Legal News

$16 Million Anthem HIPAA Breach Settlement Takes OCR HIPAA Penalties Past $100 Million Mark

OCR has announced that an Anthem HIPAA breach settlement has been reached to resolve potential HIPAA violations discovered during the investigation of its colossal 2015 data breach that saw the records of 78.8 million of its members stolen by cybercriminals.

Anthem has agreed to pay OCR $16 million and will undertake a robust corrective action plan to address the compliance issues discovered by OCR during the investigation.

The previous largest ever HIPAA breach settlement was $5.55 million, which was agreed with Advocate Health Care in 2016. “The largest health data breach in U.S. history fully merits the largest HIPAA settlement in history,” said OCR Director Roger Severino.

Anthem Inc., an independent licensee of the Blue Cross and Blue Shield Association, is America’s second largest health insurer. In January 2015, Anthem discovered cybercriminals had breached its defenses and had gained access to its systems and members’ sensitive data. With assistance from cybersecurity firm Mandiant, Anthem determined this was an advanced persistent threat attack – a continuous and targeted cyberattack conducted with the sole purpose of silently stealing sensitive data.

The attackers first gained access to its IT systems on December 2, 2014, with access continuing until January 27, 2015. During that time the attackers stole the data of 78.8 million plan members, including names, addresses, dates of birth, medical identification numbers, employment information, email addresses, and Social Security numbers.

The attackers gained a foothold in its network through spear phishing emails sent to one of its subsidiaries. They were then able to move laterally through its network to gain access to plan members’ data.

Anthem reported the data breach to OCR on March 13, 2015; however, by that time OCR was already a month into a compliance review of Anthem Inc. OCR took prompt action after Anthem uploaded a breach notice to its website and media reports started to appear indicating the colossal scale of the breach.

The OCR investigation uncovered multiple potential violations of HIPAA Rules. Anthem chose to settle the HIPAA violation case with no admission of liability.

OCR’s alleged HIPAA violations were:

  • 45 C.F.R. § 164.308(u)(1)(ii)(A) – A failure to conduct a comprehensive, organization-wide risk analysis to identify potential risks to the confidentiality, integrity, and availability of ePHI.
  • 45 C.F.R. § 164.308(a)(1)(ii)(D) – The failure to implement regularly review records of information system activity.
  • 45 C.F.R. § 164.308 (a)(6)(ii) – Failures relating to the requirement to identify and respond to detections of a security incident leading to a breach.
  • 45 C.F.R. § 164.312(a) – The failure to implement sufficient technical policies and procedures for electronic information systems that maintain ePHI and to only allow authorized persons/software programs to access that ePHI.
  • 45 C.F.R. § 164.502(a) – The failure to prevent the unauthorized accessing of the ePHI of 78.8 million individuals that was maintained in its data warehouse.

“Unfortunately, Anthem failed to implement appropriate measures for detecting hackers who had gained access to their system to harvest passwords and steal people’s private information,” said Roger Severino. “We know that large health care entities are attractive targets for hackers, which is why they are expected to have strong password policies and to monitor and respond to security incidents in a timely fashion or risk enforcement by OCR.”

In addition to the OCR HIPAA settlement, Anthem has also paid damages to victims of the breach. Anthem chose to settle a class action lawsuit filed on behalf of 19.1 million customers whose sensitive information was stolen. Anthem agreed to settle the lawsuit of $115 million.

2018 OCR HIPAA Settlements and Civil Monetary Penalties

Given the size of the Anthem HIPAA settlement it is no surprise that 2018 has seen OCR smash its previous record for financial penalties for HIPAA violations. The latest settlement takes OCR HIPAA penalties past the $100 million mark.

There have not been as many HIPAA penalties in 2018 than 2016(13), although this year has seen $1.4 million more raised in penalties than the previous record year and there are still 10 weeks left of 2018. The total is likely to rise further still.

OCR Financial Penalties for HIPAA Violations (2008-2018)

Year Settlements and CMPs Total Fines
2018 1 $24,947,000
2017 1 $19,393,000
2016 2 $23,505,300
2015 3 $6,193,400
2014 5 $7,940,220
2013 5 $3,740,780
2012 6 $4,850,000
2011 6 $6,165,500
2010 13 $1,035,000
2009 10 $2,250,000
2008 7 $100,000
Total 59 $100,120,200

 

HIPAA Fines and CMPs

Largest Ever Penalties for HIPAA Violations

Year Covered Entity Amount Settlement/CMP
2018 Anthem Inc $16,000,000 Settlement
2016 Advocate Health Care Network $5,550,000 Settlement
2017 Memorial Healthcare System $5,500,000 Settlement
2014 New York and Presbyterian Hospital and Columbia University $4,800,000 Settlement
2018 University of Texas MD Anderson Cancer Center $4,34,8000 Civil Monetary Penalty
2011 Cignet Health of Prince George’s County $4,300,000 Civil Monetary Penalty
2016 Feinstein Institute for Medical Research $3,900,000 Settlement
2018 Fresenius Medical Care North America $3,500,000 Settlement
2015 Triple S Management Corporation $3,500,000 Settlement
2017 Children’s Medical Center of Dallas $3,200,000 Civil Monetary Penalty

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California HIV Patient PHI Breach Lawsuit Allowed to Move Forward

A lawsuit filed by Lambda Legal on behalf of a victim of a data breach that saw the highly sensitive protected health information of 93 lower-income HIV positive individuals stolen by unauthorized individuals has survived a motion to dismiss.

The former administrator of the California AIDS Drug Assistance Program (ADAP), A.J. Boggs & Company, submitted a motion to dismiss but it was recently rejected by the Superior Court of California in San Francisco.

In the lawsuit, Lambda Legal alleges A.J. Boggs & Company violated the California AIDS Public Health Records Confidentiality Act, the California Confidentiality of Medical Information Act, and other state medical privacy laws by failing to ensure an online system was secure prior to implementing that system and allowing patients to enter sensitive information.

A.J. Boggs & Company made its new online enrollment system live on July 1, 2016, even though it had previously received several warnings from nonprofits and the LA County Department of Health that the system had not been tested for vulnerabilities.

It was alleged that the failure to ensure its system was secure meant that any information entered in the portal by patients was at risk of exposure and could potentially be obtained by unauthorized individuals. In November 2016, four months after the system went live, A.J. Boggs & Company took the system offline to correct the flaws.

However, in February 2017, the California Department of Health discovered that the flaws in its portal had been exploited and unauthorized individuals had gained access to the system and had downloaded the private and highly sensitive information of 93 patients with HIV or AIDS. Following the discovery, the contract with the firm was cancelled and a new state-run system was adopted.

The ADAP program provides states with federal funding to provide financial assistance to low-income individuals with HIV or AIDS to make HIV medications more affordable, extending access to Medicaid when patients earned too much. Any medical data breach is serious, although the disclosure of an individual’s HIV status is especially so.

“HIV is still a highly stigmatized medical condition,” said Scott Schoettes, HIV Project Director at Lambda Legal. “When members of already vulnerable communities — transgender people, women, people of color, undocumented people, individuals with low incomes — already face challenges in accessing health care, undermining the trust they have in the ADAP is not just a breach of security; it creates a barrier to care.”

Lambda Legal is seeking statutory and compensatory damages for the patient and is seeking class action status to allow the other 92 breach victims to be included in the lawsuit.

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Massachusetts Gynecologist Spared Jail Time for Criminal HIPAA Violation

In April 2018, the former Massachusetts-based gynecologist Rita Luthra, 65, of Longmeadow, was convicted of criminally violating the HIPAA Privacy Rule and obstructing a federal investigation into a nationwide kickback scheme. At her sentencing on September 19, 2018, Luthra was spared jail time and a fine and was given one year of probation.

Luthra was accused of being paid $23,500 to prescribe Warner Chilcott’s osteoporosis drugs, although Luthra maintained she had been paid the money as ‘speaker fees’ for speaking at medical educational events, which took place in her office, and for writing a research paper, although that paper was never finished. The jury found that Luthra lied to federal agents about money she had received from the pharmaceutical firm.

Luthra also denied providing a pharmaceutical sales representative with access to patient health information in order to complete pre-authorization forms for insurance companies that were refusing to approve prescriptions for two osteoporosis drugs that Warner Chilcott was pushing. She also allegedly instructed her assistant to lie to federal investigators and back up her story. The jury also found that Luthra had violated the HIPAA Privacy Rule.

After Luthra was arrested she lost her license to practice and also faced up to six years in jail with one year of supervised release and a maximum fine of $300,000 – $50,000 for the HIPAA violation and $250,000 for obstruction. However, U.S. District Judge Mark G. Mastroianni opted for leniency and sentenced Luthra to just one year of probation. Prosecutors were pushing for Luthra to receive a jail term of two and a half years and pay a financial penalty of $40,000. Judge Mastroianni also rejected the defense’s argument that she should be given community service.

Luthra’s lawyer, Stephen Spelman, said “Dr. Rita Luthra dedicates herself to serving others, and spends her professional lifetime treating women and girls from the disadvantaged communities in Western Massachusetts, never caring whether her patients could pay.”

Spelman also explained in a presentencing memo that Luthra “Suffered repeated beatings by her husband, who on multiple occasions tried to amputate her fingers with knives – because she was a surgeon. After one particularly vicious assault, she left the marriage, fleeing her marital home on a snowy night with literally nothing but the clothes on her back.”

It was Luthra’s work with disadvantaged women and girls in the impoverished areas of Springfield that prompted Judge Mastroianni to reject the prosecutors’ recommendation of a fine and to spare Luthra jail time. Prosecutors were pushing for jail time and a fine to serve as a deterrent, although Judge Mastroianni explained in his ruling, “Her loss of license and ability to practice is a substantial deterrent.”

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$999,000 in HIPAA Penalties for Three Hospitals for Boston Med HIPAA Violations

Three hospitals that allowed an ABC film crew to record footage of patients as part of the Boston Med TV series have been fined $999,000 by the Department of Health and Human Services’ Office for Civil Rights (OCR) for violating Health Insurance Portability and Accountability Act (HIPAA) Rules.

This is the second HIPAA violation case investigated by OCR related to the Boston Med TV series. On April 16, 2016, New York Presbyterian Hospital settled its HIPAA violation case with OCR for $2.2 million to resolve the impermissible disclosure of PHI to the ABC film crew during the recording of the series and for failing to obtain consent from patients.

Fines for Boston Medical Center, Brigham and Women’s Hospital, & Massachusetts General Hospital

Boston Medical Center (BMC) settled its HIPAA violations with OCR for $100,000. OCR investigators determined that BMC had impermissibly disclosed the PHI of patients to ABC employees during production and filming of the TV series, violating 45 C.F.R. § 164.502(a).

Brigham and Women’s Hospital (BWH) settled its HIPAA violations with OCR for $384,000. BWH allowed an ABC film crew to record footage between October 2014 and January 2015. Prior to filming, BWH conducted a review of patient privacy issues and provided the ABC film crew with HIPAA privacy training – The same training that was provided to its workforce. BWH also obtained written authorizations from patients. However, OCR determined that despite those measures, HIPAA Rules were still violated. In the resolution agreement, OCR wrote, “Based on the timing of when BWH received some written patient authorizations, BWH impermissibly disclosed the PHI of patients to ABC employees,” in violation of 45 C.F.R. § I64.502(a). BWH also failed to reasonably safeguard the PHI of patients: A violation of 45 C.F.R. § 164.530(c).

Massachusetts General Hospital (MGH) settled its HIPAA violations with OCR for $515,000. The hospital similarly allowed a film crew to record footage between October 2014 and January 2015. A review of patient privacy issues was also conducted, and the film crew was provided with the same HIPAA privacy training that MGH provides to its employees.

As was the case with BWH, OCR determined that 45 C.F.R. § I64.502(a) was violated as authorizations were received after an impermissible disclosure and MGH failed to appropriately and reasonably safeguard patients’ PHI from disclosure during the filming of the series in violation of 45 C.F.R. § 164.530(c).

In addition to covering the financial penalty, each of the three hospitals must adopt a corrective action plan which includes providing further training to staff on the allowable uses and disclosures of PHI to film and media.

“Patients in hospitals expect to encounter doctors and nurses when getting treatment, not film crews recording them at their most private and vulnerable moments,” said Roger Severino, OCR director. “Hospitals must get authorization from patients before allowing strangers to have access to patients and their medical information.”

HIPAA Enforcement in 2018

OCR had a record year for HIPAA penalties in 2016 when it agreed 12 settlements to resolve HIPAA violations and issued one civil monetary penalty. 2017 saw 9 settlements reached with HIPAA-covered entities and one civil monetary penalty issued.

2018 has seen a reduction in financial penalties for HIPAA violations, with only three penalties issued prior the September 20, 2018 announcement. These latest three settlements bring the total number of OCR HIPAA violation penalties for the year up to six.

HIPAA Penalties and Settlements Agreed with OCR in 2018

Entity Penalty Penalty Type Reason for Penalty
Boston Medical Center $100,000 Settlement Filming patients without consent
Brigham and Women’s Hospital $384,000 Settlement Filming patients without consent
Massachusetts General Hospital $515,000 Settlement Filming patients without consent
University of Texas MD Anderson Cancer Center $4,348,000 Civil Monetary Penalty Lack of encryption and impermissible disclosure of ePHI
Filefax, Inc. $100,000 Settlement Impermissible disclosure of PHI
Fresenius Medical Care North America $3,500,000 Settlement Multiple HIPAA Violations

 

HIPAA Settlements with State Attorneys General in 2018

In addition to the penalties issued by OCR, there have been four settlements reached between HIPAA covered entities and state attorneys general in 2018.

State Covered Entity Amount Reason for Penalty
New York Arc of Erie County $200,000 Online Exposure of PHI
New Jersey Virtua Medical Group $417,816 Online Exposure of PHI
New York EmblemHealth $575,000 Exposure of PHI in Mailing
New York Aetna $1,150,000 Exposure of PHI in Mailing

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Plaintiffs in Class Action Claim Premera Blue Cross Destroyed Key Evidence

There has been a twist in the class action lawsuit filed by victims of the 2015 Premera Blue Cross data breach. The plaintiffs allege Premera Blue Cross willfully destroyed evidence of data theft.

In 2015, Premera Blue Cross announced it was the victim of a cyberattack that resulted in cybercriminals gaining access to plan members’ protected health information.

The data breach was the second largest data breach ever to be reported by a healthcare organization, behind only the 78.8 million-record Anthem Inc., data breach that was also discovered in 2015. The protected health information of 11 million individuals was exposed as a result of the hack.

The Premera data breach was detected in January 2015, although the investigation revealed hackers had gained access to its network in May 2014. The attackers potentially had access to plan members’ protected health information (PHI) and personally identifiable information (PII) for 8 months before the intrusion was detected and access to data was blocked.

Unsurprisingly, given the scale of the breach, several class action lawsuits were filed by the breach victims. As was the case with the lawsuits filed in the wake of the Anthem data breach, they were consolidated into a single class action lawsuit. Anthem settled its class action lawsuit earlier this year, but the Premera Blue Cross lawsuit is ongoing.

A resolution does not appear to be getting closer. In fact, there has been a new twist in the case which is likely to delay an outcome further still. The plaintiffs have alleged that Premera Blue Cross destroyed key evidence that would have helped their case.

Alleged Destruction of Evidence of Data Theft

A third-party computer forensics firm, Mandiant, was retained to conduct an investigation into the breach. Mandiant determined that the hackers had compromised 35 Premera computers in the attack, and through those computers the attackers potentially had access to the records of 11 million plan members.

The cyberattack was not the work of amateurs. A well-known hacking group had conducted the attack and that group had succeeded in stealing data from other entities that it had attacked in the past.

While concrete evidence was allegedly not found to confirm that data had been exfiltrated, Mandiant did find fragments of RAR files on one of the computers that had been compromised. RAR files are compressed files that are used to make data transmission easier. The presence of the file fragments, which it is alleged were created by the attackers, suggests the hackers used RAR files to exfiltrate data and deleted the files to cover their tracks.

The plaintiffs requested all evidence uncovered during the Mandiant investigation be handed over, including the hard drives and forensic images of the 35 compromised computers. Premera responded to that request but claimed that it was only able to provide images for 34 out of the 35 computers as one computer, referred to in the court documents as A23567-D, had been destroyed. The computer was destroyed on December 16, 2016 – around a year after the litigation had started.

A23567-D is alleged to have contained important evidence that could confirm that data had been exfiltrated. That computer was the only one out of the 35 to contain a type of malware referred to by Mandiant as PHOTO. The malware was capable of registry modification, executing programs, and crucially, uploading and downloading files. The attackers communicated with that computer on a daily basis from July 2014 until January 2015 when the cyberattack was discovered and remote access was blocked.

“The destroyed computer was perfectly positioned to be the one-and-only staging computer hackers needed to create vast staging files for the purpose of shipping even more data outside of Premera’s network,” wrote the plaintiffs’ attorneys in the motion. “This computer functioned as the development machine for a software programmer, and as such was pre-loaded with a vast array of legitimate utilities that could be turned to any purpose.”

The computer appears to have been sent for destruction in error. It was deemed to be of no further interest to Premera and had reached end of life.

The problem for the plaintiffs is without any evidence of data theft, the case is unlikely to succeed. According to the motion, “Essentially, Premera maintains a ‘no harm, no foul’ defense, contending there can be no damage to any plaintiff unless he or she can prove confidential information was exfiltrated from Premera’s system.”

Whether accidental or willful, the destruction of the computer is extremely damaging to the case. The motion states that “Without access to that hard drive, trying to prove that the hackers removed plaintiffs PII and PHI through that computer is impossible.”

Additionally, the motion, filed in the U.S. District Court in Portland, claims that Premera Blue Cross failed to preserve data loss logs from its Bluecoat Data Loss Prevention (DLP) system, which potentially could have confirmed that plan members’ data had been stolen. It is alleged that those files were also deleted after the lawsuit was filed.

Premera Blue Cross issued a a statement to ZDNet in which it was confirmed that Premera disagrees with the motion and does not believe the facts of the case justify the relief the plaintiffs have requested. A response to the motion will be filed by Premera’s attorneys by September 28, 2018.

If the motion is granted, a federal judge would then instruct a jury that key evidence has been destroyed and that it should be assumed that the evidence confirmed data exfiltration had occurred. It would also not be possible for Premera to call in computer experts to testify that no data had been exfiltrated.

Even a favorable ruling would be no guarantee of success nor of a settlement being reached. In order for damages to be awarded, plaintiffs in the suit would still need to establish that they have suffered losses as a result of the data breach.

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Plaintiffs in Class Action Claim Premera Blue Cross Destroyed Key Evidence

There has been a twist in the class action lawsuit filed by victims of the 2015 Premera Blue Cross data breach. The plaintiffs allege Premera Blue Cross willfully destroyed evidence of data theft.

In 2015, Premera Blue Cross announced it was the victim of a cyberattack that resulted in cybercriminals gaining access to plan members’ protected health information.

The data breach was the second largest data breach ever to be reported by a healthcare organization, behind only the 78.8 million-record Anthem Inc., data breach that was also discovered in 2015. The protected health information of 11 million individuals was exposed as a result of the hack.

The Premera data breach was detected in January 2015, although the investigation revealed hackers had gained access to its network in May 2014. The attackers potentially had access to plan members’ protected health information (PHI) and personally identifiable information (PII) for 8 months before the intrusion was detected and access to data was blocked.

Unsurprisingly, given the scale of the breach, several class action lawsuits were filed by the breach victims. As was the case with the lawsuits filed in the wake of the Anthem data breach, they were consolidated into a single class action lawsuit. Anthem settled its class action lawsuit earlier this year, but the Premera Blue Cross lawsuit is ongoing.

A resolution does not appear to be getting closer. In fact, there has been a new twist in the case which is likely to delay an outcome further still. The plaintiffs have alleged that Premera Blue Cross destroyed key evidence that would have helped their case.

Alleged Destruction of Evidence of Data Theft

A third-party computer forensics firm, Mandiant, was retained to conduct an investigation into the breach. Mandiant determined that the hackers had compromised 35 Premera computers in the attack, and through those computers the attackers potentially had access to the records of 11 million plan members.

The cyberattack was not the work of amateurs. A well-known hacking group had conducted the attack and that group had succeeded in stealing data from other entities that it had attacked in the past.

While concrete evidence was allegedly not found to confirm that data had been exfiltrated, Mandiant did find fragments of RAR files on one of the computers that had been compromised. RAR files are compressed files that are used to make data transmission easier. The presence of the file fragments, which it is alleged were created by the attackers, suggests the hackers used RAR files to exfiltrate data and deleted the files to cover their tracks.

The plaintiffs requested all evidence uncovered during the Mandiant investigation be handed over, including the hard drives and forensic images of the 35 compromised computers. Premera responded to that request but claimed that it was only able to provide images for 34 out of the 35 computers as one computer, referred to in the court documents as A23567-D, had been destroyed. The computer was destroyed on December 16, 2016 – around a year after the litigation had started.

A23567-D is alleged to have contained important evidence that could confirm that data had been exfiltrated. That computer was the only one out of the 35 to contain a type of malware referred to by Mandiant as PHOTO. The malware was capable of registry modification, executing programs, and crucially, uploading and downloading files. The attackers communicated with that computer on a daily basis from July 2014 until January 2015 when the cyberattack was discovered and remote access was blocked.

“The destroyed computer was perfectly positioned to be the one-and-only staging computer hackers needed to create vast staging files for the purpose of shipping even more data outside of Premera’s network,” wrote the plaintiffs’ attorneys in the motion. “This computer functioned as the development machine for a software programmer, and as such was pre-loaded with a vast array of legitimate utilities that could be turned to any purpose.”

The computer appears to have been sent for destruction in error. It was deemed to be of no further interest to Premera and had reached end of life.

The problem for the plaintiffs is without any evidence of data theft, the case is unlikely to succeed. According to the motion, “Essentially, Premera maintains a ‘no harm, no foul’ defense, contending there can be no damage to any plaintiff unless he or she can prove confidential information was exfiltrated from Premera’s system.”

Whether accidental or willful, the destruction of the computer is extremely damaging to the case. The motion states that “Without access to that hard drive, trying to prove that the hackers removed plaintiffs PII and PHI through that computer is impossible.”

Additionally, the motion, filed in the U.S. District Court in Portland, claims that Premera Blue Cross failed to preserve data loss logs from its Bluecoat Data Loss Prevention (DLP) system, which potentially could have confirmed that plan members’ data had been stolen. It is alleged that those files were also deleted after the lawsuit was filed.

Premera Blue Cross issued a a statement to ZDNet in which it was confirmed that Premera disagrees with the motion and does not believe the facts of the case justify the relief the plaintiffs have requested. A response to the motion will be filed by Premera’s attorneys by September 28, 2018.

If the motion is granted, a federal judge would then instruct a jury that key evidence has been destroyed and that it should be assumed that the evidence confirmed data exfiltration had occurred. It would also not be possible for Premera to call in computer experts to testify that no data had been exfiltrated.

Even a favorable ruling would be no guarantee of success nor of a settlement being reached. In order for damages to be awarded, plaintiffs in the suit would still need to establish that they have suffered losses as a result of the data breach.

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NY Attorney General Fines Arc of Erie County $200,000 for Security Breach

The Arc of Erie County has been fined $200,000 by the New York Attorney General for violating HIPAA Rules by failing to secure the electronic protected health information (ePHI) of its clients.

In February 2018, The Arc of Erie County, a nonprofit social services agency and chapter of the The Arc Of New York, was notified by a member of the public that some of its clients’ sensitive personal information was accessible through its website. The information could also be found through search engines.

The investigation into the security breach revealed sensitive information had been accessible online for two and a half years, from July 2015 to February 2018 when the error was corrected. The forensic investigation into the security incident revealed multiple individuals from outside the United States had accessed the information on several occasions. The webpage should only have been accessible internally by staff authorized to view ePHI and should have required a username and password to be entered before access to the data could be gained.

In total, 3,751 clients in New York had information such as their full name, address, phone number, age, date of birth, gender, race, primary diagnosis code, IQ, health insurance information, and Social Security number exposed. Those individuals were notified of the breach on March 9, 2018, the Department of Health and Human Services’ Office for Civil Rights was informed, and a breach report was submitted to the New York Attorney General’s office.

Under HIPAA, The Arc of Erie County is required to safeguard the ePHI of its clients and prevent that information from being accessed by unauthorized individuals. The investigation into the breach by the New York Attorney General’s office confirmed that HIPAA Rules had been violated as appropriate physical, technical, and administrative safeguards had not been implemented to ensure the confidentiality, integrity, and availability of ePHI. As a result of that failure, there had been an impermissible disclosure of clients ePHI.

“The Arc of Erie County’s work serves our most vulnerable New Yorkers – and that comes with the responsibility to protect them and their sensitive personal information,” said New York Attorney General Barbara. D. Underwood. “This settlement should provide a model to all charities in protecting their communities’ personal information online.”

In addition to paying a financial penalty of $200,000, The Arc of Erie County has agreed to adopt a Corrective Action Plan (CAP) that includes the requirement to conduct a thorough risk analysis to identify all security risks and vulnerabilities affecting its electronic equipment and data systems. A report of that assessment must be submitted to the New York Attorney General’s office within 180 days. Any vulnerabilities identified must be corrected through a HIPAA-compliance risk management process and policies and procedures must also be reviewed and revised, based on the findings of the risk analysis.

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Couple Sues McAlester Hospital Over Alleged Snooping and Impermissible Disclosure

Following the accidental drowning of their adopted son, Denise and Wayne Russell were contacted by the child’s birth mother who made threats against their family.

The phone call from the birth mother came shortly after their son was admitted to McAlester Regional Health Center following a tragic swimming pool accident. Their 2-year old child had fallen into the pool after the gate to the pool area had been accidentally left open. The parents administered CPR at the scene until the paramedics arrived and the child was rushed to hospital where he was later confirmed to have died.

Shortly after their son died, the Russells received the telephone call from the birth mother. When asked how she knew about the accident and death of the child, she confirmed that she had been informed by the hospital. The birth month screamed at the Russells and made multiple threats, according to Denise Russell, including a threat to kill their other son. The situation became so bad that a protective order was filed against their son’s birth mother.

The Russells had taken care of their adopted son Keon since he was two weeks old and finalized the adoption in July 2015. Under the terms of the adoption, the birth mother terminated all of her parental rights. Even so, an employee at the hospital contacted the birth mother to alert her to the death of her son.

In the lawsuit the Russells claim that as a result of the impermissible disclosure of their son’s health information they have experienced “extreme emotional distress” from having to deal with the birth mother. The couple are seeking $150,000 in damages.

The call to the birth mother was made by an employee of the hospital, although according to the lawsuit that was not the only privacy violation and HIPAA violation that occurred. The lawsuit alleges multiple hospital workers accessed Keon’s medical records without authorization including workers in the hospital cafeteria.

One worker in the food service section had been legitimately been given access to the hospital’s EHR system. Access was required to check dietary requirements of patients and room numbers. It is alleged that that worker had been instructed to write down her login credentials on a sticky note and post them on a computer to allow others to be able to access the EHR system. Those credentials were allegedly used by other food service workers to access the child’s records, including labor and delivery department records.

An examination of the access logs showed that Keon’s medical records were accessed multiple times on the day of admission to the hospital using the food service worker’s credentials, even though the worker wasn’t on duty that day.

If the allegations are true, there have been multiple HIPAA violations, which have undoubtedly caused emotional distress for the parents; however, there is no private cause of action in HIPAA. It is not possible for an individual to sue a hospital for a HIPAA violation. Only state attorneys general and the Department of Health and Human Services’ Office for Civil Rights are permitted to bring legal action against healthcare organizations for HIPAA violations under federal law.

Instead, the lawsuit alleges the hospital was negligent for failing to protect Keon Russell’s medical records and meet HIPAA requirements and its own internal policies. It has also been alleged that Oklahoma’s medical records statutes were also been violated. A jury trial is expected to commence in January 2019.

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Court Approves Anthem $115 Million Data Breach Settlement

The $115 million settlement proposed by Anthem Inc., in 2017 to resolve the class action lawsuits filed by victims of its 78.8 million-record data breach in 2015 received final approval on Thursday, August 16.

The Anthem cyberattack resulted in plan members’ names, dates of birth, health insurance information, Social Security numbers and other data elements stolen by cybercriminals. Several class-action lawsuits were filed in the wake of the breach, which were consolidated into a single lawsuit by the Judicial Panel for Multidistrict Litigation in June 2015. The case was assigned to the U.S District Court for the Northern District of California, where a large proportion of the class members reside.

While 78.8 million individuals had protected health information (PHI) exposed when Anthem’s network was hacked, there are only 19.1 million members of the class action lawsuit, all of whom were able to demonstrate that their personal information was stored in the data center that was attacked by hackers.

Following the data breach, Anthem offered breach victims 24 months of credit monitoring services without charge; however, many class members personally paid for credit monitoring and identity theft protection services and incurred other out-of-pocket expenses as a result of the breach. “The settlement provides the class with a timely, certain, and meaningful recovery,” said Judge Koh. If the settlement was rejected, not only would the litigation come at a considerable cost, there would be no guarantee that the litigation would succeed. If it did, it would still result in substantial delays in any payment being made to the class members to cover costs associated with the breach.

Some of the class members believe the settlement is insufficient and that it has not sufficiently punished Anthem, although U.S. District Judge Lucy H. Koh believes the settlement is “fair, reasonable, and adequate”. While several objections were received, Judge Koh determined that none of them were valid.

Under the settlement, Anthem has paid for two years of credit monitoring services. This is in addition to the credit monitoring services previously offered by Anthem. Class members who do not have credit monitoring services in place will be able to sign up by submitting a straightforward form. Class members who have already signed up for credit monitoring services can claim a cash payment as an alternative, provided they provide proof of their current credit monitoring services. The fund is sufficient to allow each class member who has submitted a claim to receive a maximum payment of $50 as a cash alternative.

The settlement also includes a fund of $15 million for individuals who have already incurred out-of-pocket expenses as a result of the data breach. So far, only around 1.33 million individuals have submitted a claim. The settlement allows claims of up to $10,000 per individual to reimburse out of pocket expenses.

Anthem has also agreed to implement additional security controls to ensure sensitive information is better protected in the future, including the use of encryption for data at rest and enhancements to its data security procedures.

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