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Care New England Health System Will Pay $400,000 Settlement for Potential HIPAA Violations

September 26, 2016
by Heather Landi
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Providence, R.I.-based Care New England Health System has agreed to pay $400,000 to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules, stemming from a 2012 breach of electronic protected health information (ePHI) at Woman and Infants Hospital of Rhode Island.

The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) investigated Woman and Infants Hospital of Rhode Island (WIH), a covered entity member of Care New England, following notification November 5, 2012 that the hospital lost encrypted backup tapes containing the ultrasound studies of approximately 14,000 individuals. The files contained patient information such as patient name, date of birth, date of exam, physician names and, in some instances, Social Security numbers.

As the hospital’s business associate, Care New England provides centralized corporate support including technical support and information security for the hospital’s information systems. OCR cited Care New England for failing to have an updated business associate agreement.

“WIH provided OCR with a business associate agreement with Care New England Health System effective March 15, 2005, that was not updated until August 28, 2015, as a result of OCR’s investigation, and therefore, did not incorporate revisions required under the HIPAA Omnibus Final Rule,” OCR officials stated.

The settlement with OCR includes the fine and a comprehensive corrective action plan.

During its investigation into the data breach, OCR found that from September 23, 2014 until August 28, 2015, WIH disclosed protected health information (PHI) and allowed Care New England as a business associate to create, receive, maintain, or transmit PHI on its behalf, without obtaining satisfactory assurances as required under HIPAA. WIH failed to renew or modify its existing written business associate agreement with Care New England to include the applicable implementation specifications required by the HIPAA Privacy and Security Rules.

OCR also found that from September 23, 2014, until August 28, 2015, WIH impermissibly disclosed the PHI of at least 14,004 individuals to its business associate when WIH provided Care New England with access to PHI without obtaining satisfactory assurances, in the form of a written business associate agreement, that Care New England would appropriately safeguard the PHI.

“This case illustrates the vital importance of reviewing and updating, as necessary, business associate agreements, especially in light of required revisions under the Omnibus Final Rule,” OCR Director Jocelyn Samuels said in a statement. “The Omnibus Final Rule outlined necessary changes to established business associate agreements and new requirements which include provisions for reporting.  A sample Business Associate Agreement can be found on OCR’s website to assist covered entities in complying with this requirement.”

Back in July 2014, Woman and Infants Hospital entered into a consent judgment with the Massachusetts Attorney General’s Office (AGO), and reached a settlement of $150,000 with regard to the underlying breach.

“OCR found the consent judgment to sufficiently cover most of the conduct in this breach, including the failure to implement appropriate safeguards related to the handling of the PHI contained on the backup tapes and the failure to provide timely notification to the affected individuals. While the AGO’s actions do not legally preclude OCR from imposing civil money penalties, OCR determined not to include additional potential violations in this case for the purposes of settlement, given that such potential violations had already been addressed by the AGO and based on OCR’s policy approach to concurrent cases with State AGOs,” OCR officials stated.

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