A server hacking incident at Texas Ear, Nose and Throat Specialists (“Texas ENT”) allowed hackers to access and copy patient records containing patient names, dates of birth, medical record numbers, and procedure codes used for billing purposes and in some cases, patient Social Security numbers of 535,489 Texas ENT patients, according to a breach notification report filed with the Department of Health & Human Services Office of Civil Rights (“OCR”). With cybersecurity incidents reaching pandemic levels, health care providers, health plans, healthcare clearinghouses, their business associates and leaders need to take careful, well-documented steps to protect their data, organizations and leaders against disruptions and liabilities arising from these risks.

A Notice of Security Incident (the “Announcement”) posted to the Texas ENT website reports Texas ENT set letters notifying affected of the breach of their personal health information on December 10, 2021 and advises patients to review the statements from healthcare providers for accuracy, and to contact their provider if their review identifies services that were not received. The Announcement also states that Texas ENT is offering complimentary monitoring services through Experian to patients whose Social Security numbers were in the improperly accessed files.

The notifications to OCR, the patients and the media are required to comply with breach notification the Federally imposed breach notification requirements of the Health Insurance Portability & Accountability Act (“HIPAA”) as data breach notice requirements of the Texas Medical Records Privacy Act (“TMRPA”) and the Texas Identity Theft Enforcement and Protection Act (TITEPA).

The Texas ENT breach notification filed to OCR is one of a hundreds of large breach notifications recently reported to OCR.  HIPAA generally requires that health care providers like Texas ENT, health plans, healthcare clearinghouses and their service providers that qualify as business associates (hereafter “covered entities”) safeguard the privacy and security of individually identifiable protected health information (“protected health information”) in paper, electronic or other form against use, access or disclosure other than as allowed by HIPAA.  Along with its general restrictions upon use, access or disclosure of protected health information, HIPAA also requires that covered entities and their business associates take the special precautions to protect electronic protected health information (“ePHI”) against improper access, use, disclosure or loss required by the OCR HIPAA Security Rule.  Meanwhile, the OCR HIPAA Breach Notification Rule requires that covered entities notify affected individuals, OCR and in the case of breaches involving records of more than 500 individuals, the media in accordance with the OCR Breach Notification Rule following breach of unsecured protected health information. Breaches of the Security or Breach Notification Rules often result in significant civil monetary penalty assessments or negotiated settlements to mitigate civil liability exposures arising out of such breaches.  See e.g.,  Clinical Laboratory Pays $25,000 To Settle Potential HIPAA Security Rule Violations (May 25, 2021); Health Insurer Pays $5.1 Million to Settle Data Breach Affecting Over 9.3 Million People (January 15, 2021); Aetna Pays $1,000,000 to Settle Three HIPAA Breaches (October 28, 2020); Health Insurer Pays $6.85 Million to Settle Data Breach Affecting Over 10.4 Million People (September 25, 2020); HIPAA Business Associate Pays $2.3 Million to Settle Breach Affecting Protected Health Information of Over 6 million Individual – (September 23, 2020); Lifespan Pays $1,040,000 to OCR to Settle Unencrypted Stolen Laptop Breach (July 27, 2020); Small Health Care Provider Fails to Implement Multiple HIPAA Security Rule Requirements (July 23, 2020).  While various factors can influence whether and the amount of any fine that Texas ENT will face as a result of OCR’s ongoing investigation of the breach, OCR’s enforcement record strongly suggests Texas ENT may seek to negotiate a resolution agreement or other arrangement with OCR to mitigate its exposure to potential civil monetary penalties.

Alerts issued by OCR regarding heightened security risks in recent months and a growing tide of highly publicized breaches send a strong warning to other covered entities and their business associates to reconfirm the adequacy of their own HIPAA privacy, security, breach notification and other procedures and protections by among other things:

• Reviewing and monitoring on a documented, ongoing basis the adequacy and susceptibilities of existing practices, policies, safeguards of their own organizations, as well as their business associates and their vendors within the scope of attorney-client privilege taking into consideration data available from OCR, data regarding known or potential susceptibilities within their own operations as well as in the media, and other developments to determine if additional steps are necessary or advisable.
• Updating policies, privacy and other notices, practices, procedures, training and other practices as needed to promote compliance and defensibility.
• Renegotiating and enhancing service provider agreements to detail the specific compliance, audit, oversight and reporting rights, workforce and vendor credentialing and access control, indemnification, insurance, cooperation and other rights and responsibilities of all entities and individuals that use, access or disclose, or provide systems, software or other services or tools that could impact on security; to clarify the respective rights, procedures and responsibilities of each party in regards to compliance audits, investigation, breach reporting, and mitigation; and other relevant matters.
• Verifying and tightening technological and other tracking, documentation and safeguards and controls to the use, access and disclosure of protected health information and systems.
• Conducting well-documented training as necessary to ensure that members of the workforce of each covered entity and business associate understand and are prepared to comply with the expanded requirements of HIPAA, understand their responsibilities and appropriate procedures for reporting and investigating potential breaches or other compliance concerns, and understand as well as are prepared to follow appropriate procedures for reporting and responding to suspected
  violations or other indicia of potential security concerns.
• Tracking and reviewing on a systemized, well-documented basis actual and near miss security threats to evaluate, document decision-making and make timely adjustments to policies, practices, training, safeguards and other compliance components as necessary to identify and resolve risks.
• Establishing and providing well-documented monitoring of compliance that includes board level oversight and reporting at least quarterly and sooner in response to potential threat indicators.
• Establishing and providing well-documented timely investigation and redress of reported
  violations or other compliance concerns.
• Establishing contingency plans for responding in the event of a breach. 
• Establishing a well-documented process for monitoring and updating policies, practices and other efforts in response to changes in risks, practices and requirements.
• Preparing and maintaining a well-documented record of compliance, risk, investigation and other security activities.
• Pursuing other appropriate strategies to enhance the covered entity’s ability to demonstrate its compliance commitment both on paper and in operation.

Because susceptibilities in systems, software and other vendors of business associates, covered entities and their business associates should use care to assess and manage business associate and other vendor associated risks and compliance as well as tighten business associate and other service agreements to promote the improved cooperation, coordination, management and oversight required to comply with the new breach notification and other HIPAA requirements by specifically mapping out these details.

Leaders of covered entities or their business associates also are cautioned that while HIPAA itself does not generally create any private right of action for victims of breach under HIPAA, breaches may create substantial liability for their organizations or increasingly, organizational leaders under state data privacy and breach, negligence or other statutory or common laws.  In addition, physicians and other licensed parties may face professional discipline or other professional liability for breaches violating statutory or ethical standards.  Meanwhile, the Securities and Exchange Commission has indicated that it plans to pursue enforcement against leaders of public health care or other companies that fail to use appropriate care to ensure their organizations comply with privacy and data security obligations and the Employee Benefit Security Administration recently has issued guidance recognizing prudent data security practicces as part of the fiduciary obligations of health plans and their fiduciaries.  

For Additional Information Or Assistance

If you need have questions or need assistance with health, benefit, payroll, investment or other data, systems or other privacy or security related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.  Longtime scribe for the American Bar Association Joint Committee on Employee Benefits agency meeting with OCR and author of leading publications on HIPAA and other privacy and data security concerns, Ms. Stamer also regularly assists clients and provides input to Congress, OCR and other agencies, publishes and speaks extensively on medical and other privacy and data security, health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. Her insights on HIPAA risk management and compliance frequently appear in medical privacy related publications of a broad range of health care, health plan and other industry publications.  She also is a highly-sought out speaker on privacy and data security who serves on the planning faculty and speaks for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, the American Bar Association, the Health Care Compliance Association, a multitude of health industry, health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others.  You can get more information about her HIPAA and other experience here.  If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters, e-mail Ms. Stamer or call (214) 452-8297.  

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