HIPAA Violation Fines: North Memorial’s settlement underscores the importance of executing HIPAA business associate agreements which resulted in a $1.55 million fine

North Memorial Health Care of Minnesota has agreed to pay $1,550,000 to settle charges that it potentially violated the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules by failing to enter into a business associate agreement with a major contractor and failing to institute an organization-wide risk analysis to address the risks and vulnerabilities to its patient information. North Memorial is a comprehensive, not-for-profit health care system in Minnesota that serves the Twin Cities and surrounding communities.The Third HIPAA violation fines in 2016(read the previous resolution agreements here) demonstrates OCR’s commitment to promoting the privacy and security protections so critical to build and maintain trust in health research.

“Two major cornerstones of the HIPAA Rules were overlooked by this entity,” said Jocelyn Samuels, Director of the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR). “Organizations must have in place compliant business associate agreements as well as an accurate and thorough risk analysis that addresses their enterprise-wide IT infrastructure.”

OCR initiated its investigation of North Memorial following receipt of a breach report on September 27, 2011, which indicated that an unencrypted, password-protected laptop was stolen from a business associate’s workforce member’s locked vehicle, impacting the electronic protected health information (ePHI) of 9,497 individuals.

OCR’s investigation indicated that North Memorial failed to have in place a business associate agreement, as required under the HIPAA Privacy and Security Rules, so that its business associate could perform certain payment and health care operations activities on its behalf. North Memorial gave its business associate, Accretive Health, Inc., access to North Memorial’s hospital database, which stored the ePHI of 289,904 patients. Accretive also received access to non-electronic protected health information as it performed services on-site at North Memorial.

The investigation further determined that North Memorial failed to complete a risk analysis to address all of the potential risks and vulnerabilities to the ePHI that it maintained, accessed, or transmitted across its entire IT infrastructure — including but not limited to all applications, software, databases, servers, workstations, mobile devices and electronic media, network administration and security devices, and associated business processes.

What is the specific HIPAA violation?

North Memorial  has violated the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules by failing to enter into a business associate agreement with a major contractor and failing to institute an organization-wide risk analysis to address the risks and vulnerabilities to its patient information.

HIPAA Violation Fines and Corrective Action Plan (CAP)

The settlement includes a monetary payment of $1,550,000 and a robust corrective action plan which includes an organization-wide risk analysis and risk management plan, as required under the Security Rule. North Memorial will also train appropriate workforce members on all policies and procedures newly developed or revised.

What could have been done differently?

There were two things that could have prevented this violation and fine. A simple Risk analysis would have found the weak points in the network and helped North Memorial become more secure. The second mistake made was North Memorial not entering into a Business Associate Agreement with a major contractor. Simply having a security risk analysis done and entering a BA with the contractor would have prevented this from happening.

 

To learn more on how EHR 2.0 can help you find security risks and create an action plan, visit us at https://ehr20.com/services/risk-analysis-for-meaningful-use/

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Our mission is to assist healthcare organizations and business associates in the development, design, and implementation of practices to secure IT systems and comply with HIPAA/HITECH privacy, security, breach and enforcement rules by protecting patient health information.

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