HHS Delays Enforcement of HITECH Act Business Associate Provisions

Posted on February 19, 2010 by Hunton & Williams LLP

We understand that yesterday Adam H. Greene (Office of the General Counsel, Civil Rights Division, U.S. Department of Health & Human Services), speaking at the ABA’s 11th Annual Conference on Emerging Issues in Healthcare Law, indicated that enforcement of the business associate provisions of the Health Information Technology for Economic and Clinical Health Act (the “HITECH Act”), which became effective on February 17, 2010, will be delayed until final rules addressing those provisions are published.  The HITECH Act’s business associate provisions require business associates to implement the information security safeguards specified by the HIPAA Security Rule, and comply with certain requirements of the HIPAA Privacy Rule.  Similarly, the HITECH Act requires covered entities to provide in their business associate agreements that all of the HITECH Act’s security requirements applicable to covered entities are also applicable to business associates.

The Office for Civil Rights (“OCR”), which enforces HIPAA’s Privacy and Security Rules, has stated publicly that it is carefully evaluating how to proceed with HIPAA enforcement.  For example, Section 13411 of the HITECH Act requires HHS to “provide for periodic audits to ensure that covered entities and business associates” are complying with the HITECH Act and its implementing regulations.  At the 18th Annual National HIPAA Summit in early February, Sue McAndrew, the OCR’s Deputy Director for Health Information Privacy, explained that there are “1,000 ways” to conduct HIPAA audits and that OCR is working with a HIPAA expert to “map out essentially the range of options” to determine how best to effectively conduct HIPAA audits.

Despite the delay in enforcement, covered entities and business associates should take necessary actions to comply with the HITECH Act’s requirements.  Please see our client alert on HITECH compliance for more information.
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Interim Final Rule Implements Increased Penalties for HIPAA Violations

Posted on October 30, 2009 by Hunton & Williams LLP

The Department of Health and Human Services (“HHS”) released an interim final rule to incorporate the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) categories of violations and tiered civil penalty amounts.  The interim final rule is expected to be published in the Federal Register on October 30, 2009 and takes effect on November 30, 2009.  The rule applies to violations of the Health Insurance Portability and Accountability Act of 2003 (“HIPAA”) that occur on or after February 18, 2009.

The interim final rule amends HIPAA’s enforcement regulations.  Specifically, the rule incorporates the HITECH Act’s categories of violations, tiered ranges of civil penalty amounts, and revised limitations on the Secretary of HHS’s authority to impose civil penalties for violations of HIPAA's rules.  Pursuant to the interim final rule, covered entities may be subject to tiers of penalties as described below:

  • If a covered entity did not know and, by exercising reasonable diligence, would not have known that it was in violation, the minimum civil penalty is $100 per violation.
  • If a violation was the result of “reasonable cause” involving circumstances that would make it unreasonable for the covered entity (despite the exercise of ordinary business care and prudence) to comply, the minimum penalty is $1000 per violation.
  • The minimum penalty for a violation that is the result of willful neglect and subsequently corrected is $10,000.
  • The minimum penalty for a violation that is the result of willful neglect and is not corrected is $50,000.
  • The maximum penalty amount for multiple violations is set at $1.5 million per calendar year.

HHS will be accepting comments on the interim final rule until December 29, 2009.  Read our earlier blog posting for further information regarding the HITECH Act.

Access a copy of the interim final rule.
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HHS Posts Breach Notice Reporting Form

Posted on October 2, 2009 by Hunton & Williams LLP

The Department of Health and Human Services (“HHS”) has posted to its website a notification form that may be used to report breaches of unsecured protected health information to the agency.  Although some state agencies requiring notice of a breach employ a standard reporting form, the form issued by HHS has several unique features and requests more information than a typical breach reporting form.  Some interesting features of the form include:

  • The form may be used to report both breaches affecting 500 or more individuals, as well as breaches affecting fewer than 500 individuals, although the former must be notified to the agency within 60 days of discovery and the later need only be logged over the course of the year and reported to the agency on an annual basis.
  • The form requires that, if the breach occurred "at or by" a business associate, that business associate must be identified by name and contact information must be provided.  The form is, however, required to be completed by the covered entity.
  • The form requires a description of the breach and provides drop-down lists to facilitate the description of the type of breach (e.g., theft, loss, improper disposal, etc.), the location of the "breached information" (e.g., laptop, desktop computer, network server, etc.) and the type of PHI affected (e.g., demographic information, financial information, clinical information or "other").
  • The form further requests a description of the safeguards that were in place prior to the breach and a description of actions taken in response to the breach, again via selection from a drop-down list.  Actions taken in response to the breach also may be described in narrative form.
  • The form requires completion of an attestation that the information provided is accurate, and acknowledgement that the Office of Civil Rights ("OCR") may be required to release information provided via the form pursuant to the Freedom of Information Act, that some of the information will be posted to HHS's web site, and that OCR will use the information to provide an annual report to Congress, as required by the HITECH Act.
  • The form also may be used to submit an "initial breach report" or an "addendum to previous report," implying that covered entities could submit the form based on then-available information and later file an addendum, which may be necessary in some cases to avoid missing the 60-day reporting deadline.

The form, which is intended to be submitted electronically, includes all of the required elements specified by the HITECH Act and HHS's implementing regulations.  HHS also has provided instructions for completing the form.

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Becoming HITECH: Actions Covered Entities and Business Associates Should Take Now to Comply with the Requirements of the HITECH Act

Posted on September 23, 2009 by Hunton & Williams LLP

The Health Information Technology for Economic and Clinical Health Act (the “HITECH Act”), which was signed into law in February 2009 as part of the economic stimulus package, substantially impacts requirements imposed by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). The HITECH Act creates several new and potentially burdensome obligations that affect the relationship between covered entities and business associates. Because these changes are quite substantial and necessitate revisions to existing business associate agreements (“BAAs”), covered entities and business associates should begin compliance efforts as soon as possible. Read more on actions to take to comply with the requirements of the HITECH Act.

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