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The Coalfire Blog

Small Breach, Big Settlement

January 08, 2013, Andrew Hicks, Managing Principal, Coalfire

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Andrew Hicks

Earlier this week the Department of Health and Human Services (HHS) announced the first ever breach settlement where fewer than 500 patient records were compromised.  The $50,000 settlement was issued as a result of 441 patient records being stored on an unencrypted laptop that was stolen from the Hospice of North Idaho (HONI).  

This breach settlement not only sets the tone for stronger enforcement and penalties in the future, but also confirms that breaches involving less than 500 records are susceptible to OCR audits, corrective action plans, and monetary penalties.  According to Leon Rodriguez, Director of the OCR, “This action sends a strong message to the healthcare industry that, regardless of size, covered entities must take action and will be held accountable for safeguarding their patients' health information". The OCR’s enforcement of this security breach also emphasizes the importance of meeting the HIPAA Security Rule and HITECH requirements by covered entities and business associates regardless of the size of the organization or the magnitude of the breach.

In the healthcare industry, the most common data security deficiencies are related to a lack of:  risk assessments, security awareness and training, breach notification reporting, mobile device security, and encryption (at rest and in transit).  All of these areas can be strengthened through services such as HIPAA security assessments, gap analysis, HITRUST validation/certification, or through advisory services.

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