The New York Attorney General has agreed to settle alleged violations of New York’s data security and consumer protection laws with Healthplex, one of New York’s largest providers of dental insurance. Healthplex has agreed to pay a penalty of $400,000 to resolve the investigation with no admission of wrongdoing.

Attorney General Letitia James launched an investigation of Healthplex after being notified about a breach of the personal and protected health information of 89,955 individuals, including 62,922 New York residents to determine if Healthplex had complied with the requirements of the Health Insurance Portability and Accountability Act (HIPAA) and New York’s data security and consumer protection laws.

The data breach occurred on or around November 24, 2021, and was the result of an employee responding to a phishing email and disclosing her account credentials. The account contained more than 12 years of emails, some of which included customer enrolment information. Credentials alone should not be sufficient to gain access to email accounts; however, Healthplex had not implemented multi-factor authentication on its recently deployed Office 365 web interface.

The unauthorized individual used the account to send further phishing emails internally, and it was the reporting of those emails by employees that identified the attack. The attacker had access to the account for a period of almost 6 hours before access was terminated; however, during that time, the attacker could access emails dating from May 7, 2009, to November 24, 2022. The emails contained member identification numbers, insurance group names and numbers, addresses, dates of birth, credit card numbers, banking information, Social Security numbers, driver’s license numbers, usernames and passwords for the member portal, email addresses, phone numbers, dates of service, provider names, billing information, procedure codes, diagnosis codes, prescription drug names, and plan affiliations. While unauthorized access was confirmed, insufficient logging capabilities meant it was not possible to determine which emails had been accessed or copied.

The affected individuals were notified in April and Healthplex took steps to improve security, including extending multifactor authentication to the Office 365 web interface, implementing a 90-day email retention policy, enhancing its logging capabilities, and providing further training on phishing detection and avoidance to the workforce. The investigation determined that the measures implemented by Healthplex prior to the phishing attack did not meet the standards required by New York’s data security and consumer protection laws with respect to data retention, logging, and multifactor authentication, and its data security assessments failed to identify the risk from storing years of data in email accounts when there was no business purpose for retaining that information.

In addition to paying a financial penalty, Healthplex has agreed to maintain a comprehensive information security program, encrypt personal data, implement an email retention schedule for employee email accounts, enforce the use of complex passwords, and conduct penetration tests to identify vulnerabilities. “Visiting a dentist’s office can be a stressful experience without having the added concern that personal and medical data could be stolen by bad actors,” said Attorney General James. “Insurers, like all companies charged with holding on to sensitive information, have an obligation to ensure that data is safeguarded and doesn’t fall into the wrong hands. New Yorkers can rest assured that when my office is made aware of data breaches, we will drill down and get to the root of the problem.”

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The New York Attorney General has agreed to settle alleged violations of New York’s data security and consumer protection laws with Healthplex, one of New York’s largest providers of dental insurance. Healthplex has agreed to pay a penalty of $400,000 to resolve the investigation with no admission of wrongdoing.

Attorney General Letitia James launched an investigation of Healthplex after being notified about a breach of the personal and protected health information of 89,955 individuals, including 62,922 New York residents to determine if Healthplex had complied with the requirements of the Health Insurance Portability and Accountability Act (HIPAA) and New York’s data security and consumer protection laws.

The data breach occurred on or around November 24, 2021, and was the result of an employee responding to a phishing email and disclosing her account credentials. The account contained more than 12 years of emails, some of which included customer enrolment information. Credentials alone should not be sufficient to gain access to email accounts; however, Healthplex had not implemented multi-factor authentication on its recently deployed Office 365 web interface.

The unauthorized individual used the account to send further phishing emails internally, and it was the reporting of those emails by employees that identified the attack. The attacker had access to the account for a period of almost 6 hours before access was terminated; however, during that time, the attacker could access emails dating from May 7, 2009, to November 24, 2022. The emails contained member identification numbers, insurance group names and numbers, addresses, dates of birth, credit card numbers, banking information, Social Security numbers, driver’s license numbers, usernames and passwords for the member portal, email addresses, phone numbers, dates of service, provider names, billing information, procedure codes, diagnosis codes, prescription drug names, and plan affiliations. While unauthorized access was confirmed, insufficient logging capabilities meant it was not possible to determine which emails had been accessed or copied.

The affected individuals were notified in April and Healthplex took steps to improve security, including extending multifactor authentication to the Office 365 web interface, implementing a 90-day email retention policy, enhancing its logging capabilities, and providing further training on phishing detection and avoidance to the workforce. The investigation determined that the measures implemented by Healthplex prior to the phishing attack did not meet the standards required by New York’s data security and consumer protection laws with respect to data retention, logging, and multifactor authentication, and its data security assessments failed to identify the risk from storing years of data in email accounts when there was no business purpose for retaining that information.

In addition to paying a financial penalty, Healthplex has agreed to maintain a comprehensive information security program, encrypt personal data, implement an email retention schedule for employee email accounts, enforce the use of complex passwords, and conduct penetration tests to identify vulnerabilities. “Visiting a dentist’s office can be a stressful experience without having the added concern that personal and medical data could be stolen by bad actors,” said Attorney General James. “Insurers, like all companies charged with holding on to sensitive information, have an obligation to ensure that data is safeguarded and doesn’t fall into the wrong hands. New Yorkers can rest assured that when my office is made aware of data breaches, we will drill down and get to the root of the problem.”

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The HHS’ Office for Civil Rights (OCR) has agreed to settle a landmark cyber investigation and has imposed its first financial penalty under the Health Insurance Portability and Accountability Act (HIPAA) for a phishing attack. Lafourche Medical Group, a Louisiana-based medical group specializing in emergency medicine, occupational medicine, and laboratory testing, reported a data breach to OCR on May 28, 2021, involving the protected health information (PHI) of up to 34,862 individuals.

According to the breach notification, a hacker gained access to the email account of one of its owners on March 30, 2021, following a response to a phishing email that spoofed one of the medical group’s owners. The threat actor gained access to the Microsoft 365 environment, which contained patient data. Lafourche Medical Group said that because of the size of the email system, it was not possible to determine all patient information that had been exposed so notification letters were mailed to all patients. The exposed data included names, addresses, dates of birth, dates of service, e-mail addresses, telephone numbers, medical record numbers, insurance and health plan beneficiary numbers, guarantor names, diagnoses, treating practitioner names, and lab test results.

OCR launched an investigation into the incident to determine whether a failure to comply with the HIPAA Rules led to or contributed to the security breach. OCR’s investigators discovered Lafourche Medical Group had not conducted a security risk analysis prior to the phishing attack. The HIPAA Security Rule – 45 C.F.R. § 164.308(a)(1)(ii)(A) – requires covered entities and business associates to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of protected health information. OCR also determined that Lafourche Medical Group had not implemented procedures to regularly review records of information system activity prior to the phishing attack. This is also a required implementation specification of the HIPAA Security Rule – 45 C.F.R. § 164.308(a)(1)(ii)(D).

Lafourche Medical Group agreed to settle the investigation with no admission of liability or wrongdoing. In addition to paying a sizeable financial penalty, Lafourche Medical Group has agreed to implement a robust corrective action plan (CAP) which includes establishing and implementing security measures to reduce security risks and vulnerabilities to ePHI, developing, maintaining, and revising written policies and procedures as necessary to comply with the HIPAA Rules, and providing HIPAA training to all staff members who have access to PHI. OCR will also monitor Lafourche Medical Group for two years to ensure compliance with the HIPAA Rules.

“Phishing is the most common way that hackers gain access to health care systems to steal sensitive data and health information,” said OCR Director Melanie Fontes Rainer. “It is imperative that the health care industry be vigilant in protecting its systems and sensitive medical records, which includes regular training of staff and consistently monitoring and managing system risk to prevent these attacks. We all have a role to play in keeping our health care system safe and taking preventive steps against phishing attacks.”

This is the 12^th HIPAA violation penalty imposed by OCR in 2023 and the second-largest of the year. So far this year, OCR has imposed HIPAA penalties totaling $4,016,500

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In late September 2023, Indiana Attorney General Todd Rokita filed a lawsuit against CarePointe ENT over a ransomware attack and data breach that affected 48,742 individuals. A settlement has been reached that will see CarePointe pay $125,000 to resolve alleged violations of the Health Insurance Portability and Accountability (HIPAA) Act and state data privacy and security laws.

CarePointe ENT operates three ear, nose, throat, sinus, and hearing centers in Merrillville, Munster & Hobart in Northwest Indiana. On June 25, 2021, CarePointe ENT experienced a ransomware attack which resulted in files being encrypted and data being exfiltrated. The stolen data included names, addresses, dates of birth, Social Security numbers, medical insurance information, and health information. Affected individuals were notified about the data breach in August 2021.

AG Rokita launched an investigation into the attack to determine if CarePointe ENT had complied with its obligations under HIPAA and state laws. Despite claiming that it was committed to safeguarding patient information, CarePointe ENT was determined to have failed to implement appropriate security policies, conduct appropriate risk analyses, and address known security risks in a reasonable amount of time.

CarePointe ENT hired a third-party IT vendor that conducted a HIPAA risk analysis and identified security concerns in January 2021. The vendor was hired in March to address the identified vulnerabilities, but they were not fixed in a reasonable time frame. In June 2021, some of the unaddressed vulnerabilities were exploited in a ransomware attack. In addition to the failure to address known security issues, CarePointe ENT failed to enter into a business associate agreement with the vendor, even though the vendor was provided with access to systems containing protected health information.

AG Rokita’s lawsuit alleged one count of a failure to comply with the HIPAA Privacy Rule, one count of failing to comply with the HIPAA Security Rule, one count of failing to comply with the Indiana Disclosure of Security Breach Act (DSBA), and one count of failing to comply with the Indiana Deceptive Consumer Sales Act (DCSA). CarePointe ENT chose to settle the alleged violations of HIPAA and state laws with no admission of wrongdoing. Under the terms of the settlement, a financial penalty of $125,000 will be paid to the state and CarePointe ENT has agreed to ensure full compliance with the HIPAA Privacy and Security Rules and the DCSA and DSBA with respect to the safeguarding of personal information (PI), protected health information (PHI), and electronic protected health information (ePHI). CarePointe ENT has also agreed not to make misrepresentations about the extent to which it ensures the privacy, security, confidentiality, and integrity of PI, PHI, and ePHI.

The settlement agreement includes a comprehensive list of privacy and security measures. These include implementing a comprehensive information security program, appointing a HIPAA Security Officer to oversee that program, implementing technical safeguards and controls to ensure the privacy and security of patient data, developing an incident response plan and testing that plan through table-top exercises, developing policies and procedures regarding business associate agreements, and providing privacy and security training to all members of the workforce with access to PI, PHI, or ePHI,

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