Hospital Sisters Health System Settles Class Action Data Breach Lawsuit for $7.6 Million

Posted by Steve Alder

A class action lawsuit against Hospital Sisters Health System has been settled for $7.6 million. The lawsuit relates to an August 2023 cyberattack that affected approximately 883,000 individuals. The cyberattack caused an outage of computer systems, phone lines, and websites, and its MyChart and MyPrevea applications were taken offline for several days, leaving the health system unable to take payments. The investigation confirmed that the threat actor accessed systems containing patient and employee information between August 16, 2023, and August 27, 2023, and potentially exfiltrated data. Notification letters started to be mailed to the affected individuals on October 26, 2023.

Several class action lawsuits were filed against Hospital Sisters Health System in response to the data breach. Since they had overlapping claims and were based on the same facts, the lawsuits were consolidated into a single action – In re Hospital Sisters Health System Data Breach Litigation, in the Circuit Court of the Seventh Judicial Circuit of the State of Illinois, Sangamon County, Chancery Division.

The lawsuit alleged that Hospital Sisters Health System was negligent because it failed to implement reasonable and appropriate security measures to protect its network and patient and employee data from unauthorized access, and had those measures been implemented, the data breach could have been prevented. Hospital Sisters Health System denies all claims asserted in the lawsuit and denies all allegations of wrongdoing and liability. Class counsel and the plaintiffs believe that the legal claims asserted in the lawsuit have merit.

After assessing the strengths and weaknesses of the case, the plaintiffs and defendants moved to settle the litigation to avoid the burden, expense, risk, and uncertainty of continued litigation. Class counsel and the plaintiffs believe that the settlement is fair and provides substantial benefits for the settlement class. Under the terms of the settlement, all class members are entitled to enroll in financial data monitoring services for two years. The CyEx Financial Shield package includes fraud and identity monitoring, including monitoring for unauthorized financial transactions and compromised bank and financial account numbers. Class members will also benefit from a $1 million financial fraud insurance policy.

Class members are also eligible to claim one of two cash benefits. They may submit a claim for reimbursement of documented, unreimbursed losses due to the data breach, up to a maximum of $5,000 per class member.  Alternatively, they can submit a claim for a pro rata cash payment, which will be paid after attorneys’ fees, expenses, settlement administration costs, class representative awards, financial data monitoring costs, and claims have been paid.

The settlement has received preliminary approval from the court, and the final fairness hearing has been scheduled for December 4, 2025. Class members wishing to object to the settlement or exclude themselves must do so by November 14, 2025, and the deadline for submitting a claim is November 14, 2025.

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Cybersecurity Awareness Month 2025: Building a Cyber Strong America

Posted by Steve Alder

October is Cybersecurity Awareness Month – a global initiative that aims to educate the public and businesses about the importance of cybersecurity and protecting against cyber threats to systems and data.  The initiative is led by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA), and this year’s theme is “Building a Cyber Strong America. The main focus this year is improving cybersecurity at the government entities and small and medium-sized businesses that operate and maintain the nation’s critical infrastructure, as well as the myriad of vendors and suppliers that support or are connected to critical infrastructure.

Cybersecurity Awareness Month 2025 - CISA

CISA is issuing a call to action to all critical infrastructure entities and vendors that support those entities to take steps to improve cybersecurity, starting with four essential steps to improve baseline security:

  • Avoid phishing
  • Use strong passwords
  • Require multifactor authentication
  • Update business software

Phishing is the initial access vector in many cyberattacks, providing threat actors with the credentials they need to access internal systems and data and conduct a comprehensive attack on the organization.  According to the cybersecurity firm SentinelOne, phishing attacks have increased by 1,265%, with that increase driven by the growth of GenAI. These attacks target employees and trick them into disclosing credentials, opening malicious email attachments, or clicking links that direct them to malicious sites where malware is downloaded. While technical defenses such as spam filters can reduce the number of threats that reach employees, it is vital to train the workforce on how to recognize and report suspicious emails.

A system is only as secure as the password used to protect it, so it is essential that passwords are used that are difficult to guess and are resistant to automated brute force attempts. According to Hive Systems, even a password consisting of 10 random numbers could be cracked in less than a day, compared to 803,000 years for a 10-character password consisting of numbers, upper and lower case letters, and special characters. Strong passwords should be mandatory for all users.

Even strong passwords are not sufficient by themselves, as while they may be difficult to brute force, they can be obtained by threat actors through phishing, for example. Multifactor authentication adds an additional layer of protection, ensuring that a password alone is not sufficient to access accounts, systems, and devices. Implementing multifactor authentication will significantly improve security, and where possible, phishing-resistant multifactor authentication should be implemented.

Threat actors target vulnerabilities in software and operating systems and exploit them to gain access to the networks of critical infrastructure entities and their vendors.  All business software and operating systems should be kept up to date, with patches and security updates applied promptly to fix vulnerabilities before they can be exploited. After completing these four essential steps to improve baseline security, the next step is to level up defenses through additional actions, such as implementing logging on all systems. Logs should be monitored for anomalous activity, including hacking incidents and insider threats.

Ransomware is one of the biggest threats, especially in healthcare. These attacks lock victims out of systems and prevent access to critical data, causing massive disruption to business operations. It is therefore essential to ensure that all critical information is backed up securely, as this will allow a fast recovery in the event of an attack. In addition to making multiple backups and securing one copy off-site, backups should be checked to ensure that file recovery is possible. A backup plan should also be developed to reach the recovery point in the shortest possible time frame.

Data encryption is another key protection to safeguard data at rest and in transit. If a threat actor gains access to files, the data cannot be viewed. Threat information sharing is also a key part of building a strong cyber America. By informing CISA about cyberattacks and sharing pertinent information, CISA can take steps to warn others and help them avoid similar threats.

Healthcare organizations should also consider implementing the cybersecurity performance goals (CPGs) developed by the Department of Health and Human Services in collaboration with CISA. The CPGs set a floor of safeguards that will help prevent successful cyberattacks, and the enhanced CPGs help healthcare organizations mature their cybersecurity capabilities. The 2025 HIPAA Journal Annual Survey indicated a lack of awareness of these important CPGs.

“Critical infrastructure – whether in the hands of state and local entities, private businesses, or supply chain partners – is the backbone of our daily lives,” said Acting CISA Director Madhu Gottumukkala. “Whenever it’s disrupted, the effects ripple through communities across America. That’s why this year CISA is prioritizing the security and resilience of small and medium businesses, and state, local, tribal, and territorial government (SLTT) that facilitate the systems and services [that] sustain us every day. This includes things like clean water, secure transportation, quality healthcare, secure financial transactions, rapid communications, and more. Together, we must make resilience routine so America stays safe, strong, and secure.”

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Connecticut Medical Rehabilitation Center Announces Hacking Incident

Posted by Steve Alder

Gaylord Specialty Healthcare is notifying patients affected by a December hacking incident, and Gainwell Technologies has reported a breach involving the data of Medicaid recipients in Georgia.

Gaylord Specialty Healthcare, Connecticut

Gaylord Farm Association Inc., doing business as Gaylord Specialty Healthcare, a nonprofit medical rehabilitation center in Wallingford, Connecticut, has recently started notifying patients about a December 2024 security incident that potentially involved unauthorized access to patient information.

Suspicious activity was identified within its computer network on December 19, 2024, and the forensic investigation confirmed unauthorized access to its network from December 16 to December 19. Files were reviewed to determine the types of information involved and the individuals affected. On August 25, 2025, Gaylord learned that the impacted data included names, dates of birth, Social Security numbers, taxpayer ID numbers, driver’s license or state ID numbers, passport numbers, account numbers, routing numbers, payment card numbers, payment card CVVs, medical record numbers, mental or physical condition, treatment information, diagnoses and diagnosis codes, treatment locations, procedure types, provider names, treatment costs, medical date of services, admission/discharge dates, prescriptions, billing/claims information, health insurance information and/or patient account numbers.

Gaylord said it issued a provisional notice to the HHS’ Office for Civil Rights about the data breach and uploaded a breach notice to its website on February 28, 2025; however, the incident is not yet shown on the HHS’ data breach portal, which suggests the initial estimate indicated that fewer than 500 individuals were affected. Gaylord said the delay in issuing individual notifications was due to the complex and time-consuming review of the affected files, which required a manual review of thousands of documents. Security policies, procedures, and practices have been reviewed and enhanced to prevent similar breaches in the future. The total number of affected individuals is not currently known, although the breach was reported to the Maine Attorney General as affecting 75 Maine residents.

Gainwell Technologies, Virginia

Gainwell Technologies, a provider of technology solutions and software to healthcare organizations and government agencies, has recently announced a data breach affecting 912 Medicaid recipients in Georgia. Gainwell Technologies is the fiscal agent for Medicaid in the state, and contracts with Georgia’s Department of Community Health. According to a statement issued by the contractor, on July 23, 2025, an unauthorized caller requested access to payments to providers and gained access to a reimbursement account that contained patient information.

The account contained billing statements that included Medicaid recipients’ names, Medicaid ID numbers, coverage information, and payment information for the periods when services were received. Gainwell Technologies said it is unaware of any misuse of the affected data but has offered complimentary credit monitoring services to the affected individuals for a period of one year as a precaution.

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Healthcare Interactive: More Than 3 Million Individuals Affected by July 2025 Security Incident

Posted by Steve Alder

Healthcare Interactive, better known as HCIactive, reported a data breach to the HHS’ Office for Civil Rights on September 22, 2025, using a placeholder figure of 501 affected individuals. At the time, the extent of the data breach had not been determined as the review of affected data was ongoing. While the Maine Attorney General was informed in September that 87,565 individuals had been affected, it has now been confirmed that the data breach was far more extensive.

The Oregon Attorney General was informed on January 7, 2026, that the personal and protected health information of 3,056,950 individuals was compromised in the incident, which makes it one of the largest healthcare data breaches of 2025. As of January 30, 2026, it is the 5th largest healthcare data breach of 2025.

Healthcare Interactive is an Ellicott City, MD-based provider of AI-powered software solutions for insurance enrollment and benefits administration. On or around July 22, 2025, suspicious activity was identified within its computer network. According to its substitute data breach notice, the forensic investigation confirmed that an unauthorized third party had access to its network from July 8, 2025, to July 12, 2025, and exfiltrated files. The breach notice provided to the Oregon Attorney General suggests a longer period of unauthorized access, spanning from June 17, 2025, to July 22, 2025.

Healthcare Interactive has not uncovered any evidence to suggest that the stolen data has been misused, although as a precaution, the affected individuals have been offered complimentary credit monitoring and identity theft protection services.

The types of data compromised in the incident vary from individual to individual and may include names, addresses, phone numbers, email addresses, birth dates, health plan/policy numbers, health insurance provider names, member/group IDs, health insurance claim numbers, account numbers, explanation of benefits, billing codes, and medical data. Medical information potentially compromised in the incident includes diagnoses, treatment information, prescriptions, lab results, medical images, care information, doctors’ names, medical record numbers, and billing codes. The threat actor behind the attack is currently unknown.

Healthcare Interactive said it has reviewed its security policies and has taken additional steps to improve security to prevent similar incidents in the future. Healthcare Interactive announced in a press release on December 19, 2026, that it has strengthened its leadership team and operational structure to further its “AI First and AI Everywhere” mission. That includes expanded leadership oversight around AI security and data integrity, covering zero trust enforcement, AI-driven anomaly detection, modernization of encryption, and compliance-led security reviews, as well as strengthening leadership around ERISA, HIPAA, SOC 2, ISO 27001 oversight and compliance.

September 29, 2025: Data Exfiltrated in Hacking Incident at Healthcare Interactive Inc.

Healthcare Interactive Inc., a provider of AI-powered software solutions for insurance enrollment and benefits administration, has recently announced a July 2025 hacking incident that involved the exfiltration of files from its network. Suspicious activity was identified within its computer network on or around July 22, 2025. An investigation was launched to identify the cause of the activity, which confirmed unauthorized access to its network and data exfiltration from its network between July 8, 2025, and July 12, 2025.

The review of the exposed files confirmed that they contained protected health information such as names, addresses, email addresses, phone numbers, dates of birth, Social Security numbers, health insurance enrollment information, medical record numbers, diagnoses, lab results, prescriptions, and other care and treatment information, medical images, doctors’ names, and health insurance claims information.

While sensitive data was stolen, Healthcare Interactive said it is unaware of any misuse of that information; however, as a precaution, the affected individuals have been offered complimentary credit monitoring and identity theft protection services. Security policies and procedures are being reviewed, and additional safeguards are being implemented to better secure its systems and data. The data breach is listed on the HHS’ Office for Civil Rights breach portal using a placeholder figure of at least 501 affected individuals. The total will be updated when the investigation and file review are concluded. The Maine Attorney General has been informed that the data breach affected 87,565 individuals, including 3,782 Maine residents.

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Veradigm Announces Data Breach Affecting Several Customers

Posted by Steve Alder

On September 22, 2025, Veradigm, a Chicago, Illinois-based provider of practice management and electronic health record solutions to healthcare providers (formerly Allscripts), started issuing notification letters about a July 2025 security incident that involved unauthorized access to customer data.

On July 1, 2025, Veradigm learned that an unauthorized third party had accessed one of its storage locations. Steps were immediately taken to block the unauthorized access, law enforcement was notified, and third-party digital forensics and cybersecurity experts were engaged to investigate the activity and mitigate any impact of the unauthorized access. The investigation determined that a data security incident at one of its customers resulted in credential theft that allowed access to a Veradigm storage account. The attacker used the credentials to access the storage account on or around December 2024. Veradigm learned about the unauthorized access through a third party that was investigating its customer’s security incident. The data breach was limited to the storage account, and no other systems or environments were affected. While data was exposed, Veradigm is unaware of any misuse of the exposed data.

The file review confirmed that the following types of information had been exposed: name, contact information, date of birth, health records information (diagnoses, medications, test results, and treatments), health insurance information, payment details, and limited identifiers, such as Social Security numbers and driver’s license numbers. The types of information involved vary from individual to individual. Veradigm has implemented additional technical safeguards to prevent similar incidents in the future and has offered the affected individuals complimentary credit monitoring and identity theft protection services.

The incident is not yet shown on the HHS’ Office for Civil Rights breach portal, so it is currently unclear how many individuals have been affected. The data breach affected several of its customers and is likely to be a significant data breach. At least 70,000 individuals have been confirmed as affected in two states alone, based on the breach reports submitted to the Texas and South Carolina state attorneys general. The California Attorney General has also been informed that state residents have been affected.

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