The United States Court of Appeals for the Fifth Circuit (the “Court”) vacated a $4,348,000 civil monetary penalty (“CMP”) imposed by the U.S. Department of Health and Human Services’ Office for Civil Rights (“HHS-OCR”) in 2017 against the University of Texas M.D. Anderson Cancer Center (“MD Anderson”) for alleged violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy Rule and HIPAA Security Rule. The Court held that OCR’s actions were “arbitrary, capricious, and otherwise unlawful” and remanded the case for further proceedings. While the case is not binding precedent outside the Fifth Circuit, MD Anderson is the first HIPAA Covered Entity to appeal its fine to a Circuit Court since the HIPAA Privacy Rule and the HIPAA Security Rule took effect. The ruling likely will motivate future HIPAA settlement negotiations with HHS-OCR and encourage HIPAA Covered Entities to appeal enforcement outcomes they consider unreasonable.
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