Healthcare Business Associate Fined $75k for ePHI Breach

Healthcare Business Associate Fined $75k for ePHI Breach

Jun 29, 2023

In a recent settlement, iHealth Solutions, LLC, a Kentucky-based business associate, was fined $75,000 for a potential violation of HIPAA regulations. The Department of Health and Human Services (HHS) Office for Civil Rights (OCR) uncovered the breach due to iHealth Solutions failing to secure one of its servers properly. This incident led to unauthorized access and exfiltration of electronic protected health information (ePHI) belonging to 267 individuals.

hipaa business associate fines for violations

iHealth Fined for ePHI Breach on Unsecured Server

iHealth provides coding, billing, and IT services to healthcare providers. In May 2017, an unauthorized individual exfiltrated the company’s files that connected its clients’ ePHI. The HIPAA breach was initially reported to OCR in August 2017. Upon investigation, iHealth Solutions was found to have violated HIPAA Rules by neglecting to conduct a comprehensive risk analysis, which should have identified and mitigated potential vulnerabilities. This failure to adequately assess the security risks in their system resulted in the unauthorized exposure of ePHI, compromising the privacy and confidentiality of patient information. 

Healthcare Business Associate Fined $75k for ePHI Breach

HHS Mandates HIPAA Enforcement Actions on iHealth

iHealth’s financial penalties

In compliance with the HHS, iHealth Solutions has agreed to pay a settlement amount of $75,000. However, financial penalties are not the sole consequence of the HIPAA breach. The company is also required to implement a comprehensive corrective action plan (CAP) under the supervision of OCR. 

iHealth’s Corrective Action Plan: OCR’s requirements for security risk management

The CAP mandates several crucial steps to enhance iHealth Solutions’ security risk management and ensure compliance with HIPAA regulations. First, the company must conduct an accurate and thorough assessment of potential risks and vulnerabilities related to the ePHI it handles. This assessment should help the company develop and implement a robust risk management plan to address and mitigate identified security risks and vulnerabilities. Moreover, iHealth Solutions must establish a process to evaluate environmental and operational changes that may impact the security of ePHI. 

Additionally, as part of the CAP, iHealth Solutions is obligated to develop, maintain, and revise written policies and procedures that align with federal standards and effectively address threats and vulnerabilities to ePHI. These policies and procedures must incorporate provisions from HIPAA Rules. To ensure that iHealth’s staff are trained in handling their clients’ PHI, iHealth should distribute the approved policies and procedures to their staff. Employees must obtain compliance certifications, demonstrating that they understand the importance of HIPAA

The settlement carries not only financial implications but also requires ongoing monitoring by OCR for two years. This corrective action ensures iHealth Solutions’ continued compliance with HIPAA Rules to prevent future breaches.  

Melanie Fontes Rainer, Director of OCR, emphasized the significance of effective cybersecurity practices for HIPAA business associates. She stated in an HHS press release, “HIPAA business associates must protect the privacy and security of the health information they are entrusted with by HIPAA-covered entities. Effective cybersecurity includes ensuring that electronic protected health information is secure and not accessible to just anyone with an internet connection.” 

Healthcare Business Associate Fined $75k for ePHI Breach

Business Associates’ Role in Protecting ePHI

The repercussions of this violation extend beyond iHealth Solutions. According to The HIPAA Journal, this is the 7th OCR enforcement action in 2023 to result in a financial penalty and the third enforcement action in June 2023. Overall, the OCR has fined HIPAA-regulated entities $1,976,500 this year for violations. 

It is worth noting that this enforcement action is not an isolated incident. OCR has been actively pursuing and penalizing HIPAA violations in recent years. Several notable fines and penalties have been imposed on both covered entities and business associates, emphasizing the significance of HIPAA compliance. The consequences of non-compliance can range from significant financial penalties to reputational damage and legal ramifications. 

Despite the massive penalties and other negative consequences, healthcare entities and their business associates continue to have problems maintaining the security and confidentiality of clients’ PHI. This failure highlights the importance of continued education and awareness of HIPAA Rules. Moreover, it reinforces the importance of regular risk assessments and technological updates to address the rapid advances in digitization, including the evolving threats in the healthcare industry.

Ensuring HIPAA Compliance for Business Associates

As the healthcare industry increasingly relies on digital systems and the exchange of electronic health information, the protection of ePHI becomes all the more crucial. Business associates are critical partners in healthcare and are equally liable in the event of a HIPAA breach. Thus, they must ensure robust safeguards to secure sensitive data and avoid eroding patient trust in the healthcare system. By adhering to HIPAA requirements and implementing strict security measures, business associates can strengthen the trust and confidence of patients.

Kent Cañas

Kent is a content strategist currently specializing in HIPAA-compliant online fax. Her expertise in this field allows her to provide valuable insights to clients seeking a secure and efficient online fax solution.

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