To round out my recent postings regarding the impact of the American Recovery and Reinvestment Act of 2009 (ARRA) on healthcare organizations, I wanted to touch on the enhancements to the enforcement rules. I spoke about the mandatory reporting of a breach in one of earlier posts. Now HHS doesn't need to wait for a complaint or audit to find the breaches. Offending organizations have to tattle on themselves, and then get hit with the penalties. I wish this was how it worked at my house. I've got 4 kids and I'd love to institute mandatory self incrimination. Doubt it will work that well in either scenario, but we can always hope.
Some of the caps on willful negligence have also been raised or removed. This is important as it changes the risk model some organizations have been operating under. Knowing the most a penalty for non-compliance could cost them has allowed organizations to factor this into their risk models. If mitigating the risk is close to or more than the potential penalty, the risk may be deemed acceptable and nothing is done to mitigate it. This is great risk management for the company but bad for the patient. Eliminating a cap for willful negligence should help organizations take a harder look at the true risk they are facing, not just the financial risk.
The final interesting tidbit in the enforcement modifications is the delegation of authority to the state attorneys general. Unless there is a pending federal action, the attorney general of a state now has the authority to seek civil damages for violations of HIPAA. The limitations of these damages are lower than the federal level however there is a much greater chance of a zealous state attorney general taking action against an organization on behalf of the residents of that state than any enforcement action being taken by the federal government.
All in all, I believe these changes help strengthen HIPAA and will force some organizations that have looked for any and all loopholes to reconsider their approach to security and privacy. There is no perfect solution and I'm the last person who wants more federal regulation on any industry. However, I like to see regulations that may actually help us move toward an end state we all agree should be reached rather than one that leaves us scratching our heads from the get go.
P.S. I'm not commenting on the need, usefulness, benefits or detractors of ARRA as a whole. Simply the sections I've mentioned in these posts. Please no flaming rants about the role of the federal government, corporate responsibility or other hot topics of the day. Respectful and intelligent comments both in favor of or in contradiction to my posts will be responded to. All others will be ignored…respectfully.
Under ARRA, covered entities and their business associates are now compelled to disclose breaches of protected health information (PHI) to the Secretary of Health and Human Services (HHS). If the breach involves 500 or more individuals the notification must be immediate. If less, a log must be kept of all breaches and submitted annually to HHS. HHS will then post on their website a list of all organizations which had a breach, the nature of the breach and the number of people involved.
The organization must also attempt to make individual notifications to those affected. If the breach involves 500 or more individuals or just TEN individuals for whom there is no current contact information, the notifications must also include broadcasts through mass media in the markets where people are affected.
The one get out of jail free card that was granted is for PHI which is rendered unusable, unreadable or indecipherable. In the past many organizations believed they could anonymize data and it would be safe. Typically though in order to truly anonymize data you have to strip out so much relevant information that the remaining data is no longer useful for any sort of analytical purposes. So…unusable is out.
What about unreadable and indecipherable? Encryption seems to be our only real option at this point. HHS will soon be releasing the final guidance on this topic but I don't expect anything shell shocking. There has been lots of press over the past few years regarding the encryption of data both at rest and in motion. I'm a big proponent of both. Should you lose a laptop and the hard drive is fully encrypted, you're covered. No breach. If someone attacks a database server and your database tables are encrypted you're probably covered there too. However, if your web application which accesses the database is breached, you are up that proverbial creek without a paddle.
At some point in every process or application we need data to be readable. Otherwise why would we need it in the first place? By encrypting data in motion or at rest all we are doing is funneling the attacks to one focal point. Our applications. They must be secured. They are the key weakness in this new equation. We can implement SSL for the socket connections and encrypt a hard drive or database table but if our applications are weak, we're toast.
Application security has grown by leaps and bounds over the past several years. The problem is we continue to see the same mistakes in code. Buffer overflows, unvalidated input, unprotected file access and other flaws continue to get written into our applications. Applications must go through a more rigorous security testing process whether they are written by a team of a thousand over the course of years or a team of two over a case of Red Bull. Oh…and we need to be teaching security at our colleges and universities, but that a topic for another day.
If we have any hope of protecting our data we must secure our applications. While encryption and other security technology will prevent data leakage or thefts in some instances, they can't protect against them through approved applications. We can, and should do more.
Are you a business associate of a covered entity as defined by HIPAA? If so, you need to read the following excerpt from the American Recovery and Reinvestment Act.
PART 1—IMPROVED PRIVACY PROVISIONS AND SECURITY PROVISIONS
SEC. 13401. APPLICATION OF SECURITY PROVISIONS AND PENALTIES
TO BUSINESS ASSOCIATES OF COVERED ENTITIES;
ANNUAL GUIDANCE ON SECURITY PROVISIONS.
(a) APPLICATION OF SECURITY PROVISIONS.—Sections 164.308,
164.310, 164.312, and 164.316 of title 45, Code of Federal Regulations,
shall apply to a business associate of a covered entity in
the same manner that such sections apply to the covered entity.
The additional requirements of this title that relate to security
and that are made applicable with respect to covered entities shall
also be applicable to such a business associate and shall be incorporated
into the business associate agreement between the business
associate and the covered entity.
(b) APPLICATION OF CIVIL AND CRIMINAL PENALTIES.—In the
case of a business associate that violates any security provision
specified in subsection (a), sections 1176 and 1177 of the Social
Security Act (42 U.S.C. 1320d–5, 1320d–6) shall apply to the business
associate with respect to such violation in the same manner
such sections apply to a covered entity that violates such security
Do I have your attention now?
For the past 6 years only covered entities such as physicians, health plans or healthcare information clearinghouses were required to comply with the infamous HIPAA security and privacy rules. Organizations that may have had access to protected health information (PHI) but were not covered entities (CE) were not required to follow HIPAA standards. Most business associate agreements (BAA) stated only that the BA would protect the information they obtained from or managed on behalf of a CE with due diligence. ARRA has changed the rules of the game. I'm actually surprised it took this long.
If you are a business associate of a covered entity then you need to prepare to take on some additional risk. Now that a BA is legally bound to the same standards, sanctions and fines for deficiencies are a new reality. Hopefully your business model was to comply with HIPAA from the onset knowing this day would come. If so, great. If not, you will be playing catch up for quite some time.
While there will surely be a ramp up period before heavy enforcement begins, you can be sure there are some examples to be made. Don't be one of them. Get your business leadership together and review your risk assessments, control standards and overall security posture. Even having a nightmare story to tell an auditor who shows up unexpectedly will go over a lot better than no story at all. Guaranteed.