Bypassing the media attention that often accompany high-dollar penalties and settlements, the Department of Health and Human Services (HHS) has quitely reported a settlement concerning the HIPAA privacy and security rules that highlights the increasing cooperation of federal government agencies to enforce a steadily expanding and complex compliance environment.
Late in 2009, HHS opened an investigation of Management Services Organization Washington, Inc. (MSO) following a referral from the HHS Office of Inspector General (OIG) and Department of Justice, Civil Division (DOJC), which had been investigating MSO and its owner for violations of the
federal False Claims Act (FCA). During the course of its investigation, OIG discovered that MSO’s owner also owns Washington Practice Management, LLC (WPM) that earns commissions by marketing and selling Medicare Advantage plans.
According to the HHS Resolution Agreement with the company, the tip from OIG and DOJC led HHS to find that MSO:
- impermissibly disclosed electronic protected health information (ePHI) of numerous individuals to WPM without a valid authorization, for WPM’S purpose of marketing Medicare Advantage plans to those individuals; and
- did not have in place and did not implement appropriate and reasonable administrative, technical, and physical safeguards to protect the privacy of the ePHI.
Without acknowledging a HIPAA violation, MSO agreed to a resolution payment of $35,000 and to a two-year "Corrective Action Plan," which includes, among other things:
- adopting written policies and procedures to be reviewed and approved by HHS;
- obtaining a signed certification from all workers concerning the policies and procedures;
- changing its policies and procedures only with HHS approval; and
- conducting monitoring reviews every 180 days, which include performing unannounced interviews of workforce members.
It is not uncommon for companies considering compliance measures to assess the likelihood of a government audit or inquiry. Any illusion an organization may hold that it is operating “under the radar” of regulators should be shattered in the current compliance environment. Governmental agencies are increasingly able to efficiently coordinate with one another in matters of enforcement. Should HHS receive the additional $5.6 million it is seeking to enforce the HIPAA privacy and security regulations in its 2012 budget, flying under the radar will become more difficult.