The U.S. Department of Health and Human Services’ (HHS) reported today its first settlement involving a breach of unprotected electronic protected health information (ePHI) affecting fewer than 500 individuals. According to a statement from the Office for Civil Rights Director Leon Rodriguez, “This action sends a strong message to the health care industry that, regardless of size, covered entities must take action and will be held accountable for safeguarding their patients’ health information.”

The breach occurred in June 2010, when an unencrypted laptop belonging to the Hospice of North Idaho (HONI) that contained ePHI of 441 patients was stolen. The Office for Civil Rights (OCR) learned of the incident when HONI reported it to OCR pursuant to the annual reporting requirement for breaches affecting fewer than 500 individuals under the Health Information Technology for Economic and Clinical Health (HITECH). When OCR investigated, it discovered "that HONI had not conducted a risk analysis to safeguard ePHI." OCR also reported that HONI did not have in place policies or procedures to address mobile device security as required by the HIPAA Security Rule. 

HONI agreed to pay HHS $50,000 to settle potential violations of the Security Rule.