OCR Settlement Highlights Importance of Obtaining Signed Business Associate Agreements

The Department of Health and Human Services’ Office for Civil Rights has sent another warning to HIPAA-covered entities about the need to obtain signed, HIPAA-compliant business associate agreements with all vendors prior to disclosing any protected health information.

Yesterday, OCR announced it has agreed to settle potential violations of the Health Insurance Portability and Accountability Act with The Center for Children’s Digestive Health (CCDH); a small 7-center pediatric subspecialty practice based in Park Ridge, Illinois.

On August 13, 2015, OCR conducted a HIPAA compliance review of CCDH following an investigation of FileFax Inc., which was contracted by CCDH to store inactive patient records. The FileFax investigation revealed the company had not signed a business associate agreement prior to being provided with patients’ PHI.

The subsequent compliance review of CCDH similarly revealed that no signed business associate agreement existed. CCDH had therefore impermissibly disclosed patients’ PHI to FileFax in violation of HIPAA Rules.

CCDH had provided paper records relating to 10,728 patients without officially advising FileFax, by means of a BAA, of the firm’s responsibilities to safeguard patients’ data. CCDH also received no HIPAA-compliant assurances that appropriate safeguards had been implemented to ensure the confidentiality, integrity, and availability of PHI prior to the disclosure.

FileFax had been storing documents containing the PHI of patients of CCDH since 2003, yet the earliest business associate agreement produced by CCDH and FileFax was dated October 12, 2015.

CCDH has agreed to pay OCR $31,000 to resolve the potential HIPAA violations and will adopt a corrective action plan that involves updating policies and procedures, conducting staff training on those policies and procedures and ensuring one or more employees are made responsible for ensuring HIPAA-compliant business associate agreements are obtained from all business associates.

HIPAA-covered entities are permitted to disclose the PHI of patients to their business associates; however, before any PHI is disclosed, the covered entity must enter into a contract with the business associate. The contract must explain the responsibilities the business associate has to ensure PHI is secured and safeguards are implemented to prevent unauthorized disclosures. The business associate must also be advised of the allowable uses and disclosures of PHI and must agree not to use or disclose any PHI unless required to do so under the terms of the contract or if required to do so by law.

The business associate must also be advised of the requirement to notify the covered entity in the event that any PHI is accidentally or deliberately accessed or disclosed along with the timescale for doing so. The business associate must also be advised that the failure to comply with HIPAA Rules can result in financial penalties being issued.

Further information on HIPAA Rules concerning business associate agreements can be viewed on this link.

2017 HIPAA Settlements

Last year, OCR issued one civil monetary penalty and agreed to settle potential HIPAA violations with 12 covered entities to resolve HIPAA violations – More than any other year since the HIPAA Enforcement Rule was introduced.

This year looks set to see even more HIPAA enforcement actions. The Center for Children’s Digestive Health HIPAA settlement is the sixth financial penalty in less than four months, bringing the total amount of HIPAA fines in 2017 to $11,806,000.  The other HIPAA settlements agreed between OCR and covered entities in 2017 are:

  • Metro Community Provider Network – $400,000
  • 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.