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March 15, 2011

HealthNet and HIPAA, Again ... So, Does HIPAA Work?

HealthNet either lost, or had stolen from it, computer hard drives with PHI of 1.9 million subscribers that had been in a California facility.  This latest HealthNet data security breach, which may have included names, Social Security numbers, addresses, health information and financial information comes a little over a year after a widely-reported data security breach by HealthNet in Connecticut which resulted in the first state Attorney General action under the HIPAA amendments contained in the HITECH Act.  HealthNet is notifying affected individuals and is offering two years of no-cost credit monitoring and fraud resolution services, and credit restoration and identify theft insurance as needed.

It's both surprising and unsurprising that this has happened again to HealthNet.  In these cases, and in recent cases in Massachusetts (Mass General Hospital HIPAA settlement) and Maryland (Cignet HIPAA violations and CMPs), we have seen examples, collectively, of individual sloppiness, of ineffective corporate policies and procedures, and possibly of gross neglect/fraud/incompetence.  The question arises: Is HIPAA the right instrument to address all three sorts of problems?  Since it seems that it is not having an effect on any of them, I would suggest that the answer is no.

We need to retrench and figure out how best to address each of these scenarios.  The HIPAA enforcement scheme's underlying assumption is that covered entities would rather comply with the rules than face the monetary, customer relations and public relations hits associated with violating the rules.  Instead, it seems we've created something like a market for trading emissions credits.  At some level, certain covered entities either (a) are really, really poorly managed or (b) have made the calculation that it makes more business sense to take the hits than to comply with the rules.

Bottom line:  Since it seems unlikely that the federales and the states will ramp up enforcement beyond current levels, the rules need to be reformulated so that they make more sense given current clinical, business and technological realities.  Meanwhile, it's the law of the land.  Deal with it.     

David Harlow
The Harlow Group LLC
Health Care Law and Consulting


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In my opinion, HIPAA will never be able to address the inadvertent accidents that tend to happen everywhere. Sure, you can fine a facility out the wazoo, but will that REALLY help someone NOT lose a device later?

More specifically, I think HIPAA is a great device to educate staff about, in order to ensure no one is deliberately giving out the PHI. That deliberate, meant-to-cause-harm type of conduct I feel can be deterred via HIPAA. However, it's very hard to deter future accidents from happening.

Are all facilities to assume laptops will be stolen in transport? Are all flash drives meant to fall out of pockets? To hold these facilities responsible requires quite a dystopic view of the world. Sort of a, "You are responsible for the breach because you should have assumed someone would steal the device/hack the computer/insert your own HIPAA circumstance.

@Autumn --

I respectfully disagree. Your position is tantamount to never holding liable for an automobile collision the driver at fault - who was texting while driving - because she didn't crash the car deliberately.

Laptops and flash drives should not leave facilities with unencrypted (or otherwise unsecured) PHI on them. Pretty straightforward. I'm not sure what will make covered entities sit up and take notice short of draconian penalties (e.g., temporary suspension of license/certification). If there really is not that much harm in releases due to lost or stolen flash drives or laptops, then the rules should be changed. Of course, there is harm in such releases, and I believe that since we've solved the technical issues, we need to find the right levers to influence human behavior so that such data security breaches are simply eliminated.

Healthnet and other institutions that have lost or have had protected information such as social security numbers stolen from them have little consequences to pay for this breach of security. It seems that all they do is provide one year of free credit monitoring. Perhaps if they had to pay a small fine or payment for each person's information that was lost they would be more careful.

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