$400,000 HIPAA Penalty Agreed with Denver FQHC for Security Management Process Failures

The Department of Health and Human Services’ Office for Civil Rights (OCR) has taken action against a Denver, CO-based federally-qualified health center (FQHC) for security management process failures that contributed to the organization experiencing a data breach in 2011.

Metro Community Provider Network (MCPN) has agreed to pay OCR $400,000 and adopt a robust corrective action plan to resolve all HIPAA compliance issues identified during the OCR investigation.

The incident that triggered the OCR investigation was a phishing attack that occurred on December 5, 2011. A hacker sent phishing emails to (MCPN) personnel, the responses to which enabled that individual to gain access to employees’ email accounts. Those accounts contained the electronic protected health information of 3,200 patients.

OCR investigates all breaches of more than 500 patient records to determine whether healthcare organizations have experienced a breach as a direct result of violations of HIPAA Rules. OCR notes that MCPN took the necessary action following the breach to prevent further phishing attacks from being successful; however, OCR investigators uncovered multiple violations of HIPAA Rules.

Phishing attacks on healthcare organizations are to be expected and it would be unreasonable to expect healthcare organizations to be able to reduce the risk of a successful phishing attack to zero. However, HIPAA-covered entities must take steps to identify potential risks and to take action to reduce risks to an appropriate level.

One of the fundamental elements of the HIPAA Security Rule is the risk analysis. The purpose of the risk analysis is to identify risks to the confidentiality, integrity, and availability of electronic protected health information. If a risk analysis is not conducted, HIPAA-covered entities will not be able to determine with any degree of certainty whether all risks have been identified. Appropriate measures to reduce those risks to acceptable levels would therefore be unlikely to be implemented.

While OCR confirmed that MCPN had conducted a risk analysis, it had not been performed until mid-February 2012, more than two months after the phishing attack had occurred. Further, that risk analysis and all subsequent risk analyses performed by MCPN did not meet the minimum requirements of the HIPAA Security Rule.

The lack of a risk analysis meant MCPN failed to identify all risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI that the organization held. MCPN also failed to implement a risk management plan to address risks identified in the risk analysis.

OCR also determined that MCPN had failed to implement appropriate security measures to reduce risks to a reasonable and acceptable level and policies and procedures to prevent, detect, contain, and correct security violations had also not been implemented.

When deciding an appropriate settlement, OCR took into consideration MCPN’s status as a FQHC and its financial position to ensure MCPN could maintain sufficient financial standing to continue to provide ongoing patient care. The HIPAA settlement could have been considerably higher.

This is the first HIPAA settlement announced since the appointment of Roger Severino as Director of OCR. Severino issued a statement about the settlement explaining “Patients seeking health care trust that their providers will safeguard and protect their health information…Compliance with the HIPAA Security Rule helps covered entities meet this important obligation to their patient communities.”

This is the fifth HIPAA settlement of 2017. OCR has previously agreed to settle potential violations of the Health Insurance Portability and Accountability with the following HIPAA-covered entities in 2017:

  • Memorial Healthcare System – $5.5 million
  • Children’s Medical Center of Dallas- $3.2 million
  • MAPFRE Life Insurance Company of Puerto Rico – $2.2 million
  • Presense Health – $475,000

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.