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HHS Office for Civil Rights Settles HIPAA Ransomware Cybersecurity Investigation for $10,000

Posted on January 15, 2025 by Dissent
Settlement with Northeast Surgical Group marks OCR’s 10th ransomware enforcement action and 4th enforcement action in OCR’s Risk Analysis Initiative.

Today the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) announced a settlement with Northeast Surgical Group, P.C. (NESG), a provider of surgical services in Michigan, for a potential violation 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. The settlement resolves an investigation concerning a ransomware attack on NESG’s information system.

“One of the first steps in implementing effective cybersecurity in health care is assessing the potential risks and vulnerabilities to electronic protected health information,” said OCR Director Melanie Fontes Rainer. “A failure to conduct a HIPAA risk analysis will leave a health care entity vulnerable to cyberattacks, such as hacking and ransomware—which is bad for our health care system and bad for patients. We can and must do better.”

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 fourth 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; to increase the number of completed investigations; and to highlight the need for more attention and better compliance with this Security Rule requirement.

In March 2023, OCR received a breach report concerning a ransomware incident that had affected NESG’s information system. NESG concluded that the protected health information of 15,298 patients had been encrypted and exfiltrated from its network. OCR’s investigation determined that NESG had failed to conduct a compliant risk analysis to determine the potential risks and vulnerabilities to ePHI in NESG’s systems.

Under the terms of the resolution agreement, NESG agreed to implement a corrective action plan that OCR will monitor for two years and paid $10,000 to OCR. Under the corrective action plan, NESG will take steps to ensure compliance with the HIPAA Security Rule and protect the security of ePHI, including:

  • Conducting an accurate and thorough risk analysis to determine the potential risks and vulnerabilities to the confidentiality, integrity, and availability of its ePHI;
  • Implementing a risk management plan to address and mitigate security risks and vulnerabilities identified in their 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/northeast-surgical-group-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.

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. 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.

Source: HHS OCR

Category: Breach IncidentsHealth DataHIPAAMalwareU.S.

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