HHS Office for Civil Rights Settles HIPAA Phishing Cybersecurity Investigation with Solara Medical Supplies, LLC for $3,000,000

In 2019, DataBreaches reported that Solara Medical Supplies in California was notifying more than 110,000 patients after an attacker gained access to some employees’ email accounts via phishing. Solara was subsequently sued and settled claims for $9.76 million.

Now today, HHS OCR announced a settlement with Solara:

Today the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) announced a settlement with Solara Medical Supplies, LLC (Solara), a supplier and direct-to-patient distributor of continuous glucose monitors, insulin pumps, and other supplies to patients with diabetes, concerning potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule and Breach Notification Rule following a breach of electronic protected health information (ePHI) caused by a phishing incident.

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. The HIPAA Breach Notification Rule requires covered entities to notify affected individuals, HHS, and, in some cases, the media, following the discovery of a breach of unsecured PHI. Business associates are also required to notify covered entities following the discovery of a breach . The settlement resolves an investigation concerning a phishing attack on Solara’ s information system.

“Cyberattacks have skyrocketed exponentially in recent years. Effective cybersecurity requires identifying potential risks and vulnerabilities to health information and implementing effective security measures to protect against them,” said OCR Director Melanie Fontes Rainer. “Health care entities that fail to address identified cybersecurity issues leave themselves vulnerable to cyberattacks. OCR urges health care entities to prioritize securing their information systems and take all necessary steps to reduce and prevent cyberattacks and safeguard protected health information.”

In November 2019, OCR received a breach report concerning a phishing attack in which an unauthorized third party gained access to eight of Solara’s employees’ email accounts between April and June 2019, resulting in the breach of 114,007 individuals’ ePHI. In January 2020, OCR received notification of a second breach, when Solara reported that it had sent 1,531 breach notification letters to the wrong mailing addresses. OCR’s investigation determined that Solara failed to conduct a compliant risk analysis to identify the potential risks and vulnerabilities to ePHI in Solara’s systems; failed to implement security measures sufficient to reduce the risks and vulnerabilities to ePHI to a reasonable and appropriate level; and failed to provide timely breach notification to individuals, HHS, and the media.

Under the terms of the resolution agreement, Solara agreed to implement a corrective action plan that will be monitored by OCR for two years and pay $3,000,000 to OCR. Under the corrective action plan, Solara will be required to take definitive steps to resolve potential violations of the HIPAA Security and Breach Notification Rules, including:

• Conducting an accurate and thorough risk analysis to determine the potential risks and vulnerabilities to the ePHI in its systems;
• Implementing a written risk management plan to address and mitigate security risks and vulnerabilities identified in the risk analysis;
• Developing, maintaining, and revising, as necessary, its written policies and procedures to comply with the HIPAA Rules; and
• Training its workforce on its 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/solara-ra-cap/index.html

OCR recommends that health care providers, health plans, health care clearinghouses, and business associates that are covered by HIPAA take the following steps 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.
  • Integrate risk analysis and risk management into business processes regularly.
  • Ensure audit controls are in place to record and examine information system activity.
  • Implement regular review of 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 regular basis; reinforce workforce members’ critical role in protecting privacy and security.