The Office of Civil Rights (OCR) announced in a press release this week that Anthem, Inc. (Anthem), one of the nation’s largest health benefit companies, has agreed to pay $16 million and take substantial corrective action to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules. This settlement is the largest in HIPAA-enforcement history, far exceeding the previous record of $5.5 million paid by Memorial Healthcare in 2017.

OCR investigated Anthem following its report that a series of cyber attacks in 2014 and 2015 resulted in theft of the electronic protected health information (ePHI) of nearly 79 million members of  its affiliated and other covered entity health plans. In addition to Anthem’s failure to implement sufficient safeguards to prevent and detect the inappropriate access to its systems, OCR also found that Anthem had:

  • Failed to conduct an enterprise-wide risk analysis
  • Insufficient procedures to regularly review records of information system activity
  • Failed to identify and respond to suspected or known security incidents
  • Failed to implement adequate minimum access controls to prevent unauthorized access to ePHI

A link to the Resolution Agreement between Anthem and OCR is available here.

It is not surprising that the largest HIPAA breach to date would result in the largest settlement to date, and this is a strong signal of this administration’s interest in leveraging its penalty authority to make an example of organizations that have large data breaches. Organizations of all sizes should take note, however.  While penalties are imposed in only a small fraction of the incidents reported to OCR, any significant data breach will result in an OCR investigation that may bring inadequacies of privacy and security safeguards to light.

If you have questions or concerns about your HIPAA compliance posture or your information security and governance plans, we are ready to help.