Security Management Process Failures Lead to $400,000 HIPAA Penalty Agreed for Denver FQHC

A legal action has been taken action against a Denver, CO-based federally-qualified health center (FQHC), by Department of Health and Human Services’ Office for Civil Rights (OCR) for security management process failures that contributed to the organization experiencing a data violation in 2011.

Metro Community Provider Network (MCPN) has agreed to pay OCR the penalty of $400,000 and put in place a vigorous corrective action process to resolve all HIPAA compliance issues identified during the OCR review.

The incident that led to the OCR investigation was a phishing attack that happened on December 5, 2011. A hacker sent phishing emails to (MCPN) personnel, the responses to which allowed that person to gain access to employees’ email accounts. Those email accounts contained the electronic protected health information of 3,200 patient registered to the center.

OCR examines all data breaches of more than 500 patient records to determine whether healthcare organizations have experienced a date breach due to violations of HIPAA Rules. The OCR found that MCPN took the necessary action following the data breach to prevent further phishing attacks from being successful. However, OCR investigators found that multiple violations of HIPAA Rules did occur.

Phishing attacks on healthcare organizations often occur and it would be unreasonable to expect healthcare organizations to completely eliminate the risk of these. However, HIPAA-covered entities must take action to identify potential risks and put processes in place to reduce risks to an appropriate level.

One of the most important elements of the HIPAA Security Rule is the risk analysis, the purpose which being to identify risks to the confidentiality, integrity, and access to electronic protected health information. If a risk analysis is not carried out, HIPAA-covered entities will not be able to ascertain properly whether all risks have been identified. Appropriate measures to lessen those risks to acceptable levels would be less likely to be implemented.

While OCR affirmed that MCPN had carried out a risk analysis, it had not been completed until mid-February 2012,almost two months after the phishing attack had happened. Further, that risk analysis and all subsequent risk analyses performed by MCPN did not adhere to the minimum requirements of the HIPAA Security Rule.

The absence of a risk analysis meant MCPN did not identify all risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI that the organization held. MCPN also did not implement a risk management plan to address risks identified in the risk analysis.

OCR also found that MCPN had failed to put in place appropriate security measures to reduce risks to a reasonable and acceptable level. Additionally policies and procedures to prevent, detect, contain, and correct security violations had not been implemented.

When ruling on an appropriate settlement, OCR took into consideration MCPN’s status as a FQHC and its financial status to ensure MCPN could maintain sufficient financial standing to continue providing ongoing patient care. The HIPAA settlement could have been much higher.

This is the first HIPAA settlement since Roger Severino was appointed as Director of OCR. Severino released a statement explaining “Patients seeking health care trust that their providers will safeguard and protect their health information…Compliance with the HIPAA Security Rule helps covered entities meet this important obligation to their patient communities.”