HHS Data Breach Regulatory Action Expected to Increase | Learn How Data Breach Insurance can Help Healthcare Organizations Mitigate HIPAA Fines


WellPoint pays HHS $1.7 million for leaving information accessible over Internet

The managed care company WellPoint Inc. has agreed to pay the U.S. Department of Health and Human Services (HHS) $1.7 million to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules.

This case sends an important message to HIPAA-covered entities to take caution when implementing changes to their information systems, especially when those changes involve updates to Web-based applications or portals that are used to provide access to consumers’ health data using the Internet.

Wellpoint’s breach report indicated that security weaknesses in an online application database left the electronic protected health information (ePHI) of 612,402 individuals accessible to unauthorized individuals over the Internet.

OCR’s investigation indicated that WellPoint did not implement appropriate administrative and technical safeguards as required under the HIPAA Security Rule.

The investigation indicated WellPoint did not:

• adequately implement policies and procedures for authorizing access to the on-line application database
• perform an appropriate technical evaluation in response to a software upgrade to its information systems
• have technical safeguards in place to verify the person or entity seeking access to electronic protected health information maintained in its application database.

As a result, beginning on Oct. 23, 2009, until Mar. 7, 2010, the investigation indicated that WellPoint impermissibly disclosed the ePHI of 612,402 individuals by allowing access to the ePHI of such individuals maintained in the application database. This data included names, dates of birth, addresses, Social Security numbers, telephone numbers and health information.

Whether systems upgrades are conducted by covered entities or their business associates, HHS expects organizations to have in place reasonable and appropriate technical, administrative and physical safeguards to protect the confidentiality, integrity and availability of electronic protected health information – especially information that is accessible over the Internet.

Beginning Sept. 23, 2013, liability for many of HIPAA’s requirements will extend directly to business associates that receive or store protected health information, such as contractors and subcontractors.

The Resolution Agreement can be found on the OCR website at: http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/wellpoint-agreement.html

Data breach insurance can protect healthcare organizations and business associates from the fallout of data breaches, including coverage for:

• Regulatory fines and penalties
• The cost of notifying everyone involved
• Credit monitoring expenses
• Reputational damages
• and more!

Let our Experienced Cyber Insurance Experts Help

Did you know? Cyber/data breach insurance can help healthcare organizations of all sizes respond to a data breach and/or security incident.

For assistance, please complete the box below to learn how a Cyber Risk Insurance policy can help you be prepared for a data breach and/or network security event. Or call 1 + (855) CUT-RISK.

CYBER DATA RISK MANAGERS LLC is an Independent Insurance Agency specializing in Cyber Security and Data Breach response insurance. We offer solutions that help you quickly respond to cyber events and data breaches as well as to plan in advance for their occurrence. Given the ever changing nature of information assurance and compliance, you don’t want to be caught unprepared.