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Aetna Agrees to Pay $1.15 Million Settlement to Resolve NY Attorney General Data Breach Case

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Last July, Aetna sent a mailing to members in which details of HIV medications were clearly visible through the plastic windows of envelopes, inadvertently disclosing highly sensitive HIV information to individuals’ house mates, friends, families, and loved ones.

Two months later, a similar privacy breach occurred. This time the mailing related to a research study regarding atrial fibrillation (AFib) in which the term IMACT-AFIB was visible through the window of the envelope. Anyone who saw the envelope could have deduced the intended recipient had an AFib diagnosis.

The July breach triggered a class action lawsuit which was recently settled by Aetna for $17.2 million. Aetna must now also cover a $1.15 million settlement with the New York Attorney General to resolve violations of federal and state laws.

Attorney General Schneiderman launched an investigation following the breach of HIV information in July, which violated the privacy of 2,460 Aetna members in New York. The September privacy breach was discovered during the course of that investigation. 163 New York Aetna members had their privacy violated by the September mailing.

The settlement agreement explains that more than 90% of patients diagnosed with HIV face discrimination and prejudice, and approximately one in eight individuals with HIV are denied health services as a result of the stigma associated with HIV and AIDS. A breach of HIV information can therefore have severe repercussions for the victims.

New York has implemented strict laws that require HIV information to be kept secure and confidential to ensure its residents are not discouraged from coming forward to be tested and treated for HIV. It is therefore important that action is taken against organizations and individuals who violate state laws by disclosing HIV information.

As a HIPAA-covered entity, Aetna is bound by the regulations and is required to implement safeguards to ensure the confidentiality of health and HIV information. Several laws in New York also require safeguards to be implemented to protect personal health information and personally identifiable information.

Not only were state and federal laws violated by the mailing, Aetna provided the personal health information of its members to outside counsel who in turn gave that information to a settlement administrator. While the outside counsel was a business associate of Aetna and had signed a business associate agreement, its subcontractor, the settlement administrator, was also a business associate yet no business associate agreement was entered into prior to the disclosure of PHI. A further violation of HIPAA Rules.

The office of the attorney general determined Aetna’s two mailings violated 45 C.F.R § 164.502; 42 U.S.C. § 1320d-5 of HIPAA, N.Y General Business Law § 349, N.Y Public Health Law § 18(6), and N.Y Executive Law § 63(12).

The settlement agreement also draws attention to the fact that Aetna had reported a further three HIPAA breaches to the Office for Civil Rights in the past 24 months, which in total impacted more than 25,000 individuals.

In addition to the financial penalty, Aetna has agreed to update its policies, procedures and controls to enhance the privacy protections for its members and protect them from negligent disclosures of personal health information and personally identifiable information through its mailings.

“Through its own carelessness, Aetna blatantly violated its promise to safeguard members’ private health information,” said Attorney General Eric T. Schneiderman. “Health insurance companies handle personal health information on a daily basis and have a fundamental responsibility to be vigilant in protecting their members. We won’t hesitate to act to ensure that insurance companies live up to their responsibilities to the New Yorkers they serve.”

This may not be the last financial penalty Aetna has to cover in relation to the mailings. This $115 million settlement only resolves the privacy violations of 2,460 Aetna members in New York state. The mailing was sent to around 12,000 Aetna members across the United States. It is possible that other states will similarly take action over the privacy violations. The Department of Health and Human Services’ Office for Civil Rights is also investigating the data breach and may choose to penalize the insurer for violating HIPAA Rules.

Author: HIPAA Journal

HIPAA Journal provides the most comprehensive coverage of HIPAA news anywhere online, in addition to independent advice about HIPAA compliance and the best practices to adopt to avoid data breaches, HIPAA violations and regulatory fines.

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