Providers Beware: OCR Continues Aggressive Enforcement of the HIPAA Privacy and Security Rules

April 18, 2012

The Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) has just sent another strong signal to healthcare providers and plans that it intends to enforce the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules aggressively, and that it does not intend to give a pass to small healthcare providers or practices. On April 17, 2012, HHS announced that it had entered into a $100,000 settlement and executed a resolution agreement with Phoenix Cardiac Surgery, P.C., a physician practice with offices in Phoenix and Prescott, Arizona.

The settlement, as announced by HHS, marks the conclusion of an in-depth investigation by the OCR into the privacy and security practices of Phoenix Cardiac Surgery. The investigation was triggered by a report that Phoenix Cardiac Surgery was posting clinical and surgical appointments for its patients on an Internet-based calendar that was publicly accessible. However, the OCR investigation soon expanded into a full review of the entity’s HIPAA compliance. This resulted in a series of findings, including the following:

  1. The practice failed to implement adequate policies and procedures to safeguard protected health information (PHI) appropriately.
  2. The practice failed to document that it had trained its employees regarding its privacy and security policies and procedures.
  3. The practice failed to appoint a security official and to conduct a risk assessment. (The Security Rule mandates that covered entities appoint a security official and conduct an assessment of the potential risks and vulnerabilities to the confidentiality, availability and integrity of the electronic PHI (ePHI) held by the covered entity.)
  4. The practice failed to obtain business associate agreements with Internet-based email and calendar services where the provision of the service included storage of and access to its ePHI.

The OCR also found that, on a daily basis, over a period of four years, Phoenix Cardiac Surgery had transmitted ePHI from an Internet-based email account to the personal Internet-based email accounts of workforce members, underscoring the risks posed to practices by the unregulated or unsupervised use of email for the transmission of ePHI.

Although Phoenix Cardiac Surgery is a small, non-institutional provider, i.e., a physician practice with just two owners, the OCR did not relieve the practice of its obligation to comply with the basic requirements of HIPAA. Instead, the OCR required the practice to pay $100,000 to settle the claims against it and to enter into a one-year corrective action plan (CAP). Pursuant to the terms of the CAP, the practice must develop policies and procedures that comply with the HIPAA Privacy and Security Rules, send them to OCR for approval and fully implement them within 30 days of OCR’s approval. The CAP also requires the practice to obtain a signed statement from every workforce member that he or she has read, understands and will abide by the policies and procedures. The CAP requires the practice to train all workforce members who use or disclose PHI regarding the policies and procedures within 60 days of OCR’s approval of the policies. During the term of the CAP, any violation of the policies and procedures must be reported to OCR, together with steps the practice intends to take to mitigate any harm and prevent recurrence.

In announcing the settlement, Leon Rodriquez, director of OCR, strongly cautioned the provider community not to disregard HIPAA:

This case is significant because it highlights a multi-year, continuing failure on the part of this provider to comply with the requirements of the Privacy and Security Rules …. We hope that health care providers pay careful attention to this resolution agreement and understand that the HIPAA Privacy and Security Rules have been in place for many years, and OCR expects full compliance no matter the size of a covered entity.

The resolution agreement, which includes the OCR’s findings and the details of the CAP, may be found here.

If you have any questions regarding this article or HIPAA compliance more generally, you may contact Kim Kannensohn at 312.750.8649.