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OCR Fines Children’s Medical Center of Dallas $3.2M Due to HIPAA Non-Compliance

February 1, 2017
by Heather Landi
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The U.S. Department of Health and Human Services, Office for Civil Rights (OCR) has fined Children’s Medical Center of Dallas $3.2 million due to a Health Insurance Portability and Accountability Act of 1996 (HIPAA) breach that resulted in the impermissible disclosure of unsecured electronic protected health information (ePHI).

According to OCR, the breaches resulted from the losses of an unencrypted BlackBerry device and laptop in 2009 and 2013, respectively, that contained the unsecured ePHI of about 6,260 individuals.

The civil penalty also is the result of what OCR described as the hospital’s non-compliance "over many years with multiple standards of the HIPAA Security Rule.” Children’s is a pediatric hospital in Dallas, Texas, and is part of Children’s Health, the seventh largest pediatric health care provider in the nation.

According to an OCR press release, on January 18, 2010, Children’s Medical Center of Dallas filed a breach report with OCR indicating the loss of an unencrypted, non-password protected BlackBerry device at the Dallas/Fort Worth International Airport on November 19, 2009. 

“The device contained the ePHI of approximately 3,800 individuals. On July 5, 2013, Children's filed a separate HIPAA Breach Notification Report with OCR, reporting the theft of an unencrypted laptop from its premises sometime between April 4 and April 9, 2013. Children's reported the device contained the ePHI of 2,462 individuals. Although Children's implemented some physical safeguards to the laptop storage area (e.g., badge access and a security camera at one of the entrances), it also provided access to the area to workforce not authorized to access ePHI,” OCR officials wrote.

OCR contends that its investigation revealed Children’s noncompliance with HIPAA Rules, specifically, “a failure to implement risk management plans, contrary to prior external recommendations to do so, and a failure to deploy encryption or an equivalent alternative measure on all of its laptops, work stations, mobile devices and removable storage media until April 9, 2013.”

OCR officials stated, “Despite Children's knowledge about the risk of maintaining unencrypted ePHI on its devices as far back as 2007, Children's issued unencrypted BlackBerry devices to nurses and allowed its workforce members to continue using unencrypted laptops and other mobile devices until 2013. 

The agency issued a Notice of Proposed Determination in accordance with 45 CFR 160.420, which included instruction for how Children’s Medical Center of Dallas could file a request for a hearing. According to OCR officials, Children’s did not request a hearing, and OCR then issued a Notice of Final Determination. The hospital paid the full civil money penalty of $3.2 million.

“Ensuring adequate security precautions to protect health information, including identifying any security risks and immediately correcting them, is essential” OCR Acting Director Robinsue Frohboese, said in a prepared statement. “Although OCR prefers to settle cases and assist entities in implementing corrective action plans, a lack of risk management not only costs individuals the security of their data, but it can also cost covered entities a sizable fine.”

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