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Anthem Agrees to $115 Million Settlement in Data Breach Litigation

June 26, 2017
by Heather Landi
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Indianapolis-based Anthem, the largest U.S. health insurance company, has agreed to a proposed settlement to resolve the multidistrict class action litigation relating to the 2015 cyber attack that compromised the personal information of 78.8 million people. The $115 million settlement, if approved by the Court, will be the largest data breach settlement in history, according to attorneys representing the plaintiffs.

In a statement posted to its website on Friday, Anthem stated that the settlement does not include any finding of wrongdoing, and the company is not admitting any wrongdoing or that any individuals were harmed as a result of the cyber attack. 

As previously reported by Healthcare Informatics, an examination of the breach by the California Department of Insurance revealed that very likely, “the cyber attacker was acting on behalf of a foreign government."

According to a Reuters article, the deal must still be approved by U.S. District Judge Lucy Koh in San Jose, California, who is presiding over the case. Judge Koh is scheduled to hear Plaintiffs’ motion on August 17. More than 100 lawsuits filed against Anthem over the breach were consolidated before Judge Koh.

The cyber breach was first discovered by Anthem on Jan. 27, 2015. In early February 2015, Anthem and its affiliates announced the company had suffered a major breach, which compromised 78.8 million consumer records, including records of at least 12 million minors. At that time, the payer announced details in a letter from President and CEO, Joseph R. Swedish. He said that Anthem was the target of a “very sophisticated external cyber attack.” The hackers gained access to current and former members’ names, birthdays, medical IDs/social security numbers, street addresses, email addresses and employment information, and income data. Anthem says that credit card and medical information, such as claims, test codes, and diagnostic codes were not compromised.

When Anthem discovered the cyber attack in 2015, the company offered two years of credit monitoring and identity protection services to all individuals whose data may have been impacted. According to Anthem’s statement, as part of this final resolution of the litigation, class members can receive an additional two years of credit monitoring and identity protection services, along with other significant benefits.

According to a press release from attorneys from Altshuler Berzon, Cohen Milstein, Girard Gibbs and Lieff Cabraser, who were court-appointed to lead the representation of the plaintiffs, the proposed settlement provides for Anthem to establish a $115 million settlement fund, which will be used to provide victims of the data breach at least two years of credit monitoring; cover over out-of-pocket expenses incurred by consumers as a result of the data breach; and provide cash compensation for those consumers who are already enrolled in credit monitoring.

In addition to the monetary fund, the settlement will require Anthem to guarantee a certain level of funding for information security and to implement or maintain numerous specific changes to its data security systems, including encryption of certain information and archiving sensitive data with strict access controls. The settlement is designed to protect class members from future risk, provide compensation, and ensure best cybersecurity practices to deter against future data breaches.

“We are very satisfied that the settlement is a great result for those affected and look forward to working through the settlement approval process,” Andrew Friedman, co-lead plaintiffs’ counsel, said in a statement in the press release.

Anthem executives said in the statement, “Anthem has had, for many years, a strong information security program to protect the personal data entrusted to us. As we have seen in cyber attacks against governments and private sector companies including Anthem over the past few years, many cyber threat actors are increasingly sophisticated and determined adversaries. Anthem is determined to do its part to prevent future attacks. To that end, as part of the settlement, Anthem has agreed to continue the significant information security practice changes that we undertook in the wake of the cyber attack, and we have agreed to implement additional protections over the next three years.”

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Florida Provider Pays $500K to Settle Potential HIPAA Violations

December 12, 2018
by Heather Landi, Associate Editor
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Florida-based Advanced Care Hospitalists PL (ACH) has agreed to pay $500,000 to the Office for Civil Rights (OCR) of the U.S. Department of Health and Human Services (HHS) to settle potential HIPAA compliance failures, including sharing protected health information with an unknown vendor without a business associate agreement.

ACH provides contracted internal medicine physicians to hospitals and nursing homes in west central Florida. ACH provided services to more than 20,000 patients annually and employed between 39 and 46 individuals during the relevant timeframe, according to OCR officials.

Between November 2011 and June 2012, ACH engaged the services of an individual that claimed to be a representative of a company named Doctor’s First Choice Billings, Inc. (First Choice). The individual provided medical billing services to ACH using First Choice’s name and website, but allegedly without the knowledge or permission of First Choice’s owner, according to OCR officials in a press release published last week.

A local hospital contacted ACH on February 11, 2014 and notified the organization that patient information was viewable on the First Choice website, including names, dates of birth and social security numbers. In response, ACH was able to identify at least 400 affected individuals and asked First Choice to remove the protected health information from its website. ACH filed a breach notification report with OCR on April 11, 2014, stating that 400 individuals were affected; however, after further investigation, ACH filed a supplemental breach report stating that an additional 8,855 patients could have been affected.

According to OCR’s investigation, ACH never entered into a business associate agreement with the individual providing medical billing services to ACH, as required by the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules, and failed to adopt any policy requiring business associate agreements until April 2014. 

“Although ACH had been in operation since 2005, it had not conducted a risk analysis or implemented security measures or any other written HIPAA policies or procedures before 2014. The HIPAA Rules require entities to perform an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of an entity’s electronic protected health information,” OCR officials stated in a press release.

In a statement, OCR Director Roger Severino said, “This case is especially troubling because the practice allowed the names and social security numbers of thousands of its patients to be exposed on the internet after it failed to follow basic security requirements under HIPAA.”

In addition to the monetary settlement, ACH will undertake a robust corrective action plan that includes the adoption of business associate agreements, a complete enterprise-wide risk analysis, and comprehensive policies and procedures to comply with the HIPAA Rules. 

In a separate case announced this week, a Colorado-based hospital, Pagosa Springs Medical Center, will pay OCR $111,400 to settle potential HIPAA violations after the hospital failed to terminate a former employee’s access to electronic protected health information (PHI).

Pagosa Springs Medical Center (PSMC) is a critical access hospital, that at the time of OCR’s investigation, provided more than 17,000 hospital and clinic visits annually and employs more than 175 individuals.

The settlement resolves a complaint alleging that a former PSMC employee continued to have remote access to PSMC’s web-based scheduling calendar, which contained patients’ electronic protected health information (ePHI), after separation of employment, according to OCR.

OCR’s investigation revealed that PSMC impermissibly disclosed the ePHI of 557 individuals to its former employee and to the web-based scheduling calendar vendor without a HIPAA required business associate agreement in place. 

The hospital also agreed to adopt a substantial corrective action plan as part of the settlement, and, as part of that plan, PSMC has agreed to update its security management and business associate agreement, policies and procedures, and train its workforce members regarding the same.

“It’s common sense that former employees should immediately lose access to protected patient information upon their separation from employment,” Severino said in a statement. “This case underscores the need for covered entities to always be aware of who has access to their ePHI and who doesn’t.”

Covered entities that do not have or follow procedures to terminate information access privileges upon employee separation risk a HIPAA enforcement action. Covered entities must also evaluate relationships with vendors to ensure that business associate agreements are in place with all business associates before disclosing protected health information. 

 

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Eye Center in California Switches EHR Vendor Following Ransomware Incident

December 11, 2018
by Rajiv Leventhal, Managing Editor
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Redwood Eye Center, an ophthalmology practice in Vallejo, Calif., has notified more than 16,000 patients that its EHR (electronic health record) hosting vendor experienced a ransomware attack in September.

In the notification to the impacted patients, the center’s officials explained that the third-party vendor that hosts and stores Redwood’s electronic patient records, Illinois-based IT Lighthouse, experienced a data security incident which affected records pertaining to Redwood patients. Officials also said that IT Lighthouse hired a computer forensics company to help them after the ransomware attack, and Redwood worked with the vendor to restore access to our patient information.

Redwood’s investigation determined that the incident may have involved patient information, including patient names, addresses, dates of birth, health insurance information, and medical treatment information.

Notably, Redwood will be changing its EMR hosting vendor, according to its officials. Per the notice, “Redwood has taken affirmative steps to prevent a similar situation from arising in the future. These steps include changing medical records hosting vendors and enhancing the security of patient information.”

Ransomware attacks in the healthcare sector continue to be a problem, but at the same time, they have diminished substantially compared to the same time period last year, as cyber attackers move on to more profitable activities, such as cryptojacking, according to a recent report from cybersecurity firm Cryptonite.

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Report: 30 Percent of Healthcare Databases Exposed Online

December 10, 2018
by Heather Landi, Associate Editor
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Hackers are using the Dark Web to buy and sell personally identifiable information (PII) stolen from healthcare organizations, and exposed databases are a vulnerable attack surface for healthcare organizations, according to a new cybersecurity research report.

A research report from IntSights, “Chronic [Cyber] Pain: Exposed & Misconfigured Databases in the Healthcare Industry,” gives an account of how hackers are tracking down healthcare personally identifiable information (PII) data on the Dark Web and where in the attack surface healthcare organizations are most vulnerable.

The report explores a key area of the healthcare attack surface, which is often the easiest to avoid—exposed databases. It’s not only old or outdated databases that get breached, but also newly established platforms that are vulnerable due to misconfiguration and/or open access, the report authors note.

Healthcare organizations have been increasingly targeted by threat actors over the past few years and their most sought-after asset is their data. As healthcare organizations attempt to move data online and increase accessibility for authorized users, they’ve dramatically increased their attack surface, providing cybercriminals with new vectors to steal personally identifiable information (PII), according to the report. Yet, these organizations have not prioritized investments in cybersecurity tools or procedures.

Healthcare budgets are tight, the report authors note, and if there’s an opportunity to purchase a new MRI machine versus make a new IT or cybersecurity hire, the new MRI machine often wins out. Healthcare organizations need to carefully balance accessibility and protection.

In this report, cyber researchers set out to show that the healthcare industry as a whole is vulnerable, not due to a specific product or system, but due to lack of process, training and cybersecurity best practices. “While many other industries suffer from similar deficiencies, healthcare organizations are particularly at risk because of the sensitivity of PII and medical data,” the report states.

The researchers chose a couple of popular technologies for handling medical records, including known and widely used commercial databases, legacy services still in use today, and new sites or protocols that try to mitigate some of the vulnerabilities of past methods. The purpose of the research was to demonstrate that hackers can easily find access to sensitive data in each state: at rest, in transit or in use.

The researchers note that the tactics used were pretty simple: Google searches, reading technical documentation of the aforementioned technologies, subdomain enumeration, and some educated guessing about the combination of sites, systems and data. “All of the examples presented here were freely accessible, and required no intrusive methods to obtain. Simply knowing where to look (like the IP address, name or protocol of the service used) was often enough to access the data,” the report authors wrote.

The researchers spent 90 hours researching and evaluated 50 database. Among the findings outlined in the report, 15 databases were found exposed, so the researchers estimate about 30 percent of databases are exposed. The researchers found 1.5 million patient records exposed, at a rate of about 16,687 medical records discovered per hour.

The estimated black-market price per medical record is $1 per record. The researchers concluded that hackers can find a large number of records in just a few hours of work, and this data can be used to make money in a variety of ways. If a hacker can find records at a rate of 16,687 per hour and works 40 hours a week, that hacker can make an annual salary of $33 million, according to the researchers.

“It’s also important to note that PII and medical data is harder to make money with compared to other data, like credit card info. Cybercriminals tend to be lazy, and it’s much quicker to try using a stolen credit card to make a fraudulent purchase than to buy PII data and run a phishing or extortion campaign. This may lessen the value of PII data in the eyes of some cybercriminals; however, PII data has a longer shelf-life and can be used for more sophisticated and more successful campaigns,” IntSights security researcher and report author Ariel Ainhoren wrote.

The researchers used an example of hospital using a FTP server. “FTP is a very old and known way to share files across the Internet. It is also a scarcely protected protocol that has no encryption built in, and only asks you for a username and password combination, which can be brute forced or sniffed

by network scanners very easily,” Ainhoren wrote. “Here we found a hospital in the U.S. that has its FTP server exposed. FTP’s usually hold records and backup data, and are kept open to enable backup to a remote site. It could be a neglected backup procedure left open by IT that the hospital doesn’t even know exists.”

According to the report, hackers have three main motivations for targeting healthcare organizations and medical data:

  • State-Sponsored APTs Targeting Critical Infrastructure: APTs are more sophisticated and are usually more difficult to stop. They will attempt to infiltrate a network to test tools and techniques to set the stage for a larger, future attack, or to obtain information on a specific individual’s medical condition.
  • Attackers Seeking Personal Data: Attackers seeking personal data can use it in multiple ways. They can create and sell PII lists, they can blackmail individuals or organizations in exchange for the data, or they can use it as a basis for further fraud, like phishing, Smishing, or scam calls.
  • Attackers Taking Control of Medical Devices for Ransom: Attackers targeting vulnerable infrastructure won’t usually target healthcare databases, but will target medical IT equipment and infrastructure to spread malware that exploits specific vulnerabilities and demands a ransom to release the infected devices. Since medical devices tend to be updated infrequently (or not at all), this provides a relatively easy target for hackers to take control.

The report also offers a few general best practices for evaluating if a healthcare organization’s data is exposed and/or at risk:

  • Use Multi-Factor Authentication for Web Applications: If you’re using a system that only needs a username and password to login, you’re making it significantly easier to access. Make sure you have MFA setup to reduce unauthorized access.
  • Tighter Access Control to Resources: Limit the number of credentials to each party accessing the database. Additionally, limit specific parties’ access to only the information they need. This will minimize your chance of being exploited through a 3rd party, and if you are, will limit the damage of that breach.
  • Monitor for Big or Unusual Database Reads: These may be an indication that a hacker or unauthorized party is stealing information. It’s a good idea to setup limits on database reads and make sure requests for big database reads involve some sort of manual review or confirmation.
  • Limit Database Access to Specific IP Ranges: Mapping out the organizations that need access to your data is not an easy task. But it will give you tighter control on who’s accessing your data and enable you to track and identify anomalous activity. You can even tie specific credentials to specific IP ranges to further limit access and track strange behavior more closely.

 

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