In an interesting turn of events, the Insurance Commissioner of the State of Connecticut is now requiring that they be notified any any of the entities that they regulate, which includes many members of the healthcare ecosystem who also need to comply with HIPAA/HITECH data breach regulations. Their Bulletin IC-25 requires that they be notified within 5 days of the identification of a potential data breach incident.

The involvement of insurance authorities in data security incident definition and notification further complicates the maze of laws and regulations faced by healthcare and other organizations that maintain personal information on patients, policyholders and clients, including protected health information (PHI). For instance, in this case, even encrypted data loss will require notification of the Insurance Commissioner, as will the loss of paper files.

They also indicate that:

“Depending on the type of incident and information involved, the Department will also want to have discussions regarding the level of credit monitoring and insurance protection which the Department will require to be offered to affected consumers and for what period of time.”

In recent weeks, there have been two bills introduced in Washington, D.C. that are attempting to set nationwide standards for the security and privacy of consumers’ personal information. The “Data Security and Breach Notification Act of 2010” was introduced by Senator Pryor (D-Arkansas) and Senator John Rockefeller (D-West Virginia) on August 5, 2010. The bill requires businesses and organizations that handle and store private consumer information, such as social security numbers, to use reasonable security policies and procedures” to protect such information and to “provide nationwide notice in the event of a security breach.”

This act would require organizations to use appropriate security technologies and processes to safeguard the personal information of consumers. It would also require them to periodically assess their risk profile and take corrective actions in addressing security weaknesses. It also would require notification of consumers affected by a data security breach within 60 days of discovery. And for the first time, this bill would require that the organization provide the affected consumers with two years of credit reports, credit monitoring or “other service that enables consumers to detect the misuse of their personal information.”

Separately, Senator Carper (D-Delaware) and Senator Bennett (R-Utah) introduced the “Data Security Act of 2010” a few weeks earlier. This bill focuses on entities such as financial institutions, retailers, federal agencies that handle vast amounts of consumer data. Like the Pryor bill, it includes a requirement for notification of consumers when a data security breach occurs where there is a substantial risk to the consumer of identity theft or account fraud, but it does not prescribe that consumers be provided with free access to credit monitoring or other services to prevent or detect identity theft and fraud.

Today, there are data breach notification laws in 46 states that each have somewhat different and inconsistent provisions for notification of consumers. One of the intents of a national bill would be to eliminate these inconsistencies ensuring that all consumers are treated fairly and consistently when affected by a data breach incident. This is likely to be controversial, however in states like California and Massachusetts where they have enacted stricter regulations that either of these two bills for the privacy protection of their consumers.

Additionally, these bills are likely to have some of the same issues that currently exist with the HITECH Act which provides for the security and privacy of protected health information (PHI). While the HITECH Act specifies notification of patients whenever a data breach occurs, the companion rules from the Department of Health and Human Services (specifically the Interim Final Rule) clarify that the provision for data breach notification is only for cases where there is a “substantial risk of financial, reputational or other harm” to the affected consumers.  While this may sound fairly logical, it has been met with resistance and distain from consumer advocates.

The issue with establishing and regulating use of a “harm threshold” for data breach notification is in the details. First, can we assume that the organizations affected will carry out a proper risk assessment and come to a fair and accurate conclusion as to whether there is a risk of harm. Such a determination can cost them millions of dollars in data breach remediation costs alone, not even considering the less measureable costs such as customer churn and reputational damage, which are just as real.  Such costs really could make it difficult for the same individuals that caused the data breach to admit that it could cause harm to the affected people.

Second, it has proven difficult to provide clear and objective guidance that would allow organizations to carry out a risk assessment to make the determination as to whether financial, reputational or other harm exists, when these factors are so subjective, quite open to interpretation and judgment. For example, if you were a patient at a hospital where you were admitted to have your appendix taken out, if the clinical records from this hospital were exposed, you may not consider the fact that everyone now knows that you are appendix-less to adverse to your reputation. On the other hand, if you were admitted for a procedure where it was necessary to do an analysis of your blood, and it was determined that you carry the AIDS virus, you may in this instance consider this as having a very negative impact to your reputation if this information was exposed. This situation illustrates how the same type of exposure (personal medical records) can in some instances be rather benign and in others be quite acute.

If legislation requires notification based on an interpretation as to a risk of harm to the affected population, the government regulators should consider whether organizations should be put in the conflicted position of self-assessing such situations. They also should consider how to provide more specific and concrete means to measure the risk of harm to consumers.

I’m sure we haven’t seen the end of new bills in Congress focused on providing for a national approach personal data privacy and security, and the associated requirements for notification in cases of a data breach. But it would be helpful to see additional thought going into this topic of how to assess whether a “data security incident” is in fact a “data security breach” for purposes of notification.

This article is reprinted from Healthcare IT News with the author’s permission.

The handling of data breach incidents has become a way of life for healthcare providers and with other HIPAA covered entities. With the passage of the HITECH Act last year, there are now substantial penalties that can be levied, up to $1.5 million. This fact, combined with a requirement to notify the Department of Health and Human Services as well as the media for data breach incidents that affect over 500 individuals has, for the first time, resulted in public records being kept for such incidents.

If you oversee privacy, compliance, or IT for a hospital system, a group practice, a health insurance company, other covered entities, or even one of their business associates, the HITECH Act and its privacy and data breach provisions require your close attention. While many people know that HITECH generally creates requirements for data breach notification, there are at least four things you may not know about HITECH that you really should:

1. The requirement for a mandatory incident-specific risk assessment for every incident
2. The fact that HITECH notification provisions do not pre-empt state notification laws
3. Encryption of data does not necessarily alleviate the risk of data breach
4. If your business associate exposes your protected health information (PHI), you are responsible

1. Mandatory incident-specific risk assessment. When HHS issued its Interim Final Rule giving healthcare organizations guidance for complying with the HITECH Act data breach provisions, it added a new requirement.  The requirement is that the organization carry out an incident-specific risk assessment to determine the potential risk of harm to the individuals affected by each and every data breach incident.  The rules establish a “harm threshold” for notification, but unfortunately, don’t make the determination of risk and the potential of harm. It is essential to become well versed in these rules and be prepared to carry out a HITECH compliant data breach incident risk assessment.

2. HITECH doesn’t pre-empt state notification laws. While HITECH is the first national law for notification in the case of privacy information breaches, most U.S. states also have breach notification laws.  And while the intent of these laws is similar — to make individuals aware that their PHI may have been improperly disclosed — the specific details in all of these laws can actually vary a great deal.  But because HITECH is not “preemptive,” a healthcare organization that has experienced a data breach must ensure that it complies with both HITECH regulations as well as the regulations in every state where individuals are affected.  This can be daunting especially because HITECH and state laws in some cases are conflicting.

3.  Encryption not a silver bullet. There is a lot of advocacy for encryption of PHI as a means to avoid data breach incidents.  The general argument is that if data is encrypted, that data breaches will not occur.  Unfortunately, this is overly simplistic. While encryption will assist healthcare organizations in avoiding certain types of data breach incidents, it is not a panacea.  For instance, a common threat approach is for a criminal or organized crime entity to enlist an “insider” to assist in extracting PHI.  An insider with valid access credentials will not find encryption to be an obstacle in any way.  As a result, consider encryption one of many tools for information protection, not a silver bullet.

4.  You are responsible for your business associate. For the first time, HIPAA business associates are required to meet the HIPAA Privacy and Security Rule requirements based on HITECH.  While this is a good thing, a covered entity should not consider this a “free pass” if one of your business associates exposed PHI that was provided by your organization.  While you may be able to hold them financial accountable, if you’ve specified for such eventualities in your business associate agreements, the obligation for notification is still with the covered entity.  It is your responsibility to maintain the privacy for the PHI, no matter to whom you entrust it. And of course, the affected patients will hold you responsible as well.

As you put processes and procedures in place to meet HITECH obligations, consider also putting in place a comprehensive and current data breach incident response plan.  This will prevent a lot of headaches and last-minute scrambling, should you be faced with a data breach.

A recently published article in Healthcare IT News  highlights aspects of the Health Information Technology for Economic and Clinical Health (HITECH) Act that may have escaped your attention.

Titled “Three things you may not know about the HITECH Act…but should“, the article hones in on aspects of the rulemaking from the US Department of Health and Human Services that healthcare organizations must follow in determining whether a privacy breach incident meets the requirements to notification.

HITECH is known primarily for the manner in which it motivates healthcare providers to implement electronic health records (EHR) systems. But as more and more of our medical information is going online, the Act also wisely enhanced the privacy and security provisions that are required of healthcare providers and added penalties and enforcement mechanisms for the breach of private healthcare information.

One of the three things you may not know, per this article, is that when your organization experiences a potential privacy incident, that you are required to carry out a “risk assessment” in order to determine the nature of the protected health information (PHI) that was disclosed, and whether it poses a risk of harm to the affected patients.Based on the results of this risk assessment, your organization may or may not be obligated to notify the affected individuals, along with HHS and the media. So this assessment process is very important.

Unfortunately, the risk assessment process is not at as well defined or straightforward as might be hoped. And this gets to one of the 2nd items that you may not know about in HITECH. In carrying out a risk assessment, the goal is to determine whether there is a risk of financial, reputational or other harm to the patients affected. And in this process, not all PHI is created equally, and in fact, you must consider the nature of the information disclosed in a manner that is situationally aware.

For instance, disclosure of a persons name and their medical procedure may not be cause for any risk of harm if the procedure was having a bunion removed. However, if the procedure was for the diagnosis of AIDS, disclosure of this information could result in substantial harm. As a result, it is not just the data types that need to be considered, but the nature of the data and the environment of their release. Not at all straightforward.

And then the 3rd thing that you may not know about HITECH from this article is that its data breach notification provisions don’t “preempt” those of each of the states. In fact, if your organization experiences a data breach, you need to assess the requirement to notify and how to notify not just using not just the requirements of HITECH, but also the requirements as stated in state data breach notification laws.

For example, you may find that based on your risk assessment, that HITECH requires notification. But you may also find that in some states, the timeframe for notification is shorter than the 60 days from discovery of incident that is required by HITECH. In other words, you must look at your breach notification requirements both under HITECH as well as under each state law where you have patients that were affected by the incident.

Needless to say, this is a complex process and you would be well advised to document your processes and decisions very carefully. You really don’t want to be the target of one of those $1.5MM fines that are beginning to surface.

As was required under the Health Information Technology for Clinical and Economic Health (HITECH) Act, the US Department of Health and Human Services (HHS) released an Interim Final Rule for data breach notification provisions that went into effect earlier this year.

As noted by Healthcare IT News, “this coming May, HHS will also issue new proposed rules that will address additional privacy, security and enforcement requirements for HIPAA covered entities and their business associates that acquire and handle protected health information (PHI).

“The rule also toughens related provisions in the Health Insurance Portability and Accountability Act (HIPAA) as the adoption of electronic health records and health information exchange expands the number of organizations that may have access to personal data.

The proposed rule focuses on the liability of business associates of healthcare providers and plans; new limitations on the sale of protected health information; and stronger individual rights to access electronic medical records and restrict the disclosure of certain information, HHS has said.”

These rules will continue to expand what has become a daunting regulatory environment during 2010 for healthcare organizations to that must digest numerous requirements for securing the privacy of patient health records.

Given that healthcare organizations are now obligated to report all data breaches that affect over 500 individuals to the Office of Civil Rights at HHS for posting on their website, for the first time we will be able to get a window into the actual volume and nature of data breach incidents that are occurring in healthcare. At least this should be the case, once covered entities and their business associates develop sound processes and technologies for detecting data breach incidents as required under HITECH.

Given that data breach incidents in healthcare are moving in the wrong direction, they are on the rise, it behooves all organizations entrusted with PHI to have a comprehensive data breach incident response plan in place and to have business contracts with all organizations with whom they share this data that ensure compliance with privacy rules and determine who will bear the costs of data breach notification if/when such incidents do occur.

This past week, the Internet Security Alliance (ISA) and the American National Standards Institute (ANSI) released a groundbreaking document that is aimed at assisting the Chief Financial Officer of major corporations and organizations in managing the financial risks inherent in protecting an organization from cybercrime.

Titled “The Financial Management of Cyber Risk: An Implementation Framework for CFOs“, the document is literally a “how to” guide to understanding and addressing the finanical implications of cyber risk.

Melissa Hathaway, President of Hathaway Global Strategies and fomer Acting Senior Director for Cyberspace for the National Security Council notes that this is “an excellent guide for organizations to manage the risk and exposure derived from digital dependence.”

This paper is must reading for the CFO of any organization that has exposure to data breach risks. It is especially valuable to healthcare financial executives because of the enhanced regulatory environment in healthcare due to the recently passed Health Information Technology for Economic and Clinical Health (HITECH) Act. But CFOs in all industries and organizations that are entrusted with sensitive personally identifiable information (PII) and protected health information (PHI) should make the time to read this.

The context and perspective of this paper is best summarized in the executive summary where it states:

“Most enterprises today categorize information security as a technical or operational issue to be handled by the information technology (IT) department. This misunderstanding is fed by outdated corporate structures wherein the various silos within organizations do not feel responsible to secure their own data….In reality, cybersecurity is an enterprise-wide risk management issue that needs to be addresssed from a strategic, cross-departmental, and economic perspective. The CFO as opposed to the CIO or CSO, is the most logical person to lead this effort.”

If one were to ask the CFO at a Fortune 500 company to quantify their level of risk to cybercrime and associated risks of data breach, most would have a difficult time answering the question. Financial officers tend to defer the management of data breach risks to the information security team. Unfortunately, this leaves many organizations exposed to risks that are misunderstood, unquantified, and uncovered.

If you are the CFO of an organization of any size and in any industry — healthcare, financial services, manufacturing, retail — or in the public sector or higher education, don’t wait to read this document.

Electronic Health Records (EHR) hold the promise of substantial benefits to patients. When shared among providers, they will assure that wherever you seek medical services that your doctor will have access to complete and accurate information on your medical history.

The passage of the Health Information Technology for Economic and Clinical Health (HITECH) Act earmarks over $19 billion in funds as incentives for healthcare providers to adopt EHR technologies. As these funds flow, the amount of medical data will grow exponentially into the petabytes over the next four years.

As recent article titled “As health data goes digital, security risks grow” published in Computerworld and Business Week highlights a significant issue with this trend, the fact that the security of your medical records is far from assured. It concludes that:

“Over the next four years, the amount of personal medical information online will increase exponentially, opening up new avenues for hackers to expose personal data that, unlike financial information, can result in a permanent violation of privacy.”

With the focus of healthcare providers being on securing HITECH stimulus funds for the implementation of EHR systems, there is the risk that the security systems and architecture for these systems, especially in areas of interchange with other entities, may increase risks of exposure of protected health information (PHI) of patients.

Dr. Taher Elgamal, the individual that led the development of  secure sockets layer (SSL network encryption) as the chief scientist at Netscape, and is now the chief security officer at Axway, highlights that the current solution path for this issue, encryption of the PHI data, isn’t a silver bullet for assuring patient privacy.

“The fact that you did encryption doesn’t mean you’ve protected medical information, because access control is the real issue,” Elgamal said. “New cybercriminals do not do what the old cybercriminals did. They realize you’ll be encrypting the data and instead access the application and steal access rights.”

The implications of this on healthcare providers is significant. The financial and patient benefit motivation associates with implementing EHR systems must be balanced by the security and privacy requirements that now have public and financial implications as well for non-compliance.  It isn’t clear to me that most covered entities are appropriately balancing both sides of this equation.

The Ponemon Institute released their 5th annual 2009 Annual Study: Cost of Data Breach last month.  This year, the report explored several new areas and came up with some interesting and in some cases surprising conclusions.

These include:

- Customer/patient/client churn rate, the tendency for a data breach event to cause them to “vote with their feet” and choose another provider, remains the key cost driver for data breach incidents. Such lost customer costs are typically 2/3rds the cost of a data breach. Industries that exhibit the highest churn rates are healthcare, pharmaceuticals and communications (all 6%).

- Almost half (44%) of organizations outsourced the data breach response effort to an expert third party consultant. When outsourced in this way, the costs per victim declined a huge 26% vs. companies that “go it alone”. The ability to reduce costs by outsourcing the response process is counterintuitive to some, but validates the value of an outside consultant that is knowledgeable and can execute using best practices

-  “Companies that notify too quickly may incur higher costs”. This was surprising to me. The study found that these “quick responders”, organizations that notified within one month of detection of the breach, ended up paying 12% more than their peers. The assumption was that moving too quickly through the process causes inefficiencies that can be avoided.

As always, the study and report is full of valuable and interesting data and perspective for privacy, information security,  legal and financial officers. It is a “must read” for anyone in a relevant role at an organization that is entrusted with PII and PHI, especially the CISOs who are most frequently the organizational members responsible for the handling of data breach incidents.

One of the panels at the Consumer Electronics Show Digital Health Summit is asking a really interesting question: Who will you trust with your health data? As described in an article in Healthcare IT News on healthcare data privacy and security, there have been numerous data breach incidents over recent years who sensitive patient information has been inappropriately disclosed.

“In 2009, PrivacyRights.org reports that there were 46 breaches of PHI representing nearly 80M records.  Note that 76M of those records were from the VA that inadvertently sent one of its RAID drives out for repair without cleansing it of those 76M records of veterans.  If you can’t trust the government to keep your PHI safe, who can you trust?”

Now I must admit, I would never have suggested that it is reasonable to assume that the government is good at maintaining privacy of personal information that they collect on American citizens. But it is reasonable to assume that as more protected health information (PHI) is collected, stored, shared and manipulated in computer systems at healthcare providers and payors, that the risk of exposure, and the subsequent number of data breach incidents, will rise.

So it really does make for an interesting thought, do I trust my doctor and hospital with my health data? Do I trust my health insurer with my health data? How about my pharmacy? Like it or not, I don’t have much choice but to provide them with or allow them to access my PHI.

But I do have a choice as to whether I should entrust Microsoft or Google with this sensitive information. Both companies have built systems “in the cloud” that allow consumers to centralize their personal health history. Microsoft HealthVault is designed to let us “collect, store, and share health information critical to our family’s well-being” and Google Health allows us to “organize our health information all in one place, gather our medical records from doctors, hospitals, and pharmacies, and share our information securely with a family member, doctors or caregiver.”

Microsoft has made HealthVault quite “open”,enabling organizations such as providers, payors, pharmacies and others to create applications for individuals to import information that they hold on us into our HealthVault account. I setup a HealthVault account, to see how this worked. Unfortunately, neither my national pharmacy chain nor my health insurer were on the list of those who make such information “exportable” to HealthVault.

Assuming that my trusted providers, insurer and pharmacy do provide such export capabilities in the future, it still leaves me with a nagging concern: do I really trust Microsoft to hold my entire medical life history? While I’d love to have all of this information in one place, and to be able to make it available to healthcare providers that I may wantto see in the future, the thought of entrusting this to anyone is daunting, not the least of which a company who’s software is a constant target for viruses, worms and malware of all kinds.

So for now, I probably won’t start trusting my medical history to either Microsoft or Google.  My health data will be remain somewhat safe with doctors, an insurer and a pharmacy, and numerous business associates of their that I don’t even know by name, that I hope I can trust. But given the number and scope of data breaches the last year or so in healthcare, I’m not really feeling very confident about my healthcare data privacy at this moment.

Thanks to Healthcare Professionals Live for highlighting this article and the important questions it highlights.

…I was wondering about why there have yet to be any healthcare data breaches posted on the Health and Human Services(HHS) Office of Civil Rights (OCR) website. Because there have been a number of substantial incidents reported in the press since the notification requirement under the HITECH Act went into effect, it was unclear as to whether the covered entities were remiss in reporting or whether the hold up was at OCR… (continue reading)