On September 2, the Office for Civil Rights (OCR) reported that it agreed to settle potential violations of the HIPAA privacy and security regulations with Cancer Care Group, Inc. The dollar amount of the settlement, $750,000, is significant, and the agreement to adopt a robust, multi-year corrective action plan under the watchful eye of the government is likely to be an unwanted strain on the business.

With 17 radiation oncologists, Cancer Care is by no means a mom and pop outfit, but it is also not a national provider. Small to mid-sized healthcare providers and their business associates need to take note. What started as a seemingly small theft issue – laptop bag stolen from an employee’s car – has led to nearly a million dollars in settlement and other costs, and years of government monitoring of the practice’s privacy and security compliance.

Thinking your healthcare or related business will not experience a breach may not be a wise approach. According to a KPMG report, highlighted by ConsumerAffairs, in the past two years 81 percent of hospitals and health insurance companies have had a data breach. The question really is, however, will your business be able to stand up to an OCR compliance review that comes along with the OCR’s investigation of the breach.

What happened: On August 29, 2012, OCR received notification from Cancer Care regarding a breach of unsecured electronic protected health information (ePHI) after a laptop bag was stolen from an employee’s car. The bag contained the employee’s computer and unencrypted backup media, which contained the names, addresses, dates of birth, Social Security numbers, insurance information and clinical information of approximately 55,000 current and former Cancer Care patients. A fairly typical scenario many businesses face, including health care providers, with the myriad of devices employees use every day in their jobs.

The OCR investigation: OCR claims Cancer Care was in “widespread non-compliance with the HIPAA Security Rule.” According to OCR’s press release, the provider “had not conducted an enterprise-wide risk analysis…did not have in place a written policy specific to the removal of hardware and electronic media containing ePHI into and out of its facilities, even though this was common practice within the organization.” So you see, it was not so much the theft of the laptop, but the alleged lack of safeguards and compliance that could have (even if it in fact would not have) prevented the breach from happening, that drew the agency’s ire.

OCR’s Corrective Action Plan (CAP): You can read the CAP here. Under the CAP, you’ll find that Cancer Care needs to get OCR’s approval before it can proceed with key compliance steps. For example, it needs to provide its risk assessment to OCR within 90 days of the effective date of the settlement agreement, and await OCR’s approval. A similar process applies for other components of the HIPAA security rules, including the development of a risk management plan and training program. Cancer Care must also provide an annual report to OCR for at least three years concerning updates or changes to its risk management plan, among a number of other things.

Take Away: No health care provider or other business wants to have a breach. But if it does, it will be less likely to face significant enforcement action by OCR if it has a compliance program in place – perform and document a risk assessment; address the risks of mobile devices; design and implement a quality training program. These are just a few of the steps a health care provider, health plan, business associate or other organization with HIPAA privacy and security obligations should be taking to mitigate these compliance risks.

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.