The Health Information Technology for Economic and Clinical Health law (“HITECH”) made a number of changes for HIPAA covered entities and business associates. One key change stems from Section 13411 of HITECH, which gives the Secretary of the Department of Health and Human Services authority to conduct “periodic audits to ensure that covered entities and business associates” comply with the privacy and security mandates under HIPAA. Susan McAndrew, the Deputy Director for Health Information Privacy at the Office of Civil Rights ("OCR"), has been speaking out about the nature, scope and timing of these audits, which are expected to begin in February 2012. A summary of reports about the audit program follows below.  

Covered entities and business associates need to be prepared and take stock of their HIPAA compliance. One hundred percent compliance can be an elusive goal, particularly in a short time frame. So, perhaps a more efficient way to prepare for the coming wave of audits it to look, at a minimum, for the low hanging fruit, such as: (i) having clear policies and procedures on topics such as access management, breach notification, discipline, passwords, managing portable data storage devices, distributing notices of privacy practices, and similar items, (ii) conducting and documenting training of workforce members, and (iii) ensuring appropriate agreements are in place with business associates and subcontractors.   

According to statements from Ms. McAndrew about the planned audits, as reported in Employer’s Guide to HIPAA Privacy Requirements, a Thomson Publication, and elsewhere:

  • The 150 planned audits will likely commence in February 2012, and be completed by the end of 2012.
  • Covered entities will be the prime focus of this initial audit effort, however, the agency expects to also audit business associates.
  • The decision of what entities to audit will not be based on specific incidents, but on an objective process aimed to learn what are the compliance challenges for the entire industry. 
  • OCR decided to take a traditional approach to auditing – that is, on-site audits.
  • The audits are not part of the agency’s enforcement function, but certainly could lead to enforcement based on the audit findings.
  • Audits likely will incorporate recommendations of HHS’ Office of Inspector General
  • OCR will (i) provide advance notice of the audit; (ii) seek documentation well in advance of coming on-site, and (iii) provide an opportunity for the covered entity or business associate to comment on audit findings.
  • While audit findings will be made public, the agency likely will aggregate the audit findings before making them public.

On-site visits, to be performed by KPMG LLP, the contractor selected to design and perform the audits, will involve, among other things:

  • interviewing leadership, particuluarly those charged with privacy compliance,
  • examining physical features and operations,
  • assessing consistency of process to policy, and
  • observation of compliance with regulatory requirements.

KPMG will submit a report of its audit findings to OCR. Among other things, the report will include for each finding:

  • Condition: the defect or noncompliant status observed, and evidence of each
  • Criteria: a clear demonstration that each negative finding is a potential violation of the Privacy or Security Rules, with citation
  • Cause: the reason that the condition exists, along with identification of supporting documentation used
  • Effect: the risk or noncompliant status that results from the finding
  • Recommendations for addressing each finding
  • Entity corrective actions taken, if any