Data privacy and security legislation and enforcement saw significant activity in 2018 and early 2019. McDermott’s 2018 Digital Health Year in Review: Focus on Data report – the first in a four-part series – highlights notable developments and guidance that health care providers, digital health companies and other health care industry stakeholders should navigate in 2019. Here, we summarize four key issues that stakeholders should watch in the coming year. For more in-depth discussion of these and other notable issues, access the full report.

  1. EU General Data Protection Regulation (GDPR) enhances protections for certain personal data on an international scale. US-based digital health providers and vendors that either (a) offer health care or other services or monitor the behavior of individuals residing in the EU, or (b) process personal data on behalf of entities conducting such activities should be mindful of the GDPR’s potential applicability to their operations and take heed of any GDPR obligations, including, but not limited to, enhanced notice and consent requirements and data subject rights, as well as obligations to execute GDPR-compliant contracts with vendors processing personal data on their behalf.
  2. California passes groundbreaking data privacy law. The California Consumer Privacy Act (CCPA), which takes effect on January 1, 2020, will regulate the collection, use and disclosure of personal information pertaining to California residents by for-profit businesses – even those that are not based in California – that meet one or more revenue or volume thresholds. Similar in substance to the GDPR, the CCPA gives California consumers more visibility and control over their personal information. The CCPA will affect clinical and other scientific research activities of academic medical centers and other research organizations in the United States if the research involves information about California consumers.
  3. US Department of Health and Human Services (HHS) Office of Civil Rights (OCR) continues aggressive HIPAA enforcement. OCR announced 10 enforcement actions and collected approximately $25.68 million in settlements and civil money penalties from HIPAA-regulated entities in 2018. OCR also published two pieces of guidance and one tool for organizations navigating HIPAA compliance challenges in the digital health space.
  4. Interoperability and the flow of information in the health care ecosystem continues to be a priority. The Office of the National Coordinator for Health Information Technology (ONC) submitted its proposed rule to implement various provisions of the 21st Century Cures Act to the Office of Management and Budget (OMB) in September 2018; this is one of the final steps before a proposed rule is published in the Federal Register and public comment period opens. The Centers for Medicare & Medicaid Services (CMS) released its own interoperability proposed rule and finalized changes to the Promoting Interoperability (PI) programs to reduce burden and emphasize interoperability of inpatient prospective payment systems and long-term care hospital prospective payment systems.

Lack of a sufficient risk analysis continues to be one of the most commonly alleged violations in Office for Civil Rights (OCR) HIPAA enforcement actions, appearing in half of all OCR settlements announced in the last 12 months and in almost all of the $1 million-plus settlements during that time period. Significant confusion remains across the health care industry as to what actually constitutes a compliant risk analysis for purposes of the HIPAA Security Rule. On April 30, 2018 OCR issued guidance discussing the differences between a HIPAA Security Rule risk analysis and a HIPAA compliance “gap analysis.” Drawing from our experience reviewing clients’ historical risk analysis documents, helping clients to navigate OCR investigations and negotiating several recent HIPAA settlements with OCR, we elaborate on what constitutes a compliant HIPAA Security Rule risk analysis, discuss common risk analysis misunderstandings and pitfalls, and encourage covered entities and business associates to consider whether to conduct these reviews under attorney-client privilege.

Continue Reading.

On April 24, the US Department of Health and Human Services (HHS) Office for Civil Rights (OCR) announced a Health Insurance Portability and Accountability Act of 1996 (HIPAA) settlement in the amount of $2.5 million based on the impermissible disclosure of unsecured electronic protected health information (ePHI) by a provider of remote mobile monitoring, with a focus on patients who are at risk for cardiac arrhythmias.

In January 2012, the remote monitoring company reported that a workforce member’s laptop containing the ePHI of over a thousand individuals was stolen from a parked vehicle outside of the employee’s home. A little over one year later, the same company reported a second breach that compromised the ePHI of twice as many individuals (details regarding this breach were not provided by OCR).

OCR’s investigation revealed that the company allegedly had insufficient risk analysis and risk management processes in place at the time of the theft. Additionally, the company’s draft policies and procedures implementing the standards of the HIPAA Security Rule had never been implemented, and the company was also unable to produce final versions of any policies or procedures regarding the implementation of safeguards for ePHI, including those for mobile devices.

Continue Reading Recent $2.5 Million OCR Settlement Is a Warning to Wireless Health Service Providers

The U.S. Department of Health and Human Services, Office for Civil Rights (OCR) recently transmitted HIPAA pre-audit screening surveys to covered entities that may be selected for a second phase of HIPAA compliance audits (Phase 2 Audits). OCR is required to conduct compliance audits of covered entities and business associates under the 2009 Health Information Technology for Economic and Clinical Health Act.

Unlike the pilot audits conducted in 2011 and 2012 (Phase 1 Audits), which focused on covered entities, OCR is conducting Phase 2 Audits of both covered entities and business associates. The Phase 2 Audit program will focus on areas of greater risk to the security of protected health information (PHI) and pervasive non-compliance based on OCR’s Phase I Audit findings and observations, rather than a comprehensive review of all of the HIPAA Standards. The Phase 2 Audits are also intended to identify best practices and uncover risks and vulnerabilities that OCR has not identified through other enforcement activities. OCR will use the Phase 2 Audit findings to identify technical assistance that it should develop for covered entities and business associates. In circumstances where an audit reveals a serious compliance concern, OCR may initiate a compliance review of the audited organization that could lead to civil money penalties.

OCR had previously planned to issue the pre-audit screening surveys in the summer of 2014, but postponed their release until it completed its implementation of a new web portal that will be used for the submission of audit-related materials.

We will publish a fuller On the Subject regarding the Phase 2 Audits in the coming days.

During 2014, the Office for Civil Rights (OCR) of the U.S. Department of Health & Human Services initiated six enforcement actions in response to security breaches reported by entities covered by the Health Insurance Portability and Accountability Act (HIPAA) (covered entities), five of which involved electronic protected health information (EPHI).  The resolution agreements and corrective action plans resolving the enforcement actions highlight key areas of concern for OCR and provide the following important reminders to covered entities and business associates regarding effective data protection programs.

  1. Security risk assessment is key.

OCR noted in the resolution agreements related to three of the five security incidents, involving QCA Health Plan, Inc., New York and Presbyterian Hospital (NYP) and Columbia University (Columbia), and Anchorage Community Mental Health Services (Anchorage), that each entity failed to conduct an accurate and thorough assessment of the risks and vulnerabilities to the entity’s EPHI and to implement security measures sufficient to reduce the risks and vulnerabilities to a reasonable and appropriate level.  In each case, the final corrective action plan required submission of a recent risk assessment and corresponding risk management plan to OCR within a relatively short period after the effective date of the resolution agreement.

      2.  A risk assessment is not enough – entities must follow through with remediation of identified threats and vulnerabilities.

In the resolution agreement related to Concentra Health Services (CHS), OCR noted that although CHS had conducted multiple risk assessments that recognized a lack of encryption on its devices containing EPHI, CHS failed to thoroughly implement remediation of the issue for over 3-1/2 years.

      3.  System changes and data relocation can lead to unintended consequences. 

In two of the cases, the underlying cause of the security breach was a technological change that led to the public availability of EPHI.  A press release on the Skagit County incident notes that Skagit County inadvertently moved EPHI related to 1,581 individuals to a publicly accessible server and initially reported a security breach with respect to only seven individuals, evidentially failing at first to identify the larger security breach.  According to a press release related to the NYP/Columbia security breach, the breach was caused when a Columbia physician attempted to deactivate a personally-owned computer server on the network, which, due to lack of technological safeguards, led to the public availability of certain of NYP’s EPHI on internet search engines.

      4.  Patch management and software upgrades are basic, but essential, defenses against system intrusion.

OCR noted in its December 2014 bulletin on the Anchorage security breach (2014 Bulletin) that the breach was a direct result of Anchorage’s failure to identify and address basic security risks. For example, OCR noted that Anchorage did not regularly update IT resources with available patches and ran outdated, unsupported software.

      5.  HIPAA policies and procedures that merely sit on the shelf are not sufficient.

OCR noted the failure of two covered entities to follow policies and procedures that each entity had adopted.  In the NYP resolution agreement, OCR noted that, with respect to a data sharing arrangement with Columbia, NYP had “failed to comply with its own policies on information access management.”  Similarly, OCR noted in the 2014 Bulletin that its investigation of Anchorage revealed that Anchorage “had adopted sample Security Rule policies and procedures in 2005, but [that] these were not followed.”