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Administrative Law Judge rules in favor of OCR enforcement, requiring Lincare, Inc. to pay $239,800

Posted on February 3, 2016 by Dissent

A U.S. Department of Health and Human Services Administrative Law Judge (ALJ) has ruled that Lincare, Inc. (Lincare) violated the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule and granted summary judgment to the Office for Civil Rights (OCR) on all issues, requiring Lincare to pay $239,800 in civil money penalties (CMPs) imposed by OCR.  This is only the second time in its history that OCR has sought CMPs for HIPAA violations, and each time the CMPs have been upheld by the ALJ.

Lincare is a provider of respiratory care, infusion therapy, and medical equipment to in-home patients, with more than 850 branch locations in 48 states.  OCR’s investigation of Lincare began after an individual complained that a Lincare employee left behind documents containing the protected health information (PHI) of 278 patients after moving residences.  Evidence established that this employee removed patients’ information from the company’s office, left the information exposed in places where an unauthorized person had access, and then abandoned the information altogether.  Over the course of the investigation, OCR found that Lincare had inadequate policies and procedures in place to safeguard patient information that was taken offsite, although employees, who provide health care services in patients’ homes, regularly removed material from the business premises. Further evidence indicated that the organization had an unwritten policy requiring certain employees to store protected health information in their own vehicles for extended periods of time.  Although aware of the complaint and OCR’s investigation, Lincare subsequently took only minimal action to correct its policies and strengthen safeguards to ensure compliance with the HIPAA Rules.

“While OCR prefers to resolve issues through voluntary compliance, this case shows that we will take the steps necessary, including litigation, to obtain adequate remedies for violations of the HIPAA Rules,” said OCR Director Jocelyn Samuels.  “The decision in this case validates the findings of our investigation.  Under the ALJ’s ruling, all covered entities, including home health providers, must ensure that, if their workforce members take protected health information offsite, they have adequate policies and procedures that provide for the reasonable and appropriate safeguarding of that PHI, whether in paper or electronic form.”

Lincare claimed that it had not violated HIPAA because the PHI was “stolen” by the individual who discovered it on the premises previously shared with the Lincare employee.  The ALJ rejected this argument, in agreement with OCR:  “[U]nder HIPAA, Respondent [Lincare] was obligated to take reasonable steps to protect its PHI from theft.”

The Notice of Proposed Determination and the ALJ’s opinion may be found on the OCR website at www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/lincare/index.html.

SOURCE: HHS

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