We have heard this story before: unencrypted laptop containing electronic protected health information (ePHI) is stolen. The covered entity’s subsequent breach self-report triggers not only an incident investigation by the Department of Health and Human Services, Office for Civil Rights (OCR), but a de facto HIPAA compliance audit as well. While the covered entities involved change, the consequences and enforcement message remain the same.
Now, two more covered entities have settled potential violations of the HIPAA Privacy and Security Rules arising from the theft of unencrypted laptops by paying a total of $1,975,220, and agreeing to continued oversight by OCR through Corrective Action Plans (CAPs). In both instances, the breaches were self-reported and the settlements resulted from OCR’s subsequent investigations.
On December 28, 2011, Concentra Health Services (Concentra), a national health care provider and subsidiary of Humana Inc., reported to OCR that an unencrypted laptop was stolen from one of its facilities. OCR’s subsequent investigation revealed that while Concentra previously recognized that a lack of encryption on laptops, desktops, medical equipment, and tablets presented a critical risk to ePHI, Concentra failed to fully implement necessary steps to address those vulnerabilities. OCR’s investigation further found that Concentra had insufficient security management processes in place to ensure proper safeguarding of patient information. Concentra paid OCR $1,725,220 to resolve these alleged HIPAA violations and will adopt a CAP to evidence their remediation efforts.
The second settlement, which resulted in a $250,000 payment to OCR, stemmed from the theft of an unencrypted, stolen laptop from an employee’s car on October 8, 2011. The laptop, belonging to a workforce member of QCA Health Plan, Inc. of Arkansas (QCA), contained the ePHI of 148 individuals. While QCA instituted company-wide device encryption following discovery of the breach, OCR’s subsequent investigation revealed that QCA had failed to comply with multiple requirements of the HIPAA Security Rule, beginning from the Rule’s compliance date in April 2005. In addition to the monetary settlement amount, QCA agreed to provide HHS with an updated risk analysis and corresponding risk management plan that includes specific security measures to reduce risks to vulnerabilities of its ePHI. QCA also agreed to retrain its workforce and document its ongoing compliance efforts.
Unfortunately, as the proliferation of portable devices in the health care industry increases, the question for most covered entities is not if a laptop or mobile device will be stolen, but when. Encryption not only provides a safe harbor under the Breach Notification Rule, but it has also become a practical necessity to HIPAA compliance. Failure to address encryption of portable devices in Security Rule risk analyses and, in most cases, failure to implement some form of encryption, will continue to expose covered entities (as well as business associates) to significant compliance risk.
Additional information about OCR’s enforcement activities can be found at http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/index.html.