September 23, 2013 is a date to note if your
organization handles health-related information. You might be a medical
clinic, or a company that does IT work for a clinic. You might not think
of yourself as being a medical professional. You could be a data
storage provider or an IT consultant who does some work for a company
that sometimes helps out hospitals. The point being: Now is the time to
make sure you are aware of the implications of September 23.
So what happens on September 23, 2013? That is the deadline for
compliance with new HIPAA regulations. If you’re thinking HIPAA is “so
last decade” then you need to think again, as in HIPAA 2.0. In January
of this year, the U.S. government published new regulations that extend
the reach of federal healthcare privacy and security laws, embracing a
whole new range of companies that service the healthcare industry.
The new rules, codified as the “omnibus regulations,” also known as
the “Final Rule,” include significant changes to the privacy, security,
enforcement, and breach notification rules that were promulgated under
the Health Insurance Portability and Accountability Act of 1996 (HIPAA)
and the Health Information Technology for Economic and Clinical Health
(HITECH) Act. According to the Head of the Office of Civil Rights (OCR)
at the Department of Health and Human Services (HHS):
This final omnibus rule marks the most sweeping changes
to the HIPAA Privacy and Security Rules since they were first
implemented. These changes not only greatly enhance a patient’s privacy
rights and protections, but also strengthen the ability of my office to
vigorously enforce the HIPAA privacy and security protections,
regardless of whether the information is being held by a health plan, a
health care provider, or one of their business associates.
The Final Rule became effective on March 26, 2013, and compliance is
generally required by September 23, a little over 40 days from now.
While the enforcement body, the OCR, did not immediately begin
investigating and fining organizations after the original HIPAA rules
went into effect, I would not bet my business on there being a “grace
period” with the new rules. After all, PHI breaches are currently
running at an average of 17,000 per day, based on the
HHS breach data. You have to assume reducing that unhappy privacy statistic is a priority for OCR.
PHI and Business Associates
Practically every business that processes, stores or otherwise
handles protected health information (PHI) is required to comply with
privacy and security controls. PHI is individually identifiable health
information, in other words, health information which can be linked to a
particular person. Specifically, this information can relate to:
- The individual’s past, present or future physical or mental health or condition,
- The provision of health care to the individual, or,
- The past, present, or future payment for the provision of health care to the individual.
Clinics and hospitals and health insurance companies may be the first
things to come to mind when you read those bullets and these are
generally considered “covered entities” under HIPAA. But the structure
of the healthcare industry in America is such that a vast array of
organizations and individuals currently service the industry. HIPAA
refers to these service providers as “business associates” which are
generally defined as: “a person or entity that creates, receives,
maintains, or transmits protected health information (PHI) in fulfilling
certain functions or activities for a HIPAA-covered entity.” (
Godfrey & Kahn, S.C.)
(Let me say right now that I am not qualified to give you a legal
opinion as to whether or not you or your company constitute a business
associate under HIPAA 2.0. One area where this determination gets pretty
tricky is the cloud and what are formally known as MTDCs or
multi-tenant data-centers. Fortunately, some cloud providers offer very
helpful information on this topic, like this AIS article about
HIPAA and MTDCs.)
OCR to “vigorously enforce the HIPAA privacy and security protections”Under
HIPAA 1.0 a covered entity was supposed to impose privacy and security
requirements on the business associates with whom they did business by
means of contractual agreements (BAAs or Business Associate Agreements).
However, when the mandatory reporting of breaches of unsecured
protected health information began in 2009, it quickly became clear that
business associates were going to be a problem. So far, 57% of breaches
involving 500 or more individuals have been from business associates,
impacting five times as many individuals as breaches from covered
entities. Now, under HIPAA 2.0, both the HIPAA Security Rule and the
HIPAA Privacy Rule apply directly to business associates, making them
potentially liable for civil and criminal penalties for any
non-compliance with the HIPAA regulations.
Serious insecurity consequences
What sort of penalties are we talking about when HIPAA violations
come to light? Consider this table of amounts levied in 2012, totaling
almost $10 million:
Clearly, HHS does not like people storing unencrypted PHI on mobile
devices. And when OCR comes to investigate, you will be in trouble if
you don’t have well-documented risk analysis, policy, and controls. You
can find more
HIPAA enforcement cases online.
What you won’t see yet are fines levied against business associates. I
predict we will see the first of these towards the end of next year,
with possible headlines like this:
Cloudy with a chance of lawsuits: Data center dinged over medical record handling
Tip trip trashes clinic reputation: Record management firm faces five figure fine over health data flub!
Apart from the excessive alliteration, such stories are entirely
feasible in the wake of September 23, 2013. Now is the time to ask if
your organization needs to revisit HIPAA compliance. Remember, not every
PHI breach ends in a fine. If you can show your organization has made a
reasonable effort to comply with HIPAA 2.0 you may not be dinged (as in
subject to a fine and subject of a national press release).