$2.175 HIPAA Settlement Agreed with Sentara Hospitals for Breach Notification Rule and BAA Failures

The Department of Health and Human Services’ Office for Civil Rights (OCR) has announced its 8th HIPAA financial penalty of 2019. Sentara Hospitals has agreed to settle potential violations of the HIPAA Privacy and Breach Notification Rules and will pay a penalty of $2.175 million and will adopt a corrective action plan to address areas of noncompliance.

Sentara operates 12 acute care hospitals in Virginia and North Carolina and has more than 300 care facilities in both states. OCR launched a compliance investigation in response to a complaint from a patient on April 17, 2017. The patient had reported receiving a bill from Sentara containing another patient’s protected health information.

Sentara did report the breach to OCR, but the breach report stated that only 8 individuals had been affected, when the mailing had been misdirected and 577 individuals had had some of their PHI impermissibly disclosed. OCR determined that those 577 patients had their information merged with 16,342 different guarantor’s mailing labels.

OCR advised Sentara that under the HIPAA Breach Notification Rule – 45 C.F.R. § 164.408 – notifications were required and that the breach total needed to be updated, but Sentara persisted in its refusal to update the breach report and issue notifications. Sentara maintained that since the bills only contained names, account numbers, and dates of service, and not diagnoses, treatment information, and other medical information, it did not constitute a reportable breach.

OCR also found that Sentara Hospitals provides services for its member covered entities but had not entered into business associate agreements with its business associate until October 17, 2018.

Sentara Hospital’s parent organization and business associate, Sentara Healthcare, had been allowed to create, receive, maintain, and transmit PHI on its behalf without a BAA being in place. Sentara Hospitals had therefore not received satisfactory assurances that PHI would be safeguarded, in violation of 45 C.F.R. § 164.504(e)(2).

The corrective action plan requires Sentara Hospitals to revise its policies and procedures and ensure they are compliant with HIPAA Rules. Policies and procedures must be checked and revised at least annually, or more frequently if appropriate. OCR will be scrutinizing Sentara’s compliance efforts for a period of two years from the start date of the corrective action plan.

“HIPAA compliance depends on accurate and timely self-reporting of breaches because patients and the public have a right to know when sensitive information has been exposed.” said OCR Director, Roger Severino.  “When health care providers blatantly fail to report breaches as required by law, they should expect vigorous enforcement action by OCR.”

The latest settlement is another example of when HIPAA violations are uncovered in response to complaints from patients rather than data breach investigations. All it takes is for one patient to submit a complaint about a potential HIPAA violation for a compliance review to be launched. These investigations can occur at any time, which shows how important it is for healthcare organizations to ensure their policies and procedures fully meet the requirements of HIPAA.

So far in 2019, HIPAA-covered entities and business associates have paid $12,124,000 to OCR to resolve violations of HIPAA Rules.

Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. He is a specialist on legal and regulatory affairs, and has several years of experience writing about HIPAA. Steve holds a B.Sc. from the University of Liverpool.