According to a recent study, the median amount of time between a breach of a company's cybernetwork and the discovery of that breach is 229 days. Given this lengthy amount of time, companies should consider the benefits of an expanded cyberliability insurance policy period, particularly if the company is switching from one insurance provider to another. This topic is discussed in "Hackers Don't Care About the Terms of Your Insurance Policy: The Importance of Retroactive Dates and Extended Reporting Periods in Effective Cyberliability Insurance Coverage," a client alert written by Reed Smith's Insurance Recovery Group.… Continue Reading
Reed Smith’s Global Regulatory Enforcement Law blog features two posts of interest to those in the life sciences industry, both written by Reed Smith partner Cynthia O’Donoghue. “EU Research Group Condemns EU Regulation for Restricting Growth in Life Sciences Sector” discusses the opposition of a lobbying group, led by the Wellcome Trust, to amendments to … Continue Reading
Next week, Reed Smith will host a conference on “Big Data Monetization” at the Quadrus Conference Center in Silicon Valley (8:30-11:30 a.m. PDT). Big Data is a term used to characterize the accumulation of data. Virtually every company, in every industry, is now an information and technology company. Companies run on Big Data, whether it … Continue Reading
On September 17, 2012, the HHS Office of Civil Rights ("OCR") announced another settlement and corrective action plan following an entity's breach self-report required by HITECH's Breach Notification Rule. Massachusetts Eye and Ear Infirmary and Massachusetts Eye and Ear Associates, Inc. (collectively "MEEI") have agreed to pay $1.5 million to settle potential violations of the HIPAA Security Rule following the theft of a physician's unencrypted, but protected, laptop, providing additional evidence that: (1) OCR will likely view any breach notification as an opportunity to conduct a de facto audit of an entity's general HIPAA compliance; and (2) encryption of all portable devices containing electronic protected health information ("ePHI"), though not technically "required," is a critical compliance consideration.… Continue Reading
This post was written by Jay J. Yan, Hugh T. Scogin, Jr., John J. Tan, Mao Rong, Katherine Yang, May Wong, Amy Yin and Gordon B. Schatz. Reed Smith’s Life Sciences Health Industry China Briefing provides a summary of the monthly news and legal developments relating to China’s Pharmaceutical, Medical Device, and Life Sciences/ Health … Continue Reading
On April 17, 2012, the HHS Office of Civil Rights (OCR) announced a settlement and corrective action plan with Phoenix Cardiac Surgery, P.C. (Phoenix), a small cardiology practice based in Phoenix and Prescott, Arizona. More specifically, Phoenix has agreed to pay $100,000 to settle allegations of HIPAA violations arising out of an investigation conducted by OCR.… Continue Reading
On March 13, 2012, the HHS Office of Civil Rights (OCR) announced the first enforcement action resulting from a breach self-report required by HITECH's Breach Notification Rule. Blue Cross Blue Shield of Tennessee (BCBST) has agreed to pay HHS $1,500,000 to settle potential violations of the HIPAA Privacy and Security Rules and has entered into a corrective action plan to address gaps in its HIPAA compliance program.
The HIPAA/HITECH Breach Notification Rule requires covered entities to report a breach (e.g., an impermissible use or disclosure of protected health information that compromises the security or privacy of the protected health information) to the affected individual(s), HHS and, at times, the media. OCR's investigation of BCBST followed a breach report submitted by BCBST informing HHS that 57 unencrypted computer hard drives were stolen from a leased facility in Tennessee. The hard drives contained the protected health information of more than 1 million individuals, including member names, social security numbers, diagnosis code, dates of birth, and health plan identification numbers.
According to OCR's investigation, BCBST failed to implement appropriate administrative and physical safeguards as required by the HIPAA Security Rule. More specifically, BCBST failed to perform the required security evaluation in response to operational changes and did not have adequate facility access controls.
In addition to the $1,500,000 settlement, the Resolution Agreement between BCBST and OCR requires BCBST to revise its Privacy and Security policies, conduct robust trainings for all employees, and perform monitor reviews to ensure compliance with the corrective action plan. BCBST did not admit any liability in the agreement and OCR did not concede that BCBST was not liable for civil monetary penalties.
Additional information about OCR's enforcement activities can be found at http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/index.html.… Continue Reading
The interest level in storing health records in digital format has grown rapidly with the lower cost and greater availability and reliability of interoperable storage mechanisms and devices. Health care providers like hospitals and health systems, physician practices, and health insurance companies are among those most likely to be considering a cloud-based solution for the storage of patient-related health information. While lower cost, ubiquitous 24/7 availability, and reliability are key drivers pushing health care providers and insurers to the cloud, a number of serious legal and regulatory issues should be considered before releasing sensitive patient data into the cloud. The issues are highlighted in the Health Care chapter of our Cloud Computing White Paper.… Continue Reading
On May 16, 2011, the Office of Inspector General ("OIG") published a report with the results from its nationwide review of the Centers for Medicare and Medicaid Services ("CMS'") oversight of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). In its review, the OIG sought to determine the sufficiency of CMS' oversight and enforcement actions pertaining to hospitals' implementation of the HIPAA Security Rule. Pursuant to the Security Rule, covered entities, such as hospitals, must implement technical, physical, and administrative safeguards for the protection of electronic protected health information ("ePHI"). According to the OIG, CMS' oversight and enforcement actions were "not sufficient," leaving limited assurance of the security of hospitals' ePHI.
The report details the results from the OIG's audits of seven hospitals. The audits disclosed "numerous internal control weaknesses." Specifically, the OIG identified 151 vulnerabilities in the systems and controls intended to protect ePHI. Of these vulnerabilities, 124 were categorized as "high impact." These vulnerabilities placed the confidentiality, integrity, and availability of ePHI at risk. The consequences of the high impact vulnerabilities is that it (1) may result in the highly costly loss of major tangible assets or resources; (2) may significantly violate, harm, or impede an organization's mission, reputation, or interest; or (3) may result in human death or serious injury.… Continue Reading
According to a senior health information technology and privacy specialist at HHS Office for Civil Right (OCR), regulations finalizing the July 14, 2010, proposed rule implementing many of the HITECH Act's privacy, security, and enforcement requirements could be published by the end of 2010 or in early 2011. Additionally, OCR, developing a HITECH Act required "periodic audit" plan, which will be targeted to ensure that covered entities and business associates comply with the requirements of the Privacy and Security Rules.… Continue Reading
On April 27, 2010, the Mexican Senate passed Ley Federal de Protección de Datos Personales en Posesión de los Particulares (the Federal Law for Protection of Personal Data (FLPPA)). President Felipe Calderon is expected to sign the FLPPA into law soon, and thereafter, the FLPPA will be published and its regulatory provisions enacted. The objective of the FLPPA is to provide regulatory mechanisms for the newly established replacement agency, Instituto Federal de Acceso a la Información y Protección de Datos (the Federal Institute of Information Access and Data Protection (FIIADP), to enforce the FLPPA in relation to any individual or entity engaging in the collection, storage and/or transfer of personal data, including life sciences and health care clients.… Continue Reading
This post was written by Daniel A. Cody, Paul W. Pitts and Alison B. Riddell. Although California legislators devoted a significant amount of time and resources to addressing the state’s budget shortfall and the economic recession, the 2009 legislature debated and passed a surprising number of bills related to health care, many of which will … Continue Reading
On Feb. 17, 2009, President Obama signed into law H.R. 1, the American Recovery and Reinvestment Act (the "ARRA").1 This memorandum outlines significant changes and additions to the landscape of federal privacy and security law set forth in Subtitle D of the ARRA. In general, the privacy and security portions of the ARRA become effective 12 months after the enactment of the ARRA, which is approximately February 2010. It is also important to note that the ARRA directs the Secretary of the U.S. Department of Health & Human Services ("HHS") to amend the HIPAA Privacy and Security Rules to implement the legislative changes. As such, the effective dates associated with the rulemaking process will vary.… Continue Reading