Security breaches are now remarkably commonplace in healthcare; more than 55 were reported to the Department of Health and Human Services (HHS) in the first six months of 2010.  In fact, healthcare is the second most breached industry, according to the Identity Theft Resource Center.  And security breaches, whether digital- or paper-based, can happen at any given moment—physical theft of a laptop from an employee’s car, deliberate abuse of system access, misdirected faxes and emails, malware attacks, unintentional human error, unauthorized access, a lost backup drive.  Additionally, the future of healthcare dictates the use of electronic medical records, raising fresh concerns of protecting patient privacy, PHI threats and medical identity theft.

Dr. Larry Ponemon, chairman and founder of the Ponemon Institute, a leading researcher and voice in addressing data breach risks and issues, noted about RADAR that:

“Organizations may need guidance, especially when dealing with PHI breaches, so they cover their bases to protect individuals and follow all of the rules and laws. ID Experts’s RADAR new tool offers consistency and efficiency for evaluating and reporting a security breach, and provides the analysis and documentation required of a mandated risk assessment.”

Following any security breach, RADAR will guide the privacy or security officer to analyze the incident and exposed data to quantify the incident, determine whether the exposed information includes PHI, whether any exceptions apply, and the likelihood that the information could be misused.  The results will help companies determine the potential risk of harm to the individuals affected by each data breach incident and take appropriate steps to mitigate the potential harm to those affected, while fulfilling all of the HITECH requirements enforced by the HHS, including determining if notification is required.

RADAR is current in beta test with several leading US healthcare providers and will be generally available in August, 2010. RADAR is available as software-as-a-service on a subscription basis with pricing starting at $1,500 per user per year.

by Doug Pollack

The handling of data breach incidents has become a way of life for healthcare providers and with other HIPAA covered entities. With the passage of the HITECH Act last year, there are now substantial penalties that can be levied, up to $1.5 million. This fact, combined with a requirement to notify the Department of Health and Human Services as well as the media for data breach incidents that affect over 500 individuals has, for the first time, resulted in public records being kept for such incidents.

If you oversee privacy, compliance, or IT for a hospital system, a group practice, a health insurance company, other covered entities, or even one of their business associates, the HITECH Act and its privacy and data breach provisions require your close attention. While many people know that HITECH generally creates requirements for data breach notification, there are at least four things you may not know about HITECH that you really should:

1. The requirement for a mandatory incident-specific risk assessment for every incident
2. The fact that HITECH notification provisions do not pre-empt state notification laws
3. Encryption of data does not necessarily alleviate the risk of data breach
4. If your business associate exposes your protected health information (PHI), you are responsible

1. Mandatory incident-specific risk assessment.  When HHS issued its Interim Final Rule giving healthcare organizations guidance for complying with the HITECH Act data breach provisions, it added a new requirement.  The requirement is that the organization carry out an incident-specific risk assessment to determine the potential risk of harm to the individuals affected by each and every data breach incident.  The rules establish a “harm threshold” for notification, but unfortunately, don’t make the determination of risk and the potential of harm. It is essential to become well versed in these rules and be prepared to carry out a HITECH compliant data breach incident risk assessment.

2. HITECH doesn’t pre-empt state notification laws.  While HITECH is the first national law for notification in the case of privacy information breaches, most U.S. states also have breach notification laws.  And while the intent of these laws is similar — to make individuals aware that their PHI may have been improperly disclosed — the specific details in all of these laws can actually vary a great deal.  But because HITECH is not “preemptive,” a healthcare organization that has experienced a data breach must ensure that it complies with both HITECH regulations as well as the regulations in every state where individuals are affected.  This can be daunting especially because HITECH and state laws in some cases are conflicting.

3.  Encryption not a silver bullet.  There is a lot of advocacy for encryption of PHI as a means to avoid data breach incidents.  The general argument is that if data is encrypted, that data breaches will not occur.  Unfortunately, this is overly simplistic. While encryption will assist healthcare organizations in avoiding certain types of data breach incidents, it is not a panacea.  For instance, a common threat approach is for a criminal or organized crime entity to enlist an “insider” to assist in extracting PHI.  An insider with valid access credentials will not find encryption to be an obstacle in any way.  As a result, consider encryption one of many tools for information protection, not a silver bullet.

4.  You are responsible for your business associate.  For the first time, HIPAA business associates are required to meet the HIPAA Privacy and Security Rule requirements based on HITECH.  While this is a good thing, a covered entity should not consider this a “free pass” if one of your business associates exposed PHI that was provided by your organization.  While you may be able to hold them financial accountable, if you’ve specified for such eventualities in your business associate agreements, the obligation for notification is still with the covered entity.  It is your responsibility to maintain the privacy for the PHI, no matter to whom you entrust it. And of course, the affected patients will hold you responsible as well.

As you put processes and procedures in place to meet HITECH obligations, consider also putting in place a comprehensive and current data breach incident response plan.  This will prevent a lot of headaches and last-minute scrambling, should you be faced with a data breach.

As noted by InformationWeek Healthcare:

“While advancements in security technology better protects patient data, and regulations like HIPAA aim to set rules for information security and privacy, some breaches boil down to humans making mistakes. ‘Everything in our environment is encrypted,’ said William Fandrich, senior VP and CIO at Blue Cross Blue Shield of Massachusetts. However, despite solid attempts at security protection and other precautions, healthcare organizations need to emphasize–and continue to remind–employees about simple things they need to do to prevent patient privacy breaches.”

We continue to find that organizations turn primarily to technology to solve the data breach “problem”. This is exemplified by the perspective that once all data is encrypted, that data breach risks will be eliminated. It is great to see the thoughtfulness of healthcare CIOs at this conference where there is a prominent recognition that human error (and of course, human fraud) is a weak link for data breach risks despite the best of technologies applied.

Continuing its massive clean-up in the wake of the payment card industry’s biggest data breach, merchant acquirer Heartland Payment Systems Inc. late on Wednesday announced a $41.4 million settlement with MasterCard Inc. The settlement will reimburse MasterCard debit and credit card issuers for their costs stemming from the breach Heartland disclosed in January 2009. Heartland has already settled with Visa Inc. for about $60 million and American Express Co. for $3.54 million (Digital Transactions News, Jan. 8). That leaves Discover Financial Services as the only major U.S.-based card network with whom Heartland hasn’t announced a settlement. The U.S. attorney for New Jersey estimated the breach compromised 130 million payment cards. Several defendants, including notorious computer hacker Albert Gonzalez, have been convicted on federal charges in connection with Heartland’s and other big data breaches.

Heartland’s MasterCard settlement is contingent upon approval from issuers representing 80% of the affected MasterCard accounts. The Visa settlement had a similar 80% threshold, which issuers approved. MasterCard will make its so-called “alternative recovery offers” to issuers on May 27; issuers have until June 25 to accept them, according to a Heartland filing with the Securities and Exchange Commission. The agreement also provides that those issuers accepting a recovery release Heartland and its sponsor banks, Cleveland-based KeyBank and St. Louis-based Heartland Bank (no relation to the processor) from further breach-related claims. Heartland must obtain a loan of at least $30.7 million to fund its obligations under the settlement.

According to the Heartland filing, MasterCard will credit the settlement pool with $6.6 million in “non-compliance assessments”—network fines—that it charged Heartland’s sponsors, which those banks passed on to Heartland. That means the maximum Heartland will have to fund for the pool will be $34.8 million.

Neither Heartland nor MasterCard would comment about the settlement beyond their respective news releases. Like AmEx and Visa, MasterCard didn’t say how many of its card accounts sustained breach-related fraud losses, or how many cards its bank and credit-union clients reissued as a precaution. Gartner Inc. security and technology analyst Avivah Litan tells Digital Transactions News by e-mail that based on estimated replacement costs of $14 to $20 per card, “it would appear from this settlement that MasterCard could only prove that some 2–3 million of their cards actually had fraud losses and had to be reissued with new accounts.” She adds that, “it’s good that Heartland is finally settling with MasterCard so it can begin to put this matter behind them.”

Robert O. Carr, Heartland’s chairman and chief executive officer, said in his company’s release that, “We are pleased to have reached an equitable settlement agreement that helps issuers of MasterCard-branded cards obtain a recovery with respect to losses they may have incurred from the intrusion. We look forward to working with MasterCard to encourage these issuers to participate in the settlement program for a speedy resolution.”

“We feel that this settlement represents an appropriate and fair resolution for our issuing financial-institution customers and will enable them to avoid uncertainties and delays associated with potentially protracted litigation,” Wendy Murdock, chief franchise officer for MasterCard, said in MasterCard’s release. “The agreement underscores MasterCard’s continuing efforts to maintain the integrity of payment card industry standards and mitigate the impact of account data compromise events.”

MasterCard says issuers that refuse their offers will have their claims “determined pursuant to MasterCard’s internal processes,” and may receive more or less than they were offered, or nothing at all. Recoveries will depend on various factors, including “MasterCard’s determinations of their claims and the outcome of any litigation that Heartland may file, and has threatened to file, to challenge claim awards that exceed certain amounts,” the release says.

Issuers that accept their MasterCard settlements can expect payment in the third quarter, according to MasterCard. Since announcing the data breach 16 month ago, Heartland had expensed $108.7 million in breach costs, net of insurance recoveries, through March 31.

One of the keys to meeting the notification requirement is completing and documenting a data breach incident “risk assessment” for each and every incident that is detected. The “rules” for carrying out this mandated assessment are specified by the department of Health and Human Services (HHS) in their rulemaking. This webinar will assist information security, compliance and privacy officers and professionals at hospitals, health insurers, and other covered entities in understanding what they need to do and how to go about doing it, when faced with a potential data breach incident.

A description of the webinar follows.

The HITECH Act requires HIPAA-covered entities to carry out a careful risk assessment, including an evaluation of potential harm, for every potential data breach incident. This risk assessment will assist organizations in deciding whether they are obligated to then notify affected individuals, the Department of Health and Human Services (HHS) and the media about data breach incidents.

Kirk Nahra, CIPP, a partner at the premier healthcare law firm Wiley Rein LLP, and Rick Kam, president and founder of ID Experts, will review and discuss the HHS rules for completing these mandated data breach incident risk assessments in order to ensure compliance and utilize evolving best practices.

Learn about considerations for HIPAA-covered entities in carrying out mandated HITECH data security breach incident risk assessments. To enroll to attend the webinar, click here.

“We take security seriously and want to assure Blippy users that this was an isolated incident from many months ago in our beta test, and doesn’t affect current users. While it looks super-scary and certainly sucks for those few people who were affected, and is embarrassing to us, it’s a lot less bad than it looks.”

There is a lot of discussion among the privacy community about the need for a federal data breach notification law that would potentially homogenize requirements for notification.  There are several bills in Congress that are attempting to take on this issue. The HITECH Act already does exactly this for the healthcare industry. Blippy’s cavalier attitude adds fuel to the argument for regulations that would require all organizations to take consumer data privacy as seriously as it deserves.

Symantec released their Global Internet Security Report for 2009 which explores in great detail the causes of data breach incidents. It finds that hacking attacks are responsible for the majority of personal identity records exposed in 2009.
“In 2009, 60 percent of identities exposed were compromised by hacking attacks, which are another form of targeted attack. The majority of these were the result of a successful hacking attack on a single credit card payment processor.13 The hackers gained access to the company’s payment processing network using an SQL-injection attack. The attackers then installed malicious code designed to gather sensitive information from the network, which allowed them to easily access the network at their convenience. The attacks resulted in the theft of approximately 130 million credit card numbers. An investigation was undertaken when the company began receiving reports of fraudulent activity on credit cards that the company itself had processed. The attackers were eventually tracked down and charged by federal authorities. This type of targeted hacking attack is further evidence of the significant role that malicious code can play in data breaches. Although data breaches occur due to a number of causes, the covert nature of malicious code is an efficient and enticing means for attackers to remotely acquire sensitive information.”

The report also highlights trends in terms of countries that originate the majority  of cybercrime activity. Brazil and India show very rapid growth in malicious activity and are both now ranked in the top 10.

This past week, the Internet Security Alliance (ISA) and the American National Standards Institute (ANSI) released a groundbreaking document that is aimed at assisting the Chief Financial Officer of major corporations and organizations in managing the financial risks inherent in protecting an organization from cybercrime.

Titled “The Financial Management of Cyber Risk: An Implementation Framework for CFOs“, the document is literally a “how to” guide to understanding and addressing the finanical implications of cyber risk.

Melissa Hathaway, President of Hathaway Global Strategies and fomer Acting Senior Director for Cyberspace for the National Security Council notes that this is “an excellent guide for organizations to manage the risk and exposure derived from digital dependence.”

This paper is must reading for the CFO of any organization that has exposure to data breach risks. It is especially valuable to healthcare financial executives because of the enhanced regulatory environment in healthcare due to the recently passed Health Information Technology for Economic and Clinical Health (HITECH) Act. But CFOs in all industries and organizations that are entrusted with sensitive personally identifiable information (PII) and protected health information (PHI) should make the time to read this.

The context and perspective of this paper is best summarized in the executive summary where it states:

“Most enterprises today categorize information security as a technical or operational issue to be handled by the information technology (IT) department. This misunderstanding is fed by outdated corporate structures wherein the various silos within organizations do not feel responsible to secure their own data….In reality, cybersecurity is an enterprise-wide risk management issue that needs to be addresssed from a strategic, cross-departmental, and economic perspective. The CFO as opposed to the CIO or CSO, is the most logical person to lead this effort.”

If one were to ask the CFO at a Fortune 500 company to quantify their level of risk to cybercrime and associated risks of data breach, most would have a difficult time answering the question. Financial officers tend to defer the management of data breach risks to the information security team. Unfortunately, this leaves many organizations exposed to risks that are misunderstood, unquantified, and uncovered.

If you are the CFO of an organization of any size and in any industry — healthcare, financial services, manufacturing, retail — or in the public sector or higher education, don’t wait to read this document.

Dr. Deborah Peel, founder of Patient Privacy Rights, recently published an article in the Wall Street Journal. In it, she describes how the promise of electronic medical records may be impeded because of patients’ fears that their personal health information will be shared with others outside of their healthcare provider.

Her perspective is one that highlights the risks of rushing ahead to implement patient health record systems without fully considering the best ways to ensure their security and privacy. An excerpt from her article follows:

“I learned about the lack of health privacy when I hung out my shingle as a psychiatrist. Patients asked if I could keep their records private if they paid for care themselves. They had lost jobs or reputations because what they said in the doctor’s office didn’t always stay in the doctor’s office. That was 35 years ago, in the age of paper. In today’s digital world the problem has only grown worse.

A patient’s sensitive information should not be shared without his consent. But this is not the case now, as the country moves toward a system of electronic medical records.”

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Federal agencies and regulators announced this week that LifeLock will pay $12 million to settle a complaint that it used false and misleading claims in its advertising. $11 million of the settlement will be paid to the Federal Trade Commission (FTC) and $1 million to 35 state attorneys general, all of whom worked together on this case.

The history of aggressive advertising by Lifelock, as well as Experian with their FreeCreditReport.com singing pirate ads, has been aimed at giving consumers a sense that they can prevent them from falling victim to identity theft.

FTC Chairman Jon Leibowitz said in a statement that:

“While LifeLock promised consumers complete protection against all types of identity theft, in truth, the protection it actually provided left enough holes that you could drive a truck through it.”

Illinois Attorney General Lisa Madigan concurred by saying:

“This agreement effectively prevents LifeLock from misrepresenting that its services offer absolute prevention against identity theft because there is unfortunately no foolproof way to avoid ID theft.”