The latest HIPAA enforcement action, against Deer Oaks, a behavioral health provider, underscores the importance of conducting a thorough HIPAA risk analysis.

Yesterday, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) announced a settlement with Deer Oaks – The Behavioral Health Solution (Deer Oaks), a behavioral health provider, resolving potential violations of the HIPAA Privacy and Security Rules. Deer Oaks provides psychological and psychiatric services to residents of long-term care and assisted living facilities.

In addition to a resolution agreement and two years of oversight, Deer Oaks will pay $225,000 to OCR.

Risk Analysis is Number One

Risk analysis is the foundation of HIPAA compliance. Both the Privacy and Security Rules require regulated entities to have administrative, technical and physical safeguards in place to maintain the privacy and integrity of protected health information (PHI), whether in electronic (ePHI) or non-electronic format (non-ePHI).

OCR’s investigation of Deer Oaks focussed on the organization’s alleged failures to protect ePHI. OCR emphasized that the Security Rule requires a covered entity or business associate to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI held by that organization.

OCR Director Paula Stannard emphasized that identifying potential risks and vulnerabilities to ePHI is a key step in preventing or mitigating breaches of all PHI. An accurate and thorough HIPAA risk analysis can minimize the exposure of ePHI from both malicious actors and inadvertent errors.

According to Director Stannard,

“Based on OCR’s experience enforcing potential HIPAA Security Rule violations, the covered entity or business associate under investigation will often have deficient risk analysis practices. Common deficiencies include lacking a risk analysis entirely or failing to update existing risk analyses when implementing new technologies or expanding operations that affect the security of ePHI.”

Behavioral Health is a Key Component of Healthcare

Deer Oaks partners with long-term care facilities nationwide to bring behavioral health services to their residents. The services are a key element of residents’ care and are provided by contract between the facility and Deer Oaks.

The settlement resolves an investigation that OCR initiated in May 2023 after receiving a complaint alleging that Deer Oaks impermissibly disclosed the ePHI of individuals, including patient names, dates of birth, patient identification numbers, facilities, and diagnoses, by making patient discharge summaries publicly accessible online.

OCR’s investigation substantiated the allegations and verified that the ePHI was accessible publicly via the Internet. According to Deer Oaks, a coding error in a now discontinued pilot program for an online patient portal, caused the ePHI to be exposed and cached by search engine providers from at least December 2021 until May 19, 2023. OCR’s investigation found that Deer Oaks impermissibly disclosed the ePHI of 35 individuals when it allowed the discharge summaries and initial assessments of those individuals to be accessible to the public online.

OCR expanded the investigation in July 2024 after Deer Oaks experienced a breach on August 29, 2023, of its network resulting from a compromised account. A threat actor claimed to have exfiltrated data and demanded payment to prevent posting the ePHI on the dark web. Deer Oaks provided breach notifications to HHS, 171,871 affected individuals, and the media related to the August 2023 incident.

Deer Oaks Behavioral Health Failed Risk Analysis

Based on its investigation into both incidents, OCR found that Deer Oaks failed to conduct an accurate and thorough risk analysis to determine the potential risks and vulnerabilities to the ePHI that it held.

Under the terms of the settlement, Deer Oaks will pay $225,000 to OCR, and agreed to implement a corrective action plan that OCR will monitor for two years.

Under the corrective action plan, Deer Oaks committed to take steps to ensure compliance with the HIPAA Rules and protect the security of ePHI.

The first key component of the corrective action plan is to conduct a thorough annual HIPAA risk analysis to determine the potential risks and vulnerabilities to the confidentiality, integrity, and availability of its ePHI.

In addition, Deer Oaks must:

• Develop and implement a risk management plan to address and mitigate security risks and vulnerabilities identified in its risk analysis;
• Develop, maintain, and revise, as necessary, policies and procedures to comply with the HIPAA Rules; and
• Provide annual training for each workforce member who has access to PHI on Deer Oaks’ HIPAA policies and procedures.

The resolution agreement and corrective action plan may be found here.

The HIPAA E-Tool^® Understands Risk Analysis

If you need guidance, the E-Tool’s step-by-step Risk Analysis creates a step-by-step Risk Management plan made up of customized HIPAA policies and procedures. All the policies and procedures are pre-written and ready for you to adopt and follow, with workforce training to help the whole team.