Privacy update 04.29.2010
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    Privacy update 04.29.2010 Privacy update 04.29.2010 Presentation Transcript

    • Privacy Law Update: Red Flags, HITECH & the New Massachusetts Data Privacy Regulations
      Stephen E. Meltzer, Esquire, CIPP
    • Privacy Law:
    • HIPAA, ARRA and HITECH
      Red Flags
      201 CMR 17.00
    • ?
    • HIPAA, ARRA & HITECH
      Health Insurance Portability & Accountability Act of 1996
      Not HIPPA (Health Insurance Portability Prevention Act)
      American Recovery & Reinvestment Act
      Health Information Technology for Economic and Clinical Health
    • HITECH Requirements
      Expands the definitions of “business associates.” 
      Mandates that HIPAA security standards that apply to health plans and health care providers will also apply directly to business associates.
      Establishes new security breach notice requirements.
      Entitles individuals to electronic copies of health information. 
      Calls for regulations regarding the sale of electronic health records and protected health information by mid-August, 2010.
    • Business Associates
      “Business associates” are persons and organizations (typically subcontractors) that perform activities involving the use or disclosure of individually identifiable health information, such as claims processing, data analysis, quality assurance, billing, and benefit management, as well as those who provide legal, accounting, or administrative functions. 45 CFR §160.103. The HITECH Act adds as “business associates” organizations that transmit protected health information and require access on a routine basis to such information. See 42 USC §17938.
    • Business Associates
      Subject to the administrative, physical, and technical security requirements of HIPAA, must implement appropriate policies and procedures, and must document their security activities. Penalties for violating these HIPAA procedures will apply to business associates, just as they now do to health plans and health care providers. 42 USC §17931.
    • Breach Notification
      a health plan or health care provider that accesses, maintains, retains, modifies, records, stores, destroys, or otherwise holds, uses, or discloses unsecured protected health information and discovers a breach of the information to notify each individual whose health information has been, or is reasonably believed to have been, accessed, acquired, or disclosed as a result of the breach. 42 USC §17932(a). Business associates will also be required to give notice of such a data breach to the health plan or health care provider, and will need to identify each individual whose unsecured protected health information was illegally accessed, acquired, or disclosed. 42 USC §17932(b). The health plan, health care provider, or business associate will be required to give notice of the breach without unreasonable delay, and no later than 60 calendar days after its discovery. 42 USC §17932(d). Notice must be provided by first-class mail to individuals at their last known address, or, if specified by the individual, via e-mail. 42 USC §17932(e)(1).
    • http://www.hhs.gov/ocr/privacy/hipaa/administrative/breachnotificationrule/index.html
    • Individual Patient Rights
      Individuals are entitled to copies of their health information in electronic format from any health plan or health care provider that uses or maintains electronic health records. An individual will be able to direct the health plan or health care provider to transmit the copy directly to anyone he or she designates. Fees for providing this service must not be greater than the entity’s labor costs. 42 USC 17935(e).
    • Authorization
      The HITECH Act will prohibit a health plan, health care provider, or business associate from receiving payment for an individual’s protected health information without authorization from the individual. 42 USC §17935(d).
    • New Penalties
      Increased Civil Penalties
      ARRA creates the following "tiers" of penalties:
      A violation without knowledge of the violation - $100 per violation, with an annual maximum amount of $25,000 in penalties.
      A violation that is due to reasonable cause - $1,000 per violation, with an annual maximum amount of $100,000 in penalties.
      A violation that is due to willful neglect - $10,000 per violation, with an annual maximum amount of $1,500,000 in penalties.
    • New Enforcement
      State Attorneys General now have the authority to file suit in federal court against any person or entity that is accused of violating HIPAA in a manner that the Attorney General has reason to believe adversely affected any resident of that Attorney General's respective state.
    • RED FLAGS
      June 1, 2010
    • Red Flags – Who Must Comply?
      The Red Flags Rules apply to “financial institutions” and “creditors” with “covered accounts.”
    • Red Flags – Financial Institutions
      State or national bank, a state or federal savings and loan association, a mutual savings bank, a state or federal credit union, or any other entity that holds a “transaction account” belonging to a consumer. Most of these institutions are regulated by the Federal bank regulatory agencies and the NCUA. Financial institutions under the FTC’s jurisdiction include state-chartered credit unions and certain other entities that hold consumer transaction accounts.
    • Red Flags – Transaction Account
      A transaction account is a deposit or other account from which the owner makes payments or transfers. Transaction accounts include checking accounts, negotiable order of withdrawal accounts, savings deposits subject to automatic transfers, and share draft accounts.
    • Red Flags - Creditor
      Any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit. Accepting credit cards as a form of payment does not in and of itself make an entity a creditor. Creditors include finance companies, automobile dealers, mortgage brokers, utility companies, and telecommunications companies. Where non-profit and government entities defer payment for goods or services, they, too, are to be considered creditors. 
    • Red Flags – Covered Account
      An account used mostly for personal, family, or household purposes, and that involves multiple payments or transactions. Covered accounts include credit card accounts, mortgage loans, automobile loans, margin accounts, cell phone accounts, utility accounts, checking accounts, and savings accounts. A covered account is also an account for which there is a foreseeable risk of identity theft – for example, small business or sole proprietorship accounts
    • Red Flags – Exempt?
      Only Lawyers
      FTC has filed a Notice of Appeal
       Judge Walton is reported to have questioned whether the term could be interpreted so broadly as to render a plumber who bills a customer after performing his work a "creditor" within the meaning of the Rule.
      CPA’s have filed a lawsuit
    • Red Flags - Requirements
      Develop a written program that identifies and detects the relevant warning signs – or “red flags” – of identity theft. These may include, for example, unusual account activity, fraud alerts on a consumer report, or attempted use of suspicious account application documents. The program must also describe appropriate responses that would prevent and mitigate the crime and detail a plan to update the program. The program must be managed by the Board of Directors or senior employees of the financial institution or creditor, include appropriate staff training, and provide for oversight of any service providers.
    • Red Flags – Requirements – suggested “Starting Points”
      alerts, notifications, or warnings from a consumer reporting agency;
      suspicious documents;
      suspicious personally identifying information, such as a suspicious address;
      unusual use of – or suspicious activity relating to – a covered account; and
      notices from customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection with covered accounts.
    • Red Flags - Penalties
      • $3,500 per violation
      • No private right of action
    • http://www.ftc.gov/bcp/edu/microsites/redflagsrule/index.shtml
    • 201 CMR 17.00
      Massachusetts Data Privacy Regulations
      Effective March 1, 2010.
    • New Mandate:
      PI = PI
      Personal Information = Privacy Infrastructure
    • Scope of Rules
    • Scope of Rules
      Covers ALL PERSONS that own or license personal information about a Massachusetts resident
      Need not have operations in Massachusetts
      Financial institutions, health care and other regulated entities not exempt
    • Scope of Rules
      “Personal information”
      Resident’s first and last name or first initial and last name in combination with
      SSN
      Driver’s license or State ID, or
      Financial account number or credit/debit card that would permit access to a financial account
    • Three Requirements
      1.Develop, implement, maintain and maintain a comprehensive, written information security program that meets very specific requirements (cWISP)
      2.Heightened information security meeting specific computer information security requirements
      3.Vendor Compliance
      (Phase-in)
    • Evaluating Compliance(not Evaluating Applicability)
      Appropriate
      Size of business
      Scope of business
      Type of business
      Resources available
      Amount of data stored
      Need for security and confidentiality
      Consumer and employee information
    • Evaluating Compliance(not Evaluating Applicability)
      “The safeguards contained in such program must be consistent with the safeguards for protection of personal information and information of a similar character set forth in any state or federal regulations by which the person who owns or licenses such information may be regulated.”
    • Enforcement
      Litigation and enforcement by the Massachusetts Attorney General
      Massachusetts law requires notice to Attorney General of any breach, in addition to affected consumers
      Attorney General likely to investigate based on breach reports
      No explicit private right of action or penalties
    • Comprehensive WrittenInformation SecurityProgram
      201 CMR 17.03
    • Information SecurityProgram
      “[D]evelop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts and contains administrative, technical, and physical safeguards”
    • Comprehensive Information Security Program201 CMR 17.03 (2)(a) through (j)
      a. Designate
      b. Identify
      c. Develop
      d. Impose
      e. Prevent
      Oversee
      Restrict
      Monitor
      Review
      Document
    • Comprehensive Information Security Program
      (a) Designate an employee to maintain the WISP.
      (b) Identify and assess reasonably foreseeable risks (Internal and external).
      (c) Develop security policies for keeping, accessing and transporting records.
      (d) Impose disciplinary measures for violations of the program.
      (e) Prevent access by terminated employees.
      (f) Oversee service providers and contractually ensure compliance.
      (g) Restrict physical access to records.
      (h) Monitor security practices to ensure effectiveness and make changes if warranted.
      (i) Review the program at least annually.
      (j) Document responsive actions to breaches.
    • Comprehensive Information Security Program
      Third Party Compliance
      1. Taking reasonable steps to select and retain third-party service providers that are capable of maintaining appropriate security measures to protect such personal information consistent with these regulations and any applicable federal regulations; and
      2. Requiring such third-party service providers by contract to implement and maintain such appropriate security measures for personal information
    • Comprehensive Information Security Program
      Third Party Compliance
      Contracts entered “no later than” March 1, 2010:
      Two – year phase-in.
      Contracts entered into “later than” March 1, 2010:
      Immediate compliance.
    • Comprehensive Information Security Program
      “INDUSTRY STANDARDS”
    • Breach Reporting
      G.L. c. 93H § 3
    • Breach Reporting
      Breach of security –
      “the unauthorized acquisition or unauthorized use of unencrypted data or, encrypted electronic data and the confidential process or key that is capable of compromising the security, confidentiality, or integrity of personal information, maintained by a person or agency that creates a substantial risk of identity theft or fraud against a resident of the commonwealth. A good faith but unauthorized acquisition of personal information by a person or agency, or employee or agent thereof, for the lawful purposes of such person or agency, is not a breach of security unless the personal information is used in an unauthorized manner or subject to further unauthorized disclosure.”
    • Breach Reporting
      Possessor must give notice of
      Breach of Security
      Unauthorized Use or Acquisition
      To Owner/Licensor of Information
      Owner/Licensor must give notice of
      Breach of Security
      Unauthorized Use or Acquisition
      To –
      Attorney General
      Office of Consumer Affairs
      Resident
    • Breach Reporting
      “The notice to the Attorney General and the Director of Consumer Affairs and Business Regulation shall include, but not be limited to:
      the nature of the breach of security or the unauthorized acquisition or use;
      the number of Massachusetts residents affected by such incident at the time of notification; and
      any steps the person or agency has taken or plans to take relating to the incident.”
    • Sample Breach Notification Letter
      http://www.mass.gov/Cago/docs/Consumer/93h_sampleletter_ago.pdf
    • Breach Reporting
      Stop
      Be afraid
      Call for help
    • Computer System SecurityRequirements
      201 CMR 17.04
    • Electronic Requirements201 CMR 17.04
      • Laptop and mobile device encryption
      • Security patches and firewalls
      • System security agents
      • IT Security user awareness
      Use authentication protocols
      Secure access controls
      Encryption of transmittable records
      Mentoring systems
    • User Authentication Protocols
      Control of user IDs
      Secure password selection
      Secure or encrypted password files
      User accounts blocked for unusual logon attempts
      Examples:
      Passwords should be at least 9 characters, alpha numeric with special characters
      After 3 attempts to login users are blocked access
    • Secure Access Control Measures
      Permit “access” on a need to know basis
      Password protect account and login to determine level of access
      Example:
      Network Access Control Software/Hardware
      Consentry
      Sophos
      Audit control who is accessing what and when?
    • Encryption of Transmitted Records
      Encryption of personal information accessed over a public network
      Tunneling options (VPN)
      Faxes, VOIP, phone calls
      Encryption of PI on wireless
      Bluetooth, WEP, Wifi
      Encryption definition if very broad
      Examples:
      PGP and Utimaco are encryption technologies
    • Monitoring of Systems
      Require systems to detect unauthorized use of, access to personal information
      Some existing user account based on systems will already comply
      Examples:
      Again, Network Access Control
      Audit controls
    • Laptop and Mobile Device Encryption
      Encryption of PI stored on laptops
      Applies regardless of laptop location
      Encryption of PI stored on “mobile” devices
      Does incoming email become a problem?
      This applies only if you have data in motion of personal information.
      Email is clear text. So anyone can read any ones email on the internet.
    • Security Patches and Firewalls
      “Reasonably up-to-date firewall protection and operating systems patches” for Internet connected computers
      Date on operating systems
      All organizations should have a firewall in place (not a router a firewall)
      Can hire an organization to update and manage the security infrastructure:
      Firewall
      Anti-virus
      Patches…
    • Systems Security Agent Software
      Malware is what is infecting most enviroments. HTTP and HTTPS traffic.
      Your users are your worst enemy
      Products to look at for Malware
      TrendMicro
      Websense
      Webwasher
      Anti-malware technology required
      Are certain products better?
      What about MACs or Linux?
      Set to receive auto-updates
    • Employee Education and IT Security Training
      Proper training on all IT security policies
      User awareness
      Importance of PI security
      Proper use of the computer
      Everyone is involved
      Your employees are your weakest link to any IT security program.
      They need to know the rules.
      Suggestions:
      Stand up training
      News Letters
      Programs
      Online training
    • The Approach
      Inventory type of personal information is being kept
      Assess risk
      Plan information security strategy
      Data
      Security, Confidentially, Integrity
      IT infrastructure and information change processes
      Implement, plan and policies
      Technology deployment
      Policy implementation
      User awareness
      Continual review
      Security is all about vigilance…
      Compliance is knowing what you need to protect and building a fortress around it and testing it on a frequent basis!
    • Data Destruction
      G.L. c. 93I
    • Data Destruction (93I)
      Paper documents/ electronic Media:
      Redact, Burn, Pulverize, Shred
      So that Personal Information cannot be read or reconstructed
    • Data Destruction (93I)
      Violations:
      Attorney General: Unfair and Deceptive Practices remedies - 93H
      Civil Fine-$100/data subject not to exceed $50,000/instance – 93I
    • What To Do Now
    • Thank You
      Meltzer Law Offices
      http://www.meltzerlaw.com
      508.872-0000