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HHS Office for Civil Rights Settles 8th Ransomware Investigation with Elgon Information Systems

Posted on January 7, 2025 by Dissent

Today, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) announced an $80,000 settlement with Elgon Information Systems (Elgon), a Massachusetts company that provides electronic medical record and billing support services to covered entities, under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule. OCR enforces the HIPAA Privacy, Security, and Breach Notification Rules, which set forth the requirements that covered entities (health plans, health care clearinghouses, and most health care providers), and business associates must follow to protect the privacy and security of protected health information (PHI). The HIPAA Security Rule establishes national standards to protect and secure our health care system by requiring administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and security of electronic PHI (ePHI). The settlement resolves an investigation concerning a ransomware attack on Elgon’s information system.

“A HIPAA compliant risk analysis is not only required under the law, but is also an essential step in effective cybersecurity,” said OCR Director Melanie Fontes Rainer. “The best defense to cyberattacks, such as hacking and ransomware, is ensuring that potential risks and vulnerabilities to electronic protected health information have been assessed.”

Ransomware and hacking are the primary cyberthreats in health care. Ransomware is a type of malware (malicious software) designed to deny access to a user’s data, usually by encrypting the data with a key known only to the hacker who deployed the malware, until a ransom is paid. Since 2018, there has been a 264% increase in large breaches reported to OCR involving ransomware attacks. The settlement also marks the second enforcement action in OCR’s Risk Analysis Initiative. This enforcement initiative was created to focus select investigations on compliance with the HIPAA Security Rule Risk Analysis provision, a key Security Rule requirement, and the foundation for effective cybersecurity and the protection of ePHI. OCR created the Risk Analysis Initiative to increase the number of completed investigations and highlight the need for more attention and better compliance with this Security Rule requirement.

On March 25, 2023, an unknown actor gained access to a server on Elgon’s information system through open ports on Elgon’s firewall. Elgon did not detect the intrusion until March 31, 2023, when a ransom note was found. In June 2023, Elgon filed a breach report with HHS stating that approximately 31,248 individuals were affected when Elgon’s computer system was infected with ransomware. The protected health information disclosed included demographic information (name, social security number, address, driver’s license, and date of birth) and clinical information (medication, diagnosis, and condition). OCR’s investigation determined that Elgon failed to conduct an accurate and thorough risk analysis to determine the potential risks and vulnerabilities to ePHI in its system. Under the terms of the settlement agreement, OCR will monitor Elgon for three years to ensure compliance with HIPAA. In addition, Elgon has agreed to pay $80,000 to OCR and to implement a corrective action plan, which identifies the steps that Elgon will take to resolve potential violations of the HIPAA Privacy and Security Rules and protect the security of electronic protected health information, including:

  • Reviewing and updating its Risk Analysis to identify the potential risks and vulnerabilities to Elgon’s data to protect the confidentiality, integrity, and availability of ePHI.
  • Updating its enterprise-wide Risk Management Plan (strategy to protect the confidentiality, integrity, and availability of ePHI) to address and mitigate any security risks and vulnerabilities found in the updated Risk Analysis.
  • Reviewing and revising, if necessary, its written policies and procedures to comply with the Privacy and Security Rules.
  • Providing workforce training on HIPAA policies and procedures.

The resolution agreement and corrective action plan may be found at: https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/elgon-inc-ra-cap/index.html

OCR recommends health care providers, health plans, clearinghouses, and business associates that are covered by HIPAA take the following best practices to mitigate or prevent cyber-threats:

  • Review all vendor and contractor relationships to ensure business associate agreements are in place as appropriate and address breach/security incident obligations.
  • Risk analysis and risk management should be integrated into business processes; conducted regularly and when new technologies and business operations are planned.
  • Ensure audit controls are in place to record and examine information system activity.
  • Utilize multi-factor authentication to ensure only authorized users are accessing ePHI.
  • Encrypt ePHI to guard against unauthorized access to ePHI.
  • Incorporate lessons learned from incidents into the overall security management process.
  • Provide training specific to organization and job responsibilities and on a regular basis; reinforce workforce members’ critical role in protecting privacy and security.

The HHS Breach Portal: Notice to the Secretary of HHS Breach of Unsecured Protected Health Information may be found at: https://ocrportal.hhs.gov/ocr/breach/breach_report.jsf

OCR is committed to enforcing the HIPAA Rules that protect the privacy and security of peoples’ health information. Guidance about the Privacy Rule, Security Rule, and Breach Notification Rules can also be found on OCR’s website.

If you believe that your or another person’s health information privacy or civil rights have been violated, you can file a complaint with OCR at https://www.hhs.gov/ocr/complaints/index.html.

Follow HHS OCR on X (formerly Twitter) at @HHSOCR.

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Category: Commentaries and AnalysesHealth DataHIPAAOf Note

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