This is huge. Mary Anne Pazanowski reports:
The University of Texas’s M.D. Anderson Cancer Center dodged a $4.3 million fine for losing over 35,000 people’s protected health information after the Fifth Circuit ruled Thursday that HHS acted arbitrarily and capriciously in finding that the provider violated two information security regulations.
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Here is the opinion. Apparently HHS realized it wouldn’t be able to defend its penalty. In the background section:
M.D. Anderson unsuccessfully worked its way through two levels of administrative appeals. Then it petitioned our court for review. See 42 U.S.C. § 1320a-7a(e) (authorizing judicial review). After M.D. Anderson filed its petition, the Government conceded that it could not defend its penalty and asked us to reduce it by a factor of 10 to $450,000.
What a shame that they put the cancer center through so many appeals before they would acknowledge that. In any event, the civil monetary penalty (CMP) was vacated by the court, and the case remanded.
This opinion will likely make it more difficult to get entities to settle complaints, as it seems to keep the bar high for what HHS must show if it is going to impose a CMP.
I look forward to seeing what HIPAA lawyers think of this one.