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OPM Alleges Health Net Refused to Fully Comply with Recent Security Audit

The U.S. Office of Personnel Management (OPM) Office of the Inspector General Office of Audits (OIG) has issued a Flash Audit Alert alleging Health Net of California has refused to cooperate with a recent security audit.

Health Net provides benefits to federal employees, and under its contract with OPM, is required to submit to audits. OPM has been conducting security audits on FEHBP insurance carriers for the past 10 years, which includes scanning for vulnerabilities that could potentially be exploited to gain access to the PHI of FEHBP members.

When OPM conducts audits, it is focused on the information systems that are used to access or store the data of Federal Employee Health Benefit Program (FEHBP) members. However, OPM points out that many insurance carriers do not segregate the data of FEHBP members from the data of commercial and other Federal customers. Audits of technical infrastructure need to be conducted on all parts of the system that have a logical or physical nexus with FEHBP data. Consequently, systems containing data other than that of FEHBP members will similarly be assessed for vulnerabilities.

In its Flash Audit Alert, OPM said Health Net refused to allow OPM to conduct vulnerability and configuration management testing and documentation was not provided that would allow OPM to test whether Health Net was able to remove information system access for contractors who no longer needed data access and for terminated employees.

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By refusing to cooperate, OPM was unable to determine whether Health Net has been acting as a responsible custodian of sensitive protected health information of FEHBP members.

Health Net maintains that it has cooperated with OPM and allowed the agency to conduct the audit, although the insurance carrier consulted with its external counsel and was advised that if it cooperated fully with OPMs requests and submitted to certain parts of the audit process, it would risk violating contracts with other third parties. Health Net has obligations to those third parties to ensure their data is protected.

Health Net maintains that it has – and will – be able to satisfy the requests of OPM and OIG without compromising the security of its system and the privacy and confidentiality of members’ and employees’ data. Health Net also claims that the allegations made in the OPM report are unfounded.

“We understand the concerns associated with work of this nature, we take great care to minimize risk. Our procedures were developed as part of a collaborative working group comprised of health insurance industry Chief Information Officers and Chief Information Security Officers,” said OPM in its report. “There is nothing unique about Health Net, its technical environment, or the nature of our proposed testing that would exempt Health Net from our oversight and this testing.”

At this stage it is unclear what, if any, action OPM will take against Health Net if the company continues to refuse to comply with its audit requests in full.

Author: Steve Alder is the editor-in-chief of HIPAA Journal. Steve is responsible for editorial policy regarding the topics covered on HIPAA Journal. He is a specialist on healthcare industry legal and regulatory affairs, and has several years of experience writing about HIPAA and other related legal topics. Steve has developed a deep understanding of regulatory issues surrounding the use of information technology in the healthcare industry and has written hundreds of articles on HIPAA-related topics.