As shown by yesterday’s press release and this morning’s email blast, OCR is certainly eager to let the world know that it just issued a Notice of Final Determination and Notice of Proposed Determination finding that Cignet Health violated the HIPAA Privacy Rule to the tune of $4.3 million dollars.
According to yesterday’s Associated Press news feed that blanketed the news outlets as well as fed many privacy blogs, Cignet Health “is a Christian-influenced medical service, has four locations in Prince George’s County, in southern Maryland just outside Washington.” And, according to its website, “[t]he focus of Cignet health center is to minister to the whole person, both spiritually and physically. Our desire is to help the sick and suffering people the best way we can to the glory of God.” Cignet Health offers health plans in Nigeria as well as Ghana and acts as “a patient-Provider advocacy alternative to other healthcare presently available in the healthcare market today.”
It is unknown whether this apparently small-scale operation is equipped to pay a $4.3 million penalty. Frankly, it is pretty surprising that such a small healthcare player has the honor of being the very first CE in which HHS has imposed a civil money penalty (CMP) for alleged violations of the HIPAA Privacy Rule. As well, this CMP is the first one based on the “violation categories and increased penalty amounts authorized under the Health Information Technology for Economic and Clinical Health (HITECH) Act.” The HITECH Act has certainly seen noteworthy action given the Connecticut AG’s HITECH Act penalties against Health Net – the first time a state has used the HITECH Act to settle a data breach claim — as well as the enforcement of the HITECH Act’s public disclosure of data breaches. Cignet Health, however, did not sustain a data breach so the huge penalty is curious to say the least.
What exactly did Cignet Health do? For starters, it did NOT breach the privacy rights of its patients in any traditional sense. Unlike with the Health Net breach or the HITECH publications of breaches, this incident involved a more vanilla HIPAA violation. According to the OCR:
In a Notice of Proposed Determination issued Oct. 20, 2010, OCR found that Cignet violated 41 patients’ rights by denying them access to their medical records when requested between September 2008 and October 2009. These patients individually filed complaints with OCR, initiating investigations of each complaint. The HIPAA Privacy Rule requires that a covered entity provide a patient with a copy of their medical records within 30 (and no later than 60) days of the patient’s request. The CMP for these violations is $1.3 million.
During the investigations, Cignet refused to respond to OCR’s demands to produce the records. Additionally, Cignet failed to cooperate with OCR’s investigations of the complaints and produce the records in response to OCR’s subpoena. OCR filed a petition to enforce its subpoena in United States District Court and obtained a default judgment against Cignet on March 30, 2010. On April 7, 2010, Cignet produced the medical records to OCR, but otherwise made no efforts to resolve the complaints through informal means.
OCR also found that Cignet failed to cooperate with OCR’s investigations on a continuing daily basis from March 17, 2009, to April 7, 2010, and that the failure to cooperate was due to Cignet’s willful neglect to comply with the Privacy Rule. Covered entities are required under law to cooperate with the Department’s investigations. The CMP for these violations is $3 million.
In other words, Cignet Health failed to give 41 patients copies of their records on a timely basis and then “failed to cooperate with OCR’s investigations” after complaints were filed by these patients. Although OCR points out in its Notice of Proposed Determination that the boxes provided to OCR by Cignet Health “also contained the medical records of approximately 4,500 individuals for whom OCR made no request or demand and for whom Cignet had no basis for the disclosure of their protected health information to OCR” this inadvertent disclosure was not the basis of the CMP.
This Cignet Health result is in contrast to the non-CMP “resolution amount” of $100,000 issued to Providence Health in 2008 for alleged HIPAA privacy violations involving unprotected backup tapes, optical disks and laptops that compromised the protected health information of more than 386,000 patients. HHS publicly stated there was no need for a CMP given the level of cooperation given during the investigation. Providence Health did, however, sustain significant defense costs and a corrective action plan that brought that $100,000 fee into the millions.
The lesson here is that if called upon to respond to an investigation, do it. Based on the Cignet Health result and public statements made by OCR personnel at various privacy seminars, OCR certainly places a significant premium on what it perceives to be good faith during an investigation. As well, be ready to smile into the camera because the OCR is obviously launching into an aggressive enforcement campaign in 2011 and beyond. For example, the OCR email missive of February 23, 2011 includes the following appeal to potential claimants and whistleblowers:
If you believe that a person or organization covered by the Privacy and Security Rules (a “covered entity”) violated your health information privacy rights or otherwise violated the Privacy or Security Rules, you may file a complaint with OCR. For additional information about how to file a complaint, visit OCR’s web page on filing complaints at http://www.hhs.gov/ocr/privacy/hipaa/complaints/index.html.
Make no mistake about it: The OCR is HHS’s enforcement arm and is looking to knock some heads together and make some money for the boss. And, the tools, i.e., the HITECH Act and accompanying regs, are now in place to make that Supranos moment a reality.