Hybrid Entities Ripe For HIPAA Enforcement Actions

Posted on February 8, 2017 I Written By

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

As some readers will know, HIPAA rules allow large organizations to separate out parts of the organization which engage in HIPAA-covered functions from those that do not. When they follow this model, known as a “hybrid entity” under HIPAA, organizations must take care to identify the “components” of its organization which engage in functions covered by HIPAA, notes attorney Matthew Fisher in a recent article.

If they don’t, they may get into big trouble, as signs suggest that the Office for Civil Rights will be taking a closer look at these arrangements going forward, according to attorneys.  In fact, the OCR recently hit the University of Massachusetts Amherst with a $650,000 fine after a store of unsecured electronic protected health information was breached. This action, the first addressing the hybrid entity standard under HIPAA, asserted that UMass had let this data get breached because it hadn’t treated one of its departments as a healthcare component.

UMass’s troubles began in June 2013, when a workstation at the UMass Center for Language, Speech and Hearing was hit with a malware attack. The malware breach led to the disclosure of patient names, addresses, Social Security numbers, dates of birth, health insurance information and diagnoses and procedure codes for about 1,670 individuals. The attack succeeded because UMass didn’t have a firewall in place.

After investigating the matter, OCR found that UMass had failed to name the Center as a healthcare component which needed to meet HIPAA standards, and as a result had never put policies and procedures in place there to enforce HIPAA compliance. What’s more, OCR concluded that – violating HIPAA on yet another level – UMass didn’t conduct an accurate and thorough risk analysis until September 2015, well after the original breach.

In the end, things didn’t go well for the university. Not only did OCR impose a fine, it also demanded that UMass take corrective action.

According to law firm Baker Donelson, this is a clear sign that the OCR is going to begin coming down on hybrid entities that don’t protect their PHI appropriately or erect walls between healthcare components and non-components. “Hybrid designation requires precise documentation and routine updating and review,” the firm writes. “It also requires implementation of appropriate administrative, technical and physical safeguards to prevent non-healthcare components from gaining PHI access.”

And the process of selecting out healthcare components for special treatment should never end completely. The firm advises its clients review the status of components whenever they are added – such as, for example, a walk-in or community clinic – or even when new enterprise-wide systems are implemented.

My instinct is that problems like the one taking place at UMass, in which hybrid institutions struggle to separate components logically and physically, are only likely to get worse as healthcare organizations consolidate into ACOs.

I assume that under these loosely consolidated business models, individual entities will still have to mind their own security. But at the same time, if they hope to share data and coordinate care effectively, extensive network interconnections will be necessary, and mapping who can and can’t look at PHI is already tricky. I don’t know what such partners will do to keep data not only within their network, but out of the hands of non-components, but I’m sure it’ll be no picnic.