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HHS Announces First HIPAA Breach Settlement Involving Less than 500 Patients

January 2, 2013
by John DeGaspari
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Hospice of North Idaho settles HIPAA security case for $50,000

The Hospice of North Idaho (HONI), Hayden, Idaho, has agreed to pay the U.S. Department of Health and Human Services’ (HHS) $50,000 to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule.  This is the first settlement involving a breach of unprotected electronic protected health information (ePHI) affecting fewer than 500 individuals.

The HHS Office for Civil Rights (OCR) began its investigation after HONI reported to HHS that an unencrypted laptop computer containing the electronic protected health information (ePHI) of 441 patients had been stolen in June 2010.  Laptops containing ePHI are regularly used by the organization as part of their field work.  Over the course of the investigation, OCR discovered that HONI had not conducted a risk analysis to safeguard ePHI, and did not have in place policies or procedures to address mobile device security as required by the HIPAA Security Rule. (Since the June 2010 theft, HONI has taken extensive additional steps to improve their HIPAA Privacy and Security compliance program, according to HHS).

“This action sends a strong message to the health care industry that, regardless of size, covered entities must take action and will be held accountable for safeguarding their patients’ health information.” said OCR Director Leon Rodriguez.

The Health Information Technology for Economic and Clinical Health (HITECH) Breach Notification Rule requires covered entities to report an impermissible use or disclosure of protected health information, or a “breach,” of 500 individuals or more to the Secretary of HHS and the media within 60 days after the discovery of the breach.  Smaller breaches affecting less than 500 individuals must be reported to the Secretary on an annual basis.

OCR and the HHS Office of the National Coordinator for Health Information Technology (ONC) have launched an new educational initiative, Mobile Devices: Know the RISKS. Take the STEPS. PROTECT and SECURE Health Information that offers health care providers and organizations practical tips on ways to protect their patients’ health information when using mobile devices. More information can be found at



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