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$2.15 Million Civil Money Penalty for HIPAA Violations

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The Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services imposed a $2,154,000 civil money penalty (CMP) against Jackson Health System (JHS) for violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Security and Breach Notification Rules, stemming from various instances of noncompliance that occurred between 2013 and 2016.

JHS is a nonprofit academic medical system based in Miami, Florida that operates a number of hospitals and medical centers throughout Florida, provides health care to an average of 650,000 patients annually, and employs approximately 12,000 individuals. On August 22, 2013, JHS submitted a Breach Notification Report (Report) to OCR that indicated a loss of paper records from its Health Information Management department that affected 756 patients and that occurred in January 2013 (January 2013 Loss). JHS’s internal investigation revealed that additional patient records were lost, but it was not until June 2016 that JHS reported the additional losses, and the increased number of impacted individuals grew from 756 to 1,463.

Separately, in July 2015, OCR became aware of multiple media reports regarding the disclosure of protected health information (PHI) of a JHS hospital patient who was a well-known NFL player. An ESPN reporter also shared an electronic display board from a JHS operating room and a paper schedule containing the PHI of the same patient. JHS subsequently determined that two of its employees had accessed the patient’s electronic medical record without a job-related purpose. On February 25, 2016, JHS submitted a Report stating that a photograph of an operating room electronic display board had been taken that displayed the PHI of two individuals including “a well-known person in the community.”

In addition, on February 19, 2016, JHS submitted a Report to OCR stating that a JHS employee had been selling patient information since July 2011. JHS further reported that 24,188 patients’ records had been inappropriately accessed by the employee since 2011.

As a result of these Reports and investigations, on July 22, 2019, OCR issued a Notice of Proposed Determination (Notice) to JHS, which included the findings described above as well as the determination that JHS failed to implement accurate risk analyses, which in turn impacted JHS’s risk management and security measures. OCR separately determined that JHS did not remediate risks, threats, and vulnerabilities to a reasonable and appropriate level between 2013 and 2016. The Notice to JHS included OCR’s proposed $2,154,000 CMP determination. JHS waived its right to a hearing and did not contest the findings or proposed CMP in the Notice. JHS paid the full CMP amount to OCR.

In general, CMP amounts issued by OCR vary because of factors such as the date of the HIPAA violation, whether the covered entity knew or should have known about the failure to comply with HIPAA requirements, or whether the covered entity’s failure to comply was due to willful neglect. OCR may issue CMPs from $100 to $50,000 or more per violation, but no more than $1.5 million for multiple violations of the same compliance requirement. When OCR states that it intends to impose a CMP via a Notice, the covered entity has the right to request an administrative hearing to appeal the proposed CMP.

If you have any questions about this OCR Notice of Final Determination or would like to discuss HIPAA compliance more generally, please reach out to any member of the Drinker Biddle Health Care Group.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

About the Author: Sumaya M. Noush

Sumaya Noush counsels health care clients on strategic and operational matters, including transactions, corporate governance and regulatory compliance. View Sumaya's full bio on the Faegre Drinker website.

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November 1, 2019
Written by: Sumaya M. Noush
Category: HHS/OCR, HIPAA
Tags: CMPs, HIPAA, OCR, protected health information

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