HIPAA Training: Privacy Review and Audit Survival Guide

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HIPAA Privacy
For Employers

General Requirements
“Health plans are required to protect and safeguard a participant’s
or covered dependent’s personal health information (PHI) from
impermissible use or disclosure and they must obtain a patient’s
content for certain uses and disclosures.”
• What is required to protect information?
• What information is protected?
• What steps must a health plan and the employer do to comply?
2

What is Required?
Health plans must:
• Establish written policies and procedures to protect PHI
• Protect and safeguard a participant’s or covered dependent’s personal health
information (PHI)
• Obtain participant’s or covered dependent’s written permission for certain uses of
PHI
• Notify a participant and/or covered participant of policies of disclosure and use of
PHI
• Report impermissible use or disclosure of PHI
• Allow a participant and/or covered dependent to inspect or copy his or her PHI
• Use and disclose only the “minimum necessary” health information
• Enter into Business Associate Agreements
3

What is Protected Health Information (PHI)?
• All medical records and other individually identifiable health information held
or disclosed by a health plans in any form, whether communicated
electronically, on paper or orally
• Health plans may release PHI to employers without authorization in very
limited circumstances
• Three conditions must be met:
 Provider must provide service at the request of employer or as an employee,
 Service provided must relate to medical surveillance of workplace or an
evaluation to determine individual has workplace injuries or illness, and
 Employer must have legal requirement under state or federal law to keep
records
4

What are the Plan Sponsor’s Obligations?
• Group health plans do not need to obtain a participant’s or a
covered dependents consent to release information for the
administration of the plan
• Plan sponsor’s obligation depends on whether it receives
protected health information, summary health information or no
health information
• Obligations, if it receive only summary health information
• Required plan amendments
• Obligations, if it receives protected health information
5

What documents are needed to comply?
• HIPAA Privacy Policy
• HIPAA Privacy Use and Disclosures
• Notice of Privacy Practices
• Business Associate Contracts
• Authorization for Release of Information
• Amendment to Health Plan Document
• Amendment to Health Plan SPD
• Plan Sponsor Certification to Health Plan
6

What documents are needed to comply?
• Request to inspect or copy PHI
• Request to amend or correct PHI
• Request for Accounting of Disclosures of PHI
• Request for restrictions on Use or Disclosure of PHI
Documents for Implementing Individual Rights
7

Consent Issues – Introduction
• as required in accordance with an individual’s right to access PHI;
• for covered functions (i.e., treatment, payment, or health care operations);
• with respect to specific types of information after the opportunity to agree or
object;
• pursuant to an individual’s authorization; and
• as required or permitted under HIPAA’s public policy exceptions and a
limited data set may be disclosed when certain requirements are met
Health plans are allowed to use or disclose PHI in the following circumstances:
8

For Treatment, Payment, and Health Care Operations
• For its own treatment, payment, and health care operations;
• For the treatment activities of another health care provider;
• To another covered entity for the payment activities of the entity receiving the
information; and
• To another covered entity for certain health care operations activities of the
entity that receives the information if each entity has (or had) a relationship
with the individual who is the subject of the PHI, the PHI pertains to such
relationship, and the purpose of the disclosure is one of those listed in the
regulations
A health plan may use and disclose PHI without authorization:
9

Requiring an Opportunity to Agree or Object
The health plan may use and disclose PHI if individual has had
opportunity to, prohibit the disclosure of such information in
advance regarding to:
• Disclosures of limited types of information to family members or
close personal friends of the individual for care, payment for care,
notification, and disaster relief purposes; and
• Uses and disclosures of limited types of information for facility
directory purposes (generally not applicable to health plans)
• Exceptions
10

Requiring Individual Authorizations
Individual authorizations are required whenever the use or
disclosure is not permitted under privacy rules.
May request authorization for another entity for:
• Any purpose
• But especially, before sending any marketing material
11

Without Individual Authorization
• If required by law
• To certain designated public agencies, individuals and the employer
• Regarding an individual if a victim of designated abuse and certain other conditions are met
• To a health oversight agency
• In response to certain court proceedings
• To a law enforcement officials if certain conditions are met
• To a coroner or medical examiner of ID purposes
• To organ procurement organizations for transplant purposes
• To prevent health threat
• For certain specified government purposes
• To comply with Worker‘s Compensation purposes
Health plans may disclose PHI without authorization:
12

For Health Plan Underwriting
• Underwriting and placement of health coverage is a permissive
health coverage operation
• Sharing PHI with other covered entities for other purposes
limited.
• Authorizations may be necessary in some situations
13

Personal Representative, Minors, & Spouses
• Covered entities must recognize a personal representative’s
authority and provide information within that authority
• But certain exceptions do apply
• Parent’s authority
• Spouse’s authority
14

Privacy Policy and Procedures
Health plans must establish policies and procedures with respect
to PHI that complies with:
• HIPAA standards
• Implementation specifications
• Other requirements
What is Required?
15

Privacy Notices
Who is required to provide notices?
• Covered Entities (Health Plan)
What must the notices describe?
• Uses and disclosures of PHI that may be made by the covered entity
• Individual’s rights
• Health plan’s legal duties with respect to PHI
What are a health plan’s duties?
• Must Provide own privacy notices if it has access to PHI
• A health plan may arrange to have another entity to provide notice, but will be
responsible if no notice is provided.
16

Privacy Official
• A health plan must designate a privacy official
• Privacy official is responsible for the development and
implementation of policies and procedures
• A privacy officer must be designated for each subsidiary that is a
covered entity
 A single corporate officer could be designated for multiple subsidiaries
17

Contact Person
Covered entities must designate a contract person or office for receiving
complaints
• Such designation must be documented
• Contact person must be able to provide additional information about matters
that are covered in privacy notice
18

Health Care Security Requirements
• Apply to the electronic storage and transmission of PHI
• General effective date - April 21, 2006
• Covered entities must implement appropriate administrative,
technical and physical safeguards for PHI
• Privacy rules require “appropriate safeguards” for protecting PHI
• No guidelines for PHI in oral, written or non-electronic form
19

• Any information transmitted by electronic media, maintained in
electronic media or maintained in other form or medium
• What is electronic media?
• Certain transmissions are not covered
What information must be protected?
20

• Ensure the confidentiality, integrity and availability of all electronic
PHI that the covered entity creates, receives, maintains or
transmits
• Protect against any reasonably anticipated threats or hazards to
the security or integrity of such information
• Protect against any reasonably anticipated uses or disclosures of
such information that are not permitted or required
• Ensure compliance by the workforce
What are the four general security requirements?
21

What are the security standards?
• Administrative safeguards
• Physical safeguards
• Technical safeguards
Covered entities must:
• Use reasonable and appropriate measures to accomplish the requirements
• Engage in risk analysis to determine how to comply
22

Electronic Transaction Requirements
All covered entities must standardize the format and content of all
electronic transactions when engaging in “covered transactions.”
These are called the EDI Standards.
23

• Health claims and equivalent encounter information
• Health care payment and remittance advice
• Coordination of benefits
• Health claim status
• Enrollment and disenrollment in a health plan
• Eligibility for a health plan
• Health plan premium payments
• Referral certification and authorization
• First report of injury
• Health claims attachments
What are “covered transactions”?
24

• Covered entities in conducting covered transactions must use
standardized formats and content, as well as uniform codes in
communicating with other entities
• Only those entities who conduct ”standard transactions”
electronically or engage others to do so are subject to EDI
standards
• Health plans are considered to be covered entities and must
comply with the EDI Standards, along with the additional
requirements
What are the EDI Standards requirements?
25

What transactions and transmissions are covered?
Is the entity conducting the transaction a covered entity (or its
business associate)?
Does the transaction fall within the definition of one of the
covered transactions?
Covered entities must comply with the EDI Standards in
certain stated transactions.
Transactions within a covered entity are subject to the EDI
Standards.
26

• Applies to transactions transmitted using electronic media
• Does not apply to any transactions conducted in paper or over
the telephone
• Does not apply to noncovered entities
• Does not apply to group health plans with under 50 participants
• Does not apply to health plan sponsors because they are not
covered entities
EDI Requirements
27

Sharing PHI w/Plan Sponsor | Final Thoughts
• De-identified information
• Group health plan enrollment and disenrollment information
• Limited summary health information for insurance placement and
settlor function
• PHI to plan sponsor personnel involved in plan administration
when certain requirements are met
• Pursuant to authorization
A group health plan may not share PHI with plan sponsor except for disclosure of:
28

Certain Employer Functions Require Authorization
• Health plans can not provide access to PHI to plan sponsors
without certain plan provisions and safeguards
• Disclosure must be for “plan administrative functions”
• Health care providers and health plans may use and disclose PHI
with an individual’s “authorization” for any purpose provided in the
authorization
29

Certain Employer Functions Require Authorization
• Plan must not condition treatment or payment on receipt of an authorization
• In some circumstances, an employer may condition employment on receipt
of authorization
• Authorization may be required to obtain PHI for purposes of FMLA or ADA
• An authorization may be required for an employer to assist employee with a
claim
• An authorization may be required for an employer to receive reports from
EAP
These functions include:
30

Exceptions for Some Common Employer Practices
HIPAA includes numerous exceptions to broad use and disclosure
rules
Common employer practices that fall under these exceptions:
• State/Federal disclosure requirements
• Workers’ compensation
• Health information contained in employment record
31

Special Concerns
• Shred pertinent documents- do not simply discard them
• Prohibit staff from accessing a participant’s medical records to learn a neighbor’s
birthday or to satisfy a similar form of curiosity
• Do not leave messages about a participant’s health on an answering machine or
with someone other than the patient or doctor
• Avoid discussions about a participant’s claims in elevators, cafeteria or other public
places
• Avoid paging participant’s using identifiable information
• Do not fax information without knowing that the persons to whom the fax is
addressed is ready to receive it
• Do not allow faxes to sit on an office machine where unauthorized people may see
them
Change office behavior
32

Final Regulations Related to HIPAA Security Breaches

Overview
• American Recovery and Reinvestment Act of 2009 (ARRA)
modified HIPAA
• Security and privacy rules apply to Business Associates (BAs)
• Created new notification rules for a Privacy breach
 Notice to affected individuals
 Notice to Media
 Notice to the Department of Health and Human Services (HHS)
• Penalties for non-compliance increased
34

Security and Privacy Rules Applied to Business Associates
• Most security rules now apply to BAs
• Some privacy rules now apply to BAs
• Generally effective February 1, 2010:
 Some provisions, such as the breach rules and penalties, can apply
earlier
 BAs must comply with electronic protected health information (PHI) and
breach rules as of September 1, 2009, but do not need security policies
and procedures until February, 2010
35

Breach Defined
A breach is:
“The acquisition, access, use or disclosure of PHI…”;
[In a manner not otherwise permitted under the HIPAA privacy rule]
“…which compromises the security or privacy of the PHI”
Regulations do not incorporate the statute’s use of “accesses,
maintains, retains, modifies, records, stores, destroys or otherwise
holds, uses or discloses” unsecured PHI.
36

Breach Defined
Compromises PHI is defined as a breach that poses “a
significant risk of financial, reputational, or other harm.”
BAs can make a judgment call about how significant a threat is.
[If not significant, there is no breach and reporting is not required]
Risk assessment should be done and documented so it can be
demonstrated why a breach notice was not needed.
37

Breach Defined
• Who impermissibly used PHI or to whom information was
impermissibly disclosed
• The nature of the PHI that was disclosed
 For example:
• If the name of an individual and plan participation are disclosed there could be a
privacy breach, but there may be no harm
• If the types of treatment or other sensitive information (social security number,
account number, etc.) are revealed then there is a higher likelihood of harm
 Many types of health details are sensitive these days given the risk of
employment discrimination
During an evaluation consider:
38

Breach Defined
• Effective for breaches occurring 30 days on or after publication in the
Federal Register
• HHS will use its enforcement discretion and not impose penalties until
February 22, 2010
 No guidance on whether penalties could relate to actions taken between September 23,
2009 and February 21, 2010
• HHS does not have the authority to penalize BAs until February 18, 2010
 This will not negate any potential exposure from breach of contract or negligence
39

Exceptions to Breach
1. Secured PHI
2. Unintentional acquisition, access or use by individual acting
under authority of BA
3. Inadvertent disclosure from one covered entity to another
covered entity
4. Unauthorized disclosure where the unauthorized individual
would not reasonably have been able to retain the information
40

Secured PHI
• PHI that is held in a manner deemed to be “secure”
• Electronic data protected by specified encryption technology
• Paper or film records shredded or destroyed
• Electronic media purged in accordance with specific standards
Unsecured PHI
• PHI that is not rendered unusable, unreadable or indecipherable to unauthorized
individuals through technology or methodology approved by HHS
• PHI in any form is covered (oral and written-both paper and electronic)
• Access controls, firewalls, etc. do not make data secured
• Redaction of paper documents does not make them secured
1. Secured PHI
41

Safe harbor
For data:
• In motion (moving through a network)
• At rest (in a database or flash drive)
• In use (in process of being created, retrieved, updated or deleted)
• Disposed (both discarded paper records and recycled electronic media)
1. Secured PHI
42

The unintentional acquisition, access or use of PHI by a workforce member or person acting
under the authority of the plan or BA if acquisition, access or use is in good faith and within
the scope of authority and does not result in further use or disclosure in a manner not
permitted under the HIPAA privacy rule.
• Workforce member – includes employees, volunteers and others under the control of the
plan
• BA can be acting under the authority of the plan
Example:
An employee who is responsible for billing receives an email which contains PHI about a plan
participant from another employee. The email was accidentally sent. The billing employee
opens the email, notices she is not the intended recipient, alerts the employee who sent the
email and then deletes the email.
2. Unintentional Acquisition
43

Inadvertent disclosure by a person who is authorized to access PHI at a plan
or BA to another person authorized to access PHI at the same plan or BA, if
the PHI received is not further used or disclosed in a manner violating 45
CFR § 164 Part E.
Example:
A member of an appeals committee shares a participant’s PHI with another
committee member. Member 1 thought the participant had appealed a claim,
however it was actually a different participant’s appeal. Member 2 does not
disclose or use the PHI.
3. Disclosure to Another Covered Entity
44

Disclosure of PHI where a plan or BA has a good faith belief that an
unauthorized person to whom the disclosure was made would not reasonably
have been able to retain the PHI.
Appears to apply to both physical (e.g., actual paper record) retention and
mental retention.
Example:
A plan mails a number of EOBs to the wrong individual. The EOBs are
returned by the post office as undeliverable. They are unopened.
4. Unauthorized Disclosure, Not Retained
45

Identification of Breach
• whether there was an impermissible use or disclosure of PHI
under the Subpart E
• whether the impermissible use or disclosure compromises the
security or privacy of the PHI and document such findings
• if an exception applies
Plan and BA must determine:
46

Notification Rules
• BA should report the data to the plan within the timeframe allowed by their
agreement
 Do not need to report the breach to the affected individuals, unless the contract
specifies
• Plan must notify each individual whose unsecured PHI has been, or is
reasonably believed to have been, accessed, acquired, used or disclosed as
a result of the breach
• Plan may need to notify the media
• Plan must notify HHS
When a breach is discovered:
47

Notification Rules
• First day on which the breach is known or should reasonably have been
known by a covered entity or BA if they had exercised reasonable diligence
• Plan and BA deemed to have knowledge of workforce members and any
agents
 Agent status determined using federal common law agency rules
• BA is often an agent of the plan
• Broad reach
• If breaching employee never tells anyone of a breach, the breach occurred
but cannot be discovered and therefore there is no reporting obligation
Discovery of a breach
48

Notification Rules
• Must notify plan after it discovers a breach of unsecured PHI
 Same rules as for covered entities in determining when a breach is
discovered
• BA must provide notice to plan without unreasonable delay, but in
no event later than 60 days after breach discovered
• BA must provide a list of each individual whose PHI was
breached and any other information the plan would need to send
out notice to individuals
Business Associate notification to plan
49

Notification Rules
The Plan must notify each individual whose unsecured PHI has been, or is
reasonably believed to have been, accessed, acquired or disclosed as a result
of the breach.
• If BA discovers breach, must notify plan and should identify each individual who is
affected.
Notification must be made without unreasonable delay and be no later than 60
calendar days after discovery of the breach.
• 60 days, from date breach first known, is the outside limit and may be unreasonable
in some circumstances.
 60 days begins even if initially unclear whether there was a breach
• Burden of proof on covered entity/BA to show timeliness.
Notice to Individuals
50

Notification Rules
• Written notice should be sent by first-class mail to individuals last known
address
 May notify by email if the individual has consented
 May notify next of kin or personal representative if the plan has that information
• If it is an urgent situation, due to possible imminent misuse, notification may
be made by telephone or other means in addition to the written notice
 No guidance has been provided regarding what is considered urgent
• Burden of proof is on the plan/BA to prove notifications provided
51

Notification Rules
When direct notice is not possible due to the plan having insufficient or out of
date contact information, may notify by substitute form.
• For less than 10 individuals, it may be written notice, telephone notice or other
means.
• For more than 10 individuals, should be a conspicuous posting on the covered
entity’s web site for 90 days or more or a conspicuous notice in a major print or
broadcast media.
 Toll-free phone number must be included so individuals can learn if unsecured PHI was
breached.
 Must be on the home page or the website or be a prominent hyperlink.
 What constitutes a major print or broadcast media is a facts and circumstances test,
which considers the geography of the individuals.
52

Notification Rules
Notice must include:
• Plain language, brief description of what happened including the date of
breach and date of breach discovery
• Type of unsecured PHI involved (e.g., social security number, full name,
address, etc.)
• Steps an individual should take to protect himself/herself from potential harm
• Brief description of what is being done to remedy and mitigation the effects
of the breach
• Contact procedures for individuals to ask questions or get additional
information
 Must include a toll-free phone number, email address, web site or mailing address
53

Notification Rules
Notice must be provided to prominent media outlets in the state or jurisdiction
if unsecured PHI of more than 500 residents of the state or jurisdiction is or is
reasonably believed to have been accessed, acquired or disclosed during a
breach
• Assumption that major media is similar to prominent media
• Jurisdiction is smaller than a state (e.g., county or city)
• Must affect 500 residents of the state or jurisdiction – if the total breach is
more, but there are not 500 in a state or jurisdictions, this notice is not
required
This notice is in addition to the individual notice
Media Notice
54

Notification Rules
Notice must be provided to HHS if there is a breach of 500 or more individuals.
• Notice must be submitted within same timeframe for sending notice to affected individuals.
• Calculation of individuals is for a total discovered during investigation.
 If there was an individual discovery of 400 individual, but upon investigation another 150 are
discovered, must notify HHS.
Log must be maintain and submitted annually to HHS for breaches of less than 500
individual.
• Must be submitted within 60 days of the end of the calendar year.
• HHS website will provide details on how to submit.
HHS Notice
55

Other Changes
• State notification laws not preempted unless they stand “as an obstacle”
• Law enforcement delay of notification, verbal notice must be documented
and is for a maximum of 30 days, written notice is for the time period
specified
• Must train workforce on requirements
• Complaint processes must provide for the ability to include complaints
regarding these processes
• Retaliation/waiver/intimidating acts are prohibited
• There are sanctions for failure to comply
56

Penalties/Enforcement
• State notification laws not preempted unless they stand “as an obstacle”
• Law enforcement delay of notification, verbal notice must be documented
and is for a maximum of 30 days, written notice is for the time period
specified
• Must train workforce on requirements
• Complaint processes must provide for the ability to include complaints
regarding these processes
• Retaliation/waiver/intimidating acts are prohibited
• There are sanctions for failure to comply
57

Penalties/Enforcement
HHS audits now required
Penalty amounts:
• Minimum $100 if did not know of violation and would not have known even
with reasonable diligence – maximum $50K per violation, $1.5M total
• Minimum $1,000 if reasonable cause and not willful neglect – maximum
$50K per violation, $1.5M total
• Minimum $10,000 if willful neglect but corrected – maximum $50K per
violation, $1.5M total
• Minimum $50,000 if willful neglect and not corrected – maximum $1.5M
58

Compliance Audits
• OCR announced the launch of phase 2 of the audit program in
March 2016.
• Here are some things to expect:
• Who may be audited?
 OCR intends to audit a wide range of covered entities, and business
associates will be added to the list of audit targets, now that OCR has
direct enforcement authority over business associates.
 OCR’s stated goal is to have a broad sample of audited entities,
including each type of covered entity (plans, providers, and
clearinghouses), different types of business associates, entities of
different sizes, and entities located in various regions throughout the
country.
60

Compliance Audits
Phase 2 will be conducted in three rounds:
• Round 1: The first round will be remote desk audits of covered entities, based on
documents and other information received in response to an information request
• Round 2: The second round will be remote desk audits of business associates,
based on documents and other information received in response to an information
request. Rounds 1 and 2 are expected to be completed by December 2016
• Round 3: The third set of audits will be on-site and will examine a broader scope of
HIPAA requirements than the desk audits. Both covered entities and business
associates, including those that already underwent a desk audit, may be subject to
an on-site audits
What is the structure of the audit program?
61

Compliance Audits
• The audit process will employ common audit techniques
• Entities selected for an audit will be sent an email notification of their selection and will
be asked to provide documents and other data in response to a document request letter
• Audited entities will submit documents online via a new secure audit portal on OCR’s
website—within 10 business days after they receive OCR’s request
• After reviewing relevant documentation and other information, auditors will develop and
share draft findings with the audited entity
• Audited entities will have the opportunity to respond to the draft findings, and their
written responses will be included in the final audit report. Audit reports generally
describe how the audit was conducted, discuss any findings, and contain entity
responses to the draft findings
How will the audit program work?
62

Compliance Audits
• The timeline for desk audits is quite compressed
• Once the auditor sends draft findings to the audited entity, the audited entity will have
just 10 business days to review the findings and return written comments to the auditor
• The auditor will complete a final report within 30 business days after receiving the
audited entity’s comments
• On-site audits will be conducted over a period of 3–5 days, depending on the size of the
entity
• As with desk audits, the audited entity will have just 10 business days to review and
submit written comments on the auditor’s draft findings
• The final audit report will be completed and furnished to the audited entity within 30
days after the audited entity’s response
What is the audit timeline?
63

Compliance Audits
OCR has indicated that desk audits will be more limited than on-site audits,
but it is unclear how much more limited they will be.
OCR also has released an updated audit protocol. Previously, OCR had
suggested that the updated protocol would identify the areas that OCR would
focus on during phase 2 audits, but the actual protocol does not really carry
through on this suggestion—it lists all of the security rule’s requirements for
administrative, physical, and technical safeguards and all of the breach
notification rule’s requirements.
What is the likely scope of an audit?
64

Compliance Audits
The protocol is a little narrower with respect to the privacy rule, covering:
• the Notice of Privacy Practices
• the right to request privacy protection for PHI
• access of individuals to PHI
• administrative requirements (such as training, policies and procedures, sanctions,
and document retention)
• uses and disclosures of PHI
• and individuals’ rights to request amendment of PHI and accountings of disclosures
What is the likely scope of an audit?
65

Compliance Audits
• Be alert to OCR communications
• Don’t ignore OCR
• Round up all the OCR inquiries
• Have an audit response plan in place
• Conduct a pre-audit review
• Time is of the essence
• Know your business associates
• Develop or update compliance documents
How do you prepare for a possible audit?
66

Contact
Larry Grudzien
Attorney at Law
708-717-9638
larry@larrygrudzien.com
larrygrudzien.com
68

HIPAA Training: Privacy Review and Audit Survival Guide

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