Modernizing Medicine Agrees to $3M Data Breach Settlement
Modernizing Medicine, a Boca Raton, Florida-based company that provides cloud-based, AI-powered software and electronic health record systems for healthcare providers, has agreed to pay almost $3 million to settle class action data breach litigation.
The litigation stems from a July 2025 cybersecurity incident in which a criminal hacker gained access to two of its computer servers between July 9, 2025, and July 10, 2025. The servers were used for the conversion of data from retiring EHR platforms to the current Modernizing Medicine EHR platform. Data compromised in the incident included names, addresses, dates of birth, phone numbers, email addresses, limited Social Security numbers, health insurance information, and medical information. The affected individuals were notified on or around October 17, 2025. The HHS Office for Civil Rights was informed that 198,795 individuals had been affected.
A class action lawsuit – Cavallaro-Kearins v. Modernizing Medicine, Inc. – was filed on November 19, 2025, in the U.S. District Court for the Southern District of Florida by plaintiff Patricia Cavallaro-Kearins, individually and on behalf of similarly situated individuals. The lawsuit alleged that the data breach occurred as a result of insufficient cybersecurity measures, and asserted claims for negligence, breach of implied contract, invasion of privacy, unjust enrichment, and breach of fiduciary duty. Modernizing Medicine denies wrongdoing and liability.
All parties opted to explore opportunities for early resolution of the litigation, and after a full day of mediation on April 2, 2026, the material terms of a settlement were agreed upon by all parties. The settlement has now been finalized and has received preliminary approval from the court. Under the terms of the settlement, Modernizing Medicine has agreed to establish a $2,999,750.00 settlement fund to pay benefits to the class members, after attorneys’ fees and expenses, settlement administration costs, and service awards have been deducted.
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All class members are entitled to claim a two-year membership to the CyEx Medical Shield Complete medical data monitoring service, plus one of two cash payments. A claim may be submitted for reimbursement of documented losses fairly traceable to the data breach up to a maximum of $5,000 per class member. Alternatively, class members may claim a one-time pro rata cash payment, which is expected to be approximately $75 per class member, but may be higher or lower depending on the number of valid claims received. Claims must be submitted by November 2, 2026, and the final fairness hearing has been scheduled for November 17, 2026. Individuals wishing to object to the settlement or opt out have until October 19, 2026, to do so.
