HIPAA Business Associates

Kristen Marotta writes:

Many believe that educated millennials are choosing to work in urban, rather than rural areas, during their early career due to societal milestones being steadily pushed back and the professional opportunities and preferences of a young professional. Recent medical school graduates are a good example of this dichotomy. The shortage of physicians in rural areas is a well-known phenomenon. Over the years, locum tenens staffing has helped to soften the impact and, recently, so has telemedicine.

Illustration of stethoscope and mobile phone, symbolizing telemedicineThe growing prevalence of telemedicine around the country is an important consideration for new physicians as they decide where to settle down and establish their careers.  In New York, medical graduates should be aware that a $500,000 federal grant was given to New York State’s Office of Mental Health this month, February 2018 by the U.S. Department of Agriculture Rural Development Distance Learning and Telemedicine program.  Using telemedicine to provide mental health services may be a productive and efficient way to deliver healthcare, not only because many mental health examinations would not have to be conducted in-person, but also because of the general shortage of psychiatrists and mental health providers to meet these patient needs. Now, medical graduates who would like to establish their lifestyle in a city can simultaneously care for patients living miles apart from them.

It is essential that health care providers engaging in telemedicine understand the implications of this practice model with respect to compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Providers rendering health care services via telemedicine should update and adjust their security risk assessments and HIPAA privacy and security policies and procedures, because protected health information is likely to be created in two separate locations (i.e., the location of the provider and the location of the patient).  Providers should also make sure that their (or their practice’s) Notice of Privacy Practices has been updated to reflect the provision of services via telemedicine, so that the patient has the opportunity to make an informed decision about engaging in this type of health care. Additionally, new business associate agreements may be required with telehealth vendors that do not meet the narrow “mere conduit” exception and any new parties who will have access to the individual’s protected health information as a result of the provision of services via telemedicine. In connection with these efforts, Providers should research and conduct due diligence on vendors to confirm that they understand the services model and are HIPAA-compliant.

As telemedicine emerges and gains more traction in health care, state laws and regulations will also be created and/or updated, and physicians will need to keep abreast of these changes. A good example of this is the State of New York, which has an entire section of mental health regulations dedicated to telepsychiatry. Stay tuned to Fox Rothschild’s Physician Law Blog for further updates on these specific New York regulations, as well as the developments in telemedicine.

Kristen A. Marotta is an associate in the firm’s Health Law Department, based in its New York office.

Many employers who offer wellness programs to their employees may not have considered compliance with HIPAA privacy, security and breach notification rules (collectively, “HIPAA Rules”), since they don’t think of their wellness programs as a group health plan. Part 1 of this post covered why most employee assistance programs (“EAPs”) are subject to the HIPAA Rules. This part discusses wellness programs. As with EAPs, wellness programs must comply with the HIPAA Rules to the extent that they are “group health plans” that provide medical care.

A wellness program may be considered a group health plan in at least two common ways. First, if an employer offers a wellness program as part of another group health plan (e.g., a major medical plan), any individually identifiable health information collected from participants in the wellness program is protected health information (“PHI”) under the HIPAA Rules. In other words, if the wellness program is part of another group health plan, such as a major medical plan—for example, by offering incentives like premium reductions or lower cost-sharing amounts for major medical coverage based on participation in the wellness program—the wellness program will be subject to the HIPAA Rules.

Second, a wellness program will be a group health plan subject to the HIPAA Rules if it provides medical care to employees. Some benefits commonly provided by wellness programs are not medical benefits—a health risk assessment (“HRA”), for example, is typically a questionnaire intended to identify an employee’s possible health risks and to motivate the employee to make positive behavior changes to reduce those risks. HRAs are not medical care if they are not administered by medical professionals and are not intended to diagnose illness or prescribe treatment. Other non-medical benefits offered by wellness programs include exercise, nutrition, or weight loss programs, as long as they are not connected with or recommended in response to a medical practitioner’s diagnosis. A wellness program may also provide general health-related information, or referrals (if made by people without any special medical training), without providing medical care (and without triggering compliance obligations under the HIPAA Rules).

Other common wellness program benefits, however, may provide medical care. A biometric screening (often conducted in conjunction with an HRA) is typically medical care because it often involves a blood draw, labs and a clinical assessment of an employee’s health and is intended to diagnose, or indicate an increased risk of, certain health conditions (heart disease, diabetes, etc.). Wellness programs also often include disease management and smoking cessation services, which are considered medical care because they are designed to assist with specific health conditions. Even something as simple as an employee flu shot is medical care, whether or not it is part of another group health plan. Individualized health coaching by trained nurses or counseling provided by trained counselors also would be considered medical care. Providing any of this medical care through a wellness program may lead to unexpected compliance obligations under the HIPAA Rules.

Employers/plan administrators facing unexpected compliance obligations under the HIPAA Rules because of a self-insured wellness program that provides medical care will need to enter into a the HIPAA Rules business associate agreement with the wellness program vendor, amend the plan document for the wellness program to include language required by the HIPAA Rules and develop and implement other compliance documents and policies and procedures under the HIPAA Rules. One option is to amend any existing compliance documents and policies and procedures in place under the HIPAA Rules for another self-insured group health plan (such as a major medical plan) to make them apply to the wellness program as well. If the wellness program is the plan administrator’s only group health plan for which it has compliance responsibility under the HIPAA Rules, the plan administrator should consult with legal counsel to develop and implement all necessary documentation for compliance under the HIPAA Rules.









You may be surprised to learn that those “extra” benefits your company offers to its employees such as your employee assistance program (“EAP”) and wellness program likely are subject to the HIPAA privacy, security and breach notification rules (collectively, “HIPAA Rules”). Part 1 covers why most EAPs are subject to the HIPAA Rules. Part 2 will discuss wellness programs. In both cases, EAPs and wellness programs must comply with the HIPAA Rules to the extent that they are “group health plans” that provide medical care.

As background, the HIPAA Rules apply to “covered entities” and their “business associates.” Health plans and most healthcare providers are “covered entities.” Employers, in their capacity as employers, are not subject to the HIPAA Rules. However, the HIPAA Rules do apply to any “protected health information” (“PHI”) an employer/plan administrator holds on a health plan’s behalf when the employer designs or administers the plan.

Plan administrators and some EAP vendors may not consider EAPs to be group health plans because they do not think of EAPs as providing medical care. Most EAPs, however, do provide medical care. They are staffed by health care providers, such as licensed counselors, and assist employees who are struggling with family or personal problems that rise to the level of a medical condition, including substance abuse and mental health issues. In contrast, an EAP that provides only referrals on the basis of generally available public information, and that is not staffed by health care providers, such as counselors, does not provide medical care and is not subject to the HIPAA Rules.

A self-insured EAP that provides medical care is subject to the HIPAA Rules, and the employer that sponsors and administers the EAP remains responsible for compliance with the HIPAA Rules because it acts on behalf of the plan.   On the other hand, for an EAP that is fully-insured or embedded in a fully-insured policy, such as long-term disability coverage, the insurer will have the primary obligations for compliance with the HIPAA Rules for the EAP. The employer will not be responsible for overall compliance with the HIPAA Rules for an insured EAP even though it provides medical care, but only if the employer does not receive PHI from the insurer or only receives summary health information or enrollment/disenrollment information. Even then, the employer needs to ensure it doesn’t retaliate against a participant for exercising their rights under the HIPAA Rules or require waiver of rights under the HIPAA Rules with respect to the EAP.

An EAP that qualifies as an “excepted benefit” for purposes of HIPAA portability and the Affordable Care Act (as is most often the case because the EAP is offered at no cost, eligibility is not conditioned on participation in another plan (such as a major medical plan), benefits aren’t coordinated with another plan, and the EAP does not provide “significant benefits in the nature of medical care”) can be subject to the HIPAA Rules. In other words, just because you’ve determined that your EAP is a HIPAA excepted benefit doesn’t mean the EAP avoids the HIPAA Rules. Most EAPs are HIPAA excepted benefits, yet subject to full compliance with the HIPAA Rules.

Employers/plan administrators facing unexpected compliance obligations under the HIPAA Rules because of a self-insured EAP that provides medical care will need to enter into a HIPAA business associate agreement with the EAP vendor, amend the EAP plan document to include language required by the HIPAA Rules and develop and implement other compliance documents and policies and procedures under the HIPAA Rules. One option is to amend any existing compliance documents and policies and procedures under the HIPAA Rules for another self-insured group health plan to make them apply to the EAP as well. If the EAP is the plan administrator’s only group health plan for which it has compliance responsibility under the HIPAA Rules, the plan administrator should consult with legal counsel to develop and implement all necessary documentation for compliance with the HIPAA Rules.

Heading into its 22nd year, HIPAA continues to be misunderstood and misapplied by many, including health care industry professionals who strive for (or at least claim the mantle of) HIPAA compliance. Here is my “top 5” list of the most frequent, and most frustrating, HIPAA misperceptions seen during 2017:

  1. “If I’m using or disclosing protected health information (PHI) for health care operations purposes, I don’t need a Business Associate Agreement.”

Yes, HIPAA allows PHI to be used or disclosed for treatment, payment and health care operations purposes, but the term “health care operations” is defined to include specific activities of the covered entity performing them. In addition, the general provision permitting use or disclosure for health care operations purposes (45 C.F.R. 164.506(c)) allows such use or disclosure for the covered entity’s “own” health care operations. So if the covered entity (or business associate) is looking to a third party to perform these activities (and the activities involve the use or disclosure of PHI), a Business Associate Agreement is needed.

  1. “I don’t need to worry about HIPAA if I’m only disclosing a patient’s/member’s telephone number, since that’s not PHI.”

If the data disclosed was ever PHI, it’s still PHI (unless it has been de-identified in accordance with 45 C.F.R. 164.514). For example, if data is received by a health care provider and relates to the provision of care to patient (e.g., as a phone number listed on a patient intake form), it’s PHI – even though, as a stand-alone data element, it doesn’t appear to have anything to do with the patient’s health. Unless the patient has signed a HIPAA authorization allowing the disclosure of the phone number to a third party vendor, the vendor receiving the phone number from the provider to perform patient outreach on behalf of the provider is a Business Associate.

  1. “When a doctor leaves a practice, she can take her patients’ medical records with her.”

This is not automatic, particularly if the practice is the covered entity responsible for maintaining the records and the patient has not expressly allowed the disclosure of his or her records to the departing doctor. In most cases, the practice entity transmits health information in electronic form in connection with a HIPAA transaction and acts as the covered entity health care provider responsible for HIPAA compliance. The patient can access his or her records and direct that they be sent to the departing physician (see guidance issued by the U.S. Department of Health and Human Services (HHS) on individual’s access rights), and if the patient shows up in the departing doctor’s new office, the practice can share the patient’s PHI under the “treatment” exception. If the practice wants the departing doctor to maintain the records of patients she treated while part of the practice, it can enter a records custodian agreement and Business Associate Agreement with the departing doctor.

  1. “I can disclose PHI under the “sales exception” to anyone involved in due diligence related to the sale of my health care practice/facility without getting a Business Associate Agreement.”

HIPAA prohibits the sale of PHI, but excluded from this prohibition is “the sale, transfer, merger, or consolidation of all or part of the covered entity and for related due diligence” as described in the definition of health care operations. The definition of health care operations, in turn, includes the “sale, transfer, merger, or consolidation of all or part of the covered entity with another covered entity, or an entity that following such activity will become a covered entity and due diligence related to such activity.”  This “sales exception” is a bit vague and the cross-referencing of other regulations adds to the confusion, but the fact that disclosing PHI in connection with due diligence related to a possible sale of a covered entity is not prohibited as a “sale” does not mean it’s permitted without regard to other HIPAA requirements and protections. Attorneys, consultants, banks, brokers and even potential buyers should consider whether they are acting as business associates, and careful buyers and sellers may want to require Business Associate Agreements with those accessing PHI.

  1. “If I’m treating an overdose victim [or other unconscious or incapacitated person], I can’t share his/her PHI with family members or caregivers.”

The HHS Office for Civil Rights recently published guidance to clarify that HIPAA does not prohibit health care professionals from sharing information with family members and others in crisis situations, such as those involving overdose victims. I blogged on a related topic, involving the nightclub shooting tragedy in Orlando, Florida, back in 2016. The bottom line is that HIPAA allows the disclosure of PHI in two circumstances that are often forgotten: (1) where the patient is unconscious or incapacitated and the provider believes sharing information with family and close friends involved in the patient’s care is in the best interests of the patient; and (2) where the provider believes that sharing information will prevent or lessen a serious and imminent threat to the patient’s health or safety.  More stringent laws may apply, such as those governing substance use disorder treatment records created or maintained by certain federally-assisted substance use disorder treatment providers or state laws, but HIPAA permits providers to exercise discretion in crisis situations.


This blog recently discussed tips for a covered entity (CE) in dealing with a HIPAA business associate (BA). Now, even though you have adopted all of the tips and more, in this dangerous and ever more complex data security world, one of your BAs suffers a breach and it becomes your responsibility as the victim CE to respond. What should you do?

Our partner Elizabeth Litten and I discussed aspects of this issue with our good friend Marla Durben Hirsch who included some of our discussion in her article in the June 2017 issue of Medical Practice Compliance Alert entitled “6 ways practices can reduce the risk of delegating breach-notification duties.” Full text of the article can be found in the June, 2017 issue, but a number of the items included below are drawn from the article.

  1. Locate the most recent Business Associate Agreement (BAA) with the BA who experienced the breach, and see what it says about the post-breach obligations of the CE and the BA. Two important threshold issues are whether the BA complied with the time period for reporting breaches to the CE contained in the BAA and the remaining time, if any, available to the CE for complying with any reporting requirements under HIPAA and state law, remediation and limitation of loss requirements, and notification requirements to affected individuals (collectively, the Requirements).
  2. Determine promptly what are the time deadlines for notification to insurance carriers if cybersecurity or general liability insurance may be available to the BA and/or the CE for payment of expenses of the breach and its remediation.
  3. Spell out any circumstances where the BA will handle the consequences of a breach that occurred on its watch, and the scope of its responsibilities vs. that of the CE. These can range from delegating to the BA the entire range of Requirements to assumption by the CE of complying with the Requirements with payment by the BA of the costs thereof.
  4.  Make sure that the required reporting and notification Requirements are sent on CE stationery or, if such Requirements are being delegated to the BA (especially where the breach affected a number of different CEs), the notifications make it clear that the breach was attributable to the acts of the BA and not the CE. As CE, insist that the final wording of the required reporting and notification documents be subject to your approval.
  5.  Ensure that your staff is familiar with the circumstances of the breach so that they will be able to answer questions from affected individuals and the media intelligently. It may be advisable to designate a single trained and articulate person to be referred all inquiries, so that the responses are uniform, accurate and clear.
  6.  Assess whether the BA handled the breach adequately and whether you want to retain your relationship with the BA. Did the BA comply with HIPAA and the BAA in the post-breach period? Did the BA cooperate with the CE? What is the likelihood of a repeat breach by the BA? Is the CE assuming the risk of potential repeat HIPAA breaches if the BA relationship is continued?
  7. If you determine as CE that you will continue your relationship with the breaching BA, consider whether the BAA with the BA requires changes based upon the experience of the breach and its aftermath.
  8. As CE, consider modifying, updating and/or strengthening all of your BAAs as a result of your experience.
  9. As CE, you may require improving and/or changing your cybersecurity insurance coverage as a result of experience with the breach.
  10.  As CE, document all activities and decisions respecting HIPAA made in the post-breach period to defend your actions as reasonable and to provide concrete planning steps for future HIPAA compliance.

While all the precautions in the universe by a CE cannot eliminate a HIPAA breach by a BA, a CE that is victimized by such a HIPAA breach can do many things to reduce its liability and image damage and strengthen its own HIPAA compliance and risk avoidance efforts for the future by adopting the steps described above.

Our partner Elizabeth Litten and I were recently featured again by our good friend Marla Durben Hirsch in her article in the April 2017 issue of Medical Practice Compliance Alert entitled “Business associates who farm out work create more risks for your patients’ PHI.” Full text can be found in the April, 2017 issue, but a synopsis is below.

In her article Marla cautioned, “Fully one-third of the settlements inked in 2016 with OCR [the Office of Civil Rights of the U.S. Department of Health and Human Services] dealt with breaches involving business associates.” She pointed out that the telecommuting practices of business associates (“BAs”) and their employees with respect to protected health information (“PHI”) create heightened risks for medical practices that are the covered entities (“CEs”) — CEs are ultimately responsible not only for their own HIPAA breaches but for HIPAA breaches of their BAs as well.

Kline observed, “Telecommuting is on the rise and this trend carries over to organizations that provide services to health care providers, such as billing and coding, telehealth providers, IT support and law firms.” Litten commented, “Most business associate agreements (BAAs) merely say that the business associate will protect the infor­mation but are not specific about how a business associate will do so, let alone how it will when PHI is off site.”

Litten and Kline added, “OCR’s sample business associate agreement is no dif­ferent, using general language that the business associate will use ‘appropriate safeguards’ and will ensure that its subcontractors do so too.”

Kline continued, “You have much less control over [these] people, who you don’t even know . . . . Moreover, frequently practices don’t even know that the business associate is allowing staff or subcontractors to take patient PHI off site. This is a collateral issue that can become the fulcrum of the relationship. And one loss can be a disaster.”

Some conclusions that can be drawn from Marla’s article include the following items which a CE should consider doing  when dealing with BAs:

  1. Select BAs with due care and with references where possible.
  2. Be certain that there is an effective BAA executed and in place with a BA before transmitting any PHI.
  3. Periodically review and update BAAs to ensure that they address changes in technology such as telecommuting, mobile device expansion and PHI use and maintenance practices.
  4. Ask questions of BAs to know where they and their employees use and maintain PHI, such as on laptops, personal mobile devices or network servers, and what encryption or other security practices are in place.
  5. Ask BAs what subcontractors (“SCs”) they may use and where the BAs and SCs are located (consider including a provision in BAAs that requires BAs and their SCs to be legally subject to the jurisdiction of HIPAA, so that HIPAA compliance by the CE and enforcement of the BAA can be more effective).
  6. Transmit PHI to the BA using appropriate security and privacy procedures, such as encryption.
  7. To the extent practicable, alert the BA in advance as to when and how transmission of PHI will take place.
  8. Obtain from each BAA a copy of its HIPAA policies and procedures.
  9. Maintain a readily accessible archive of all BAAs in effect to allow quick access and review when PHI issues arise.
  10. Have a HIPAA consultant available who can be contacted promptly to assist in addressing BA issues and provide education as to best practices.
  11. Document all actions taken to reduce risk from sharing PHI with BAs, including items 1 to 10 above.

Minimizing risk of PHI breaches by a CE requires exercising appropriate control over selection of, and contracting and ongoing interaction with, a BA. While there can be no assurance that such care will avoid HIPAA breaches for the CE, evidence of such responsible activity can reduce liability and penalties should violations occur.

According to the latest HIPAA-related guidance (Guidance) published by the U.S. Department of Health and Human Services (HHS), a cloud service provider (CSP) maintaining a client’s protected health information (PHI) is a business associate even when the CSP can’t access or view the PHI. In other words, even where the PHI is encrypted and the CSP lacks the decryption key, the CSP is a business associate because it maintains the PHI and, therefore, has HIPAA-related obligations with respect to the PHI.

HHS explains:

While encryption protects ePHI by significantly reducing the risk of the information being viewed by unauthorized persons, such protections alone cannot adequately safeguard the confidentiality, integrity and availability of the ePHI, such as ensuring that the information is not corrupted by malware, or ensuring through contingency planning that the data remains available to authorized persons even during emergency or disaster situations. Further, encryption does not address other safeguards that are also important to maintaining confidentiality, such as administrative safeguards to analyze the risks to the ePHI or physical safeguards for systems and services that may house the ePHI.”

It makes sense to treat a CSP as a business associate if it holds PHI, even if it cannot view or access that PHI. After all, a business associate is a person or entity that performs a function or service on behalf of a covered entity (or another business associate) that requires it to create, receive, maintain, or transmit PHI.

Still, HHS’s explanation is less than satisfying, perhaps because it rather crudely mixes together very distinct HIPAA obligations:  protecting the confidentiality of PHI, on one hand, and protecting the integrity and availability of PHI, on the other.

Under the HIPAA regulations, a business associate is only required to provide notice to the covered entity following the discovery of a breach of unsecured PHI. “Unsecured” PHI is defined as PHI that is “not rendered unusable, unreadable, or indecipherable to unauthorized persons through the use of a technology or methodology specified by the Secretary [of HHS]…” – in other words, PHI that is not encrypted at a level that meets HHS’s standards. The HIPAA regulations also say that a breach excludes a “disclosure of PHI where a covered entity or business associate has a good faith belief that an unauthorized person to whom the disclosure was made would not reasonably have been able to retain such information.” Obviously, a disclosure of PHI that cannot be viewed will also not be able to be retained.

HHS contends that encryption “alone cannot adequately safeguard the confidentiality” of the PHI, but, later in the Guidance, concedes that if the PHI is encrypted at a level that meets HHS’s standards, an unauthorized incident would fall within the breach “safe harbor” and would not need to be reported to the CSP’s customer. In such a case, the confidentiality of the PHI would be adequately safeguarded by encryption alone and the CSP arguably would not have an obligation to do anything else under HIPAA to protect the confidentiality of the PHI.  The CSP would have an ongoing obligations, however, to protect the integrity and accessibility of the encrypted PHI under HIPAA. The encryption “blindfold” will simplify the CSP’s obligations under HIPAA.

A CSP is in a tricky position if it holds encrypted PHI for a customer, but does not know that it holds it. The Guidance emphasizes that if a CSP maintains PHI for a customer that is a covered entity or business associate, it must execute a business associate agreement with the customer, and risks enforcement action (such as reported here) by the Office of Civil Rights (OCR) within HHS if it doesn’t have one.

“OCR recognizes that there may, however, be circumstances where a CSP may not have actual or constructive knowledge that a covered entity or another business associate is using its services to create, receive, maintain, or transmit ePHI.  The HIPAA Rules provide an affirmative defense in cases where a CSP takes action to correct any non-compliance within 30 days … of the time that it knew or should have known of the violation… This affirmative defense does not, however, apply in cases where the CSP was not aware of the violation due to its own willful neglect.”

Two key takeaways from the Guidance for a CSP? If you are blindfolded from viewing the data you maintain or transmit on behalf of a customer, or otherwise do not know whether the data might bring HIPAA obligations along with it, take reasonable steps to find out if the customer is a covered entity or business associate and whether the data includes PHI.  If so, execute a business associate agreement. Then, make sure the blindfold (i.e., encryption level) meets HHS’s standards and do NOT accept or have access to the decryption key.  This way, you can focus your HIPAA compliance efforts on protecting the integrity and accessibility of the data, not on protecting its confidentiality.

Jessica Forbes Olson and T.J. Lang write:

In Part 1, we noted that on March 21, 2016, the Office of Civil Rights (“OCR”) announced it will launch a second round of HIPAA audits this year. As with the first round of audits, in round two OCR will be reviewing compliance with HIPAA Privacy, Security and Breach Notification rules. New for this round, the 2016 audits will focus on covered entities, including health care providers and health insurers, and their business associates.

A HIPAA compliance checklist for health care providers and insurers follows:

  • Determine whether for HIPAA purposes you are a hybrid entity, an affiliated covered entity or part of an organized health care arrangement. Document that status.
  • Appoint a HIPAA privacy official.
  • Appoint a HIPAA security official.
  • Appoint a HIPAA privacy contact person who will handle complaints and respond to the exercise of patient or participant rights.
  • Determine where PHI is located, whether hard copy, electronic, or spoken.
  • Determine the reasons why PHI is used or disclosed (e.g., treatment, payment, health care operations, public health reasons, public policy reasons, to government agencies or officials).
  • Determine which departments and workforce members have access to PHI, why they have such access and the level of access needed.
  • Identify and document the routine requests, uses and disclosures of PHI and the minimum necessary for those requests, uses and disclosures.
  • Identify all business associates: vendors that create, maintain, use or disclose PHI when performing services for your entity.
  • Have executed business associate agreements with all business associates.
  • Have and follow written HIPAA privacy, security and breach notification policies and procedures.
  • Train all workforce members who have access to PHI on the policies and procedures and document the training.
  • Have and use a HIPAA-compliant authorization form.
  • Have and follow process for verifying the status of personal representatives.
  • Distribute a notice of privacy practices and providers must attempt to obtain acknowledgment of receipt of notice from patients and post one in each facility where patients can view it.
  • Establish and document reasonable administrative, technical and physical safeguards for all PHI, including hard copy and spoken PHI.
  • Conduct and document a HIPAA security risk analysis for all electronic PHI (e.g., PHI on desktops, laptops, mobile phones, iPads and other electronic notebooks, copy machines, printers, discs and thumb drives).
  • Address risks to ePHI that are identified in the HIPAA security risk analysis.
  • Update your HIPAA security risk analysis periodically or when there is a material change in your environment that does or could impact PHI or if there are changes in the law impacting PHI.
  • Encrypt PHI to fall within the breach safe harbor.
  • Have written disaster recovery and contingency plans.
  • Prepare for and respond to security incidents and breaches.
  • Comply with HIPAA standard transactions and code set rules related to electronic billing and payment.
  • Although it will not be covered by the audits, comply with more stringent state privacy and security laws (e.g., document retention; patient consent; breach reporting).
  • Maintain HIPAA compliance documentation in written or electronic form for at least 6 years from the date the document was created or last in effect.

For more information about OCR audits or assistance in conducting a HIPAA compliance review, please contact any member of the Fox Rothschild Health Law practice group.

Jessica Forbes Olson is a partner and TJ Lang is an associate, both resident in the firm’s Minneapolis office.

Jessica Forbes Olson and T.J. Lang write:

HIPAA and Health Records
Copyright: zimmytws / 123RF Stock Photo

On March 21, 2016, the Office of Civil Rights (“OCR”) announced it will launch a second round of HIPAA audits during 2016. As with the first round of audits, in round two OCR will be reviewing compliance with HIPAA Privacy, Security and Breach Notification rules. New for this round, the 2016 audits will focus on covered entities, including health care providers and health insurers, and their business associates.

The round two audits will occur in three phases: desk audits of covered entities, desk audits of business associates, and finally, follow-up onsite reviews. It is reported OCR will conduct about 200 total audits; the majority of which will be desk audits.

OCR has already begun the process of identifying the audit pool by contacting covered entities and business associates via email.  Health care providers,   insurers and their business associates should be on the lookout for automated emails from OCR which are being sent to confirm contact information. A response to the OCR email is required within 14 days. OCR instructed covered entities and business associates to check their spam or junk email folders to verify that emails from OCR are not erroneously identified as spam.

After the initial email, OCR will send a pre-audit questionnaire to entities it may choose to audit. Receiving a pre-audit questionnaire does not guarantee your entity will be audited. The purpose of the questionnaire is to gather information about entities and their operations, e.g., number of employees, level of revenue, etc. The questionnaire will also require covered entities to identify all of their business associates. Health care providers and insurers who have not inventoried business associates should do so now.

Entities who fail to respond to the initial OCR email or questionnaire will still be eligible for audit. OCR will use publicly available information for unresponsive entities to create its audit pool.

OCR will then, in the “coming months,” randomly select entities to audit and notify them via email that they have been selected for audit.

Health care providers, health insurers and business associates should check their HIPAA compliance status before they are contacted by OCR. Once selected for an audit, entities will only have 10 business days to provide the requested information to OCR.

Recent OCR enforcement activity has shown that noncompliance with HIPAA can be costly:

  • A Minnesota-based hospital entered into a $1.55 million settlement for failure to implement one business associate agreement and failure to conduct a HIPAA security risk analysis;
  • A teaching hospital of a university in Washington entered into a $750,000 settlement for failure to conduct an enterprise-wide HIPAA security risk analysis;
  • An insurance holding company based in Puerto Rico entered into a $3.5 million settlement for failure to implement a business associate agreement, conduct a HIPAA security risk analysis, implement security safeguards and for an improper disclosure of protected health information (“PHI”);
  • A radiation oncology physician practice in Indiana entered into a $750,000 settlement for failure to conduct a HIPAA security risk analysis and implement security policies and procedures.

If you receive any communications from OCR, please contact a member of the Fox Rothschild Health Law practice group immediately. A proactive review of your HIPAA compliance status can identify potential gaps and minimize the risk of potential penalties.

In Part 2, we’ll provide a HIPAA compliance checklist for healthcare providers and insurers. Stay tuned!

Jessica Forbes Olson is a partner and TJ Lang is an associate, both resident in the firm’s Minneapolis office.

Congratulations!  You have a HIPAA-compliant business associate (or subcontractor) agreement in place – now what? How can you implement the agreement without becoming a HIPAA guru?

There are many resources available that offer detailed guidance on risk analysis and implementation protocols (such as the Guide to Privacy and Security of Electronic Health Information published by the Office of the National Coordinator for Health Information Technology and numerous “Special Publications” issued by the National Institute of Standards and Technology (NIST)).

These are terrific resources and can keep a team of IT professionals and Privacy and Security Officers reading and scratching their heads for weeks, but here are a few simple and practical steps you can take to avoid the security incident that may result in a protected health information (PHI) breach.

  1. Make sure the covered entity knows which individual(s) is authorized to receive PHI at the business associate. If neither the services agreement nor the business associate agreement specifies the person to whom PHI is to be disclosed, make sure the name, title and contact information of any designated recipient is communicated to the covered entity in writing.
  2. Include a provision in the business associate agreement (or subcontractor agreement) or develop a process whereby the covered entity (or business associate) provides notice, when feasible, prior to transmitting PHI to the designated recipient. Particularly when the transmission of PHI is sporadic or infrequent, provision of advance notice helps heighten awareness of the parties’ HIPAA obligations with respect to particular data being transmitted.
  3. Establish an agreed-upon means of PHI transmission – for example, specify whether transmission will be made via encrypted email, portable device, hard copy, etc. – and document the chain of custody from covered entity to business associate and after receipt by business associate.
  4. Create a “vault” for PHI received by the business associate that is secured by access codes that are changed periodically and can be deactivated when personnel leave the employ of the business associate.
  5. Maintain a perpetual inventory of PHI repositories, delegating responsibility to the Security Officer to oversee or authorize repository access rights, review activity, and conduct regular audits.