Linking his announcement to National Privacy Day, January 28, 2013, Maryland Attorney General Douglas F. Gansler informed the public that his office has formed an Internet Privacy Unit. (See similar step taken by Connecticut AG)

The stated purpose of the Unit is to protect the privacy of online users. The Unit will be charged with "monitor[ing] companies to ensure they are in compliance with state and federal consumer protection laws." In addition, the Unit will "examine weaknesses in online privacy policies" and help to create awareness about privacy rights. Of course, the Unit also will pursue enforcement actions to ensure consumer protection.

As in other states, such as Massachusetts and California, Maryland has a Personal Information Protection Act.  The Act provides, in part:

To protect personal information from unauthorized access, use, modification, or disclosure, a business that owns or licenses personal information of an individual residing in the State shall implement and maintain reasonable security procedures and practices that are appropriate to the nature of the personal information owned or licensed and the nature and size of the business and its operations.

Md. Code Ann. Comm. Section 14-3503. The Attorney General’s Office has published some guidance about the data breach provisions of the law.

Maryland businesses and businesses which maintain personal information about Maryland residents should review their online privacy statements, as well as the policies and procedures for safeguarding personal information. In his press release, Attorney General Gansler acknowledged "the emergence and evolution of the Digital Age has created new and significant privacy risks for both consumers and businesses." Businesses need to be prepared to address these risks and defend against enforcement activities.

As we continue to examine the final HIPAA privacy and security regulations, as amended by the HITECH Act and the Genetic Information Nondiscrimination Act, we pulled together a summary of some of the key points. We fully expect additional sub-regulatory guidance to be provided by OCR, such as frequently asked questions and sample business associate agreement provisions.

In honor of National Data Privacy Day, we have laid out 13 key issues affecting businesses in 2013. While the list is by no means exhaustive, it does provide critical areas businesses will need to consider in 2013.

  1. BYOD. As advancements in technology continue at a breakneck pace, many businesses are confronted with the idea of implementing a Bring Your Own Device (“BYOD”) program. Under these programs, employees are permitted to connect their own personal devices to the company’s networks and systems to complete job tasks either in the office or working remotely. While BYOD programs have advantages, they also have associated risks. Developing a thorough implementation strategy with appropriate policies is critical.
  2. Bans On Requesting Social Media Passwords. As we have previously discussed  fourteen states introduced legislation in 2012 which would prohibit employers from requiring current, or prospective, employees to disclose a user name or password for a personal social media account. Six states have passed and/or enacted such legislation and it is anticipated that other states will pass similar measures in 2013.
  3. Final HIPAA Regulations. On January 17, 2012, the Office for Civil Rights released final privacy and security regulations under the Health Insurance Portability and Accountability Act. In addition to incorporating the HITECH Act which, among other things, expands the application of the rules to business associates, the final rules also apply the rules to subcontractors and remove the risk of harm trigger for data breaches affecting unsecured protected health information.
  4. Disaster Recovery Plans. Hurricane Sandy caused extensive damage on the east coast in 2012, greatly affecting not only personal residences, but many businesses up and down the coast. Unfortunately, protecting information and technology assets from natural disasters and other emergencies is often an afterthought. However, developing a comprehensive disaster recovery plan now can avoid the significant expense, and often irretrievable loss of data, associated with natural disasters.
  5. Develop a Plan for Responding to a Breach Notification. All state and federal data breach notification requirements currently in effect require notice be provided as soon as possible. Delays in notification viewed as unreasonable could trigger an inquiry by the state’s Attorney General, or in the case of HIPAA protected health information, the Office of Civil Rights. This is true even when the number of individuals affected is relatively small.
  6. Investigating Social Media. As the use of social media continues to grow throughout the world, it is only natural that social media content is being sought to aid in litigation. While public content may generally be utilized without issue, if private content is accessed improperly, serious repercussions can follow. This is especially true for attorneys and their staff who attempt to aid their clients by accessing social media content.
  7. International Data Protection. More and more company information is being stored in electronic format and shared with various corporate divisions through company intranets or email. While U.S. law requires some safeguarding of this information, international protections on personal information can be much more stringent. When the transfer of data across international borders is possible, or actively occurring, companies should be advised on the potential risks and requirements associated with same.
  8. Develop a Written Information Security Program. Even if adopting a written information security program (WISP) to protect personal information is not an express statutory or regulatory mandate in your state, having one is critical to addressing information risk. Not only will a WISP better position a company when defending claims related to a data breach, but it will help the company manage and safeguard critical information, and may even help the company avoid whistleblower claims from employees. For some companies, a WISP can be a competitive advantage. Of course, in states like Massachusetts, Maryland, Oregon, Texas, Connecticut and others, a WISP in one form or another is required.
  9. Risk Assessment. Many businesses remain unaware of how much personal and confidential information they maintain, who has access to it, how it is used and disclosed, how it is safeguarded, and so on. Getting a handle on a business’ critical information assets must be the first step, and is perhaps the most important step to tackling information risk. You simply can’t adequately safeguard something you are not aware exists. And failing to conduct a risk assessment may subject the business to penalties under federal and/or state law.
  10. Insurance. Like many other risks, information risk can be addressed in part through insurance. More carriers are developing products dealing with personal information risk, and specifically data breach response. This kind of coverage should be a part of any CIO, privacy officer or risk manager’s toolkit for safeguarding information.
  11. Training. A necessary component of any WISP and a required element under most federal and state laws mandating data security is training. In addition to meeting compliance requirements, training employees and supervisors also will aid in defending any potential breach of privacy claim that may be asserted against the company.
  12. Carefully Integrate New Technologies. As businesses look for new technologies to increase productivity, cut costs, and gain a competitive advantage, how those technologies address information risk must be a factor in the decision to adopt.
  13. Watch for New Legislation. Today, managing data and ensuring its privacy, security and integrity is critical for businesses and individuals, and is increasingly becoming the subject of broad, complex regulation. As no national law requiring the protection of personal information has yet to be passed in the U.S., companies are left to navigate the constantly evolving web of growing state legislation. Companies therefore need to stay tuned in order to continue to remain compliant and competitive in this regard.

Under the HITECH Act, business associates are subject to the HIPAA privacy and security rules (the "HIPAA Rules") virtually to the same extent as covered entities. In addition to implementing this change for business associates ("BAs"), and providing additional guidance concerning what entities are business associates, the final HIPAA regulations issued last week also treat certain subcontractors of BAs as BAs directly subject to the HIPAA Rules. As a result of some of these changes, covered entities and BAs need to re-examine the relationships with their subcontractors to ensure they obtain the appropriate satisfactory assurances concerning the "protected health information" (PHI) they make available to those subcontractors.

Below are some of the key points from the final regulations concerning BAs and subcontractors:

  • Subcontractors. The final HIPAA regulations provide that subcontractors that create, receive, maintain, or transmit PHI on behalf of a BA are business associates. This is a significant expansion of the application of the HIPAA Rules; it makes subcontractors directly liable under the HIPAA Rules.

As a result of this change, just as covered entities need to ensure that they obtain satisfactory assurances concerning compliance with the HIPAA Rules (usually in the form of a business associate agreement, BAA) from their BAs, BAs must do the same with regard to certain subcontractors. This must continue no matter how far “down the chain” the PHI flows.

  • Business Associate Agreement Not Necessary to Establish Status as Business Associate. The final HIPAA regulations confirm that persons and entities that meet the definition of a BA have that status regardless of whether a "business associate agreement" is in place.
  • Data Storage Companies. Entities that maintain PHI (digital or hard copy) on behalf of a covered entity are BAs, "even if [they] do not actually view the [PHI]."  This provision may create significant compliance issues for cloud service providers, as well as hard copy document storage companies, that have access to the records of their clients but may never look at them. The conduit exception is a narrow one and only applies transmissions of data, not storage. 
  • Certain Groups Not Considered Business Associates.
    • Researchers generally are not considered BAs when performing research functions.
    • Banking institutions generally are not considered BAs with respect to certain payment processing activities (e.g., cashing a check or conducting a funds transfer)
    • Malpractice insurers generally are not considered BAs when providing services related to the insurance, but may be BAs when providing risk management and similar services to covered entities.

Transition rule for compliance. A transition rule under the final HIPAA regulations permits covered entities and BAs to continue to operate under certain existing contracts for up to one year beyond the compliance date (September 23, 2013) of the final regulations. A qualifying business associate agreement will be deemed compliant until the earlier of (i) the date such agreement is renewed or modified on or after September 23, 2013, or (ii) September 22, 2014. This rule only applies to the language in the agreements, the parties must operate as required under the HIPAA Rules in accordance with the applicable compliance dates. 

Covered entities and business associates may want to act more quickly to identify and contract with those individuals and entities from whom they must obtain satisfactory assurances under HIPAA.

The Office for Civil Rights released on January 17, 2013, final privacy and security regulations (563 pages) under the Health Insurance Portability and Accountability Act. The rules address four key issues:

  • Reflecting the changes made by the Health Information for Economic and Clinical Health Act (HITECH);
  • Revisions to the HIPAA enforcement rule;
  • Updates to the previously issued data breach regulations; and
  • Incorporating the changes made by the Genetic Information Nondiscrimination Act.

In general, covered entities and business associates will need to comply by September 23, 2013. We expect to be reporting on some of the key changes shortly.  

ACCESS SUMMARY HERE
 

Following the mass shootings in Newtown, CT, and Aurora, CO, Office for Civil Rights Director Leon Rodriguez issued a letter on January 15, 2013, reminding covered health care providers about disclosures of protected health information that may be made to avert threats to health and safety.

The letter points out, for example, that mental health professionals may alert police, a parent or other family member, school administrators or campus police, and others who are in a position to stop a credible threat by a patient to inflict serious and imminent bodily harm on one or more persons. It is important that the letter also points out that while HIPAA may permit the disclosure, other federal and state laws, along with professional ethical standards, need to be taken into account because they may provide greater protections. Of course, health care providers should not wait for a crisis to happen to think through these issues, but should instead address this issue in its crisis management policy.

 

In 2012, California took significant steps to increase privacy protections for users of mobile applications (apps) which involved working with companies such as Amazon, Apple, Facebook, Google, Hewlett-Packard, and Microsoft. In July 2012, the Attorney General created the Privacy Enforcement and Protection Unit, with the mission of protecting the inalienable right to privacy conferred by the California Constitution.

These efforts led to the "Privacy on the Go" booklet published this month which sets out a range of helpful recommendations for app developers. Of course, many of the same principles discussed in this booklet would be helpful to any organization seeking to secure personal information. 

Approximately 233 pages of confidential patient grievance files are at the center of a legal storm in U.S. District Court for the District of Minnesota.  In the case of Peterson v. HealthEast Woodwinds Hospital, the plaintiff, a former Patient Advocate, alleges she was instructed to improperly destroy medical files. According to her Complaint, this caused Peterson stress that required her to take a leave of absence and led her to attempt suicide. In her Complaint, Peterson asserts counts under the Family Medical Leave Act, Improper Destruction of Documents, Violation of Public Policy, and Negligent and Intentional Infliction of Emotional Distress. Among other things, she alleges she was told to remove and destroy and medical related correspondence with patients or families that could become discoverable during any potential medical negligence or personal injury claim against the hospital. She also alleges she was ordered not to discuss with a first-time mother patient an allegation that an OB-GYN physician was inebriated during a delivery. Peterson was terminated on June 1, 2011 for not coming to work and failing to maintain contact with her employer.

Prior to her departure, Peterson took home medical records and files which she claims support her legal claims. When the hospital learned of this in the course of discovery, it demanded the documents be returned citing patient privacy concerns under HIPAA. After the parties were unable to come to an agreement, the magistrate judge assigned to the case issued an Order instructing Peterson to provide copies to the hospital, designating the records "attorney’s eyes only", and ordering that all copies be returned to the hospital at the conclusion of the litigation.  The court based its order on the so-called HIPAA Whistleblower exception at 45 C.F.R. Section 164.502(j)(i).  That section provides that a covered entity will not be considered to have violated the privacy requirements of HIPAA if a member of its workforce, who believes in good faith that the covered entity has engaged in conduct that is unlawful or otherwise violates professional or clinical standards, discloses protected health information to her attorney or a public health authority.

Employers are often confronted with the frustration of learning that a disgruntled employee or former employee has taken home confidential or trade secret documents which he or she intended to use to protect their interests, whether in litigation or otherwise. In this case, the hospital faced the added concern of confidentiality under HIPAA. 

 

 

 

Our Labor colleagues reported on an interesting decision in the context of the National Labor Relations Act and involving Facebook. The decision holds that threats made by union members on Facebook are not treated the same as threats made by those same union members who happened to be on a picket line or in person. Read the full article.

 

During the summer of 2010, while dumping his own garbage at the Georgetown Transfer Station, a Boston Globe photographer saw a large pile of paper which, after further inspection, turned out to be medical records of more than 67,000 residents including names, Social Security numbers, and medical diagnoses that were not redacted or destroyed. His discovery led to a Boston Globe article and the eventual investigation by Massachusetts Attorney General Martha Coakley. On January 7, 2013, Attorney General Coakley announced a $140,000 settlement with the individual and entities involved – one physician, three medical practices, and the medical billing vendor for these health care providers.

The health care providers and the billing company all were subject to the Massachusetts data security regulations, including the obligation to dispose of and destroy personal information in a secure manner. Massachusetts General Laws Chapter 93I. Of course, with regard to the health care providers, the Attorney General alleged they failed to take reasonable steps to select and retain a service provider (the medical billing company) that would maintain appropriate security measures to protect such confidential information. In addition, the providers and the medical billing company had obligations to safeguard the protected health information in the documents that were discarded under the HIPAA privacy and security regulations, as amended by the HITECH Act. As a result, the Attorney General could exercise her enforcement authority under state law, as would be expected, but also under HIPAA, pursuant to the authority granted under the HITECH Act.

This incident represents another reminder for companies (health care providers, in particular) to appropriately evaluate their vendors and service providers to ensure they will safeguard the personal information with which they have been entrusted.