Seattle-based Health System Agrees to Pay $100,000 HIPAA Fine

The U.S. Department of Health & Human Services has entered into a Resolution Agreement with Seattle-based Providence Health & Services to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules. Providence is a not-for-profit health system that provides services across five states--Alaska, Washington, Montana, Oregon, and California--to 26 hospitals, more than 35 non-acute facilities, physician clinics, a health plan, a university, and a high school. In the agreement, Providence agreed to pay $100,000 and implement a detailed Corrective Action Plan to ensure that it will appropriately safeguard identifiable electronic patient information against theft or loss.

The Privacy and Security Rules are enforced by HHS' Office for Civil Rights (OCR) and the Centers for Medicare & Medicaid Services (CMS). The Privacy and Security Rules require health plans, health care clearinghouses and most health care providers (covered entities) to safeguard the privacy of certain individually identifiable health information and meet additional security standards for patient information maintained in electronic form.

The incidents giving rise to the agreement involved two entities within the health system. On several occasions between September 2005 and March 2006, backup tapes, optical disks, and laptops, all containing unencrypted electronic protected health information, were removed from the premises and were left unattended. The media and laptops were subsequently lost or stolen, compromising the protected health information of more than 386,000 patients. HHS received more than 30 complaints about the stolen tapes and disks, submitted after the company, pursuant to state notification laws, informed patients of the theft.

In addition to the fine, the Corrective Action Plan Providence has agreed to requires it to: revise its policies and procedures regarding physical and technical safeguards (e.g., encryption) governing off-site transport and storage of electronic media containing patient information, subject to HHS approval; train workforce members on the safeguards; conduct audits and site visits of facilities; and submit compliance reports to HHS for a period of three years. The Resolution Agreement and Corrective Action Plan can be found on the OCR Web site at www.hhs.gov/ocr/privacy/enforcement/.

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