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A woman in Alabama has been awarded $300,000 in damages after a doctor illegally accessed and disclosed her protected health information to a third party.

Plaintiff Amy Pertuit filed a lawsuit against Medical Center Enterprise (MCE) in Alabama, a former MCE physician, and an attorney over the violation of her privacy in January 2015.

According to lawyers for the plaintiff, Amy Pertuit’s husband was experiencing visitation issues and was involved in a custody battle with his former wife, Deanna Mortenson.

Mortenson contacted Dr. Lyn Diefendfer, a physician at MCE, and convinced her to obtain health information about Amy Pertuit for use against her husband in the custody battle. The information was disclosed to Mortenson’s attorney, Gary Bradshaw.

Dr. Diefendfer accessed Pertuit’s records through the Alabama Prescription Drug Monitoring Program website. Since Dr. Diefendfer had no treatment relationship with Pertuit, she was not authorized to access her medical information. The access and disclosure were violations of hospital policies and HIPAA Rules.

After discovering that her health information had been disclosed, Pertuit lodged a complaint with the Department of Health and Human Services’ Office for Civil Rights which put the hospital on notice. However, the hospital failed to implement appropriate sanctions against Diefendfer. Dr. Diefendfer is alleged to have accessed further health information in 2016 and again disclosed that information to Bradshaw.

The plaintiff’s lawyers also said that the hospital’s privacy officer had investigated Dr. Diefendfer and discovered 22 separate violations of hospital policies and HIPAA Rules.

The lawsuits filed against Dr. Diefender, Deanna Mortensen, and Gary Bradshaw were all settled out of court. The case against MCE went to a jury trial.

The jury unanimously found that MCE had failed to take appropriate action against Dr. Diefender after the discovery of the privacy violation, and awarded the plaintiff $295,000 in punitive damages and a further $5,000 as compensation for pain, suffering, and humiliation.

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The dust has barely settled after the news of the massive data breach at American Medical Collection Agency (AMCA) broke last week, but already more than a dozen lawsuits have been filed by victims of the breach.

The breach was officially announced by Quest Diagnostics on June 3, 2019 through a 8-K filing with the Securities and Exchange Commission (SEC), and a SEC filing by LabCorp on June 4, 2019, shortly followed by BioReference Laboratories. Currently, the personal of up to 20 million individuals has potentially been compromised.

The data breach at AMCA was identified by security researchers at Gemini Advisory who found a batch of 200,000 payment card numbers for sale on a popular darknet marketplace. The numbers included dates of birth and Social Security numbers. AMCA and law enforcement were notified, and systems were secured. However, the investigation revealed hackers had access to its web payment portal for 7 months.

It would appear that the hackers behind the breach have at least made an effort to monetize some of the stolen data so it is no surprise that there has been a flurry of class action lawsuits filed on behalf of victims of the breach. Plaintiffs in the lawsuits claim to have been harmed as a result of the data breach.

Most of the lawsuits name one or more of the laboratories where testing occurred – Quest Diagnostics, LabCorp and BioReference Laboratories. A small number also name AMCA and the company Optum360. Optum360 was a business associate of Quest Diagnostics. Under certain circumstances, when a patient did not pay a bill, Quest Diagnostics sent the patient’s information to Optum360, which passed the data to AMCA for collection.

Several of the class action lawsuits allege negligence and breach of implied contract for failing to secure personal information. One complaint alleges the use of encryption and the adoption of national and industry standards were warranted to prevent reasonably foreseeable harm to patients. However, even though the defendants had the funds available to implement controls to prevent the breach, they failed to adequately invest in their security programs.

The lawsuits allege various violations of state laws and are seeking damages, monetary relief, and penalties to be issued over the privacy violation.

Only a small percentage of the individuals have been notified about the breach by AMCA – mostly individuals who had their financial information exposed. The healthcare organizations that provided AMCA with health information are still waiting to receive details of all individuals affected. As more notification letters are sent, is likely that the numbers of affected individuals in these class-action lawsuits will swell and further lawsuits will be filed.

In addition to battling the class action lawsuits, all of the entities involved now face scrutiny by state and federal regulators and Congress. The breach will certainly be investigated by the HHS’ Office for Civil Rights to determine whether HIPAA Rules have been violated. So far, at least six state attorneys general have launched investigations into the breach: Michigan, New York, Minnesota, North Carolina, Illinois and Connecticut and have demanded answers about the breach.

If the investigations do uncover noncompliance with state or federal laws, financial penalties may be pursued. Already this year, state attorneys general have joined forces and filed a multi-state HIPAA lawsuit against Medical Informatics Engineering over its 2014 data breach. That breach resulted in a settlement of $900,000.

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A recent report from Carbon Black has revealed 66% of healthcare organizations have experienced a ransomware attack in the past year and 45% experienced an attack in which data destruction was the main motivation behind the attack.

The figures come from Carbon Black’s latest report: Healthcare Cyber Heists in 2019. Carbon Black sought input from 20 industry leading CISOs and questioned them about the cyberattacks they had experienced in the past year, the tactics used in the attacks, and how the threat landscape is evolving.

Last year was a record-breaking year for healthcare data breaches and attacks are continuing at an unprecedented level. April 2019 was the worst ever month for healthcare data breaches with 46 major breaches (500+ records) reported to the HHS’ Office for Civil Rights.

“The potential, real-world effect cyberattacks can have on healthcare organizations and patients is substantial,” explained Rick McElroy, Carbon Black’s Head of Security Strategy and co-author of the report. “Cyber attackers have the ability to access, steal and sell patient information on the dark web. Beyond that, they have the ability to shut down a hospital’s access to critical systems and patient records, making effective patient care virtually impossible.”

83% of surveyed CISOs believe there has been an increase in cyberattacks over the past 12 months and 66% of CISO’s think attacks have grown in sophistication in the past year.

Two thirds of surveyed organizations have had to deal with an attempted ransomware attack in the past 12 months. A variety of ransomware variants were used although Kryptik/GenKryptik ransomware variants were most common and were used in 74% of attacks.

Almost half of respondents experienced a data destruction attack. These attacks involved the destruction of data in an attempt to paralyze business operations. The attacks are commonly associated with nation-state sponsored hacking groups in Russia, China, and North Korea.

While there were many different methods used to attack healthcare organizations, one of the most common was the use of Excel spreadsheets containing macro-enabled PowerShell to download malware.

One third of CISOs said they had experienced an ‘island hopping’ attack in the past year. This is where hackers have compromised a third party and used it to attack their organization. For example, an attack via partner-provisioned Virtual Desktop Infrastructure access, VPNs, or private network links. One third of CISOs also said counter incident response tactics were used by the hackers to prevent mitigation of a breach and to try to maintain persistent access.

CISOs were also asked about their biggest concerns. Compliance was the most stated area of concern (33%) followed by budget restrictions (22%), loss of patient data (16%), and vulnerable devices (16%).

Compliance as the main concern is worrying. It suggests healthcare organizations believe that becoming compliant with HIPAA equates to robust cybersecurity when that is not the case. Compliance with HIPAA only means an organization has achieved a baseline level of security. Many healthcare organizations that were HIPAA-complaint have still experienced data breaches. It is important for compliance to be viewed as a starting point in an organization’s security program. Once HIPAA compliant, security programs must be developed further.

The report shows organizations have realized the importance of staff security awareness training, not just for compliance but for improving security posture. 84% of organizations provide staff security awareness training at least annually with 45% providing more frequent training sessions.

When asked to rate their security posture, most CISOs believed there was still considerable room for improvement. 74% gave their organization a B or less (25% B, 16% B-, 33% C).

While the majority of organizations that engage in threat hunting say that it has significantly improved their cybersecurity posture, only one third of respondents said they had a threat hunting team. Carbon Black notes that threat hunting is no longer reserved for the security elite. Threat hunting software is available to help businesses of all sizes gain better visibility and find and address threats before they result in a data breach.

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Coffey Health System has agreed to a $250,000 settlement with the U.S. Department of Justice to resolve alleged violations of the False Claims and HITECH Acts.

The Kansas-based health system attested to having met HITECH Act risk analysis requirements during the 2012 and 2013 reporting period in claims to Medicare and Medicaid under the EHR Incentive Program.

One of the main aims of the HITECH Act was to encourage healthcare organizations to adopt electronic health records. Under the then named Meaningful Use Program, healthcare organizations were required to demonstrate meaningful use of EHRs in order to receive incentive payments. In addition to demonstrating meaningful use of EHRs, healthcare organizations were also required to meet certain requirements related to EHR technology and address the privacy and security risks associated with EHRs.

In 2016, Coffey Health System’s former CIO, Bashar Awad, and its former compliance officer, Cynthia McKerrigan, filed a lawsuit in federal court in Kansas against their former employer alleging violations of the False Claims Act.

Both alleged Coffey Health System had falsely claimed it had conducted risk analyses in order to receive incentive payments and was aware that those claims were false when they were submitted. As a result of the false claims, Coffey Health System received payments of $3 million under the Meaningful Use program which it did not qualify for.

Awad found no documentation that demonstrated risk analyses had been performed and had personally conducted some basic tests on network security and made an alarming discovery: The health system shared a firewall with Coffey County municipalities. That security failure allowed anyone to login to its system and see patient records from locations protected by the same firewall, including schools and libraries, by using its IP address and logging in. Any attempt to do so required no username or password – A major security failure and violation of the HIPAA Security Rule.

In 2014, Awad arranged for a third-party firm to conduct a risk analysis for the 2014 attestation. The risk analysis revealed several security issues including 5 critical vulnerabilities that had been allowed to persist unchecked. While some attempts were made to correct the issues identified in the risk analysis, Awad was not provided with sufficient resources to ensure those vulnerabilities were properly addressed. He claimed that few of the identified vulnerabilities had been corrected.

When the time came to submit the 2014 attestation, Awad refused to do so as several vulnerabilities had not been addressed. As a result of the failure to support the attestation, Awad was terminated. Awad and McKerrigan then sued Coffey Health System.

Under the whistleblower provisions of the False Claims Act, individuals can sue organizations on behalf of the government and receive a share of any settlement. Awad and McKerrigan will share $50,000 of the $250,000 settlement.

Coffey Health System settled the case with no admission of liability.

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