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LA Care Health Plan Pays $1.3M to Settle HIPAA Investigation

HIPAA enforcement is not letting up and no one is immune. Large or small, public or private – all regulated entities need to follow HIPAA.

Yesterday, the U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) announced a settlement of potential HIPAA violations by the L.A. Care Health Plan (LA Care).

LA Care is an independent local public agency that provides health coverage to low-income Los Angeles County residents. LA Care supports the safety net of health care providers needed to care for them and is the nation’s largest publicly operated health plan with more than 2.7 million members.

The settlement concludes two OCR investigations initiated from a large breach report and a media article regarding a separate security incident. Under the agreement, LA Care agreed to pay $1,300,000 and to implement a corrective action plan, discussed in further detail below, which identifies steps LA Care will take to resolve these potential violations of the HIPAA Security Rule and protect the security of electronic protected health information (ePHI).

“Breaches of protected health information by a HIPAA-regulated entity often reveal systemic, noncompliance with the HIPAA Rules,” said OCR Director Melanie Fontes Rainer.  “HIPAA-regulated entities need to be proactive in ensuring their compliance with the HIPAA Rules, and not wait for OCR to reveal long-standing HIPAA deficiencies. Entities such as LA Care must protect the health information of its insureds while providing health care for the most vulnerable residents of Los Angeles County through its coverage, which includes Medicaid, Medicare, and Affordable Care Act health plans.”

Violations and Follow-Up Action Steps

From the OCR press announcement –

The potential violations in this case included:

  • failure to conduct an accurate and thorough risk analysis to determine risks and vulnerabilities to ePHI across the organization,
  • failure to implement security measures sufficient to reduce risks and vulnerabilities to ePHI to a reasonable and appropriate level,
  • failure to implement sufficient procedures to regularly review records of information system activity,
  • failure to perform a periodic technical and nontechnical evaluation in response to environmental or operational changes affecting the security of ePHI, and
  • failure to implement hardware, software, and/or procedural mechanisms that record and examine activity in information systems that contain or use ePHI.

OCR’s investigation found evidence of potential noncompliance with the HIPAA Privacy and Security Rules across LA Care’s organization, a serious concern given the size of this covered entity. In addition to the monetary settlement, LA Care has agreed to take the following steps under a comprehensive corrective action plan that will be monitored for three years by OCR to ensure compliance with HIPAA:

  • Conduct an accurate and thorough risk analysis to determine risks and vulnerabilities to electronic patient/system data across the organization.
  • Develop and implement a risk management plan to address identified risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI.
  • Develop, implement, and distribute policies and procedures for a risk analysis and risk management plan.
  • Report to HHS when it conducts an evaluation due to an environmental and operational change that affects the security of ePHI in LA Care’s possession or control.
  • Report to HHS within thirty (30) days when workforce members fail to comply with the HIPAA Rules.

Compliance and Prevention are Less Expensive than Enforcement

OCR’s message is loud and clear. The OCR Director warned that “HIPAA-regulated entities need to be proactive in ensuring their compliance” and not wait for an investigation to uncover deficiencies.

This settlement payment is larger than most OCR investigations and likely reflects the glaring omissions in LA Care’s HIPAA practices. They had not conducted a risk analysis, had no risk management plan, and lacked routine electronic security procedures.

LA Care missed out by not making HIPAA compliance a priority. You don’t need to make the same mistake because HIPAA compliance is affordable, manageable and easy to do with the right guidance.

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Maggie Hales

Maggie Hales is a lawyer focusing on health information privacy and security. As CEO of ET&C Group LLC she advises health care providers and business associates in 36 states, Canada, Egypt, India and the EU, using The HIPAA E-Tool® to deliver up to date policies, forms and training on everything related to HIPAA compliance.

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