HHS Strengthens HIPAA Enforcement

The U.S. Department of Health and Human Services (HHS) issued an interim final rule with request for comments today to strengthen its enforcement of the rules promulgated under the Health Insurance Portability and Accountability Act (HIPAA). The Health Information Technology for Economic and Clinical Health (HITECH) Act, which was enacted as part of the American Recovery and Reinvestment Act of 2009, modified the HHS Secretary's authority to impose civil money penalties for violations occurring after Feb. 18, 2009. These HITECH Act revisions significantly increase the penalty amounts the Secretary may impose for violations of
the HIPAA rules and encourage prompt corrective action.

Prior to the HITECH Act, the Secretary could not impose a penalty of more than $100 for each violation or $25,000 for all identical violations of the same provision. A covered health care provider, health plan or clearinghouse could also bar the Secretary's imposition of a civil money penalty by demonstrating that it did not know that it violated the HIPAA rules. Section 13410(d) of the HITECH Act strengthened the civil money penalty scheme by establishing tiered ranges of increasing minimum penalty amounts, with a maximum penalty of $1.5 million for all violations of an identical provision. A covered entity can no longer bar the imposition of a civil money penalty for an unknown violation unless it corrects the violation within 30 days of discovery.

The interim final rule with request for comments published today conforms the HIPAA enforcement regulations to these revisions made by the HITECH Act. It may be viewed and commented on at: www.regulations.gov. This rulemaking will become effective on Nov. 30,
2009, and HHS will consider all comments received by Dec. 29, 2009.

"The Department's implementation of these HITECH Act enforcement provisions will strengthen the HIPAA protections and rights related to an individual's health information," said Georgina Verdugo, the director of HHS Office for Civil Rights (OCR). OCR is responsible for
administering and enforcing HIPAA's privacy, security and breach notification rules.

"This strengthened penalty scheme will encourage health care providers, health plans and other health care entities required to comply with HIPAA to ensure that their compliance programs are effectively designed to prevent, detect and quickly correct violations of the HIPAA rules,"
said Verdugo. "Such heightened vigilance will give consumers greater confidence in the privacy and security of their health information and in the industry's use of health information technology."

This interim final rule with request for comments is the first of several steps HHS is taking to implement the HITECH Act's enforcement provisions. The remaining provisions, which have yet to become effective, will be addressed in the next few months in forthcoming rulemakings.

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HHS Issues Rule Requiring Individuals Be Notified of Breaches of Their Health Information

New regulations requiring health care providers, health plans, and other entities covered by the Health Insurance Portability and Accountability Act (HIPAA) to notify individuals when their health information is breached were issued today by the U.S. Department of Health and Human
Services (HHS).

These "breach notification" regulations implement provisions of the Health Information Technology for Economic and Clinical Health (HITECH) Act, passed as part of American Recovery and Reinvestment Act of 2009 (ARRA).

The regulations, developed by the HHS Office for Civil Rights (OCR), require health care providers and other HIPAA covered entities to promptly notify affected individuals of a breach, as well as the HHS Secretary and the media in cases where a breach affects more than 500
individuals. Breaches affecting fewer than 500 individuals will be reported to the HHS Secretary on an annual basis. The regulations also require business associates of covered entities to notify the covered entity of breaches at or by the business associate.

"This new federal law ensures that covered entities and business associates are accountable to the Department and to individuals for proper safeguarding of the private information entrusted to their care. These protections will be a cornerstone of maintaining consumer trust as we move forward with meaningful use of electronic health records and electronic exchange of health information," said Robinsue Frohboese, acting director and principal deputy director of OCR.

The regulations were developed after considering public comment received in response to an April 2009 request for information and after close consultation with the Federal Trade Commission (FTC), which has issued companion breach notification regulations that apply to vendors of personal health records and certain others not covered by HIPAA.

To determine when information is "unsecured" and notification is required by the HHS and FTC rules, HHS is also issuing in the same document as the regulations an update to its guidance specifying encryption and destruction as the technologies and methodologies that render protected health information unusable, unreadable, or indecipherable to unauthorized individuals. 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. This guidance will be updated annually.

The HHS interim final regulations are effective 30 days after publication in the Federal Register and include a 60-day public comment period. For more information, visit the HHS Office for Civil Rights web site at http://www.hhs.gov/ocr/privacy/.

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