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HIPAA Compliance

“What is HIPAA compliance?” HIPAA compliance involves fulfilling the requirements of the Health Insurance Portability and Accountability Act of 1996, its subsequent amendments, and any related legislation such as the Health Information Technology for Economic and Clinical Health (HITECH) Act.

Typically the question following “What is HIPAA compliance?” is “What are the HIPAA compliance requirements?” That question is not so easy to answer as – in places – the requirements of HIPAA are intentionally vague. This is so HIPAA can be applied equally to every different type of Covered Entity or Business Associate that comes into contact with Protected Health Information (PHI). For the sake of clarification:

What is a Covered Entity?

A covered entity is a health care provider, a health plan or a health care clearing house who, in its normal activities, creates, maintains or transmits PHI. There are exceptions. Most health care providers employed by a hospital are not covered entities. The hospital is the covered entity and responsible for implementing and enforcing HIPAA complaint policies.

Employers – despite maintaining health care information about their employees – are not generally covered entities unless they provide self-insured health cover or benefits such as an Employee Assistance Program (EAP). In these cases they are considered to be “hybrid entities” and any unauthorized disclosure of PHI may still be considered a breach of HIPAA.

What is a Business Associate?

A “business associate” is a person or business that provides a service to – or performs a certain function or activity for – a covered entity when that service, function or activity involves the business associate having access to PHI maintained by the covered entity. Examples of Business Associates include lawyers, accountants, IT contractors, billing companies, cloud storage services, email encryption services, etc.

Before having access to PHI, the Business Associate must sign a Business Associate Agreement with the Covered Entity stating what PHI they can access, how it is to be used, and that it will be returned or destroyed once the task it is needed for is completed. While the PHI is in the Business Associate´s possession, the Business Associate has the same HIPAA compliance obligations as a Covered Entity.

HIPAA Requirements

Despite the intentionally vague HIPAA requirements, every Covered Entity and Business Associate that has access to PHI must ensure the technical, physical and administrative safeguards are in place and adhered to, that they comply with the HIPAA Privacy Rule in order to protect the integrity of PHI, and that – should a breach of PHI occur – they follow the procedure in the HIPAA Breach Notification Rule.

All risk assessments, HIPAA-related policies and reasons why addressable safeguards have not been implemented must be chronicled in case a breach of PHI occurs and an investigation takes place to establish how the breach happened. Each of the HIPAA requirements is explained in further detail below. Business unsure of their obligation to comply with the HIPAA requirements should seek professional advice.

HIPAA Security Rule

The HIPAA Security Rule contains the standards that must be applied to safeguard and protect ePHI when it is at rest and in transit. The rules apply to anybody or any system that has access to confidential patient data. By “access” we mean having the means necessary to read, write, modify or communicate ePHI or personal identifiers which reveal the identity of an individual (for an explanation of “personal identifiers”, please refer to our “HIPAA Explained” page).

There are three parts to the HIPAA Security Rule – technical safeguards, physical safeguards and administrative safeguards – and we will address each of these in order in our HIPAA compliance checklist.

Technical Safeguards

The Technical Safeguards concern the technology that is used to protect ePHI and provide access to the data. The only stipulation is that ePHI – whether at rest or in transit – must be encrypted to NIST standardsonce it travels beyond an organization´s internal firewalled servers. This is so that any breach of confidential patient data renders the data unreadable, undecipherable and unusable. Thereafter organizations are free to select whichever mechanisms are most appropriate to:

Implementation Specification                          Required or Addressable                                                     Further Information

Implement a means of access control                          Required                        This not only means assigning a  centrally-controlled unique username and PIN                                                                                                                                                     code for each user, but also establishing procedures to govern the release or                                                                                                                                                       disclosure of ePHI during an emergency.

Introduce a mechanism to authenticate ePHI               Addressable                  This mechanism is essential in order to comply with HIPAA regulations as it                                                                                                                                                          confirms whether ePHI has been altered or destroyed in an unauthorized manner.

Implement tools for encryption and decryption             Addressable                   This guideline relates to the devices used by authorized users, which must have                                                                                                                                                   the functionality to encrypt messages when they are sent beyond an internal                                                                                                                                                         firewalled server, and decrypt those messages when they are received.

Introduce activity logs and audit controls                      Required                        The audit controls required under the technical safeguards are there to register                                                                                                                                                     attempted access to ePHI and record what is done with that data once it has been                                                                                                                                               accessed.

Facilitate automatic log-off of PCs and devices            Addressable                   This function logs authorized personnel off of the device they are using to access                                                                                                                                                 or communicate ePHI after a pre-defined period of time. This prevents unauthorized                                                                                                                                             access of ePHI should the device be left unattended.

Physical Safeguards

The Physical Safeguards focus on physical access to ePHI irrespective of its location. ePHI could be stored in a remote data center, in the cloud, or on servers which are located within the premises of the HIPAA covered entity. They also stipulate how workstations and mobile devices should be secured against unauthorized access:

Implementation Specification                            Required or Addressable                                                   Further Information

Facility access controls must be implemented             Addressable                    Controls who has physical access to the location where ePHI is stored and                                                                                                                                                            includes software engineers, cleaners, etc. The procedures must also include                                                                                                                                                        safeguards to prevent unauthorized physical access, tampering, and theft.

Policies for the use/positioning of workstations            Required                          Policies must be devised and implemented to restrict the use of workstations that                                                                                                                                                  have access to ePHI, to specify the protective surrounding of a workstation and                                                                                                                                                    govern how functions are to be performed on the workstations.

Policies and procedures for mobile devices                 Required                          If users are allowed to access ePHI from their mobile devices, policies must be                                                                                                                                                    devised and implemented to govern how ePHI is removed from the devices if the                                                                                                                                                  user leaves the organization or the device is re-used, sold, etc.

Inventory of hardware                                                   Addressable                     An inventory of all hardware must be maintained, together with a record of the                                                                                                                                                       movements of each item. A retrievable exact copy of ePHI must be made before                                                                                                                                                   any equipment is moved.

Administrative Safeguards

The Administrative Safeguards are the policies and procedures which bring the Privacy Rule and the Security Rule together. They are the pivotal elements of a HIPAA compliance checklist and require that a Security Officer and a Privacy Officer be assigned to put the measures in place to protect ePHI, while they also govern the conduct of the workforce.

The OCR pilot audits identified risk assessments as the major area of Security Rule non-compliance. Risk assessments are going to be checked thoroughly in the second phase of the audits; not just to make sure that the organization in question has conducted one, but to ensure to ensure they are comprehensive and ongoing. A risk assessment is not a one-time requirement, but a regular task necessary to ensure continued compliance.

The administrative safeguards include:

Implementation Specification                            Required or Addressable                                                   Further Information

Conducting risk assessments                                      Required                           Among the Security Officer´s main tasks is the compilation of a risk assessment                                                                                                                                                  to identify every area in which ePHI is being used, and to determine all of the                                                                                                                                                        ways in which breaches of ePHI could occur.

Introducing a risk management policy                         Required                           The risk assessment must be repeated at regular intervals with measures                                                                                                                                                               introduced to reduce the risks to an appropriate level. A sanctions policy for                                                                                                                                                           employees who fail to comply with HIPAA regulations must also be introduced.

Training employees to be secure                                 Addressable                      Training schedules must be introduced to raise awareness of the policies and                                                                                                                                                       procedures governing access to ePHI and how to identify malicious software                                                                                                                                                         attacks and malware. All training must be documented.

Developing a contingency plan                                    Required                           In the event of an emergency, a contingency plan must be ready to enable the                                                                                                                                                       continuation of critical business processes while protecting the integrity of ePHI                                                                                                                                                     while an organization operates in emergency mode.

Testing of contingency plan                                         Addressable                      The contingency plan must be tested periodically to assess the relative criticality                                                                                                                                                   of specific applications. There must also be accessible backups of ePHI and                                                                                                                                                         procedures to restore lost data in the event of an emergency.

Restricting third-party access                                      Required                           It is vital to ensure ePHI is not accessed by unauthorized parent organizations                                                                                                                                                      and subcontractors, and that Business Associate Agreements are signed with                                                                                                                                                        business partners who will have access to ePHI.

Reporting security incidents                                        Addressable                      The reporting of security incidents is different from the Breach Notification Rule                                                                                                                                                    (below) inasmuch as incidents can be contained and data retrieved before the                                                                                                                                                       incident develops into a breach.

The difference between the “required” safeguards and the “addressable” safeguards on the HIPAA compliance checklist is that “required” safeguards must be implemented whereas there is a certain amount of flexibility with “addressable” safeguards. If it is not reasonable to implement an “addressable” safeguard as it appears on the HIPAA compliance checklist, covered entities have the option of introducing an appropriate alternative, or not introducing the safeguard at all.

That decision will depend on factors such as the entity’s risk analysis, risk mitigation strategy and what other security measures are already in place. The decision must be documented in writing and include the factors that were considered, as well as the results of the risk assessment, on which the decision was based.

HIPAA Privacy Rule

The HIPAA Privacy Rule governs how ePHI can be used and disclosed. In force since 2003, the Privacy Rule applies to all healthcare organizations, the providers of health plans (including employers), healthcare clearinghouses and – from 2013 – the Business Associates of covered entities.

The Privacy Rule demands that appropriate safeguards are implemented to protect the privacy of Personal Health Information. It also sets limits and conditions on the use and disclosure of that information without patient authorization. The Rule also gives patients – or their nominated representatives – rights over their health information; including the right to obtain a copy of their health records – or examine them – and the ability to request corrections if necessary.

Under the Privacy Rule, covered entities are required to respond to patient access requests within 30 days. Notices of Privacy Practices (NPPs) must also be issued to advise patients and plan members of the circumstances under which their data will be used or shared.

Covered entities are also advised to:

Provide training to employees to ensure they are aware what information may – and may not – be shared outside of an organization´s security mechanism.
Ensure appropriate steps are taken to maintain the integrity of ePHI and the individual personal identifiers of patients.
Ensure written permission is obtained from patients before their health information is used for purposes such as marketing, fundraising or research.

Covered entities should make sure their patient authorization forms have been updated to include the disclosure of immunization records to schools, include the option for patients to restrict disclosure of ePHI to a health plan (when they have paid for a procedure privately) and also the option of providing an electronic copy to a patient when it is requested.

The full content of the HIPAA Privacy Rules can be found on the Department of Health & Human Services website.

HIPAA Breach Notification Rule

The HIPAA Breach Notification Rule requires covered entities to notify patients when there is a breach of their ePHI. The Breach Notification Rule also requires entities to promptly notify the Department of Health and Human Services of such a breach of ePHI and issue a notice to the media if the breach affects more than five hundred patients.

There is also a requirement to report smaller breaches – those affecting fewer than 500 individuals – via the OCR web portal. These smaller breach reports should ideally be made once the initial investigation has been conducted. The OCR only requires these reports to be made annually.

Breach notifications should include the following information:

The nature of the ePHI involved, including the types of personal identifiers exposed.
The unauthorized person who used the ePHI or to whom the disclosure was made (if known).
Whether the ePHI was actually acquired or viewed (if known).
The extent to which the risk of damage has been mitigated.

Breach notifications must be made without unreasonable delay and in no case later than 60 days following the discovery of a breach. When notifying a patient of a breach, the covered entity must inform the individual of the steps they should take to protect themselves from potential harm, include a brief description of what the covered entity is doing to investigate the breach and the actions taken so far to prevent further breaches and security incidents.

HIPAA Omnibus Rule

The HIPAA Omnibus Rule was introduced to address a number of areas that had been omitted by previous updates to HIPAA. It amended definitions, clarified procedures and policies, and expanded the HIPAA compliance checklist to cover Business Associates and their subcontractors.

Business Associates are classed as any individual or organization that creates, receives, maintains or transmits Protected Health Information in the course of performing functions on behalf of a covered entity. The term Business Associate also includes contractors, consultants, data storage companies, health information organizations and any subcontractors used by Business Associates.

The Omnibus Rule amends HIPAA regulations in five key areas:

Introduction of the final amendments as required under the Health Information Technology for Economic and Clinical Health (HITECH) Act.
Incorporation of the increased, tiered civil money penalty structure as required by HITECH.
Introduced changes to the harm threshold and included the final rule on Breach Notification for Unsecured Protected Health Information under the HITECH Act.
Modification of HIPAA to include the provisions made by the Genetic Information Nondiscrimination Act (GINA) to prohibit the disclosure of genetic information for underwriting purposes.
Prevented the use of ePHI and personal identifiers for marketing purposes.

Definition changes were also made to the term Business Associate, the term Workforce was amended to include employees, volunteers and trainees, and what material is now classified as Protected Health Information.

Covered entities must now:

Update Business Associate Agreements – Old BA agreements must be updated to take the Omnibus Rule into account. Business Associates must be made aware that they are bound by the same Security Rule and Privacy Rule regulations as covered entities, and must similarly implement the appropriate technical, physical and administrative safeguards to protect ePHI and personal identifiers. Bas must comply with patient access requests for information and data breaches must be reported to the covered entity without delay, while assistance with breach notification procedures must also be provided.
Issue new Business Associate Agreements – A new HIPAA-compliant agreement must be signed before the services provided by a BA are used.
Update privacy policies – Privacy policies must be updated to include the Omnibus Rule definition changes. These include amendments relating to deceased persons, patient access rights to their ePHI and the response to access requests. Policies should also reflect the new limitations of disclosures to Medicare and insurers, the disclosure of ePHI and school immunizations, the sale of ePHI and its use for marketing, fundraising and research.
Update Notices of Privacy Practices – NPPs must be updated to cover the types of information that require an authorization, the right to opt out of correspondence for fundraising purposes and must factor in the new breach notification requirements
Train staff – Staff must be trained on the Omnibus Rule amendments and definition changes. All training must be documented.

HIPAA Enforcement Rule

The HIPAA Enforcement Rule governs the investigations that follow a breach of ePHI, the penalties that could be imposed on covered entities responsible for an avoidable breach of ePHI and the procedures for hearings. Although not part of a HIPAA compliance checklist, covered entities should be aware of the following penalties:

A violation attributable to ignorance can attract a fine of $100 – $50,000.
A violation which occurred despite reasonable vigilance can attract a fine of $1,000 – $50,000.
A violation due to willful neglect which is corrected within thirty days will attract a fine of between $10,000 and $50,000.
A violation due to willful neglect which is not corrected within thirty days will attract the maximum fine of $50,000.

Fines are imposed per violation category and reflect the number of records exposed in a breach, risk posed by the exposure of that data and the level of negligence involved. Penalties can easily reach the maximum fine of $1,500,000 per year, per violation category. It should also be noted that the penalties for willful neglect can also lead to criminal charges being filed. Civil lawsuits for damages can also be filed by victims of a breach.  The organizations most commonly subject to enforcement action are private medical practices (solo doctors or dentists, group practices, and so on), hospitals, outpatient facilities such as pain clinics or rehabilitation centers,  insurance groups, and pharmacies. The most common disclosures to the HHS are:

Misuse and unauthorized disclosures of patient records.
No protection in place for patient records.
Patients unable to access their patient records.
Using or disclosing to third parties more than the minimum necessary protected health information
No administrative or technological safeguards for electronic protected health information.