Latest HIPAA News

December 2020 Healthcare Data Breach Report

Posted January 18, 2021 by HIPAA Journal

2020 ended with healthcare data breaches being reported at a rate of 2 per day, which is twice the rate of breaches in January 2020. Healthcare data breaches increased 31.9% month over month and were also 31.9% more than the 2020 monthly average.

There may still be a handful more breaches to be added to the OCR breach portal for 2020 but, as it stands, 565 healthcare data breaches of 500 or more records have been reported to OCR in 2020. That is more than any other year since the HITECH Act required OCR to start publishing data breach summaries on its website.

December was the second worst month of 2020 in terms of the number of breached records. 4,241,603 healthcare records were exposed, compromised, or impermissibly disclosed across the month’s 62 reported data breaches. That represents a 272.35% increase in breached records from November and 92.25% more than the monthly average in 2020. For comparison purposes, there were 41 reported breaches in December 2019 and 397,862 healthcare records were breached.

Largest Healthcare Data Breaches Reported in December 2020

Name of Covered Entity	State	Covered Entity Type	Individuals Affected	Type of Breach	Cause
MEDNAX Services, Inc.	FL	Business Associate	1,290,670	Hacking/IT Incident	Phishing attack
Dental Care Alliance, LLC	FL	Business Associate	1,004,304	Hacking/IT Incident	Unspecified hacking incident
Aetna ACE	CT	Health Plan	484,157	Hacking/IT Incident	Phishing attack (business associate)
Allegheny Health Network	PA	Healthcare Provider	299,507	Hacking/IT Incident	Ransomware attack (Blackbaud)
AMITA Health	IL	Healthcare Provider	261,054	Hacking/IT Incident	Ransomware attack (Blackbaud)
Community Eye Care, LLC	NC	Health Plan	149,804	Hacking/IT Incident	Email account breach
GenRx Pharmacy	AZ	Healthcare Provider	137,110	Hacking/IT Incident	Ransomware attack
Wilmington Surgical Associates, P.A.	NC	Healthcare Provider	114,834	Hacking/IT Incident	Ransomware attack
Agency for Community Treatment Services, Inc.	FL	Healthcare Provider	73,825	Hacking/IT Incident	Ransomware attack
Sonoma Valley Healthcare District	CA	Healthcare Provider	69000	Hacking/IT Incident	Ransomware attack

There were two healthcare data breaches reported in December that each impacted more than 1 million individuals. The largest breach was a phishing attack on the Florida-based business associate, MEDNAX Services, Inc. MEDNAX provides revenue cycle management and other administrative services to its affiliated physician practice groups. Hackers gained access to its Microsoft Office 365-hosted email system after employees responded to phishing emails. The compromised accounts contained the protected health information of 1,290,670 patients of its clients.

Dental Care Alliance is a Sarasota, FL-based dental support organization with more than 320 affiliated dental practices in 20 U.S. states. Little information has been released about the exact nature of the cyberattack, other than hackers gaining access to its systems and viewing files containing patient information.

Causes of December 2020 Healthcare Data Breaches

Ransomware gangs continue to target healthcare organizations and attacks have increased considerably in recent months. 5 of the worst data breaches reported in December involved ransomware, as did many of the smaller breaches. Several healthcare providers have only just reported being affected by the ransomware attack on Blackbaud Inc., which was discovered by the cloud service provide in May 2020.

Phishing continues to be a major cause of healthcare data breaches. There were 13 data breaches involving unauthorized accessing of email accounts, the majority of which used credentials stolen in phishing attacks. While most of the month’s breaches involved unauthorized accessing of electronic protected health information, 17.75% of the month’s breaches involved paper records and films, highlighting the importance of also protecting physical records.

33 hacking/IT incidents were reported to OCR in December 2020. Those incidents accounted for 98.39% of the month’s breached records (4,173,519 records). An average of 126,470 records were breached per incident with a median breach size of 8,000 records per incident.

There were 21 unauthorized access/disclosure incidents reported to OCR which involved a total of 57,837 records. The average breach size was 2,754 records and the median breach size was 1,020 records.

There were 7 theft and loss incidents reported (5 theft/2 loss). The average breach size was 1,392 records and the median breach size was 856 records. There was also one incident involving the improper disposal of 501 records.

Entities Reporting Data Breaches in December 2020

Healthcare providers were the worst affected covered entity in December 2020 with 39 breaches reported, but there was a major increase in data breaches reported by health plans. 17 health plans reported breaches of 500 or more records in December, which is a 183% increase from November.

There were 6 data breaches reported by business associates of HIPAA covered entities, but 40% of the month’s breaches (25) had some business associate involvement. In many cases, the breach was experienced by the business associate but was reported by the covered entity.

December 2020 Healthcare Data Breaches by State

HIPAA covered entities and business associates in 58% of U.S. states reported data breaches in December. Florida was the worst affected of the 29 states with 9 reported data breaches. Pennsylvania also had a particularly bad month with 7 reported breaches, followed by Missouri and Texas with 4, and Illinois, North Carolina, and Tennessee with 3.

There were two breaches reported in each of Arizona, Connecticut, Georgia, Massachusetts, Minnesota, Ohio, and Wisconsin, and one breach reported in each of Arkansas, California, Colorado, Delaware, Indiana, Iowa, Kentucky, Louisiana, Maine, Mississippi, Nebraska, Oregon, Utah, Virginia, and West Virginia.

HIPAA Enforcement in December 2020

2020 has been a busy year in terms of HIPAA enforcement. More financial penalties were imposed on HIPAA covered entities and their business associates to resolve potential HIPAA violations in 2020 than in any other year since the HHS was given the authority to enforce HIPAA compliance. 19 settlements were reached to resolve cases where HIPAA Rules appeared to have been violated.

OCR announced one further financial penalty in December – The 13^th financial penalty under its HIPAA Right of Access initiative. Peter Wrobel, M.D., P.C., dba Elite Primary Care, agreed to pay OCR a $36,000 to resolve a case involving the failure to provide two patients with timely access to their medical records.

You can read more about 2020 HIPAA enforcement in our end of year summary.

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Excellus Health Plan Settles HIPAA Violation Case and Pays $5.1 Million Penalty

Posted January 17, 2021 by HIPAA Journal

The Department of Health and Human Services’ Office for Civil Rights has announced the health insurer Excellus Health Plan has agreed to pay a $5.1 million penalty to settle a HIPAA violation case stemming from a 2015 data breach that affected 9.3 million individuals.

The breach in question was discovered by Excellus Health Plan in 2015, the same year that massive data breaches were discovered by the health insurers Anthem Inc. (78.8 million records) and Premera Blue Cross (10.6 million records). All three entities have now settled breach investigations with OCR and have paid substantial financial penalties.

Excellus Health Plan, doing business as Excellus BlueCross BlueShield and Univera Healthcare, serves individuals in upstate and western New York. In August 2015, the health insurer discovered hackers had gained access to its computer systems. The breach investigation revealed access to its systems was first gained around December 23, 2013 and continued until May 11, 2015. The breach was reported to OCR on September 9, 2015.

The hackers installed malware on its systems, performed reconnaissance, and were found to have accessed the healthcare data of around 7 million Excellus Health Plan members and approximately 2.5 million members of Lifetime Healthcare, its non-BlueCross subsidiary. The information accessed by the hackers included names, contact information, dates of birth, Social Security numbers, health plan ID numbers, claims data, financial account information, and clinical treatment information.

OCR launched an investigation of the breach in June 2016 to determine whether Excellus Health Plan was in compliance with the HIPAA Privacy, Security, and Breach Notification Rules. The investigation identified five standards of the HIPAA Rules where Excellus was potentially noncompliant.

OCR determined the health plan had failed to conduct an accurate and thorough organization-wide risk analysis to identify risks and vulnerabilities to the confidentiality, integrity, and availability of the electronic protected health information (ePHI) of its members. Sufficient measures had not been implemented to reduce risks and vulnerabilities to ePHI to a reasonable and appropriate level, and technical policies and procedures that only allow authorized persons and software programs to access systems containing ePHI were insufficient. As a result of these issues, unauthorized individuals gained access to the PHI of 9,358,891 of its members. It took Excellus more than 18 months to discover its systems had been breached. OCR found policies and procedures requiring regular reviews of information system activity to be lacking.

The financial penalty was agreed with OCR to avoid further investigation and formal proceedings, and the settlement was reached with no admission of liability or wrongdoing. In addition to paying the financial penalty, Excellus is required to adopt a corrective action plan that covers all areas of potential noncompliance identified by OCR during the investigation. Excellus will also be monitored closely by OCR for 2 years to ensure continued compliance with the HIPAA Rules.

“Hacking continues to be the greatest threat to the privacy and security of individuals’ health information. In this case, a health plan did not stop hackers from roaming inside its health record system undetected for over a year which endangered the privacy of millions of its beneficiaries,” said OCR Director Roger Severino. “We know that the most dangerous hackers are sophisticated, patient, and persistent. Health care entities need to step up their game to protect the privacy of people’s health information from this growing threat.”

This is the second HIPAA enforcement action to be announced by OCR in 2021. Earlier this month, OCR said a $200,000 settlement had been reached with Banner Health to resolve potential HIPAA Right of Access violations. The Excellus settlement comes just a few hours after the 5^th Circuit Court of Appeals vacated a $4.3 million Civil Monetary Penalty imposed by OCR on University of Texas M.D. Anderson Cancer Center that stemmed from three incidents involving the loss/theft of portable devices containing ePHI between 2012 and 2013.

The two HIPAA settlements in January follow on from a record year of HIPAA enforcement that saw 19 financial penalties paid by HIPAA covered entities and business associates to resolve potential violations of HIPAA Rules.

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M.D. Anderson Cancer Center Has $4.3 Million OCR HIPAA Fine Overturned on Appeal

Posted January 15, 2021 by HIPAA Journal

The U.S. Court of Appeals for the Fifth Circuit has overturned a $4,348,000 HIPAA violation penalty imposed on University of Texas M.D. Anderson Cancer Center by the Department of Health and Human Services’ Office for Civil Rights.

The Civil Monetary Penalty was imposed on M.D. Anderson in 2018 following an investigation of three data breaches that were reported to the Office for Civil Rights between 2013 and 2014 that involved the loss/theft of unencrypted devices between 2012 and 2013. Two unencrypted flash drives containing the ePHI of 2,264 and 3,598 patients were lost, and an unencrypted laptop computer containing the ePHI of 29,021 patients was stolen.

The Office for Civil Rights investigation concluded that M.D. Anderson was in violation of two provisions of the HIPAA Rules. The first violation was the failure to implement encryption or adopt an alternative and equivalent method to limit access to ePHI stored on electronic devices, and the second prohibits unauthorized disclosures of ePHI.

HIPAA penalties are tiered and are based on the level of culpability, with the Office for Civil Rights determining M.D. Anderson had reasonable cause to know it was in violation of the HIPAA Rules. OCR calculated the appropriate penalties to be $1,348,000 for the of lack of encryption and $1.5 million per year for the impermissible disclosures of ePHI.

M.D. Anderson contested the financial penalties and after two unsuccessful reviews, OCR imposed the civil monetary penalties on the Texas healthcare provider in June 2018. M.D. Anderson then petitioned the 5^th Circuit Court of Appeals to review the ruling in April 2019.

M.D. Anderson maintained that the HHS’ Office for Civil Rights is a federal agency and exceeded its authority by imposing the civil monetary penalties, since M.D. Anderson is a state agency and is therefore not a ‘person’ covered by the Enforcement Provision of the Health Insurance Portability and Accountability Act. M.D. Anderson also alleged the financial penalty was excessive. At the time it was the third largest HIPAA penalty to be imposed on a single covered entity for violations of the HIPAA Rules.

The two failed reviews resulted in the case going before an Administrative Law Judge (ALJ) who refused to rule on whether HIPAA, the HITECH Act, any other statute applied, nor whether the civil monetary penalty was arbitrary or capricious.

The 5th Circuit explained, “For the sake of today’s decision, we assume that M.D. Anderson is such a “person” and that the enforcement provision therefore applies. The petition for review nonetheless must be granted for an independent reason: the CMP violates the Administrative Procedure Act (“APA”).”

After reviewing the financial penalty, the Court of Appeals ruled that the Office for Civil Rights had acted arbitrarily, and its decision was capricious and contrary to law for at least four independent reasons. As required by HIPAA, M.D. Anderson had implemented a mechanism for encryption as early as 2006, but the Office for Civil Rights failed to demonstrate that M.D. Anderson had not done enough to secure the ePHI of its patients. It was only possible to demonstrate that three employees had failed to abide by M.D. Anderson’s encryption policies.

The Court of Appeals also found issue with the impermissible disclosure aspect of the decision. The HIPAA definition of disclosure suggests an affirmative act rather than a passive loss of information, and also that ePHI would need to be disclosed to someone outside the covered entity, when that could not be determined in this case.

The Court of Appeals also found the decision to fine some covered entities for loss/theft incidents and not others was inconsistent. Regarding the penalty amount, under the “reasonable cause” penalty tier, the maximum fine for violations of an identical provision during a calendar year may not exceed $100,000. The ALJ and the Departmental Appeals Board nevertheless determined that the per-year statutory cap was $1,500,000.

Following the petition to the Court of Appeals, the HHS’ Office for Civil Rights conceded that the $4,348,000 financial penalty could not be justified and asked the Court of Appeals to reduce the fine by a factor of ten to $450,000.

The Court of Appeals concluded that the Government had offered no lawful basis for the civil monetary penalties, vacated the CMP order, and remanded the matter for further proceedings consistent with the court’s opinion.

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2020-2021 HIPAA Violation Cases and Penalties

Posted January 13, 2021 by HIPAA Journal

The Department of Health and Human Services’ Office for Civil Rights (OCR) settled 19 HIPAA violation cases in 2020. More financial penalties were issued in 2020 than in any other year since the Department of Health and Human Services was given the authority to enforce HIPAA compliance. $13,554,900 was paid to OCR to settle the HIPAA violation cases. 2021 saw a slight reduction in the number of settlements and fines for HIPAA violations, with 14 enforcement actions announced by OCR. Even so, 2021 had the second-highest number of HIPAA fines of any year since OCR started enforcing compliance with the HIPAA Rules.

While the number of penalties was still high in 2021, there was a sizeable reduction in penalty amounts which totaled $5,982,150 for the year, and $5,100,000 of that total came from just one enforcement action. The reason for this is that most of the penalties were for violations of the HIPAA Right of Access, and were in response to investigations of complaints filed by patients who had not been provided with timely access to their medical records, rather than penalties for violations of multiple HIPAA Rules that impacted large numbers of individuals. The $5,100,000 penalty, imposed on Excellus Health Plan, was so large because there were multiple violations of the HIPAA Rules, over multiple years, that led to a breach of the ePHI of 9,358,891 individuals.

Penalties for Noncompliance with the HIPAA Right of Access

In late 2019, OCR announced a new HIPAA enforcement initiative to tackle non-compliance with the Right of Access standard of the HIPAA Privacy Rule. Since then, OCR has been rigorously enforcing compliance with the HIPAA Right of Access and as of December 2021, has imposed 25 penalties for HIPAA Right of Access violations totaling $1,564,650. The fines range from $3,500 to $200,000. There have been 24 settlements and one civil monetary penalty, with many of the fines imposed on small healthcare providers.

The HIPAA Right of Access standard – 45 C.F.R. § 164.524(a) – gives patients the right to access, inspect, and obtain a copy of their own protected health information in a designated record set. When a request is received from an individual or their personal representative, the records must be provided within 30 days. A reasonable, cost-based fee may be charged for providing a copy of the requested records. A request for access to an individual’s health records may be denied, but only in very limited circumstances.

OCR investigates complaints from individuals who allege they have been denied access to their health records, have not received records within 30 days, or have been charged excessive amounts for copies of their records. The financial penalties imposed by OCR in 2020 for HIPAA Right of Access violations ranged from $15,000 to $160,000 and stemmed from refusals to provide copies of records or long delays. In many cases, records were only provided after OCR intervened.

2021 HIPAA Right of Access Enforcement Actions

Covered Entity	Penalty	Outcome
Banner Health	200,000	Settlement
Rainrock Treatment Center LLC (dba monte Nido Rainrock)	160,000	Settlement
Dr. Robert Glaser	100,000	Civil Monetary Penalty
Children’s Hospital & Medical Center	80,000	Settlement
Renown Health	75,000	Settlement
Sharpe Healthcare	70,000	Settlement
Arbour Hospital	65,000	Settlement
Advanced Spine & Pain Management	32,150	Settlement
Denver Retina Center	30,000	Settlement
Village Plastic Surgery	30,000	Settlement
Wake Health Medical Group	10,000	Settlement

Other 2021 HIPAA Violation Penalties

Covered Entity	Penalty	Outcome
Excellus Health Plan	$5,100,000	Settlement
AEON Clinical Laboratories (Peachstate)	$25,000	Settlement

Only two HIPAA enforcement actions in 2021 were not the result of HIPAA Right of Acess violations.

Excellus Health Plan

Rochester, New York-based Excellus Health Plan, a member of the Blue Cross Blue Shield Association, was investigated to identify potential HIPAA compliance issues following a report of a data breach of 9,358,891 records in 2015. It was one of three mega data breaches to be reported by health plans that year, Anthem Inc and Premera Blue Cross being the other two, both of which had settled their cases and paid sizeable penalties.

Excellus discovered the breach in August 2015, with its investigation revealing hackers had access to its systems between December 23, 2013, and May 11, 2015. The breach was reported to OCR on September 9, 2015. Malware had been installed which allowed the hackers to exfiltrate the data of around 7 million Excellus Health Plan members and approximately 2.5 million members of Lifetime Healthcare, its non-BlueCross subsidiary, which included names, contact information, dates of birth, Social Security numbers, health plan ID numbers, claims data, financial account information, and clinical treatment information.

OCR’s investigation uncovered multiple HIPAA violations, including the failure to conduct an accurate and thorough organization-wide risk analysis, the failure to reduce risks and vulnerabilities to ePHI to a reasonable and appropriate level, and a lack of technical policies and procedures to limit data access to authorized persons and software programs. Excellus chose to settle the case and paid a $5,100,000 penalty and agreed to implement a comprehensive Corrective Action Plan to address all areas of non-compliance.

Peachstate Health Management LLC, dba AEON Clinical Laboratories

The enforcement action against Peachstate Health Management is notable because this was the first OCR investigation to result in a financial penalty for HIPAA violations identified in a company that was not the initial subject of the investigation.

OCR launched an investigation after receiving a report from the Department of Veteran Affairs in 2015 about a data breach involving its business associate, Authentidate Holding Corporation (AHC). AHC managed the VA’s Telehealth Services Program and suffered a data breach. While investigating, OCR learned that AHC had entered into a reverse merger with Peachstate Health Management on January 27, 2016, which saw Peachstate acquired by AHC. Peachstate is a CLIA-certified laboratory that provides clinical and genetic testing services through its publicly traded parent company, AEON Global Health Corporation (AGHC).

OCR then launched an investigation of Peachstate to assess HIPAA Privacy and Security Rule compliance and found multiple violations of the HIPAA Rules. OCR identified multiple HIPAA Security Rule failures, including risk assessment, risk management, audit controls failures, as well as the failure to maintain documentation of HIPAA Security Rule policies and procedures. The case was settled for $25,000, and a corrective action plan was agreed to resolve the HIPAA violations.

2020 HIPAA Right of Access Enforcement Actions

Covered Entity	Penalty	Outcome
Dignity Health, dba St. Joseph’s Hospital and Medical Center	$160,000	Settlement
NY Spine	$100,000	Settlement
Beth Israel Lahey Health Behavioral Services	$70,000	Settlement
University of Cincinnati Medical Center	$65,000	Settlement
Housing Works, Inc.	$38,000	Settlement
Peter Wrobel, M.D., P.C., dba Elite Primary Care	$36,000	Settlement
Riverside Psychiatric Medical Group	$25,000	Settlement
Dr. Rajendra Bhayani	$15,000	Settlement
All Inclusive Medical Services, Inc.	$15,000	Settlement
Wise Psychiatry, PC	$10,000	Settlement
King MD	$3,500	Settlement

Other 2020 HIPAA Violation Penalties

The remaining HIPAA violation penalties issued in 2020 were issued for non-compliance with several provisions of the HIPAA Rules. The penalty amounts reflect the seriousness of the violations, the harm caused, the number of individuals affected, the level of cooperation with OCR, the voluntary actions taken to address the violations, and the ability of the entity to pay. In each of the HIPAA violation cases below, OCR discovered multiple violations of the HIPAA Rules.

Covered Entity	Amount	Outcome
Premera Blue Cross	$6,850,000	Settlement
CHSPSC LLC	$2,300,000	Settlement
Athens Orthopedic Clinic	$1,500,000	Settlement
Lifespan Health System Affiliated Covered Entity	$1,040,000	Settlement
Aetna	$1,000,000	Settlement
City of New Haven, CT	$202,400	Settlement
Steven A. Porter, M.D	$100,000	Settlement
Metropolitan Community Health Services dba Agape Health Services	$25,000	Settlement

Second Largest HIPAA Violation Penalty for Premera Blue Cross

The largest HIPAA violation penalty of 2020 was imposed on the health insurer Premera Blue Cross. Premera Blue Cross was investigated over a data breach in which the protected health information of 10,466,692 individuals was obtained by hackers.

During the investigation, OCR discovered multiple potential violations of the HIPAA Security Rule. Premera Blue Cross had failed to conduct a comprehensive risk analysis, had not reduced risks to the confidentiality, integrity, and availability of ePHI to a reasonable and appropriate level, and had implemented insufficient hardware and software controls.

Premera Blue Cross agreed to pay a financial penalty of $6,850,000 to resolve the case and adopted a corrective action plan to address all areas of noncompliance.

In addition to the OCR penalty, Premera Blue Cross settled a multi-state action for $10 million and a class action lawsuit filed on behalf of victims of the breach for $74 million.

The financial penalty was the second-largest ever to be issued by OCR. The largest HIPAA violation penalty – $16 million – was paid by Anthem Inc. in 2018 and resolved an investigation into its 78.8 million record data breach that was discovered in 2015. Following on from that settlement, in 2020 Anthem Inc settled a multi-state action and paid $48.2 million in penalties. Anthem also settled a class action lawsuit filed on behalf of victims of the breach in 2018 for $115 million.

CHSPSC LLC

CHSPSC LLC, a Tennessee-based management company that provides services to many subsidiary hospital operator companies and other affiliates of Community Health Systems, suffered a cyberattack in April 2014 in which compromised admin credentials were used by hackers to gain access to its systems. The hackers stole the ePHI of 6,121,158 individuals.

OCR investigated and found systemic noncompliance with the HIPAA Security Rule. CHSPSC had failed to conduct a comprehensive risk analysis, was not conducting information system activity reviews, and had implemented insufficient access controls and security incident response procedures. When notified about the cyberattack by the FBI, it took CHSPSC two months to respond.

CHSPSC LLC settled the case, paid a $2,300,000 penalty, and adopted a corrective action plan to address all areas of noncompliance. Community Health Systems and CHSPSC LLC also settled a multi-state action with 28 state Attorneys General over the breach for $5,000,000.

Athens Orthopedic Clinic

The Athens, GA-based healthcare provider Athens Orthopedic Clinic suffered a cyberattack in 2016 in which a hacker stole a database containing the PHI of 208,557 patients and demanded payment not to release the stolen data. When payment was not received the database was published.

OCR’s investigation into the breach uncovered systemic noncompliance with the HIPAA Rules. Athens Orthopedic Clinic had failed to conduct a comprehensive risk analysis, had not implemented security procedures to reduce risks to ePHI to a reasonable and appropriate level, had failed to implement appropriate hardware, software, and procedures for recording and analyzing information system activity, and did not implement HIPAA policies until August 2016.

OCR also found the clinic had not entered into business associate agreements with three vendors and did not provide HIPAA Privacy Rule training to the entire workforce until January 15, 2018.

Athens Orthopedic Clinic agreed to settle the case, paid a $1.5 million penalty, and adopted a corrective action plan to address all areas of noncompliance.

Lifespan Health System Affiliated Covered Entity

Lifespan Health System Affiliated Covered Entity is a Rhode Island not-for-profit health system with many healthcare provider affiliates in the state. In February 2017, an unencrypted laptop computer was stolen from an employee’s vehicle. The laptop contained the ePHI of 20,431 patients.

OCR investigated the breach and discovered systemic noncompliance with the HIPAA Rules. Lifespan had conducted a risk analysis and determined encryption was required for its mobile devices due to the high risk of data exposure but failed to implement encryption on mobile devices. The movement of the devices in and out of its facilities was not tracked and there was no comprehensive inventory of mobile devices. OCR also found that there was no business associate agreement between Lifespan Corporation and Lifespan ACE.

Lifespan ACE agreed to settle the case, paid a $1,040,000 penalty, and adopted a corrective action plan to address all areas of noncompliance.

Aetna

Aetna Life Insurance Company and its affiliated covered entity (Aetna) were investigated by OCR after reporting three data breaches in 2017. The first breach involved the exposure of the protected health information of 5,002 plan members over the Internet, and the other two breaches involved mailings in which sensitive PHI could be viewed through the windows of the envelopes. In the first mailing to 11,887 individuals the words ‘HIV medication’ could be viewed through the windows of the envelopes. In the second mailing to 1,600 individuals, the name and logo of an atrial fibrillation study could be viewed.

OCR determined Aetna had not performed periodic technical and non-technical evaluations of operational changes affecting the security of their ePHI, procedures had not been implemented to verify the identity of individuals or entities looking to access their ePHI, disclosures of ePHI had not been limited to the minimum necessary information to achieve the purpose for the disclosures, and there was a lack of appropriate administrative, technical, and physical safeguards to ensure the privacy of ePHI.

Aetna agreed to settle the case, paid a $1 million penalty, and agreed to adopt a corrective action plan to address all areas of noncompliance.

Other penalties related to be breach include a $1.15 million settlement with the New York Attorney General, a $935,000 settlement with the California Attorney General, and similar settlements with Connecticut ($99,959), the District of Columbia ($175,000), and New Jersey ($365,211.59). A class action lawsuit filed on behalf of victims of the breach was settled for $17.2 million.

City of New Haven, CT

In January 2017, the City of New Haven in Connecticut reported a data breach of the ePHI of 498 individuals to OCR. The city had terminated an employee in 2016 during her probationary period. The former employee returned to the New Haven Health Department with her union representative after she had been terminated, used her work key to access her old office, and locked herself inside. She used her login credentials to access a work computer and copied data onto a USB drive before leaving.

In addition to failing to terminate the former employee’s access rights, OCR discovered a comprehensive risk analysis had not been performed, the city had failed to implement HIPAA Privacy Rule policies, and had not issued unique IDs to allow system activity to be tracked.

The City of New Haven settled the case, paid a $202,400 financial penalty, and agreed to adopt a corrective action plan to address all areas of noncompliance.

Steven A. Porter, M.D

The medical practice of Steven A. Porter, M.D in Ogden, UT provides gastroenterological services to more than 3,000 patients. On November 13, 2013, OCR received a breach notification alleging Dr. Porter’s electronic medical record company was impermissibly using patients’ electronic medical records by blocking the practice’s access to ePHI until a $50,000 bill was paid.

OCR investigated and found serious violations of the HIPAA Security Rule at the practice. At the time of the investigation, a risk analysis had never been performed and risks to the confidentiality, integrity, and availability of ePHI had not been managed and reduced to a reasonable and acceptable level. The practice had also allowed Dr. Porter’s EHR company to create, receive, maintain, or transmit ePHI on behalf of the practice, without entering into a business associate agreement.

Dr. Porter settled the case, paid a $100,00 financial penalty, and agreed to adopt a corrective action plan to address all areas of noncompliance.

Metropolitan Community Health Services / Agape Health Services

Metropolitan Community Health Services is a Washington, NC-based Federally Qualified Health Center that provides integrated medical, dental, behavioral health & pharmacy services for adults and children. Operating as Agape Health Services, Metro provides discounted medical services to the underserved population in rural North Carolina.

In June 2011, Metro notified OCR about a breach of the PHI of 1,263 patients. OCR conducted a compliance review and identified longstanding, systemic noncompliance with the HIPAA Security Rule.

Prior to the breach, Metro had not implemented HIPAA Security Rule policies and procedures, had failed to conduct an accurate risk analysis, and had not provided security awareness training to its workforce for more than 16 years.

Metro settled the case, paid a $25,000 penalty, and agreed to adopt a corrective action plan to address all areas of noncompliance.

Further information on HIPAA Penalties

You can view a summary of the HIPAA violation penalties in previous years on this link.

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OCR Continues HIPAA Right of Access Crackdown with $200,000 Fine

Posted January 13, 2021 by HIPAA Journal

The HHS’ Office for Civil Rights (OCR) is continuing to crackdown on healthcare providers that are not providing patients with timely access to their medical records. Yesterday, OCR announced a settlement had been agreed with Banner Health to resolve a HIPAA Right of Access investigation. Banner Health agreed to pay $200,000 to settle the case.

The HIPAA Privacy Rule gives individuals the right to access, inspect, and obtain a copy of their own protected health information. When a request is received, HIPAA-covered entities are required to provide a copy of the requested records within 30 days.

In late 2019, OCR announced it was cracking down on noncompliance with this important provision of HIPAA. Since then, 14 financial penalties have been imposed on covered entities that have failed to provide patients with timely access to their medical records.

Phoenix, AZ-based Banner Health is one of the largest health care systems in the United States. The non-profit health system operates 30 hospitals and many primary care, urgent care, and specialty care facilities.

OCR received two complaints from patients of Banner Health affiliated covered entities alleging long delays receiving copies of medical records. The first patient submitted a request to Banner Estrella Medical Center in December 2017 and was not provided with the requested records until May 2018. A second complaint was received alleging another patient had to wait 5 months for an electronic copy of his records. The request was submitted to Banner Gateway Medical Center in September 2019 and he did not receive the records until February 2020.

The $200,000 financial penalty is the largest HIPAA fine imposed on a HIPAA-covered entity by OCR under its HIPAA Right of Access enforcement initiative. In addition to paying the financial penalty, Banner Health has agreed to adopt a corrective action plan that includes reviewing and revising written policies on health record access, implementing those policies, and providing training to staff on the new policies. OCR will monitor Banner Health for 2 years to ensure compliance.

“This first resolution of the year signals that our Right of Access Initiative is still going strong and that providers of all sizes need to respect the right of patients to have timely access to their medical records,” said OCR Director Roger Severino.

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HITECH Act Amendment Creating Cybersecurity Safe Harbor Signed into Law

Posted January 12, 2021 by HIPAA Journal

On January 5, 2020, President Trump added his signature to a bill (HR 7898) that amends the Health Information Technology for Economic and Clinical Health Act (HITECH Act) and creates a safe harbor for companies that have implemented recognized security best practices prior to experiencing a data breach.

While the bill does not go as far as preventing the Department of Health and Human Services’ Office for Civil Rights from imposing financial penalties for HIPAA compliance issues that contributed to a data breach, the amendment requires OCR to take into consideration the security measures that were in place to reduce cybersecurity risk in the 12 months prior to a data breach.

The main aim of the bill is to incentivize healthcare organizations to adopt an established, formalized, and recognized cybersecurity framework and adhere to industry security best practices, as doing so will provide a degree of insulation against regulatory enforcement actions.

The bill requires the HHS to consider an entity’s use of recognized security best practices when investigating reported data breaches and considering HIPAA enforcement penalties or other regulatory actions. If an entity has adopted the NIST Cybersecurity Framework or HITRUST CSF for example, it will be taken into consideration when calculating fines related to security breaches. Adoption of security best practices will mitigate remedies that would otherwise be agreed between an entity and the HHS to resolve potential violations of the HIPAA Security Rule.

The bill also requires the HHS to decrease the extent and length of audits if an entity is determined to have achieved industry-standard security best practices and makes it clear that the HHS is not authorized to increase fines for entities found not to have adhered to recognized security practices.

Recognized security practices are defined as “the standards, guidelines, best practices, methodologies, procedures, and processes developed under section 2(c)(15) of the National Institute of Standards and Technology (NIST) Act, the approaches promulgated under section 405(d) of the Cybersecurity Act of 2015, and other programs and processes that address cybersecurity and that are developed, recognized, or promulgated through regulations under other statutory authorities. Such practices shall be determined by the covered entity or business associate, consistent with the HIPAA Security Rule.”

The healthcare industry is extensively targeted by hackers and healthcare data breaches are becoming much more common. Each year, the number of successful cyberattacks on healthcare organizations and their business associates increases and 2020 was no exception. 2020 was the worst ever year for healthcare industry data breaches by far. It is also worth noting that 2020 saw more HIPAA penalties imposed on HIPAA covered entities and business associates by the HHS’ Office for Civil Rights than any other year since the HHS was given the authority to impose financial penalties for HIPAA violations.

Healthcare organizations and HIPAA business associates that have not yet adopted a common cybersecurity framework or other recognized security practices should consider doing so now. Adoption of recognized security practices will help to reduce the risk of a data breach as well as the negative consequences if a data breach does occur.

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FBI Issues Warning About Increasing Egregor Ransomware Activity

Posted January 11, 2021 by HIPAA Journal

The Federal Bureau of Investigation (FBI) has issued a Private Industry Alert about the growing threat of Egregor ransomware attacks.

Egregor ransomware is a ransomware-as-a-service operation that was first identified in September 2020. The threat actors behind the operation recruit affiliates to distribute their ransomware and give them a cut of any ransoms they generate. The affiliates have been highly active over the past three months and have conducted attacks on many large enterprises. High-profile victims include Barnes & Noble, Ubisoft, Kmart, Crytek, and the Canadian transportation agency TransLink.

The threat group claims to have gained access to more than 150 corporate networks and deployed their ransomware, with the ransom demands exceeding $4 million. Many affiliates have been recruited by the Egregor ransomware gang and each has their preferred method of distributing the ransomware. With a wide range of tactics, techniques, and procedures used to deliver the ransomware, defending against attacks can be a challenge for network defenders.

Initial access to corporate networks is often gained through phishing attacks targeting corporate email accounts using attachments with malicious code that downloads the ransomware payload. Other tactics include brute force attacks on weak passwords and the exploitation of vulnerabilities in Remote Desktop Protocol (RDP) and Virtual Private Networks (VPNs).

Once a network has been compromised, the attackers escalate privileges and move laterally within networks using tools such as Advanced IP Scanner, Cobalt Strike, AdFind, and malware such as QakBot. The network is explored to find sensitive data, which is exfiltrated using 7zip and Rclone, sometimes hiding the activity as a Service Host Process (svchost). The exfiltrated data is used to pressure victims into paying the ransom with the threat actors threatening to sell or publish the data if payment is not made.

The ransomware first appeared around the same time as the Maze ransomware operation shut down and any Maze ransomware affiliates switched to distributing Egregor ransomware. Several security researchers have suggested the Maze ransomware gang is running the Egregor ransomware operation due to the arrival of Egregor as the Maze operation shut down, similarities between the companies attacked and the ransom notes. The threat actors running the Egregor ransomware operation also appear to have considerable experienced running ransomware-as-a-service operations.

The FBI has advised against paying the ransom demands as there is no guarantee that valid keys will be supplied to unlock encrypted data and that stolen data may not be deleted even if the ransom is paid. Paying the ransom helps to fund future attacks and encourages the threat actors to continue.

Due to the diverse tactics, techniques, and procedures used to distribute the ransomware, network defenders need to harden security organization-wide. To ensure data can be recovered in the event of an attack, regular backups should be performed of critical data, and those backups should be stored offline, in the cloud or on an external hard drive that is not connected to the network. Backups should never be accessible from the network where the data resides.

Antivirus and antimalware solutions should be deployed and set to update automatically, email security gateways should be used to block phishing attacks, and multi-factor authentication should be implemented on corporate email accounts and remote access solutions. If multi-factor authentication cannot be implemented, it is essential to use strong passwords.

Secure networks should be used for remote access and public Wi-Fi networks should be avoided. Public-facing remote access solutions should be regularly updated and patches should be applied promptly. Several attacks saw networks compromised by exploiting vulnerabilities in RDP such as CVE-2020-0609, CVE-2020-0610, CVE-2020-16896, CVE-2019-1489, CVE-2019-1225, CVE-2019-1224, CVE-2019-1108. Patching these vulnerabilities should be prioritized. The FBI also recommends reviewing suspicious .bat and .dll files with recon data, such as .log files, and monitoring for the use of exfiltration tools.

Victims of Egregor ransomware attacks are being encouraged to report the attacks to their local FBI office or the FBI’s 24/7 CyberWatch. Victims should bear in mind that payment of a ransom potentially carries sanctions risks. Last year, the Office of Foreign Assets Control (OFAC) of the Treasury Department warned that paying a ransom could violate OFAC regulations if it involves a sanction nexus. OFAC should be contacted prior to victims paying any ransom payment in order to avoid future sanctions.

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Healthcare Industry Cyberattacks Increase by 45%

Posted January 6, 2021 by HIPAA Journal

In the fall of 2020, a warning was issued to the healthcare and public health sector following a spike in ransomware activity. The joint CISA, FBI, and HHS cybersecurity advisory explained that the healthcare industry was being actively targeted by threat actors with the aim of infecting systems with ransomware. Several ransomware gangs had stepped up attacks on the healthcare and public health sector, with the Ryuk and Conti operations the most active.

A new report from Check Point shows attacks continued to increase in November and December 2020, when there was a 45% increase in cyber-attacks on healthcare organizations globally. The increase was more than double the percentage rise in attacks on all industry sectors worldwide over the same period. Globally, there was an average of 626 cyberattacks on healthcare organizations each week in November and December, compared to 430 attacks in October.

The vectors used in the attacks have been varied, with Check Point researchers identifying an increase in ransomware, botnet, remote code execution, and DDoS attacks in November and December; however, ransomware attacks showed the largest percentage increase and ransomware remains the biggest malware threat.

Conti ransomware continues to pose a threat and has been used in many healthcare industry ransomware attacks, although Ryuk remains the most commonly used ransomware variant, followed by Sodinokibi. The biggest increase in attacks was in Central Europe, which saw a 145% spike in attacks, followed by East Asia (137%) and Latin America (112%). There was a 67% rise in attacks in Europe and a 37% increase in North America. The country with the biggest increase was Canada, which saw attacks increase by 250%.

Ransomware attacks are financially motivated. Ransomware gives threat actors a large payout in a matter of days after conducting an attack and ransoms are often paid to allow files to be restored or to prevent the release or sale of stolen sensitive data. The healthcare industry is targeted because there is a higher probability that a ransom will be paid than attacks on other industry sectors. Healthcare providers need to restore access to patient data quickly to ensure care can continue to be provided to patients, especially at a time when there is tremendous pressure due to the number of new patients requiring treatment for COVID-19.

While it is still common for ransomware to be distributed via spam email and exploit kits, the attacks on the healthcare industry have been highly targeted, with the main ransomware variants used in the attacks delivered manually. Initial access to healthcare networks is gained using a variety of methods. Many ransomware attacks start with phishing emails that deliver Trojans such as Emotet, TrickBot, and Dridex. Check Point advises security professionals to search for these Trojans on the network, along with Cobalt Strike, all of which are used to deliver Ryuk ransomware.

Many ransomware attacks start with a phishing email, so it is important to ensure that anti-phishing cybersecurity solutions are implemented, and for employees to receive regular training to help them identify phishing and social engineering attacks.

While most phishing attacks occur in the week during business hours, ransomware attacks commonly commence over the weekend and during holidays, when monitoring by security staff is likely to be reduced. Healthcare organizations are advised to raise their guard over the weekend and during holidays to detect attacks in progress.

Vulnerabilities in software and operating systems are commonly exploited to gain access to healthcare networks, so prompt patching is vital, but in healthcare it is not always possible for patches to be applied. Check Point recommends using an intrusion prevention system (IPS) with virtual patching capabilities that can prevent the exploitation of vulnerabilities in systems and applications that cannot be patched. Anti-ransomware cybersecurity solutions should also be used that have a remediation feature that can block attacks within minutes if ransomware is deployed.

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Largest Healthcare Data Breaches in 2020

Posted January 1, 2021 by HIPAA Journal

2020 was the worst ever year for healthcare industry data breaches. 616 data breaches of 500 or more records were reported to the HHS’ Office for Civil Rights. 28,756,445 healthcare records were exposed, compromised, or impermissibly disclosed in those breaches, which makes 2020 the third worst year in terms of the number of breached healthcare records.

The chart below clearly shows how healthcare industry data breaches have steadily increased over the past decade and the sharp rise in breaches in the past two years.

The Largest Healthcare Data Breaches in 2020

When a breach occurs at a business associate of a HIPAA-covered entity, it is often the covered entity that reports the breach rather than the business associate. In 2020, a massive data breach was experienced by the cloud service provider Blackbaud Inc. Hackers gained access to its systems and stole customer fundraising databases before deploying ransomware. Blackbaud was issued with a ransom demand and a threat that the stolen data would be released publicly if the ransom was not paid. Blackbaud decided to pay the ransom to prevent the exposure of client data. Blackbaud received assurances that the stolen data was permanently deleted and not been further disclosed.

The total victim count from the Blackbaud ransomware attack may never be known, but more than 6 dozen healthcare providers have reported being affected to date and over 8 million healthcare records have potentially been compromised. That breach clearly tops the list of the largest healthcare data breaches in 2020 and ranks as one of the largest healthcare data breaches of all time.

2020’s Largest Healthcare Data Breaches

The individual entities that reported data breaches in 2020 involving more than 300,000 healthcare records are listed below. In some cases, the actual data breach occurred prior to 2020, but was only discovered and reported in 2020.

Trinity Health – 3,320,726 Individuals

At more than 3.3 million records, Trinity Health was the worst affected healthcare victim of the ransomware attack on Blackbaud Inc. The hackers potentially obtained the philanthropy database of the Livonia, Michigan-based Catholic health system, which contained patient and donor information from 2000 to 2020.

MEDNAX Services, Inc. – 1,290,670 Individuals

Sunrise, FL-based MEDNAX Services Inc, a provider of revenue cycle management and other administrative services to its affiliated physician practice groups, suffered a breach of its Office 365 environment in June 2020 after employees responded to phishing emails. The breach was extensive, involving patient and guarantor information such as Social Security numbers, driver’s license numbers, and health insurance and financial information.

Inova Health System – 1,045,270 Individuals

Virginia-based Inova Health System was also a victim of the Blackbaud ransomware attack. The hackers gained access to Blackbaud’s systems on February 7, 2020 and the breach continued until May 20, 2020. Ransomware was deployed on May 14, 2020. Inova’s fundraising database was potentially compromised which contained patient and donor information.

Magellan Health Inc. 1,013,956 Individuals

Arizona-based Magellan Health was the victim of an April 2020 ransomware attack in which the protected health information of patients was potentially compromised. The attack ended with the deployment of ransomware but started with a spear phishing email. Several of its affiliated entities were also affected by the breach.

Dental Care Alliance – 1,004,304 Individuals

Sarasota, FL-based Dental Care Alliance, LLC, a dental support organization with more than 320 affiliated dental practices across 20 states, reported a breach of its systems in December. Few details have been released about the nature of the hacking incident as the investigation is still ongoing. The breach affected many of its affiliated dental practices.

Luxottica of America Inc. – 829,454 Individuals

Luxottica of America Inc., an operator of vision care facilities across the United States and owner of the eyewear brands Ray-Ban, Oakley, and Persol, experienced a cyberattack in August 2020 which saw hackers gain access to its web-based appointment scheduling system which contained the PHI of patients of its eye care partners.

Northern Light Health – 657,392 Individuals

The Maine health system Northern Light Health was also a victim of the ransomware attack on Blackbaud Inc. The hackers potentially gained access to its fundraising database which contained patient and donor information.

Health Share of Oregon – 654,362 Individuals

In May 2020, the Medicaid coordinated care organization Health Share of Oregon reported the theft of a laptop computer from its non-emergent medical transportation vendor. The laptop was stolen in November 2019 and was not encrypted, which potentially gave the thief access to patents’ contact information, Health Share ID numbers, and Social Security numbers.

Florida Orthopaedic Institute – 640,000 Individuals

Florida Orthopaedic Institute suffered a ransomware attack in April which saw patient information on its servers encrypted. Prior to the use of ransomware, patient data may have been viewed or obtained by the hackers.

Elkhart Emergency Physicians – 550,000 Individuals

Elkhart Emergency Physicians reported a breach in May 2020 involving the improper disposal of patient records by a third-party storage vendor – Central Files Inc. Elkhart Emergency Physicians was the worst affected entity, but several other clients of the vendor were also impacted by the breach. The records had been dumped without being shredded after the storage facility permanently closed.

Aetna ACE – 484,157 Individuals

Aetna reported a data breach in December which occurred at business associate EyeMed, which provides vision benefit services for its members. The breach occurred when an EyeMed employee responded to a phishing email, which allowed the attacker to gain access to email accounts containing PHI. Several EyeMed clients were affected by the breach.

Saint Luke’s Foundation – 360,212 Individuals

Kansas City, MO-based Saint Luke’s Foundation was also a victim of the ransomware attack on Blackbaud Inc. The hackers potentially gained access to its fundraising database which contained patient and donor information.

NorthShore University Health System – 348,746 Individuals

Evanston, IL-based NorthShore University Health System was also affected by the ransomware attack on Blackbaud Inc. The hackers potentially gained access to its fundraising database.

SCL Health Colorado – 343,493 Individuals

SCL Health Colorado was also a victim of the Blackbaud ransomware attack. The PHI of patients in its Colorado, Montana and Kansas locations was potentially accessed by the attackers.

AdventHealth – 315,811 Individuals

The Altamonte Springs, FL-based healthcare system AdventHealth was also a victim of the Blackbaud ransomware attack which saw the hackers gain access to its fundraising database.

Nuvance Health – 314,829 Individuals

Nuvance Health was a victim of the ransomware attack on Blackbaud Inc. The hackers potentially gained access to its fundraising database between February and May.

Magellan Rx Management – 314,704 Individuals

Magellan Rx Management was one of the victims of the ransomware attack on its parent company, Magellan Health, in April. The hackers potentially stole patient data prior to encrypting files.

The Baton Rouge Clinic – 308,169 Individuals

The Baton Rouge Clinic in Louisiana experienced a cyberattack in early July involving ransomware. The attackers potentially viewed or obtained patient data prior to the deployment of ransomware.

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