A Single Stolen, Unencrypted Laptop Can Cost Entities Millions of Dollars

laptop encryptionEarlier this week, the U.S. Department of Health and Human Services, Office for Civil Rights (OCR) announced two, multimillion dollar settlements relating to “potential” privacy and security violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Both settlements stem from the entity’s reports to OCR of the thefts of unencrypted laptops containing electronic protected health information (ePHI) even though one of the laptops was password protected.

First, on March 16, 2016, OCR announced that North Memorial Health Care of Minnesota agreed to pay $1,550,000 to settle potential violations of the HIPAA Privacy and Security Rules after a laptop containing the ePHI of 9,497 individuals was stolen from the vehicle of one of its contractors in July 2011.

OCR’s subsequent investigation determined that North Memorial failed to enter into a business associate agreement with this contractor, as required under the HIPAA Privacy and Security Rules.  The investigation also discovered that North Memorial failed to conduct an organization-wide risk analysis to address all of the risks and vulnerabilities to its ePHI.  OCR concluded Continue reading

To Freeze or Not to Freeze? That Is the Question

UPDATE: Senate Bill 23 did not become law during 2016 Kentucky Legislative Session. The bill was passed unanimously by the Senate. It was then sent to the House, where it was read twice, amended, but never read for the third and final time.


Overview

The Commonwealth of Kentucky’s General Assembly is considering a bill which would permit parents to place security freezes on their children’s credit record. Senate Bill 23 (SB 23) was introduced in the Senate on January 6, 2016. After several readings and committee reviews, it was approved by the Senate with minor changes and sent to the House Banking & Insurance Committee on February 11, 2016. The 2016 Kentucky Legislative Session will adjourn on April 12, 2016.

Credit cards & keyboardChildren do not have credit reports since they generally do not have credit in their names. So SB 23 provides that if there is no credit file/credit report, then the consumer reporting agency must create such a record for the protected person (as defined below).

SB 23 would require a consumer reporting agency to place a security freeze on a protected person’s record or report upon proper request by a representative. A “protected person” is defined as “an individual who is under sixteen (16) years of age at the time a request for the placement of a security freeze is made, or who is an incapacitated person or other person for whom a guardian or conservator has been appointed.”

State Laws and the Three Major Consumer Reporting Agencies Vary on Security Freezes for Children

The National Council of State Legislators reports that only “twenty-three states allow parents, legal guardians or Continue reading

New HIPAA Exception Allows Covered Entities to Report Behavioral Health Considerations Applicable to Possessing a Firearm

gun rangeAs of February 5, 2016, a change in the law allows certain health care providers to report the identity of an individual who is prohibited from possessing a firearm for mental health reasons to the National Instant Criminal Background Check System (“NICS”).  The Department of Health & Human Services (“HHS”) amended the Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule to allow such reporting by health care providers who are a “covered entity” under HIPAA and who are: state agencies; designated by the state with lawful authority to make the adjudications or commitment decisions that make individuals subject to a “mental health prohibitor”; or serve as repositories of information for NICS reporting purposes.  The Final Rule that makes this amendment to HIPAA was published in the Federal Register on January 6, 2016: click here.

Before this amendment, health care providers who are “covered entities” under HIPAA could report information to the NICS only if:

(1) the health care provider had designated itself as a “hybrid entity” where the Privacy Rule would apply only to the entity’s functions that are subject to Continue reading

Administrative Law Judge Dismisses FTC Complaint Against LabMD

electronic health recordOn November 13, 2015, the Chief Administrative Law Judge (ALJ) for the Federal Trade Commission (FTC) issued an Initial Decision dismissing the FTC’s Complaint against LabMD, Inc. for lack of evidence. The FTC originally issued this Complaint against LabMD in 2013, alleging that the clinical testing laboratory failed to provide “reasonable and appropriate” security for personal information maintained on LabMD’s computer networks and that this conduct “caused or is likely to cause” substantial consumer injury.

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Recent OIG Studies Recommend Tighter Enforcement of the Privacy and Security Rules

The U.S. Department for Health & Human Services’ Office of Inspector General (OIG) has conducted two recent studies calling for tighter enforcement of the Privacy and Security Rules under the Health Insurance Portability and Accountability Act (HIPAA).

OCR Should Strengthen Its Oversight of Covered Entities’
Compliance With the HIPAA Privacy Standards

In the first study, the OIG recommends that the Office of Civil Rights (OCR), the government agency responsible for enforcing covered entities’ compliance with the HIPAA Privacy Standards, should strengthen its oversight of these privacy standards. The OIG reviewed a statistical sample of privacy cases investigated by the OCR from September 2009 through March 2011, surveyed and interviewed OCR staff, reviewed the OCR’s investigation policies, and surveyed providers’ compliance with five selected privacy standards.

Based upon this review, the OIG concluded that OCR should strengthen its oversight of covered entities’ compliance with the Privacy Rule. It criticized the OCR’s oversight as “primarily reactive” and suggested they be more Continue reading