HHS Office for Civil Rights Settles HIPAA Investigation with Arkansas Business Associate MedEvolve Following Unlawful Disclosure of Protected Health Information on an Unsecured Server for $350,000

May 16, 2023

Today, the U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) announced a settlement of potential violations of the Health Insurance Portability and Accountability Act (HIPAA) Rules with MedEvolve, Inc., a business associate that provides practice management, revenue cycle management, and practice analytics software services to covered health care entities. The settlement concludes OCR’s investigation of a data breach, where a server containing the protected health information of 230,572 individuals was left unsecure and accessible on the internet. HIPAA is the federal law that required the establishment of national standards to protect the privacy and security of protected health information. The HIPAA Privacy, Security, and Breach Notification Rules apply to most health care breaches and set the requirements that HIPAA-regulated entities must follow to protect the privacy and security of health information.

The potential HIPAA violations in this case include the lack of an analysis to determine risks and vulnerabilities to electronic protected health information across the organization, and the failure to enter into a business associate agreement with a subcontractor. The HIPAA Rules require that covered entities and business associates (person or entity that has access to protected health information as part of their relationship with a covered entity), enter into contracts – or business associate agreements – that generally document the permissible uses and disclosures of protected health information, that appropriate safeguards will be implemented, and that the covered entity will be notified of any breaches. MedEvolve has paid a $350,000 monetary settlement to OCR and agreed to implement a corrective action plan which identifies steps MedEvolve will take to resolve these potential violations and protect the security of electronic patient health information.

“Ensuring that security measures are in place to protect electronic protected health information where it is stored is an integral part of cybersecurity and the protection of patient privacy,” said OCR Director Melanie Fontes Rainer. “HIPAA regulated entities must ensure that they are not leaving patient health information unsecured on network servers available to the public via the internet.”

In July 2018, OCR initiated an investigation of MedEvolve following the receipt of a breach notification report stating that an FTP server containing electronic protected health information was openly accessible to the internet. The information included patient names, billing addresses, telephone numbers, primary health insurer and doctor’s office account numbers, and in some cases Social Security numbers. OCR investigates every report we receive of breaches of unsecured protected health information affecting 500 or more people. Hacking/IT incidents was the most frequent (79%) type of large breach that was reported to OCR in 2022. Network servers are the largest category by location for breaches involving 500 or more individuals. It is critical that HIPAA covered entities and their business associates improve their efforts to identify, deter, protect against, detect, and respond to cybersecurity threats and malicious actors.

As a result of the settlement agreement, MedEvolve will be monitored for two years by OCR to ensure compliance with the HIPAA Security Rule. MedEvolve has agreed to take the following steps:

  • Conduct an accurate and thorough risk analysis to determine risks and vulnerabilities to electronic patient/system data across the organization;
  • Develop and implement a risk management plan to address and mitigate identified security risks and vulnerabilities identified in the risk analysis;
  • Develop, maintain, and revise, as necessary, its written policies and procedures to comply with the HIPAA Privacy and Security Rules;
  • Augment its existing HIPAA and Security Training Program for all MedEvolve workforce members who have access to protected health information; and
  • Report to HHS within sixty (60) days when workforce members fail to comply with MedEvolve’s written policies and procedures to comply with the HIPAA Privacy and Security Rules.

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

OCR is committed to enforcing the HIPAA Rules that protect the privacy and security of peoples’ health information. If you believe that you 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.

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