Alaska Medicaid Settles HIPAA Security Case For $1,700,000

The U.S. Department of Health and Human Services Office of Civil Rights (OCR) has announced the first HIPAA enforcement action OCR has taken against a State agency, and the resolution agreement and related corrective action plan carry important lessons for both public and private entities. The Alaska Department of Health and Social Services (Alaska DHSS), the State of Alaska's Medicaid agency, has entered into a resolution agreement with OCR to settle potential violations of the HIPAA Security Rule. Alaska DHSS has agreed to pay the federal government $1.7 million and also take corrective action to properly safeguard the electronic protected health information (ePHI) of Alaska's Medicaid beneficiaries.

The HIPAA violations covered under the resolution agreement were identified following a breach report submitted by Alaska DHSS as required by the Health Information Technology for Economic and Clinical Health (HITECH) Act. The report indicated that a single portable electronic storage device (USB hard drive) possibly containing ePHI was stolen from the vehicle of an Alaska DHSS employee in 2009. Over the course of the investigation, OCR determined that Alaska DHSS:

Failed to implement adequate policies and procedures to safeguard ePHI; Had not completed an ePHI security risk analysis; Did not have sufficient risk management measures; Had not completed security training for its workforce members; Did not have electronic device and media controls; and Failed to encrypt electronic devices and media as required by the HIPAA Security Rule. In addition to the $1,700,000 settlement, the agreement includes a corrective action plan pursuant to which Alaska DHSS agreed to develop and maintain policies and procedures to ensure compliance with HIPAA's Security Rule. At a minimum, such policies and procedures are to include:

Procedure for tracking devices...

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