First-Ever Business Associate Fine for a HIPAA Violation

Catholic Health Care Services of the Archdiocese of Philadelphia (CHCS) has agreed to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule after the theft of a CHCS mobile device compromised the protected health information (PHI) of hundreds of nursing home residents, according to the Office for Civil Rights (OCR), which enforces the HIPAA Breach, Privacy and Security rules.. CHCS provided management and information technology services as a business associate to six skilled nursing facilities. The total number of individuals affected by the combined breaches was 412.  The settlement includes a monetary payment of $650,000 and a corrective action plan. OCR initiated its investigation on April 17, 2014, after receiving notification that CHCS had experienced a breach of PHI involving the theft of a CHCS-issued employee iPhone.  The iPhone was unencrypted and was not password protected.  The information on the iPhone was extensive, and included social security numbers, information regarding diagnosis and treatment, medical procedures, names of family members and legal guardians, and medication information. At the time of the incident, CHCS had no policies addressing the removal of mobile devices containing PHI from its facility or what to do in the event of a security incident; OCR also determined that CHCS had no risk analysis or risk management plan. In determining the resolution amount, OCR considered that CHCS provides unique and much-needed services in the Philadelphia region to the elderly, developmentally disabled individuals, young adults aging out of foster care, and individuals living with HIV/AIDS. OCR will monitor CHCS for two years as part of this settlement agreement, helping ensure that CHCS will remain compliant with its HIPAA obligations while it continues to act as a Business Associate. Until the Department of Health and Human Services (HHS) released its Omnibus Final Rule in 2013, Business Associates were not directly responsible for HIPAA violations, making CHCS the first to be so disciplined.