At the International Association of Privacy Professionals (“IAPP”) Global Privacy Summit in Washington, D.C. on March 5th and March 6th, the Federal Trade Commission (“FTC”) was clear in its message that privacy was a top priority for the agency.  The FTC had a strong presence at the conference.  Three of the five Commissioners and the Director of the Bureau of Consumer Protection (Jessica Rich) all spoke at the conference and relayed a message of the importance of consumer privacy and security.  In that regard, the FTC speakers stressed the importance of:

  • informing consumers of the collection of consumer information;
  • informing consumers how such collected information will be used; and
  • providing strong safeguards for information collected.

The FTC speakers also announced that the FTC will be beginning a new security campaign to engage businesses of all sizes in understanding the importance of securing consumer information.  The FTC speakers also emphasized the FTC’s concern and focus on the collection of health information by organizations that are not covered under HIPAA (for example organizations developing wearable devices or other consumer driven apps).  Given the tenor of the discussions, there is no question that FTC will continue to make privacy enforcement a top priority.  As a result, device manufacturers, pharmaceutical manufacturers, and mobile health developers should remember to think beyond HIPAA when they think of U.S. privacy compliance.  For a listing of prior privacy enforcement actions by the FTC see, https://www.ftc.gov/news-events/media-resources/protecting-consumer-privacy/enforcing-privacy-promises.

superfishReports in the last week stated that the computer manufacturer Lenovo had preloaded software onto various lines of computers which critically compromised cybersecurity. The software in question is a product called Superfish Visual Discovery, a program generally designed to replace advertisements seen while browsing the Internet with ads provided by Superfish. However, the method of implementation opens up a universe of potential problems.

What Does Superfish Do?

Superfish is designed to replace Internet advertisements with advertisements provided by their sponsors. In order to do this, Superfish installs its own signed root certificate to the operating system. Furthermore, the Superfish certificate key being used is the same across all the affected systems.

What Does This Mean?

Secure browsing is based on a system of certificates. When you look up any website starting with https://, you are loading a secure website whose identity is verified using a certificate, usually validated by a third party. Normally, sites claiming to be secure that are not will trigger warnings from your browser. Superfish installs its own certificate and functions as a Man in the Middle, injecting its own content into the ostensibly secure connection between your computer and the secure website.

Because the certificate key used by Superfish is the same across all affected systems, it is easy to exploit that certificate to attack systems with the software installed. Reports indicate that people have been able to decrypt all data sent by HTTPS, including passwords, using this exploit.

Which Computers Are Affected?

Lenovo has published information containing a list of affected computers. The affected computers are laptops not in the ThinkPad series manufactured between September 2014 and February 2015. ThinkPad laptops, desktops, and smartphones are unaffected. Enterprise systems (e.g., servers and storage) are also safe.

Even if your organization has computers on the list of affected products, your organization may be safe. Generally, your IT department should be installing a clean version of Windows or an organizational system image on any new computer before it is brought into your network ecosystem. If your IT department does not do this, or your organization allows personal computers to perform work functions, you may be at risk.

Another potential issue is remote access. If anyone with remote access was using an affected computer, the user’s logon information potentially could have been compromised.

How Do We Remove Superfish from Affected Systems? 

The easiest and most secure way to ensure the removal of any issues is to install a clean copy of Windows on the affected computer. This should not be the backup copy provided by Lenovo, as that copy will still have Superfish. However, reinstalling Windows will cause you to lose any data on the computer. If you need to keep the data on the computer or otherwise cannot back up the data, a good guide on how to uninstall Superfish without reinstalling Windows can be found at ExtremeTech.

What Else Should We Do?

If your organization does not install a clean version of Windows or an organizational system image on new computers, you should put into place a procedure ensuring that all new computers get a fresh install of Windows or a fresh system image prior to introducing them to the network.

Because your employees may potentially have used an affected computer for remote access, you should identify any employees who have used Lenovo computers for remote access in the past six months. Those users should have their credentials changed as a precautionary measure.

On January 9, 2015, New Jersey Governor Chris Christie signed new legislation that will require health insurance carriers authorized to issue health benefits plans in the state—including insurance companies, health service corporations, hospital service corporations, medical service corporations, and health maintenance organizations—to encrypt personal information. Triggered by a series of data breaches involving the health information of almost a million residents, Senate Bill No. 562 (“SB 562”) was passed unanimously by both houses of the state legislature and will take effect on August 1, 2015.

Under SB 562, health insurance carriers will be prohibited from maintaining computerized records that contain personal information unless the information is “secured by encryption or by any other method or technology rendering the information unreadable, undecipherable, or otherwise unusable by an unauthorized person.” The use of a password protection program that prevents general unauthorized access will not suffice to meet the encryption requirement. “Personal information” is defined as an individual’s first name or first initial and last name linked with at least one of the following: (1) Social Security number, (2) driver’s license number or state identification card number, (3) address, or (4) identifiable health information.

The law applies only to end user computer systems and computerized records transmitted across public networks. “End user computer systems” include desktop computers, laptop computers, tablets and other mobile devices, and removable media.

The requirement to encrypt makes the New Jersey law stricter in this regard than the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), under which encryption of electronic protected health information (“ePHI”) is an addressable specification. Nonetheless, given that encrypted ePHI is exempt from HIPAA’s breach notification requirements, it is considered a best practice to encrypt ePHI.

Violation of New Jersey’s encryption mandate will constitute a violation of the New Jersey Consumer Fraud Act, which imposes penalties of up to $10,000 for the first offense and up to $20,000 for any subsequent offense. The state Attorney General may also issue cease-and-desist orders to violators and award treble damages and costs to affected individuals. Given these potential penalties, health insurance carriers in New Jersey should carefully review their policies and procedures and ensure compliance with the new law.

On September 23 and 24, 2014, the National Institute of Standards and Technology (“NIST”) and the Department of Health and Human Services Office of Civil Rights (“HHS OCR”) hosted their annual HIPAA conference “Safeguarding Health Information: Building Assurance through HIPAA security.”

OCR officials and key industry leaders engaged in dialogue regarding developments and trends in data breach incidents with respect to health information as well as stakeholder responses and best practices to mitigate risk and respond to potential incidents.

VULNERABILITY AWARENESS: ASSESSING RISK

In her opening remarks, OCR Director Jocelyn Samuels highlighted the observation that information privacy compliance is poorly prioritized within organizations.  Specifically, Samuels identified the lack of widespread risk analysis and vulnerability assessment activities at the enterprise level as a key area meriting internal and agency prioritization.  Samuels reiterated that organizations dealing in protected health information (“PHI”) should, and in fact must, undertake to routinely assess and investigate vulnerability as part of an effective compliance program.

ENTERPRISE APPROACH

The aspiration of enterprise-wide security protocol for PHI, and adoption thereof, continues to be an ongoing work-in-progress.  This is especially true given the often divergent priorities within large provider systems and the endemic evolution of “local” IT systems that integrate with the sanctioned IT environment but often create network porosity and points of vulnerability.  Embracing comprehensive, end-to-end, privacy and security policies and procedures that serve the IT needs of the organization while operating within the security protocol established by the system is imperative to establish and maintain network integrity and compliance with the HIPAA Security Rule (“Security Rule”).

IF YOU LOOK FOR IT, YOU WILL FIND IT

OCR representative Linda Sanches proposed the thesis that “the question is not if you will have a breach, but more so when.”  To this end, the initial step to preparedness is the undertaking of a risk analysis as required by the Security Rule.  Stakeholders expressed frustration with the broadly stated requirements of the Security Rule that are non-specific as to what precise set of activities constitute compliance and how much is in fact enough.   This uncertainty adds to existing organizational tensions between resource allocations to business objectives versus compliance obligations with respect to the establishment and implementation of a reasonable compliance program.  Sanches indicated that a defensible and reasonable approach is what is required to establish compliance.

LESSONS FROM THE FIELD: REPORT FROM OCR

Iliana Peters, Senior Advisor for HIPAA Compliance and Enforcement at HHS OCR, reported on recent enforcement activities as well as OCR’s regulatory agenda.  With respect to reported incident activity, through August 31, 2014, theft and loss accounted for 51% and 9% of breach incidents, respectively followed by unauthorized access/disclosure at 18% among a total of 1176 reported breaches involving more than 500 people and in excess of 122,000 smaller breaches.

With respect to OCR’s regulatory agenda, Peters indicated that OCR is working on providing additional guidance and clarification to the Omnibus Final Rule including a breach safe harbor update, breach risk assessment tool, and clarification of the standards for minimum necessary. Peters also explained how the audit pilot program which is anticipated to go live in the near future will create a new enforcement channel for OCR outside of the breach response protocol.  She commented that although the audits will be mostly desk audits with shorter timelines than investigations, they will require covered entities and business associates to have their documents in order and respond quickly to requests.  Peters continued to state that “audits will be an enforcement tool which will result in compliance reviews and could result in enforcement actions up to and including civil monetary penalties. Peters stated “we may come to you because of an audit or a breach, but if we find gaps in the compliance program while there, we can’t walk away; it is our job to see it through”

RISK ELIMINATION: THE HOLY GRAIL

The global advice from OCR over the course of the conference was preparedness.  To that end, however, the best that healthcare stakeholders can aspire to is effective mitigation of risk.  OCR repeatedly stressed that “it is really important that covered entities and business associates prepare as much as possible” and take affirmative steps to protect their data.  A comprehensive and documented risk analysis is the key to identifying system vulnerabilities and stakeholders should undertake to conduct or update their risk analyses and work in concert with organizational management to prioritize security compliance.

The increasing prevalence of mobile technology in the healthcare sector continues to create compliance concerns for physician practices and other health care entities.  While the Office of Civil Rights (OCR) of the Department of Health and Human Services, has traditionally focused on technology breaches within larger health systems, smaller physician practices and health care entities must also ensure that their policies and practices related to mobile technology do not foster non-compliance and create institutional risk. 

Physicians Integrate Mobile Technology Into Daily Practice

The Physicians Practice’s 2014 Technology Survey found that only 31 percent of more than 1,400 survey respondents reported implementing policies and rules to address bring your own device (“BYOD”) practices.  With more than 80 percent of doctors using mobile devices at work and integrating their personal devices into their professional practice, these devices could potentially represent a significant privacy and security risk. 

Traditional Safeguards Undermined By “Anywhere” Access

The HIPAA Security Rule applies when any protected health information (PHI) is accessed and communicated through a mobile device, such as texting a patient’s name and phone number for follow-up calls.  In the annual OCR report to Congress on breaches of unsecured PHI for calendar years 2011 and 2012, OCR reported that information loss or theft from mobile devices was among the top three sources of breached PHI in 117 of the 222 reported breaches in 2012. Additionally, the Physicians Practice’s 2014 Technology Survey indicated that only 61 percent of the respondents surveyed reported securely backing data on a second server or via another method, thereby not complying with the HIPAA Security Rule which requires covered entities to create and maintain retrievable copies of electronic protected health information (ePHI).

OCR Enforcement Areas, Especially Among Small Breaches, Continue to Grow

OCR officials routinely remind covered entities and business associates to understand their obligations with respect to mobile device security – obligations that continue to become more complex to satisfy as the use of mobile technology in the workplace proliferates.  Simultaneously, OCR continues to increase enforcement of data breaches by entities subject to the HIPAA Security Rule. Significantly, this enforcement expansion has included smaller entities and breaches affecting fewer than 500 individuals.  OCR expects HIPAA Security Rule enforcement to continue its trend and increase going forward in 2014

Be Prepared

Physician practices and health care entities should conduct a thorough risk assessment which addresses the use of mobile devices and storage of mobile device data in their environment.  Additionally, policies and procedures should be developed to manage the risk associated with mobile devices to a business tolerable level.  Risk management plans and security evaluations should be updated and conducted periodically.  Additionally, physician practices and health care entities must remember that their business associates must also comply with the HIPAA Security Rule.  Thus, some diligence on the use of mobile devices in their business associates environment is advisable.  In practice, over 20 percent of HIPAA data breaches have been traced to noncompliant business associates. While the risk may be significant, with proper staff training to identify and address questionable HIPAA behaviors, physician practices and health care entities can minimize the risk of OCR enforcement and large settlement costs associated with mobile devices.

On May 20, 2014, the Secretary of the Department of Health and Human Services (HHS) submitted the agency’s Annual Report to Congress on Breaches of Unsecured Protected Health Information for Calendar Years 2011 and 2012 (“Breach Report”). This report provides valuable insight for healthcare entities regarding their data security and enforcement priorities.

Section 13402(i) of the Health Information Technology for Economic and Clinical Health Act (HITECH) requires the Secretary of Health and Human Services to prepare an annual report regarding the number and nature of breaches report to HHS, as well as the actions taken in response to those breaches.

By way of background, HITECH requires that both covered entities and business associates (as defined under HIPAA) provide notifications after a breach of unsecured protected health information (PHI).  These required notifications include the affected individuals, HHS, and also media outlets in cases where the breach includes more than 500 residents of a state or jurisdiction.  However, HHS has issued guidance explaining that encryption and destruction make PHI “unusable, unreadable, or indecipherable to unauthorized persons” and, thus, loss of such secured PHI does not trigger the breach notification requirements.

Report Findings

                Healthcare providers accounted for the majority of breaches affecting 500 or more individuals in both 2011 and 2012 while business associates and health plans accounted for the remainder, as illustrated below.

Breaching Entity 2011 2012 Change
Providers 63% 68% 5%
Business Associates 27% 25% (2%)
Health Plans 10% 7% (3%)
Total 100% 100%

 

Theft of PHI was the leading cause of a breach in both 2011 and 2012 followed by loss of PHI and unauthorized access/disclosures.  In 2011, theft was the cause for 24% of the total number of individuals affected by a breach and loss accounted for 54% of individuals affected. This high affected rate due to loss was the result of single breach incident involving a business associate and loss of back-up tapes containing information on 4.9 million individuals. In 2012, the causes of breach returned to expected rates with 36% of individuals affected due to theft and 13% due to loss. The below tables outline the frequency of breach causes in 2011 and 2012 as well as the sources of the breached information in each year.

 

Causes of Data Breach 2011 2012
Theft 50% 52%
Loss of PHI 17% 12%
Unauthorized Access 19% 18%
Hacking/IT incident 8% 27%

 

Sources of Breach 2011 2012 Change
Laptop 20% 27% 7%
Paper 27% 23% (4%)
Server 9% 13% 4%
Desktop Computer 14% 12% (2%)
Other Portable Device 13% 9% (4%)
Email 1% 4% 3%
Electronic Medical Records 2% 2% 0
Other 14% 10% (4%)

 

Audit Information

                HITECH authorizes and requires HHS to conduct periodic audits of covered entities and business associates to ensure compliance with HIPAA rules. Unlike compliance reviews (which occur after a major breach) or compliance investigations, these audits are not triggered by an adverse event or incident.  Instead, they are “based on application of a set selection criteria.”

                The Office for Civil Rights (OCR) (the office within HHS that is responsible for administering the Breach Notification Rules) implemented a pilot program of the audit process to assess the privacy and security compliance which was described in the Breach Report. The audit revealed that 31 out of 101 audited entities had at least one negative audit finding related to the Breach Notification Rule.  Specifically, the audit examined the following four areas:  (1) notification to individuals, (2) timeliness of notification, (3) methods of individual notification, and (4) burden of proof.  All four areas had a similar number of deficiencies noted.

Implications and Recommendations for Healthcare Entities

                Breaches involving 500 or more individuals accounted for less than 1% of reports filed with HHS, yet represent almost 98% of the individuals affected by a PHI breach.  It is likely that OCR will continue investing significant resources into large scale PHI breaches due to the extensive impact of these breaches. Additionally, theft remains one of the top causes of PHI breaches and covered entities and business associates must take appropriate measures to ensure that any PHI stored or transported on portable electronic devices is properly safeguarded.  Chronic vulnerabilities include:

Encryption: Even if a device is stolen or misplaced, the Breach Notification Rule will not apply if the data is properly encrypted. Thus, it is imperative that covered entities and business associates encrypt portable electronic devices (such as laptops) and all CDs or USB thumb drives. 

Access Control: Healthcare entities must pay close attention to the physical access to and proper disposal of devices that contain PHI.  Server rooms should be locked with limited access, and the physical access to buildings, floors, and offices should be secured to prevent theft of desktop computers containing PHI. 

Disposal: Electronic devices need to be purged and the data securely erased (also known as “scrubbed”) prior to the device being discarded, recycled, sold, or transferred to a third party, such as a leasing company.  Such devices include computers, external storage media, and photocopiers.

Lastly, as explained in the Breach Report discussion of OCR’s audit pilot program, covered entities most often explain noncompliance with the various aspects of the Breach Notification Rule by pleading unawareness of the requirements of the Rules. Covered entities and business associates should ensure that comprehensive privacy and security policies and procedures are developed and implemented to mitigate the risks of a breach and to effectively respond to a breach should one occur.

By Brandon Ge and Alaap Shah

The Department of Health and Human Services (“HHS”) is taking laudable steps to improve notices of privacy practices (“NPPs”) and make them more clear, understandable, and user-friendly. Under the HIPAA Privacy Rule, individuals are entitled to a receive an NPP informing them of how their health information may be used and shared, as well as how to exercise their health privacy rights. Health plans and health care providers must develop and distribute NPPs that clearly explain these rights and practices. Unfortunately, to date NPPs have been poorly designed, hard to navigate and unclear with regard to patient rights or company obligations regarding use and disclosure of health information.

Privacy is just as much about protecting patients’ rights to data as it is about protecting data. The HIPAA Omnibus Rule, CLIA Rule, and others are designed to improve patient access to their medical records, empowering them to actively manage their health. The digitization of medical records, in the form of electronic health records, personal health records, patient portals, and the like, facilitates patient engagement in healthcare if used properly.  However, ineffective NPPs create barriers for patient understanding their rights.

NPPs that clearly convey patients’ privacy rights are critical in enabling patients to take a more active role in healthcare. Conversely, if patients do not understand NPPs, then they won’t have a good sense of their privacy rights, including their right to access their health information. Some critiques regarding NPPs include that they are frequently lengthy and include legalese that the general public has difficulty understanding.  To remedy these concerns, some suggest simplifying language and “layering” the notice—that is, including a short summary of the individual’s rights as a first layer and including a longer, more detailed explanation as a second layer—would go a long way toward improving the readability of NPPs.

In an effort to address criticisms of NPPs, last month, the Office of the National Coordinator for Health Information Technology (“ONC”) collaborated with the HHS, Office for Civil Rights (“OCR”) to develop model NPPs that clearly convey the required information to patients in an accessible format. Covered entities can customize these model NPPs and then display them and distribute them to patients.

ONC and OCR have also thrown down the gauntlet and established the Digital Privacy Notice Challenge, which will award $15,000 to the creators of the best online NPP (second place wins $7,000 and third place gets $3,000). The challenge calls for designers, developers, and privacy experts to use the model notices as a baseline and create an online NPP that is clear, effectively informs patients of their privacy rights, and is easily integrated online. Once submissions are finalized, the public will have two weeks to vote on the best submission.

The submission period ends on April 7, 2014, and winners will be announced in May or June of 2014.

Does your organization think it has what it takes to win this challenge?

 

Follow Alaap Shah on Twitter: @HealthITLawyers

By Marshall Jackson and Alaap Shah

If you have tuned into the news over the last few months, you are likely aware that several major corporations—including one of the nation’s largest retail chains—have suffered data breaches. These breaches have affected hundreds of millions of consumers, and in some cases exposed sensitive financial data such as credit card information, as well as personal information including names, mailing addresses, phone numbers, email addresses, usernames and passwords.

There is no doubt that a primary concern raised by these data breaches is risk to consumers’ financial wellbeing. Chiefly, hackers that seek out personal information tend to sell or use the data to commit identity theft and credit card fraud. Yet, an often overlooked concern involves risk to the medical wellbeing of individuals. It is commonplace for retail chains to operate pharmacies within their facilities where electronic protected health information (“e-PHI”) is received, used, stored and transmitted. Although current information regarding known breaches does not indicate that pharmacy files were accessed, the vulnerability of e-PHI stored by these entities is a serious concern in the field of health care privacy. To manage these risks, entities should take heed of the privacy and security concerns raised in the most recent data breaches, and proactively craft comprehensive and sophisticated approaches to data security.

Historically, data security is reactive in nature: corporations store data on their systems; hackers break into the systems (or the systems of their business partners); companies, if aware of the breach, modify their security to prevent a similar data breach; hackers find a different weakness and again breach the system. This cycle continues ad infinitum.

While there is definitely value in defensive security, as cybersecurity risks grow and lead to increasing volume of data breach, healthcare entities may want to consider strategies to remain on the offensive when it comes to data security of e-PHI. The laws applicable to the security of e-PHI provide a flexible framework to address these risks, but most entities have not designed effect risk management programs to address risk proactively. Nevertheless, the HIPAA Security Rule requires entities to implement a number of technical safeguards which can be used proactively. For example, HIPAA requires audit controls to ensure entities have sufficient awareness about system activity (and specifically malicious activity). If reasonable and appropriate controls are put in place relative to these safeguards, companies can thwart hackers from gaining unauthorized access to e-PHI.

Offensive security requires a proactive mindset and approach to protecting computer systems, networks, and protected information from attack. While proactive security can take several forms, some liken the proactive approach to purchasing insurance. Assets are invested and measures are taken to protect against the risk that something will occur resulting in liability or loss. In the modern digital world it is often not a question of “if” but rather “when” a company will experience a data breach. According to a 2012 independent study by the Ponemon Institute, a staggering 94 percent of health care organizations have had at least one data breach in the last two years alone. The same study estimated that overall economic impact of a breach has risen six-fold over the last few years and now costs millions. With this in mind, here are just a few reasons why proactive data security should be a priority for health care entities:

1) Rapid & Continuous Evolution of Cyber Security Threats. Hackers are not only more sophisticated, they are more prevalent; threats to cyber security do not remain static in nature or volume. This unrelenting growth may be a result of the success rate of the illicit activity. Merely reacting to hackers’ successful attempts puts the industry at a major disadvantage because hackers are incentivized to evolve.

2) Ignorance. It is a common misconception that data security breaches are rare—more often data breaches go undetected or unreported. The simple truth is that no organization is immune, and may be an unwitting victim of a breach at any moment.

3) Monetary & Reputational Damage. Data breaches have a reverberating effect on a company. Damages are not limited to fines or sanctions, and they exceed the cost of mitigating the breach for consumers. Frequently, the greatest damage done is that to the company’s reputation. Consumers may second-guess their choice of providers based on an organization’s perceived failures, and the company’s reputation across the industry may diminish their competitive advantage for years to follow.

What Your Company Can Do

The prevalence of data breaches has led many to ask the question “Is proactive data security the solution?” There are many proactive measures that healthcare entities can implement to combat data breaches, the following summarizes just a few.

Risk Assessment

A risk assessment is the first critical step a health care entity should take when implementing a proactive data security plan. The HIPAA Security rule requires conducting risk assessments. Further, The National Institute of Standards and Technology (NIST) have placed great emphasis on conducting risk assessments as the foundation for data security. Risk assessments systematically identify vulnerabilities that even the most sophisticated organizations may not have anticipated. Identification of vulnerabilities can help a company stay ahead of hackers by knowing where to utilize security resources.

Invest in Data Security

Depending on the size of the company, data security may be a dual function for the company’s IT Department. Based on the severity of the potential risk, security should not be just one of many tasks for the IT department. According to a 2013 Ponemon Study, the average cost of a data breach exceeds $5 million without even considering reputational harm. Studies show that each year U.S. hospitals alone incur costs of an estimated $1.6 billion each year for security incidences. Although certain actions might initially seem redundant, measures such as establishing a dedicated data security team or department, appointing specific data-security personnel within an IT department, or investing in robust data security software and hardware, are all worthwhile investments which will likely prove less costly than a data breach.

Improve Audit Controls

HIPAA requires organizations to implement hardware, software, and/or procedural mechanisms that record and examine activity in information systems that contain or use e-PHI. Audit controls must be sufficient to examine system activity comprehensively. NIST audit control standards provide substantial guidance on conducting proactive system monitoring and activity logging. Audit controls give a company visibility into their own system, allowing them to recognize suspicious activity early in order to limit exposure and ultimately prevent full-blown data breach.

Conduct Breach Drills

Preparation is the key to mitigating damage that cannot be prevented. Similar to a fire drill, companies should maintain a plan for implementation in case of a data breach, and that plan should be put to practice regularly. HHS has teamed with HITRUST to launch CyberRx, an industry-wide effort to simulate cyberattacks. Twelve organizations will participate in these simulated cyber-attacks. The goal of CyberRx is to help industry participants identify ways to better prepare for, and respond to cyber-attacks. This is an exercise of great value and can be done independent of HHS. By preparing to respond to a breach, companies can ensure that damage will be contained as efficiently and effectively as possible when one occurs.

 

For updates on Health Privacy and Security follow Marshall Jackson on Twitter: @MJacksonJr_ESQ

Follow Alaap Shah on Twitter: @HealthITLawyers

   By:  Alaap Shah and Ali Lakhani

Why is data breach such a rampant problem within the health care industry?

As health care rapidly digitizes through adoption of electronic health records, mobile applications and the like, the risk of data breach is rising exponentially.  To effectively manage this risk, health care companies and their business associates must be vigilant by implementing and evaluating security controls in the form of administrative, physical and technical safeguards.  Health care companies also have resources to assist them with managing this risk.  Specifically, the Federal agency for oversight of the Health Insurance Portability and Accountability Act (“HIPAA”), the Department of Health and Human Services, Office for Civil Rights (“OCR”) is tasked with providing technical assistance to guide companies to achieve compliance with the HIPAA security rules.  Further, when companies fail to comply, OCR has enforcement authority to “obtain” compliance.

The responsibility for the oversight and enforcement of the Security Rule was delegated to OCR by DHHS in 2009 under the Health Information Technology for Economic and Clinical (“HITECH”) Act.  Nonetheless, anyone that reads the news is aware that data breaches within the health care sector are commonplace.  As such, it is becoming increasingly clear that health care companies systemically lack adequate security safeguards.  Additionally, it raises a concern regarding the effectiveness of OCR’s efforts to ensure compliance.

Lack of Insight into Industry Security Compliance

According to a recently released report by the Department of Health and Human Services (“DHHS”) Office of Inspector General (“OIG”), OCR’s compliance efforts reveal significant gaps in their oversight activities between 2009 and 2011.  Specifically, the report states that OCR “hasn’t performed required audits of how corporations handle patient information and failed to guarantee the security of its own records.”  As a result, OIG indicated that OCR’s periodic Security Rule compliance audits, which were made mandatory by HITECH, remain an outstanding objective.

OCR responded to the OIG’s report explaining their performance citing that “no funds [have] been appropriated . . . to maintain a permanent audit program.”  Going forward, however, Rodriguez said he expects that OCR “will leverage more civil penalties” and that OCR will be permitted to use collected penalties to fund enforcement actions and “to maximize funding [for] our auditing and breach analysis” activities.  OCR has already committed $4.5 million from monies it collected from prior enforcement actions.

Interestingly, this is not to suggest OCR has not been active in promoting security compliance.  For example, OIG indicated that OCR has provided guidance to covered entities to promote compliance and has established an investigation process for responding to reported violations.    Yet, OCR’s report card, although somewhat changed, is not materially improved since OIG’s 2011 report wherein a “need for greater OCR oversight and enforcement” was recommended.  In light of these findings, it is likely that OCR will turn its focus to increasing its oversight activities in an effort to gain further insight into security rule compliance.

OCR is Transforming into OIG

As early as May 2012, the Director of OCR, Leon Rodriquez, indicated that the agency is headed toward the Office of Inspector General enforcement model.  OCR director Leon Rodriguez has warned that “the same level of vigilance that providers have used to steer clear of OIG’s fraud enforcement now needs to be applied in the HIPAA environment.”  Coupling these comments with the findings of the recent OIG report suggest that OCR will be taking its oversight and enforcement activities even seriously moving forward.

Based on reinvigoration of the HIPAA Audit Program and signals from OCR, it appears that 2014 will be the year of heightened OCR enforcement.  According to federal regulators, the permanent HIPAA Audit program is planned to begin early in the new-year and that covered entities should identify and mitigate outstanding non-compliance.  Although Rodriguez has conceded that “the audits under this permanent program will be narrower in scope in comparison [to those] conducted during the pilot program,” the number of organizations that will be audited is expected to increase.

In short, the health care industry should expect even more audits and enforcements in the future.

Follow Alaap Shah on Twitter: @HealthITLawyers

One of the European Parliament’s 20 committees, the Civil Liberties Committee (“LIBE”), voted on October, 21, 2013 on a proposed EU General Data Protection Regulation. The regulation includes an increased level of fines and new regulatory requirements (in case of certain international data transfers and disclosure requests for personal data by foreign courts or authorities). Companies should monitor these issues closely in the next couple of months. Most likely, after the plenary vote on November 18-21, the Parliament will push for rapid negotiations with the Council (which represents the governments of the individual member countries) and the Commission  to obtain a decision on the final text of the proposed regulation before the Parliamentary elections and end of the current Commission mandate in May 2014. In Europe, the three institutions are involved in the law-making process. In principle, the Commission proposes new laws, and the Parliament and Council adopt them. The Commission and the member countries then implement them, and the Commission also ensures that the laws are properly applied and implemented.

What’s in store for health data specifically?

The EU Parliament proposes a compromise text on the EU Commission proposal for general data protection, including health data. The general principles of the proposed regulation would apply to health information, with health data being a category of sensitive personal data subject to extra controls. There are however specific provisions for processing of health data at articles 81 and 83.

Paraphrasing Article 81, when processing health data, companies must safeguard the patient’s interests and fundamental rights, to the extent that these are necessary and proportionate, and of which the effects shall be foreseeable by the data subject.

The principle of data minimization also applies, meaning that a data controller should limit the collection of personal information to what is directly relevant and necessary to accomplish a specified purpose. A data controller is someone who has a certain degree of control over the data processing activity. Data controllers can be either individuals or legal entities such as companies or government authorities. Examples of cases where the data controller is an individual include general practitioners, pharmacists, politicians and sole traders, where these individuals keep personal information about their patients, clients, constituents etc. Data controllers should retain the data only for as long as is necessary to fulfill that purpose. In other words, data controllers should collect only the personal data they really need, and should keep it only for as long as they need it.

The data minimization principle is not new. It derives from Article 6.1(b) and (c) of Directive 95/46/EC and Article 4.1(b) and (c) of Regulation EC (No) 45/2001, which provide that personal data must be “collected for specified, explicit and legitimate purposes” and must be “adequate, relevant and not excessive in relation to the purposes for which they are collected and/or further processed.”

In proposed Article 83 the Parliament imposes strict requirements for data processing in health research. These proposed requirements have led to an outcry from industry stakeholders because they believe the proposal would unduly limit the positive uses of health data in research, as you can see here in the joint statement of the Healthcare Coalition on Data Protection.

Software Developers AND Medical Device Manufacturers Should Design with Privacy in Mind

Privacy by Design is not a new concept. Privacy by Design means that privacy and data protection are embedded throughout the entire life cycle of technologies, from the early design stage to their deployment, use and ultimate disposal. What is new, however, is its scope. The Parliament proposes to expand general compliance obligations and “privacy-by-design”/“privacy-by-default” requirements in particular, to software and hardware manufacturers — regardless of whether they process personal data. So, software that captures health data must be compliant by default with the design requirements. The design requirements are not clearly defined, and companies should do their due diligence beforehand. Erik Vollebregt, an expert on EU medical devices regulations, has seen many companies dealing with these issues, and wrote a practical report explaining the pitfalls and strategies to help you comply with these design requirements. You may access that report here.

Further, producers and data processors (which will affect many cloud providers) must also “implement appropriate technical and organizational measures and procedures to ensure that their services and products allow controllers by default to meet the requirements of this regulation, in particular [privacy-by-design and privacy-by-default]” (emphasis added).

Companies might think that locating the cloud in countries outside the EU with more permissive laws would save them from the EU maze. It is unlikely that such strategies would make sense since the European Commission is already encouraging companies to locate their clouds in the EU.

So why are Europeans so gung ho about data protection?

First, unless you were stranded on an island with zero Internet access, you probably have read about whistleblower Edward Snowden’s allegations about US spying. Because of the Snowden revelations, the European Union has reacted and is reinforcing its privacy fortress.

For example, on October 23, 2013 the EU Parliament recommended the EU suspend its Terrorist Finance Tracking Program (TFTP) agreement with the US in response to the NSA’s alleged tapping of EU citizens’ bank data held by the Belgian company SWIFT. The EU-US TFTP agreement on the processing and transfer of bank messaging data to track terrorists’ financial flows became effective in August 2010. The US authorities’ access to these financial data is strictly limited by the TFTP deal. If proven, the NSA’s activities would constitute a clear breach of the EU-US agreement.

Second, data protection is explicitly protected as a constitutional right in Europe. Under the Lisbon Treaty of 2009, the protection of personal data is recognized as a fundamental right.  While the US has a constitutional right to privacy, the concept has grown organically from a Supreme Court case (Griswold v. Connecticut), and privacy protections have not been developed as comprehensively as they have in the EU.

Third, as recently as World War II and its aftermath, many countries in Europe lived through the catastrophic consequences of what can happen when collected personal is shared with and by authorities without restriction.

Whether influenced by history, constitutional rights, or rapid technological advances, the EU will reinforce its data protection and privacy rules. Companies will need to invest in risk management. Government may seek disclosure for security purposes, but then in the EU companies would need to disclose those requests for personal data by foreign authorities.