet it is one of the most common areas of noncompliance discovered during Office for Civil Rights data breach investigations, compliance reviews, and audits. While there have been examples of HIPAA-covered entities ignoring this requirement entirely, in many cases noncompliance is due to the failure to perform a comprehensive risk analysis across the entire organization.

In order to perform a comprehensive risk analysis to identity all threats to the confidentiality, integrity, and availability of electronic protected health information (ePHI), you must first know how ePHI arrives in your organization, where it flows, where all ePHI is stored, and the systems that can be used to access that information. One of the common reasons for a risk analysis compliance failure, is not knowing where all ePHI is located in the organization.

In its Summer 2020 Cybersecurity Newsletter, OCR highlighted the importance of maintaining a comprehensive IT asset inventory and explains how it can assist with the risk analysis process. An IT asset inventory is a detailed list of all IT assets in an organization, which should include a description of each asset, serial numbers, names, and other information that can be used to identify the asset, version (operating system/application), its location, and the person to whom the asset has been assigned and who is responsible for maintaining it.

“Although the Security Rule does not require it, creating and maintaining an up-to-date, information technology (IT) asset inventory could be a useful tool in assisting in the development of a comprehensive, enterprise-wide risk analysis, to help organizations understand all of the places that ePHI may be stored within their environment, and improve their HIPAA Security Rule compliance,” explained OCR in the newsletter.

An IT asset inventory should not only include physical hardware such as mobile devices, servers, peripherals, workstations, removable media, firewalls, and routers. It is also important to list software assets and applications that run on an organization’s hardware, such as anti-malware tools, operating systems, databases, email, administrative and financial records systems, and electronic medical/health record systems.

IT solutions such as backup software, virtual machine managers/hypervisors, and other administrative tools should also be included, as should data assets that include ePHI that an organization creates, receives, maintains, or transmits on its network, electronic devices, and media.

“Understanding one’s environment – particularly how ePHI is created and enters an organization, how ePHI flows through an organization, and how ePHI leaves an organization – is crucial to understanding the risks ePHI is exposed to throughout one’s organization.”

For smaller healthcare organizations, an IT asset inventory can be created and maintained manually, but for larger, more complex organizations, dedicated IT Asset Management (ITAM) solutions are more appropriate. These solutions include automated discovery and update processes for asset and inventory management and will help to ensure that no assets are missed.

When creating an IT asset inventory to aid the risk analysis, it is useful to include assets that are not used to create, receive, process, or transmit ePHI, but may be used to gain access to ePHI or to networks or devices that store ePHI.  IoT devices may not store or be used to access ePHI, but they could be used to gain access to a network or device that would allow ePHI to be viewed.

“Unpatched IoT devices with known vulnerabilities, such as weak or unchanged default passwords installed in a network without firewalls, network segmentation, or other techniques to deny or impede an intruder’s lateral movement, can provide an intruder with a foothold into an organization’s IT network,” suggests OCR. “The intruder may then leverage this foothold to conduct reconnaissance and further penetrate an organization’s network and potentially compromise ePHI.” There have been multiple incidents where hackers have exploited a vulnerability in one of these devices to penetrate an organization’s network and access sensitive data.

Organizations that do not have a comprehensive IT asset inventory could have gaps in recognition and mitigation of risks to ePHI. Only with a comprehensive understanding of the entire organization’s environment will it be possible to minimize those gaps and ensure that an accurate and thorough risk analysis is performed to ensure Security Rule compliance.

Maintaining an IT asset inventory may not be a Security Rule requirement but covered entities must create policies and procedures that govern the receipt and removal of hardware and electronic media that contain ePHI into and out of a facility. An IT asset inventory can also be used for this purpose. The IT asset inventory can also be compared with the results of network scanning and mapping processes to help identify unauthorized devices that have been connected to the network and used as part of vulnerability management to ensure that no devices, software, or other assets are missed when performing software updates and applying security patches.

The NIST Cybersecurity Framework can be leveraged to assist with the creation of an IT asset inventory. NIST has also produced guidance on IT asset management in its Cybersecurity Practice Guide, Special Publication 1800-5. The HHS Security Risk Assessment Tool can also help with IT asset management. It includes inventory capabilities that allow for manual entry or bulk loading of asset information with respect to ePHI.

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House of Representatives Votes to Remove Ban on HHS Funding a National Patient Identifier System

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The House of Representatives has voted to lift the ban on the Department of Health and Human Services using federal funds to develop a national patient identifier system.

The Health Insurance Portability and Accountability Act (HIPAA) called for the development of a national patient identifier system. As the name suggests, a national patient identifier system would see each person in the united States issued with a permanent, unique identification number, similar to a Social Security number, that would allow each patient to be identified across the entire healthcare system in the United States. If a patient from California visited an emergency room in New York, the patient identifier could be used to instantly identify the patient, allowing the healthcare provider to access their medical history. Currently, the lack of such an identifier makes matching patients with their medical records complicated, which increases the potential for misidentification of a patient.

The extent to which records are mismatched has been shown in multiple studies. For instance, in 2012, a study conducted by the College of Healthcare Information Management Executives (CHIME) found that 20% of its members could trace an adverse medical event to the mismatching of patient records. In 2014, the Office of the National Coordinator for Health Information Technology (ONC) found that 7 out of every 100 patient records were mismatched. Between 50% and 60% of records are mismatched when shared between different healthcare providers. A study conducted by the Ponemon Institute suggested 35% of all denied claims are due to inaccurately matched records or incomplete patient information, which costs the healthcare industry around $1.2 million each year.

It has been 24 years since HIPAA was signed into law, yet there is still no national patient identifier system. A ban was implemented in 1999 preventing the Department of Health and Human Services from funding the development of such as system out of privacy concerns. The ban has remained in place ever since.

Attempts have been made to lift the ban, notably by Reps. Bill Foster (D-IL) and Mike Kelly (R-PA). Last year, their efforts were partially successful, as the House of Representatives voted to remove the ban, only for the Senate to reject the house provision by not including the language removing the ban in the fiscal year 2020 funding bill for the HHS.

On July 30, 2020, the House approved the Foster-Kelly amendment for the House fiscal 2021 appropriations bill covering the departments of labor, health and human services and education. If the Foster-Kelly amendment is included in the Senate fiscal year 2021 funding bill, the HHS will be free to evaluate a range of solutions and find one which is cost-effective, scalable and secure.

Proponents of lifting the ban claim a national patient identifier would increase patient safety and would help with the secure exchange of healthcare information. While support for a national patient identifier is growing, not everyone believes such a system is wise. Opponents to the lifting of the ban believe a national patient identifier would create major privacy risks. The Citizens’ Council for Health Freedom said a national patient identifier “would combine all of your private information, creating a master key that would open the door to every American’s medical, financial and other private data.”

While there are concerns about privacy, the benefits of introducing such a system have been highlighted during the COVID-19 pandemic. Temporary healthcare facilities and testing sites have been set up and laboratories are now processing huge numbers of COVID-19 tests. There have been many reports of healthcare facilities struggling to correctly identify patients and laboratories have found it difficult to match test results with the right patients due to the lack of complete demographic data.

“The coronavirus pandemic continues to demonstrate the importance of accurately identifying patients and matching them to their medical records. Today marks another milestone in keeping patients safe with the passage of the Foster-Kelly Amendment in the House, bringing us closer to a national patient identification solution,” Russ Branzell, CHIME CEO.

“Removing this archaic ban is more important than ever as we face the COVID-19 pandemic,” said Rep. Bill Foster. “Our ability to accurately identify patients across the care continuum is critical to addressing this public health emergency, and removing this ban will alleviate difficult and avoidable operational issues, which will save money and, most importantly, save lives.”

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OCR Imposes $1 Million HIPAA Penalty on Lifespan for Lack of Encryption and Other HIPAA Failures

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The HHS’ Office for Civil Rights has imposed a $1,040,000 HIPAA penalty on Lifespan Health System Affiliated Covered Entity (Lifespan ACE) following the discovery of systemic noncompliance with the HIPAA Rules.

Lifespan is a not-for-profit health system based in Rhode Island that has many healthcare provider affiliates in the state. On April 21, 2017, a breach report was filed with OCR by Lifespan Corporation, the parent company and business associate of Lifespan ACE, about the theft of an unencrypted laptop computer on February 25, 2017.

The laptop had been left in the vehicle of an employee in a public parking lot and was broken into. A laptop was stolen that contained information such as patient names, medical record numbers, medication information, and demographic data of 20,431 patients of its healthcare provider affiliates.

OCR investigated the breach and discovered systemic noncompliance with the HIPAA Rules. Lifespan ACE uses a variety of mobile devices and had conducted a risk analysis to identify potential risks to the confidentiality, integrity, and availability of ePHI. Through the risk analysis, Lifespan ACE determined that the use of encryption on mobile devices such as laptops was reasonable and appropriate given the level of risk but failed to implement encryption. The lack of encryption was a violation of 45 C.F .R. § I 64.312(a)(2)(iv).

OCR also discovered Lifespan ACE had not implemented policies and procedures that required the tracking of portable devices with access to a network containing ePHI, nor was there a comprehensive inventory of those devices, in violation of 45 C.F.R. § 164.310(d)(1).

Lifespan Corporation was a business associate of Lifespan ACE, but both entities had failed to enter into a business associate agreement with each other. Lifespan ACE had also not obtained a signed business associate agreement from its healthcare provider affiliates, in violation of 45 C.F.R. § 164.502(e).

As a result of the compliance failures, Lifespan ACE was responsible for the impermissible disclosure of the ePHI of 20,431 individuals when the laptop was stolen – See 45 C.F.R. § 164.502(a).

Lifespan ACE agreed to settle the case, pay the financial penalty, and adopt a comprehensive corrective action plan (CAP). The CAP requires Lifespan ACE to enter into business associate agreements with its affiliates and parent company, create an inventory of all electronic devices, implement encryption and configure access controls, and review and revise its policies and procedures with respect to device and media controls. Those policies and procedures must be distributed to the workforce and training must be provided on the new policies. Lifespan ACE’s compliance efforts will be scrutinized by OCR for the duration of the two-year CAP.

“Laptops, cellphones, and other mobile devices are stolen every day, that’s the hard reality.  Covered entities can best protect their patients’ data by encrypting mobile devices to thwart identity thieves,” said Roger Severino, OCR Director.

This is the second HIPAA penalty to be announced by OCR in the past week. On July 23, 2020, OCR announced Metropolitan Community Health Services dba Agape Health Services had been fined $25,000 for longstanding, systemic noncompliance with the HIPAA Security Rule.

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