5 Lessons In One Big HIPAA Penalty

Posted on February 2, 2017 I Written By

The following is a guest blog post by Mike Semel, President and Chief Compliance Officer at Semel Consulting.

The federal Office for Civil Rights just announced a $ 3.2 million penalty against Children’s Medical Center of Dallas.

5 Lessons Learned from this HIPAA Penalty

  1. Don’t ignore HIPAA
  2. Cooperate with the enforcers
  3. Fix the problems you identify
  4. Encrypt your data
  5. Not everyone in your workforce should be able to access Protected Health Information

If you think complying with HIPAA isn’t important, is expensive, and annoying, do you realize you could be making a $3.2 million decision? In this one penalty there are lots of hidden and not-so-hidden messages.

1. A $ 3.2 million penalty for losing two unencrypted devices, 3 years apart.

LESSON LEARNED: Don’t ignore HIPAA.

If Children’s Medical Center was paying attention to HIPAA as it should have, it wouldn’t be out $3.2 million that should be used to treat children’s medical problems. Remember that you protecting your patients’ medical information is their Civil Right and part of their medical care.

2. This is a Civil Money Penalty, not a Case Resolution.

What’s the difference? A Civil Money Penalty is a fine. It could mean that the entity did not comply with the investigation; (as in this case) did not respond to an invitation to a hearing; or did not follow corrective requirements from a case resolution. Most HIPAA penalties are Case Resolutions, where the entity cooperates with the enforcement agency, and which usually results in a lower dollar penalty than a Civil Money Penalty.

LESSON LEARNED: Cooperate with the enforcers. No one likes the idea of a federal data breach investigation, but you could save a lot of money by cooperating and asking for leniency. Then you need to follow the requirements outlined in your Corrective Action Plan.

3. They knew they had security risks in 2007 and never addressed them until 2013, after a SECOND breach.

Children’s Medical Center had identified its risks and knew it needed to encrypt its data as far back as 2007, but had a breach of unencrypted data in 2010 and another in 2013.

LESSON LEARNED: Don’t be a SLOW LEARNER. HIPAA requires that you conduct a Security Risk Analysis AND mitigate your risks. Self-managed risk analyses can miss critical items that will result in a breach. Paying for a risk analysis and filing away the report without fixing the problems can turn into a $ 3.2 million violation. How would you explain that to your management, board of directors, your patients, and the media, if you knew about a risk and never did anything to address it? How will your management and board feel about you when they watch $3.2 million be spent on a fine?

4. There is no better way to protect data than by encrypting it.

HIPAA gives you some leeway by not requiring you to encrypt all of your devices, as long as the alternative methods to secure the data are as reliable as encryption. There’s no such thing.

If an unencrypted device is lost or stolen, you just proved that your alternative security measures weren’t effective. It amazes me how much protected data we find floating around client networks. Our clients swear that their protected data is all in their patient care system; that users are given server shares and always use them; that scanned images are directly uploaded into applications; and that they have such good physical security controls that they do not need to encrypt desktop computers and servers.

LESSON LEARNED: You must locate ALL of your data that needs to be protected, and encrypt it using an acceptable method with a tracking system. We use professional tools to scan networks looking for protected data.

5. Not everyone in your workforce needs access to Protected Health Information.

We also look at paper records storage and their movement. This week we warned a client that we thought too many workforce members had access to the rooms that store patient records. The Children’s Medical Center penalty says they secured their laptops but “provided access to the area to workforce not authorized to access ePHI.”

LESSON LEARNED: Is your Protected Health Information (on paper and in electronic form) protected against unauthorized physical access by your workforce members not authorized to access PHI?

You can plan your new career after your current organization gets hit with a preventable $ 3.2 million penalty, just like Children’s Medical Center. Or, you can take HIPAA seriously, and properly manage your risks.

Your choice.

About Mike Semel
mike-semel-hipaa-consulting
Mike Semel is the President and Chief Compliance Officer for Semel Consulting. He has owned IT businesses for over 30 years, has served as the Chief Information Officer for a hospital and a K-12 school district, and as the Chief Operating Officer for a cloud backup company. Mike is recognized as a HIPAA thought leader throughout the healthcare and IT industries, and has spoken at conferences including NASA’s Occupational Health conference, the New York State Cybersecurity conference, and many IT conferences. He has written HIPAA certification classes and consults with healthcare organizations, cloud services, Managed Service Providers, and other business associates to help build strong cybersecurity and compliance programs. Mike can be reached at 888-997-3635 x 101 or mike@semelconsulting.com.