the new hipaa privacy rule

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THE NEW HIPAA PRIVACY RULE OVERVIEW In 2013, the Department of Health and Human Services' Office for Civil Rights (“OCR”) said it was taking the "compliance through enforcement" approach to encourage more covered entities to comply with the full letter of the HIPAA law. OCR stated its goal to identify existing privacy and security problems and take the necessary steps to ensure remediation, whether through fines or other actions. To begin, the OCR expects that every company with Protected Health Information (“PHI”) to regularly engage in a risk analysis and other compliance activities related to HIPAA. Since 2009, over 60,000 breaches have been reported, and 800 have been identified to affect 500 or more individuals. Not surprisingly, over half of the reported incidents were caused by the loss or theft of a laptop or other mobile device. 46% of corporate laptops and 35% of smartphones contain sensitive data. 113 smartphones are lost every minute in the U.S. FINES AND PENALTIES There are new consequences for noncompliance. For years, HIPAA violations were considered insignificant, but the 2009 Health Information Technology for Economic and Clinical Health (“HITECH”) Act radically changed the financial impact of a PHI data breach and broadened the sources that could induce an audit. Fines now range from $100 to $50,000 per violation, depending on the preparedness and culpability of the covered entity. Furthermore, state attorneys general may now bring civil actions on behalf of state residents to obtain damages or seek enjoinment to avoid further violations. It is each organization’s responsibility to clearly document their security policies and breach response in addition to the requirement to perform annual risk assessments. OCR investigations consider the culture of compliance and examine the organization’s overall approach to security and privacy. Gartner research estimates that covered entities and business associates now have a 20% chance of undergoing a HIPAA audit in the next five years. BRINGING ON UHY UHY can train your organization to identify, classify, and protect PHI. Companies with mature compliance strategies can leverage UHY to execute their vision. UHY’s experienced consultants can help you develop and implement appropriate incident response plans to respond to the updated breach standards.

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Page 1: The New HIPAA Privacy Rule

 

THE NEW HIPAA PRIVACY RULE 

OVERVIEW 

In 2013, the Department of Health and Human Services' Office for Civil Rights (“OCR”) said  it was  taking  the  "compliance  through  enforcement"  approach  to  encourage more  covered entities to comply with the full letter of the HIPAA law. OCR stated its goal to identify existing privacy and security problems and take the necessary steps to ensure remediation, whether through fines or other actions. 

To begin, the OCR expects that every company with Protected Health  Information (“PHI”) to regularly engage in a risk analysis and other compliance activities related to HIPAA. Since 2009, over 60,000 breaches have been reported, and 800 have been identified to affect 500 or more individuals. Not  surprisingly, over half of  the  reported  incidents were  caused by  the  loss or theft of a  laptop or other mobile device. 46% of corporate  laptops and 35% of smartphones contain sensitive data. 113 smartphones are lost every minute in the U.S. 

FINES AND PENALTIES 

There are new consequences for noncompliance. For years, HIPAA violations were considered insignificant,  but  the  2009  Health  Information  Technology  for  Economic  and  Clinical Health (“HITECH”)  Act  radically  changed  the  financial  impact  of  a  PHI  data  breach  and broadened the sources that could induce an audit. Fines now range from $100 to $50,000 per violation, depending on the preparedness and culpability of the covered entity. Furthermore, state  attorneys  general may  now  bring  civil  actions on  behalf  of  state  residents  to  obtain damages or seek enjoinment to avoid further violations. 

It  is each organization’s  responsibility  to clearly document  their security policies and breach response  in  addition  to  the  requirement  to  perform  annual  risk  assessments.  OCR investigations  consider  the  culture  of  compliance  and  examine  the  organization’s  overall approach  to  security  and  privacy.  Gartner  research  estimates  that  covered  entities  and business associates now have a 20% chance of undergoing a HIPAA audit in the next five years. 

BRINGING ON UHY 

UHY can train your organization to identify, classify, and protect PHI. Companies with mature compliance  strategies  can  leverage  UHY  to  execute  their  vision.    UHY’s  experienced consultants  can  help  you  develop  and  implement  appropriate  incident  response  plans  to respond to the updated breach standards. 

 

 

Page 2: The New HIPAA Privacy Rule

 

NEW REQUIREMENTS 

The OCR recognized the number of outside organizations touching PHI increased dramatically in  recent years and established  the HIPAA Omnibus Rule  to hold business associates  to  the same privacy and security standards as providers. This rule impacts organizations primarily in two ways. 

RULE: First, the Omnibus Rule extends the authority of HHS to regulate business associates, as well  as  any  subcontractors  they  employ.  This  creates  new  responsibilities  for  the  business associates of HIPAA covered entities who handle PHI.  

ACTION: Covered entities  should  review  all of  their business practices  to ensure  they have correctly  identified  all  of  their  business  associates,  and  review  the  Business  Associate Agreements  (“BAAs”)  they  have  in  place  to  ensure  they  properly  require  organizations  to comply with  the HIPAA Privacy Rule and Security Rule. This  rule  requires organizations  that serve as business associates to conduct risk assessments to  identify gaps  in their compliance and understand  their  legal  responsibilities  to both  the  covered entity  and HHS.  In effect,  a business associate is now subject to the same kinds of fines and penalties for HIPAA violations as covered entities are. 

RULE: Second,  the Omnibus Rule  requires breach notification whenever a covered entity or business  associate  experiences  an  impermissible  use  or  disclosure  of  PHI.  Any  event  of unauthorized disclosure, even internally, is presumed to be a breach and the burden is on the entity to prove there is a low probability that PHI has been compromised. This lower standard significantly increases the likelihood that notification is required than under the previous “risk of harm” standard. 

ACTION:  Organizations  subject  to  HIPAA  need  to  reevaluate  their  incident  response  and breach notification practices to ensure that they are in compliance with the Omnibus Rule. At a minimum, this should include:  

1. Review policies and procedures to verify the organization’s practice is consistent with the new rule 

2. Update policies and procedures that notify both HHS and affected individuals when a breach occurs 

3. Update the risk assessment process for the new breach standard 4. Address incident response plan 

THE SOLUTION 

While the changes may seem minor, the enhanced documentation requirements create new burdens for providers. Eliminating the harm threshold forces each organization to investigate and document every possible breach. The OCR enforced the Omnibus Rule since September and organizations would be well‐advised to review and improve their policies and practices as soon as possible.    

Page 3: The New HIPAA Privacy Rule

 

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THE NEXT LEVEL OF SERVICE In July, 2000, six leading regional tax and business advisory firms, with tenures dating back to the early 1970s, merged to form a national professional services entity known as UHY Advisors, Inc. They came together in the pursuit of a shared vision: to deliver the service of a local/regional firm and the services of a national firm to the dynamic middle market. 

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