HHS Issues Interim Final Requiring Health Care Provider, Health Plans & Other Covered Entities To Give Breach Notifications When Certain Personal Health Information Breached Beginning In September; Register to Participate In September 10th Briefing on New Rules In Person or Via Telephone

August 20, 2009

The U.S. Department of Health and Human Services (HHS) yesterday (August 19, 2009) issued “breach notification” regulations requiring health care providers, health plans and other covered entities (Covered Entities) under the personal health information privacy and security rules of the Health Insurance Portability & Accountability  (HIPAA) to notify affected individuals following a “breach” of “unsecured” protected health information. Scheduled for publication in the Federal Register on August 24, 2009, the new breach notification regulations are part of a series of new rules that implement new electronic personal health information data security and data breach notification requirements for Covered Entities added to HIPAA under the Health Information Technology for Economic and Clinical Health (HITECH) Act signed into law on February 17, 2009 as part of American Recovery and Reinvestment Act of 2009 (ARRA).  Covered entities must begin complying with the new rules no later than September 24, 2009.

Curran Tomko Tarski, LLP Health Practice leader Cynthia Marcotte Stamer will conduct a briefing on these new protected health information data security and data breach rules on Thursday, September 10, 2009 from Noon to 1:30 P.M. Central Time. For a registration fee of $45.00, registrants will have the option to participate via teleconference or in person at the offices of Curran Tomko Tarski LLP, 2001 Bryan Street, Suite 2050, Dallas Texas 75201.  For more information, e-mail here.

 HITECH Act Data Breach and Unsecured PHI Rules

The new data breach notification rules are part of a series of recent HIPAA enacted under the HITECH Act to strengthen the federal rules requiring HIPAA covered entities to safeguard electronic and certain other protected health information. Enhanced data security and data breach rules added as part of these HITECH Act amendments obligate  covered entities and business associates to provide certain notifications following a breach of “unsecured”  “protected health information” within the meaning of HIPAA, as amended.  “Unsecured protected health information” is defined as protected health information that is not secured through the use of a technology or methodology specified by the HHS Secretary.

The new data breach regulations implement the HITECH Act requirement that Covered Entities and their business associates notify affected individuals, the Secretary of HHS, and in some cases, the media, of a breach and the form, manner, and timing of that notification.  For purposes of the HITECH Act, electronic protected health information is considered “unsecured” unless the covered entity has satisfied certain minimum standards for the protection of that data established pursuant to the HITECH Act.  HHS and the Federal Trade Commission previously issued certain initial guidance concerning the HITECH Act standards for determining when electronic personal health information qualifies as secure.  To help further define when electronic health information is treated as “unsecured” and therefore subject to the breach notification requirements, the data breach rules also update and clarify the previously issued existing HHS guidance specifying encryption and destruction as the technologies and methodologies that render protected health information unusable, unreadable, or indecipherable to unauthorized individuals published earlier this year by HHS to for purposes of determining when protected health information will be considered “unsecured” for purposes of the HITECH Act data breach rules.  Entities subject to the HHS and FTC regulations that secure health information as specified by the guidance through encryption or destruction are relieved from having to notify in the event of a breach of such information.  

The HHS interim final regulations are effective September 24, 2009, which is the date 30 days after the date they will be published on the Federal Register and include a 60-day public comment period. To review the interim final data breach regulations, see here.  To review the HITECH Act Breach Notification Guidance and Request for Information, see here.

For More Information

The author of this article, Curran Tomko and Tarski LLP Health Care Practice Chair Cynthia Marcotte Stamer has extensive experience advising and assisting health care providers, payors and their business associates about HIPAA and other privacy and data security matters, as well as a diverse range of health care policy, regulatory, compliance, risk management and operational concerns. 

Past chair of the American Bar Association Health Law Section Managed Care & Insurance Section, Martindale Hubble AV-rated and recognized in International Who’s Who of Professionals, Ms. Stamer continuously advises health care providers, health care payers and administrators, employers, governments and others about health care, insurance, human resources, privacy and data security, technology, and other legal and operational concerns.  A popular lecturer and widely published author on privacy and data security and other related health care and health plan matters, Ms. Stamer also writes and speaks extensively on health and managed care industry privacy, data security and other technology, regulatory and operational risk management matters.  She currently serves as the Editor in Chief of the forthcoming 2010 edition of the Information Security Guide to be published by the American Bar Association Information Security Committee in 2010.  Examples of her other works include “Protecting & Using Patient Data In Disease Management: Opportunities, Liabilities And Prescriptions,” “Privacy Invasions of Medical Care-An Emerging Perspective,” “Cybercrime and Identity Theft: Health Information Security Beyond HIPAA,” and a host of others.  Her insights on health care, health insurance, human resources and related matters appear in the Atlantic Information Service Privacy Report, The Wall Street Journal, Business Insurance, the Dallas Morning News, Managed Healthcare, Health Leaders, and a various other national and local publications.  For additional information about Ms. Stamer, her experience, involvements, programs or publications, see here.  

We hope that this information is useful to you.  If you need assistance monitoring, evaluating or responding to these or other proposed health care or other regulatory reforms or with other health care compliance, risk management, transaction or operation concerns, please contact the author of this update, Curran Tomko Tarski LLP Health Practice Group Chair, Cynthia Marcotte Stamer, at (214) 270-2402, cstamer@cttlegal.com or your other favorite Curran Tomko Tarski LLP Partner.

We also encourage you and others to join the discussion about these and other health care reform proposals and concerns by joining the Coalition for Responsible Health Care Reform Group on Linkedin, registering to receive these updates here.

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on our electronic Solutions Law Press Health Care Update publication available here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please register to receive this Solutions Law Press Health Care Update here and be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. You can access other recent updates and other informative publications and resources provided by Curran Tomko Tarski LLP attorneys and get information about its attorneys’ experience, briefings, speeches and other credentials here.

For important information concerning this communication click here.  If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@SolutionsLawyer.net.

©2009 Cynthia Marcotte Stamer.  All rights reserved. 


Reassignment of HIPAA Security Rule Enforcement Signals Growing Seriousness About Enforcing HIPAA

August 4, 2009

The Department of Health & Human Services (HHS) today (August 3, 2009) transferred authority for the administration and enforcement of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule to the Office for Civil Rights (OCR).  Prior to this announcement, responsibility for interpretation and enforcement of the Security Rule rested with the Centers for Medicare & Medicaid Services (CMS).  The change reflects the growing seriousness of HHS and others about enforcing federal privacy and data security mandates for health information.  HHS anticipates the transfer of authority will eliminate duplication and increase efficiencies in how the department ensures that Americans’ health information privacy is protected.

HHS has the authority for administration and enforcement of the federal standards for health information privacy called for in HIPAA. The Privacy Rule provides federal protections for personal health information held by covered entities and gives patients an array of rights with respect to that information. OCR has been responsible for enforcement of the Privacy Rule since 2003. The Security Rule specifies a series of administrative, technical, and physical security procedures for covered entities to use to assure the confidentiality of electronic protected health information. The Health Information Technology for Economic and Clinical Health (HITECH) Act, part of the American Recovery and Reinvestment Act of 2009 (ARRA), mandated improved enforcement of the Privacy Rule and the Security Rule.

Through a separate delegation, CMS continues to have authority for administration and enforcement of the HIPAA Administrative Simplification regulations, other than privacy and security of health information.

The transfer of Security Rule enforcement authority comes as guidance about new data breach rules for electronic protected health information is impending.  This impending guidance relates to  the implementation of new breach notification rules for covered entities and their business associates concerning their obligation to use of technologies and methodologies that render protected health information unusable, unreadable, or indecipherable to unauthorized individuals, as required by amendments to HIPAA enacted under the Health Information Technology for Economic and Clinical Health (HITECH) Act passed as part of the American Recovery and Reinvestment Act of 2009 (ARRA) last February.  OCR officials have stated that they are working to publish the next set of regulations regarding these new breach notifications before the end of August, 2009. 

In addition to adding the breach notification requirements, the HITECH Act also tightened the HIPAA mandates in several other respects.  Among other things, it amended HIPAA to:

  • Broaden the applicability of the HIPAA’s Privacy Rules and penalties to include business associates;
  • Clarify that HIPAA’s criminal sanctions apply to employees or other individuals that wrongfully use or access PHI held by a covered entity;
  • Increase criminal and civil penalties for HIPAA Privacy Rules violators;
  • Allow State Attorneys General to bring civil damages actions on behalf of certain state citizens who are victims of HIPAA Privacy and Security Rule violations;
  • Modify certain HIPAA use and disclosure and accounting requirements and risks;
  • Prohibits sales of PHI without prior consent;
  • Tighten certain other HIPAA restrictions on uses or disclosures;
  • Tighten certain HIPAA accounting for disclosure requirements;
  • Clarify the definition of health care operations to excludes certain promotional communications; and
  • Expand the Business Associates Agreement Requirements.

These and other developments make it imperative HIPAA covered entities and their business associates take prompt action to immediately review and update their data security and privacy practices to guard against growing liability exposures under HIPAA and other federal and state laws. Covered entities must update policies and practices to avoid these growing liabilities. Business associates that have not already done so also must appoint privacy officers and adopt and implement privacy and data security policies and procedures fully compliant with HIPAA and other applicable federal and state rules, including amendments enacted as part of the American Recovery and Reinvestment Act of 2009 signed into law on February 17, 2009.

 

For more information about today’s announcement, see here.  See here for the initial guidance and request for comments issued by HHS regarding these new security standards.

For More Information

We hope that this information is useful to you.  If you need assistance with health care privacy and data security, technology, or other health care compliance, risk management, transaction or operation concerns, please contact the author of this update, Curran Tomko Tarski LLP Health Practice Group Chair, Cynthia Marcotte Stamer, at (214) 270-2402, cstamer@cttlegal.com or your other favorite Curran Tomko Tarski LLP Partner.  Ms. Stamer has extensive experience advising clients and writes and speaks extensively on these and other health care privacy and data security and related matters. 

You can review other recent health care and internal controls resources and additional information about the health industry and other experience of Ms. Stamer here.  If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information to cstamer@cttlegal.com.

For important information concerning this communication click here.  If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@SolutionsLawyer.net.

©2009 Cynthia Marcotte Stamer.  All rights reserved. 


FTC Issues FAQ Guidance On Red Flag Rules Applicable To Health Care Providers & Others

June 12, 2009

The Federal Trade Commission (FTC) and five other federal agencies yesterday (June 11, 2009) jointly issued a set of frequently asked questions (FAQs) about  federal regulations on the “Red Flags and Address Discrepancy Rules” (Red Flag Rules) implementing sections of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act) now scheduled to take effect on August 1, 2009.  

Health care providers and a broad range of other entities are among the organizations generally required to comply with the broadly reaching Red Flag Rules, which require “financial institutions” and “creditors” to develop and implement written Identity Theft Prevention Programs and require issuers of credit cards and debit cards to assess the validity of notifications of changes of address.  The rules also provide guidance for users of consumer reports regarding reasonable policies and procedures to employ when consumer reporting agencies send them notices of address discrepancy.  

The sweeping reach of the definition of “creditor: and “financial institutions” in the Red Flag Rules and other confusion about the Red Flag Rules have prompted the agencies to delay the deadline for compliance several times.  The most recent delay, which extended the compliance deadline from May 1 to August 1, 2009, was announced by the FTC on April 30, 2009.  The FTC promised to issue additional guidance to help promote better understanding of the rules when it announced this latest delay in the compliance deadline on April 30, 2009.

Fulfilling this promise, the FAQs discuss numerous aspects of the Red Flag Rules, including:

  • Types of entities and accounts covered;
    Establishment and administration of an Identity Theft Prevention Program;
  • Address validation requirements applicable to card issuers; and
  • Obligations of users of consumer reports upon receiving a notice of address discrepancy.

FACTA directed financial regulatory agencies, including the FTC, to promulgate rules requiring “creditors” and “financial institutions” with covered accounts to implement programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft. FACTA’s definition of “creditor” applies to any entity that regularly extends or renews credit – or arranges for others to do so – and includes all entities that regularly permit deferred payments for goods or services. Accepting credit cards as a form of payment does not, by itself, make an entity a creditor. Some examples of creditors are finance companies; automobile dealers that provide or arrange financing; mortgage brokers; utility companies; telecommunications companies; non-profit and government entities that defer payment for goods or services; and businesses that provide services and bill later, including many  doctors and other health care providers and other professionals. “Financial institutions” include entities that offer accounts that enable consumers to write checks or make payments to third parties through other means, such as other negotiable instruments or telephone transfers.  The FTC has made clear it perceives most health care providers as falling within the scope of these rules.

FACTA is only one of a growing list of the evolving privacy and data security mandates applicable to businesses under federal and state laws that organizations must address under applicable federal laws.   In addition to FACTA, most businesses also face other specific data security and data breach requirements under a tapestry of other federal and state laws which are constantly evolving.  In addition to these FACTA and other generally applicable data security and breach rules, many organizations face evolving industry specific mandates. For example, health care providers, health plans, health care and their business associates also are required to update their privacy and data security practices to comply with recent amendments to the Health Insurance Portability & Accountability Act Privacy & Security Standards signed into law February 17, 2009.

Many of these federal laws provide for both civil penalties as well as criminal penalties that bring violations of these regulations under the Federal Sentencing Guidelines.  As a consequence, most organizations need to implement and administer compliance programs to manage these Federal Sentencing Guideline risks.  Even where criminal sanctions are not triggered, noncompliance with these and other data security mandates can trigger substantial judgment awards, administrative penalties or both.

If you need assistance with auditing, updating, administering or defending your privacy, data security or other privacy and data security practices or addressing other health care compliance, risk management, transactions or operations concerns, please contact Cynthia Marcotte Stamer at (214) 270-2402, CStamer@CTTLegal.com.

For More Information

We hope that this information is useful to you. You can find more information about the Red Flag Rules and other privacy and identity theft matters at here. You also can review other recent health care and internal controls resources and additional information about the health industry and other experience of Ms. Stamer here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information to CStamer@CTTLegal.com.


Newly Enacted FERA Amendments To False Claims Act Signal New Risks For Health Industry Organizations & Others

May 26, 2009

Health care providers and other parties covered by the False Claims Act, 31 U.S.C. § 3729 (FCA), now face expanded whistleblower and other liability under amendments to the FCA enacted under the “Fraud Enforcement and Recovery Act of 2009”(FERA).  The amendments increase the likelihood both that whistleblowers will turn in health care providers and other individuals and organizations that file false claims in violation of the FCA and the liability that violators may incur for that misconduct.

Signed into law by President Obama last Wednesday (May 20, 2009), FERA immediately upon enactment:

  • Amends the whistleblower protections afforded to employees, contractors and agents who suffer retaliation for taking lawful efforts to stop violations of the FCA and to make it easier for those individuals to pursue retaliation claims;
  • Expands liability under for making false or fraudulent claims to the federal government under the FCA;
  • Applies liability under the FCA for presenting a false or fraudulent claim for payment or approval (currently limited to such a claim presented to an officer or employee of the federal government); and
  • Requires persons who violate such Act to reimburse the federal government for the costs of a civil action to recover penalties or damages 

Concurrent with President Obama’s signature of FERA into law, the U.S. Departments of Justice (DOJ) and Health & Human Services (HHS) jointly announced the expansion of federal health care fraud enforcement efforts.  On May 20, 2009, HHS and DOJ announced their activation of a new interagency team to combat health care fraud highlights the increasing need for health care providers and health plans to review and tighten their practices for dealing with Medicare and other federal programs to survive scrutiny under federal health care fraud initiatives.  Coupled with FERA and the already significant increase in federal health care fraud detection and enforcement activities in recent years and a proposed 50 percent increase in funding for these activities included in President Obama’s Fiscal Year 2010 budget, health care providers and payers must be prepared to defend their dealing with Medicare, Medicaid and other federal health care programs.

The expanded protections afforded under FERA to whistleblowers and others suffering retaliation for opposing or reporting illegal actions can be expected to serve as a key tool in these efforts. These new retaliation safeguards are designed further increase the likelihood that employees and other insiders will help government officials ferret out false claims and other fraud. Specifically with regard to retaliatory action claims Section 4(d) of FERA amends 31 U.S.C.§ 3730(h) to provide for the recovery of “all relief necessary to make that employee, contractor, or agent whole” where that individual is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts he does or takes on behalf of an individual in furtherance of other efforts to stop a violation of the FCA. 

FERA expressly provides that relief to victims of retaliation will include “reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.” 

The FERA amendments to the FCA, the new TEAMS enforcement effort announced simultaneously with its signature into law mean that health care industry organizations and others covered by the FCA must implement appropriate fraud prevention, detection, redress and other procedures to help defend against possible FCA or other health care fraud claims and investigations.

The attorneys at Curran Tomko Tarski, LLC have extensive experience representing and advising health industry and other clients against FCA and other federal health care and fraud laws. 

For More Information

We hope that this information is useful to you. If you need assistance with auditing or defending health care fraud concerns or other health care compliance, risk management, transactions or operations concerns, please contact Curran Tomko Tarski LLP Partners Cynthia Marcotte Stamer at (214) 270-2402, CStamer@CTTLegal.com; Michael T. Tarski at (214) 270-1420 or MTarski@CTTLegal.com; Edwin J. Tomko at (214) 270-1405 or ETomko@CTTLegal.com.

You can review other recent health care and internal controls resources and additional information about the health industry and white collar experience of the Curran Tomko Tarski LLP attorneys at http://www.CTTLegal.com. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at CTTLegal.com or e-mailing this information to CStamer@CTTLegal.com.


FTC Extends Red Flag Rule Compliance Deadline From May 1 to August 1, 2009

May 1, 2009

Today is no longer the deadline for health care providers and other businesses regulated by the Fair and Accurate Credit Transactions Act of 2003 (“FACTA”) to begin complying with the identity theft detection and prevention (“Red Flag Rules”) adopted by the Federal Trade Commission (“FTC”).   

While health care providers have more time to comply, they can’t breathe easy.  Finalizing arrangements to comply with these new mandates and other recent amendments to the health care privacy and data security requirements applicable to health care providers under recently enacted amendments to the Health Insurance Portability & Accountability Act (“HIPAA”) and FACTA and other recent regulatory and enforcement changes to these rules requires that health care providers move quickly.  Learn more about these recent changes at http://solutionslaw.wordpress.com/2009/04/18/hhs-ftc-release-guidance-on-hitech-act-data-breach-rules-for-hipaa-covered-entities-entities-dealing-with-personal-health-records.

The FTC announced yesterday (April 30, 2009) its extension of the Red Flag Rule enforcement date to until August 1, 2009.  Before yesterday’s announcement, health care providers and certain other FACTA-regulated businesses were required to comply with the Red Flag Rules today.  The announcment means these organizations now have an additional three months to adopt the necessary policies and processes to monitor and respond to possible identity theft required under the Red Flag Rules. 

According to the FTC announcement, organizations regulated by FACTA also will need to review their practices in light of additional guidance that the FTC expects to issue soon.  For entities that have a low risk of identity theft, such as businesses that know their customers personally, the FTC plans to  soon release a template to help them comply with the law.  Yesterday’s announcement does not affect other federal agencies’ enforcement of the original November 1, 2008 compliance deadline for institutions subject to their oversight.

The FACTA directed financial regulatory agencies, including the FTC, to promulgate rules requiring “creditors” and “financial institutions” with covered accounts to implement programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft. FACTA’s definition of “creditor” applies to any entity that regularly extends or renews credit – or arranges for others to do so – and includes all entities that regularly permit deferred payments for goods or services. Accepting credit cards as a form of payment does not, by itself, make an entity a creditor. Some examples of creditors are finance companies; automobile dealers that provide or arrange financing; mortgage brokers; utility companies; telecommunications companies; non-profit and government entities that defer payment for goods or services; and businesses that provide services and bill later, including many  doctors and other health care providers and other professionals. “Financial institutions” include entities that offer accounts that enable consumers to write checks or make payments to third parties through other means, such as other negotiable instruments or telephone transfers.

During outreach efforts last year, the FTC staff learned that some industries and  entities within the agency’s jurisdiction were uncertain about their coverage under the Red Flags Rule. During this time, FTC staff developed and published materials to help explain what types of entities are covered, and how they might develop their identity theft prevention programs. Among these materials was an alert on the Rule’s requirements, www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm.  The resources also included a Web site with more resources to help covered entities design and implement identity theft prevention programs, www.ftc.gov/redflagsrule.

You can find more information about the Red Flag Rules and other privacy and identity theft matters at CynthiaStamer.com.  If you need assistance with questions or compliance with these or other privacy and data security rules or other health law matters, contact Cynthia Marcotte Stamer at (214) 270.2402, or cstamer@cttlegal.com.  To receive future Solutions Law Press Health Care Updates, register to participate in this Solution Law Press Health Care Update blog, register at CynthiaStamer.com or join the SLP Health Care Risk Management & Operations Group on linkedin.com.


%d bloggers like this: