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HIPAA Business Associate Pays $2.3 Million to Settle Breach Affecting Protected Health Information of Over 6 Million Individuals

CHSPSC LLC, ("CHSPSC") has agreed to pay $2,300,000 to the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) and to adopt a corrective action plan to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules related to a breach affecting over six million people. CHSPSC provides various business associate services, including IT and health information management, to hospitals and physician clinics indirectly owned by Community Health Systems, Inc., in Franklin, Tennessee.

In April 2014, the Federal Bureau of Investigation (FBI) notified CHSPSC that it had traced a cyberhacking group's advanced persistent threat to CHSPSC's information system. Despite this notice, the hackers continued to access and exfiltrate the protected health information (PHI) of 6,121,158 individuals until August 2014. The hackers used compromised administrative credentials to remotely access CHSPSC's information system through its virtual private network.

OCR's investigation found longstanding, systemic noncompliance with the HIPAA Security Rule, including failure to conduct a risk analysis, and failures to implement information system activity review, security incident procedures, and access controls.

"The health care industry is a known target for hackers and cyberthieves. The failure to implement the security protections required by the HIPAA Rules, especially after being notified by the FBI of a potential breach, is inexcusable," said OCR Director Roger Severino.

In addition to the monetary settlement, CHSPSC has agreed to a robust corrective action plan that includes two monitoring years.

The OCR previously released a fact sheet that identified HIPAA Rule requirements that apply directly to business associates and for which business associates are directly liable. Additional information can be found here. If you have any questions about preventing breaches, business associate obligations, or anything compliance-related, please call or email us at support@hcp.md or 855-427-0427.


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