Last week, Diabetes, Endocrinology & Lipidology Center Inc. (DELC) of West Virginia reached a $5,000 settlement with the Office for Civil Rights (OCR) over  allegations that it failed to provide timely access to a patient’s health records.   The OCR alleged that DELC waited more than two years to send a minor’s medical records to their parent, and the records were sent only after the OCR opened an investigation in response to the parent’s complaint. This alleged failure to provide timely access was a violation of the Health Insurance Portability and Accountability Act (HIPAA). HIPAA requires health care providers to respond to a patient’s request for access to health records within 30 days.

This is the 19th settlement for alleged right-of-access violations.

In addition to the $5,000 payment, DELC has agreed to implement a corrective action plan and submit to two years of monitoring.

The Office for Civil Rights (OCR) this week announced a settlement with Peachstate Health Management LLC (aka AEON Clinical Laboratories) following a compliance review that uncovered alleged violations of HIPAA.

The settlement includes a $25,000 payment to OCR by Peachstate, a corrective action plan, and three years of monitoring by OCR.

OCR initiated a compliance review of Peachstate in December 2017 to determine its compliance with HIPAA following a report of a data breach by the U.S. Department of Veterans Affairs.  The notification alleged that the data breach was caused by the VA’s vendor, which was subsequently acquired by Peachstate.

According to OCR’s press release, “OCR’s investigation found systemic noncompliance with the HIPAA Security Rule, including failures to conduct an enterprise-wide risk analysis, implement risk management and audit controls, and maintain documentation of HIPAA Security Rule policies and procedures.”

OCR further stated, “This settlement reiterates OCR’s commitment to ensuring compliance with rules that protect the privacy and security of protected health information.”

Renown Health, P.C. (Renown), a non-profit health system in Nevada, settled with the U.S. Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services in a matter resulting from an enforcement action for a potential violation of patients’ access rights under the OCR’s Health Insurance Portability and Accountability Act of 1996 (HIPAA) Right-of-Access Initiative. The Renown settlement is the 15th settlement under this initiative.

Renown paid $75,000 and agreed to:

  • Develop and maintain written access policies and procedures to comply with HIPAA
  • Distribute updated policies and procedures related to the right-of-access to all workforce members
  • Train workforce members on the right-of-access
  • Revise its Notice of Privacy Practices to reflect the steps that patients need to take to access their PHI (including billing records)

OCR alleged that Renown did not respond to a patient’s request that an electronic copy of her protected health information (PHI), including billing records, be sent to a third party in a timely manner under HIPAA. The OCR’s investigation determined that this failure to provide timely access was a potential violation of Renown’s obligations to the patient. As a result of the investigation, Renown also provided access to all the requested records.

Acting Director of OCR, Robinsue Frohboese, said “Access to one’s health records is an essential HIPAA right and health care providers have a legal obligation to their patients to provide access to their health information on a timely basis,” and OCR will certainly continue to enforce these types of violations throughout 2021. OCR announced this initiative in September 2019 seeking to support patients’ right to timely access to their PHI at a reasonable cost under HIPAA.

To view the corrective action plan that Renown has agreed to, click here.

The state of Virginia might be the next state to enact a privacy law. Senate Bill No. 1392 recently passed the Senate and is likely on its way to Governor Ralph Northam’s desk.  The bill adds the Consumer Data Protection Act to the Virginia Code and includes definitions of biometric data, precise geolocation data, profiling, sensitive data, and targeted advertising. The bill’s effective date is January 1, 2023.

The bill will apply to persons who conduct business in the Commonwealth or produce products or services that are targeted to residents of the Commonwealth, and that (i) during a calendar year, control or process data of at least 100,000 consumers or (ii) control or process personal data of at least 25,000 consumers and derive over 50 percent of gross revenues from the sale of personal data. The law would not apply to any state or local government agency, to financial institutions subject to the Gramm-Leach-Bliley Act, or to covered entities or business associates governed by the Health Insurance Portability and Accountability Act (HIPAA) and Health Information Technology for Economic and Clinical Health Act (HITECH Act).

Consumer rights include the following:

  1. The right to know whether or not a controller is processing the consumer’s personal data and the right to access such personal data;
  2. The right to correct inaccuracies in the consumer’s personal data;
  3. The right to delete personal data provided by or obtained about the consumer;
  4. The right to data portability; and
  5. The right to opt out of the processing of the personal data for purposes of (i) targeted advertising, (ii) the sale of personal data, or (iii) profiling in furtherance of decisions that produce legal or similarly significant effects concerning the consumer.

The bill is designed to feature data controllers and data processors and organizes the rights and responsibilities of each according to those roles. There is no private right-of-action in this bill, as the Attorney General is charged with enforcing violations. The Attorney General will have the exclusive authority to enforce violations in the name of the Commonwealth or on behalf of individual persons residing in the Commonwealth.

The Office for Civil Rights (OCR) recently announced another settlement involving investigations under its Right of Access Initiative. This settlement, the sixteenth such agreement under the Initiative (and one of the most interesting), involves San Diego-based Sharp HealthCare, doing business as Sharp Rees-Stealy Medical Centers (SRMC). In the settlement, OCR alleged that it received a complaint on June 11, 2019, stating that SRMC “failed to timely respond” to a patient’s request to electronically access his medical records. OCR provided technical assistance to SRMC and closed the case.

OCR subsequently received a second, similar complaint that SRMC still had not received the medical records as of August 19, 2019. OCR notes in the Resolution Agreement with SRMC that SRMC did not provide access to the requested records until October 15, 2019.

In settling with SRMC, OCR stated that its investigation found that SRMC failed to timely respond to the request for the records from the third-party recipient. SRMC agreed to pay the OCR $70,000 to settle the case and to enter into a standard Corrective Action Plan.

The reason this is so interesting is that it is apparent from reading the Resolution Agreement that the request to access the medical records of the patient did not come directly from the patient, but from a third party. Covered entities are often faced with requests for medical records from third parties on behalf of patients. These third parties could be family members, executors of estates, guardians, administrators, parents, or lawyers. Under HIPAA, covered entities are not permitted to simply hand over medical records to individuals who are not the patient, and requests from third parties can be tricky for many reasons. In general, covered entities are prohibited from providing medical records of patients without the patient’s specific authorization. Although the background detailed facts of this settlement are not known, reading between the lines it looks like the request came from the patient’s attorney.

Covered entities often receive requests for medical records from attorneys, but often are not accompanied by HIPAA-compliant authorization forms to enable the covered entity to provide the medical records to the attorney. Although as attorneys we are used to being able to obtain documents on behalf of clients we represent, HIPAA does not allow covered entities to provide medical records to attorneys without a valid HIPAA authorization form. If an attorney provides the covered entity with a valid authorization form, the request is no different than the request of the patient, and the covered entity must provide access to the records under HIPAA and the OCR’s Right of Access Initiative. The lesson here is to treat the valid request from the attorney no differently than the request from the patient and to provide access to the records within the time frame outlined in HIPAA. Otherwise, the attorney may file a complaint with the OCR.

On December 10, 2020, the U.S. Department of Health and Human Services (HHS) announced proposed changes to the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule, which is one of several rules that protect the privacy and security of individuals’ medical records and other protected health information (PHI). According to HHS, the proposed changes are intended to support individuals’ engagement in their health care, remove barriers to coordinated care and case management, and reduce regulatory burdens on the health care industry, while continuing to protect the privacy and security of individuals’ PHI.

Some of the proposed changes affect individuals’ right of access to PHI by, among other things, strengthening their right to inspect their PHI in person by allowing them to take notes or use other personal resources to view and capture images of their PHI, reducing the identity verification burden on those exercising their access rights, and creating a pathway for individuals to direct the sharing of PHI in an electronic health record (EHR). The proposed changes address areas of the Privacy Rule, including in particular the right of access, that have been the subject of enforcement scrutiny and litigation in recent years (see, e.g., recent articles here, here, and here).

HHS also proposes shortening covered entities’ current 30 calendar day response time to give individuals access to their PHI to a maximum of 15 calendar days with a potential a 15-day extension (currently, a 30-day extension is permitted). The proposed rule clarifies the form and format required for responding to such requests for access, and specifies when electronic PHI must be provided to individuals at no charge. In addition, the proposed rule amends the permissible fee structure for covered entities to respond to requests to direct records to a third party, and would require covered entities to post estimated fee schedules on their website for access and for disclosures with an individual’s valid authorization. Upon request, covered entities would be required to provide individualized estimates of fees for an individual’s request for copies of PHI, and to provide itemized bills for completed requests. The proposed modifications also would eliminate the requirement of obtaining a patient’s written acknowledgment of receiving a provider’s Notice of Privacy Practices.

The HHS rule proposes to clarify the scope of permitted uses and disclosures for individual-level care coordination and case management that constitute “health care operations” by proposing to amend the definition of that term. HHS also proposes to create an exception to the “minimum necessary” standard for uses by, disclosures to, or requests by a health plan or covered health care provider for care coordination and case management activities. The proposed rule also seeks to clarify the abilities of covered entities to disclose PHI to social services agencies, community-based organizations, home- and community-based service providers, and similar third parties that provide health-related services, in furtherance of the coordination and management of individuals’ care. HHS also proposes to replace the privacy standard currently permitting covered entities to make certain uses and disclosures of PHI based on “professional judgment” with one based on a good-faith belief that the use or disclosure is in the best interests of the individual. Finally, HHS proposes to permit covered entities to disclose PHI to avert a threat to health or safety when harm is “serious and reasonably foreseeable” (replacing the current “serious and imminent” harm threshold for such disclosures).

HHS seeks comments by interested parties including patients, HIPAA covered entities and business associates, consumer advocates, health care professional associations, health information management professionals, health information technology vendors, and government entities. Comments are due within 60 days after the proposed rule is formally published in the Federal Register (which is expected to occur in the coming days), and can be submitted electronically or by mail to HHS. Given the upcoming change in administration, the significant updates proposed by HHS in this proposed rule, as well as the comments that will be received from industry stakeholders, it is likely the proposed modifications will be the subject of significant analysis and potential changes before HHS takes steps to finalize.

The Office for Civil Rights (OCR) issued a press release on November 12, 2020, announcing that it had settled its eleventh enforcement action in its HIPAA Right-of-Access Initiative. The settlement with Dr. Rajendra Bhayani, an otolaryngologist (ENT) practicing in Regal Park, New York, included a payment of $15,000, a corrective action plan and two years of monitoring by the OCR.

The facts behind the case are these: In September 2018, the OCR received a complaint from a patient alleging that Dr. Bhayani failed to provide her with access to her medical records after she requested them in July 2018. Following the complaint, the OCR provided technical assistance to Dr. Bhayani regarding compliance with the right-of-access requirements and closed the case. Similar to other recent settlements with the OCR, the patient lodged a second complaint, alleging that Dr. Bhayani still had not provided her with access to her records, and as a result of re-opening the file, the OCR “determined that Dr. Bhayani’s failure to provide the requested medical records was a potential violation of the HIPAA right of access standard.” Following the investigation, the patient received a copy of her medical records in September 2020.

According to OCR Director Roger Severino, “Doctor’s offices, large and small, must provide patients their medical records in a timely fashion. We will continue to prioritize HIPAA Right of Access cases for enforcement until providers get the message.”

Providers, the message is clear: carefully follow HIPAA’s right-of-access requirements.

New Jersey Attorney General (AG) Gurbir S. Grewal announced on November 2, 2020, that his office has settled with ShopRite’s parent company, Wakefern Food Corp. (Wakefern) and two of its supermarket entities for $235,000 for a data breach that occurred in 2016.

According to the press release, the AG alleged that Wakefern violated HIPAA and the New Jersey Consumer Fraud Act (CFA) by “failing to properly dispose of electronic devices used to collect the signatures and purchase information of pharmacy customers” in its Kingston and Millville ShopRite stores.

The AG alleged that the electronic devices were discarded in dumpsters in 2016 without wiping them when newer technology was adopted. The incident “may have exposed names, phone numbers, birthdates, driver’s license numbers, prescription numbers, medication names, dates and times of pick-up or delivery, and customer zip codes.”

In addition to the fine, Wakefern is required to appoint a chief privacy officer, execute Business Associate Agreements with the entities that are operating its pharmacies, ensure that all ShopRite stores with pharmacies designate a HIPAA privacy officer and a HIPAA security officer, and provide online training for those officers on the HIPAA privacy and security rules.

Proposition 24 is known as the California Privacy Rights Act of 2020 (CPRA). It is on the ballot in California on November 3, and if it passes it will amend and expand certain provisions of the California Consumer Privacy Act (CCPA). Some say it’s CCPA 2.0, however, there are some provisions that make the CPRA look more like the General Data Protection Regulation (GDPR) – the European data regulation that reshaped privacy rights in the European Union. Two provisions in particular are very GDPR-like; specifically, the creation of the California Privacy Protection Agency (CPPA), which will become the regulator charged with implementing and enforcing both the CCPA and CPRA, and the expanded definition of sensitive personal information. CPRA would become effective Jan. 1, 2023, with an enforcement date of July 1, 2023. Here are some key highlights of Proposition 24.

What’s new for California consumers in CPRA? CPRA creates a new category of data, similar to GDPR, for sensitive personal information. CPRA also adds several new rights for consumers:

  • to restrict the use of sensitive personal information;
  • to correct inaccurate personal information;
  • to prevent businesses from storing data longer than necessary;
  • to limit businesses from collecting more data than necessary;
  • to know what personal information is sold or shared and to whom, and to opt out of that sale or sharing of personal information;
  • CPRA expands the non-discrimination provision to prevent retaliation against an employee, applicant for employment, or independent contractor for exercising their privacy rights.

What do businesses need to know regarding CPRA? It creates a new data protection agency with regulatory authority for enforcement of both CCPA and CPRA. Some new key provisions for businesses are:

  • the CPRA creates a Chief Auditor, who will have the authority to audit businesses data practices;
  • the CPRA also requires high risk data processors to perform regular cybersecurity audits and regular risk assessments;
  • the CPRA adds provisions regarding profiling and automated decision making;
  • the CPRA adds restrictions on transfer of personal information;
  • the CPRA requires businesses that sell or share personal information to provide notice to consumers and a separate link to the “Do Not Sell or Share My Personal Information” webpage and a separate link to the “Limit the Use of My Sensitive Personal Information” webpage or a single link to both choices;
  • the CPRA triples the fines set forth in CCPA for collecting and selling children’s private information and requires opt-in consent to sell personal information of consumers under the age of 16;
  • the CPRA expands the consumer’s private right of action to include a breach of a consumer’s email address and password/security question and answer.

The CPRA also changes the definition of “business” to more clearly define the annual period of time to determine annual gross revenues, which specifies that a business must comply with CPRA if, “as of January 1 of the calendar year,” the business had annual gross revenues in excess of twenty-five million dollars “in the preceding calendar year,” or alone or in combination annually buys or sells or shares the personal information of 100,000 or more consumers or households, or derives 50 percent or more of its annual revenues from selling or sharing consumers’ personal information.

In addition to these criteria, CPRA adds somewhat puzzling language that states that a business would also be defined in the CPRA as a person that does business in California, that is not covered by one of the criteria described above, who may voluntarily certify to the California Privacy Protection Agency that it is in compliance with and agrees to be bound by CPRA.

The CPRA adds the new term “contractor” in addition to service provider. A contractor is a person to whom the business makes available a consumer’s personal information for a business purpose pursuant to a written contract with the business. The CPRA contains specific provisions to be included in the contract terms, and the contract must include a certification that the contractor understands the restrictions and will comply with them. The CPRA adds several new definitions, including definitions for cross-context behavioral advertising, dark pattern, non-personalized advertising, and profiling, and makes some changes to the definition of personal information. The CPRA eliminates some of the CCPA language regarding the “categories” of personal information.

The CPRA also adds “sensitive personal information” as a defined term which means:

(l) personal information that reveals: (A) a consumer’s social security, driver’s license, state identification card, or passport number; (B) a consumer’s account log-in, financial account, debit card, or credit card number in combination with any required security or access code, password, or credentials allowing access to an account; (C) a consumer’s precise geolocation; (D) a consumer’s racial or ethnic origin, religious or philosophical beliefs, or union membership; (E) the contents of a consumer’s mail, email and text messages, unless the business is the intended recipient of the communication; (F) a consumer’s genetic data; and (2) (A) the processing of biometric information for the purpose of uniquely identifying a consumer; (B) personal information collected and analyzed concerning a consumer’s health; or (C) personal information collected and analyzed concerning a consumer’s sex life or sexual orientation.

The CPRA retains the CCPA exemptions for medical information governed by the California Confidentiality of Medical Information Act or protected health information collected by a covered entity or business associate under HIPAA (Health Insurance Portability and Accountability Act) and HITECH (Health Information Technology for Economic and Clinical Health Act), personal information collected as part of a clinical trial or other biomedical research study, activity involving the collection of personal information bearing on a consumer’s credit worthiness, and personal information collected, processed, sold or disclosed subject to the Gramm-Leach-Bliley Act or the federal Driver’s Privacy Protection Act of 1994.

The CCPA’s limited exemptions for employment information and so-called business-to-business information are also continued in the CPRA, however these provisions shall expire on January 1, 2023.

The CPRA provides authority for the CPPA to create extensive regulations, including a requirement for regulation of businesses whose processing of consumers’ personal information presents significant risk to consumers’ privacy or security to: (A) perform a cybersecurity audit on an annual basis, including defining the scope of the audit and establishing a process to ensure that audits are thorough and independent; and (B) to submit to the CPPA on a regular basis a risk assessment with respect to the processing of personal information.

The private right of action under CPRA is expanded to include that consumers whose email address in combination with a password or security question and answer that would permit access to the account be able to institute a civil action and to recover damages or other injunctive relief. The CCPA 30-day cure period after notice of a breach is eliminated and administrative fines for violation of the CPRA increase to not more than $2,500 for each violation or $7,500 for each intentional violation or violations involving the personal information of consumers that the business has actual knowledge is under 16 years of age. The CPPA will have broad powers of investigation and enforcement for violations of the CPRA.

We will follow the progress of Proposition 24 on election day and provide an update here next week.

Regulatory bodies are upping the ante when it comes to settling with companies that have suffered data breaches. In addition to the below settlements, see also the settlement between the OCR and Dignity Health.

Community Health Systems, Inc. Settles for $5 M in Multi-State Settlement

On October 8, 2020, New Jersey Attorney General Gurbir Grewal (AG) announced that his office has entered into a multi-state settlement agreement with Community Health Systems, Inc. (CHS) stemming from an investigation of a 2014 data breach that exposed personal information of approximately 6.1 million patients, including 45,000 New Jersey residents. This is after CHS agreed to pay $2.3 million in settlement for HIPAA violations alleged by the Office for Civil Rights. Read article

Morgan Stanley Settles with OCC for $60 Million

Morgan Stanley has settled claims by the Office of the Comptroller of the Currency (OCC) that it failed to properly decommission data centers that housed client data of its wealth-management operations two times—once in 2016 and once in 2019 for $60 million. Read article