Electronic health record (EHR) vendor Allscripts recently disclosed on an earnings call that it has reached a tentative agreement with the Department of Justice (DOJ) to pay $145 million to settle an investigation into the regulatory compliance of one of its recent acquisitions, Practice Fusion. This news, combined with DOJ’s other recent successful enforcement actions against EHR companies, represents a trend and should be a warning that compliance is a priority when it comes health IT. We anticipate that there will be more Anti-Kickback, HIPAA, and False Claims Act cases against similar health IT targets in the pipeline.

Allscripts acquired Practice Fusion, also an electronic health record company, in February 2018. According to the company’s public SEC filing from the first quarter of 2019, the investigation “relates to both the certification Practice Fusion obtained in connection with the U.S. Department of Health and Human Services’ Electronic Health Record Incentive Program and Practice Fusion’s compliance with the Anti-Kickback Statute and HIPAA.”


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The HHS Office of Civil Rights (“OCR”) closed out the month of April with some updates to HIPAA civil monetary penalty (“CMP”) limits and clarifications to OCR’s stance on the Privacy Rule’s application to transfers of electronic protected health information (“ePHI”) to third-party applications and application programming interfaces (“APIs”).

Differential CMP Caps Based on Enforcement Discretion

Under the current HIPAA Enforcement Rule, HHS employs a four-tier level of culpability scale in line with the HITECH Act. These four tiers correspond to appropriate CMPs ranges for violations by covered entities and business associates of the HIPAA Privacy and Security Rules. These penalty tiers are adjusted for inflation pursuant to the cost-of-living formula set forth in the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

For instance, if a person did not know and, by exercising reasonable diligence, would not have known that the person violated the applicable HIPAA provision, the CMP range the person could be levied was $100-$50,000 for each identical violation, up to a maximum of $1.5 million for all such violations annually (before adjusted for inflation). The $1.5 million annual cap on CMPs for HIPAA violations applied across all four tiers, even though the minimum penalties for each tier increased in amount.

Since HHS began using this four-tier structure, however, there has been debate about whether the HITECH Act mandates different annual CMP caps for each of the tiers. OCR’s April 30, 2019 Federal Register Notice changes HHS’s prior position on this, and now imposes the following annual caps on CMPs for HIPAA violations:.


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In order to move health care organizations towards consistency in mitigating important cybersecurity threats to the health care sector, the Department of Health & Human Services (HHS) published multiple guidance documents on best practices for health care organizations to reduce cybersecurity risks (“HHS Cyber Guidance”). The HHS Cyber Guidance is the result of HHS’ public-private partnership with more than 150 cybersecurity and health care experts. While compliance is voluntary, this guidance serves as direction to health care entities on important practices that should be considered and implemented to reduce risk.

Why HHS has published this guidance


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  • More of our health information is becoming digital every day, as new technology companies enter the health care and wellness markets.
  • Many companies that hold a wealth of consumer health information are not covered by HIPAA.
  • Many consumers may not realize that their health information only is protected and they only have certain rights with respect to that information when it is held by certain entities, but not when it is held by others.
  • The private sector should work with regulators to develop a common sense, appropriate framework for use of health information by non-HIPAA covered entities.

As we await proposed HHS regulations on interoperability and patient access to data, and as more companies than ever before are collecting and using data to power advanced data analytics, artificial intelligence, and machine learning to improve health care quality and delivery, it is important to understand the scope and limitation of protections and the applicability of the HIPAA Privacy Rule.

Patients, providers and caregivers now have access to a wide array of devices and applications to manage and track patient health, improve treatment adherence, and better coordinate care. Large technology companies, athletic gear manufacturers, and others are entering a rapidly growing consumer health technology market. They are developing new technologies including tracking apps, wearables, and social networks that are increasingly integrated into patients’ daily lives. With an estimated 86.7 million U.S. consumers owning wearable devices by 2019, patients are generating billions of data points that provide insight into their health. Yet many of these companies are not subject to existing privacy protections under HIPAA, creating a significant gap in consumer protections.

At the same time, HHS is pushing for greater interoperability and patient access to data to address a challenge that remains widespread even after the investment of billions of federal dollars into the adoption of electronic health records. Agencies are encouraging and mandating easier availability of electronic health data, through current and anticipated CMS and ONC regulations and through a variety of government initiatives such as: 1) Blue Button and MyHealtheData; 2) incentivizing the adoption of open APIs; 3) developing new fee-for-service payment policies regarding remote monitoring and virtual care reimbursement; and 4) launching Sync for Science, a technical standard for facilitating patient-mediated data exchange for research. Consumers and companies alike seek guidance on the implications of collecting, storing, maintaining, and commercializing personal health data.
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On Wednesday, the U.S. Department of Health and Human Services, Office for Civil Rights announced a $400,000 settlement with Metro Community Provider Network arising from MCPN’s alleged failure to implement adequate security management processes to safeguard electronic protected health information in accordance with the Health Insurance Portability and Accountability Act Security Rule. This settlement followed

If you are a technology company developing products for the health market, you have probably heard about and maybe even been “warned” about HIPAA (the Health Insurance Portability and Accountability Act). If you are asking, “How can I avoid complying with HIPAA?” you might be asking the wrong question. Health care is almost 20 percent of the U.S. economy and craving the kind of innovation that technology companies can bring. Leaders in the health care space, like those at AcademyHealth, are pushing for changes to the health system to achieve better care, smarter spending, and healthier people. And they can’t do it without your help.

Compliance with HIPAA opens up new business opportunities, and, in an age of data breaches and privacy concerns, it can set you apart as a company that cares about protecting the information you have about your customers and the patients/clients of those you work with.

Recently, AcademyHealth facilitated a Health Data Innovator Privacy and Security Workshop supported by the California Health Care Foundation. As a featured speaker at the workshop, I’ve pulled out some of the key insights around when and how HIPAA might apply to those working in digital health.

Does HIPAA Apply to My Work?

Maybe.  HIPAA does not apply to all health data.  It depends on who collects or maintains the data and the relationships with HIPAA covered entities or business associates.

Generally, HIPAA applies to health data collected or maintained by those in the traditional health care space, including health plans and most health care providers (such as doctors, hospitals, pharmacies, and labs) and those doing business on behalf of these entities (such as a billing company or a cloud storage provider (CSP)).  However, if the same data is held by the consumer or by a product or company that has a relationship only with the consumer, then it is not covered by HIPAA, although other federal laws may apply. Typically, technology companies will be business associates working with clients that are covered health care providers or health plans.
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The HHS Office of Civil Rights published a new FAQ response (OCR FAQ) detailing the agency’s position that generally information blocking will violate the HIPAA Privacy and Security Rules if it affects a covered entity’s access to its own protected health information (PHI) or its ability to respond to requests for access to PHI from patients. This follows a series of similar policy documents from HHS over the past 18 months that focus on preventing business arrangements or practices that would be defined as information blocking, and thereby, frustrating the goal of interoperability. Specifically, according to the OCR FAQ:

  • An electronic health records (EHR) vendor or cloud provider’s actions to terminate a covered entity’s access to its own electronic PHI (ePHI) (e.g., in a payment dispute) would violate the HIPAA Privacy Rule because those actions would constitute an impermissible use of PHI.
  • An EHR vendor or cloud provider’s refusal to ensure the accessibility and usability of a covered entity’s ePHI upon demand by the covered entity or to return a covered entity’s ePHI upon termination of the agreement, in the form and format that is reasonable in light of the agreement, would violate the HIPAA Security Rule.
  • A business associate may not deny a covered entity access to the PHI the business associate maintains on behalf of the covered entity if necessary to provide individuals with access to their PHI under the HIPAA Privacy Rule.
  • A covered entity that agrees to terms within a business associate agreement (BAA) that would prevent the covered entity from ensuring the availability of its own PHI as required would not be in compliance with the HIPAA Privacy and Security Rules.

OCR has increasingly ramped up its enforcement of violations of the HIPAA Privacy and Security Rules related to noncompliant BAAs, so the new OCR FAQ signals that information blocking provisions could be the source of future enforcement actions.


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On July 19th, the Office of the National Coordinator for Health Information Technology (“ONC”) released a report expressing concerns about major gaps in policies and oversight surrounding the access to, security, and privacy of health information held by certain mobile health (“mHealth”) technology companies and health social media.  While the report frames the

In late June, Crowell & Moring partnered with Accenture to host a comprehensive one-day conference on legal issues affecting the digital health landscape. The program covered a wide range of topics, some of which you can read more about via the following links: Developing Digital Health Platforms; the Health Care Economy’s Internet of Things; and New Payment Models and Data. More information on the June 23rd “Fostering Innovative Digital Health Strategies Conference” can be found on Crowell.com.

One session touched upon privacy and cybersecurity issues regarding the usage of products and data in the digital health realm. This panel was moderated by Fauzia Zaman-Malik, Accenture’s Global Legal Lead for Health Industry Offerings and North America Legal Lead for Health and Public Services Operating Group; and featured Evan Wolff, partner at Crowell & Moring; Cora Han, FTC senior attorney, Division of Privacy and Identity Protection; and Hilary Weckstein, chief privacy officer at Inovalon, Inc.

This panel focused on methods and benefits of de-identification, HIPAA requirements, the FTC’s role in regulating big data and digital health technologies, and data breach preparation and response.  Keep reading for four key takeaways from this session; the full panel session can also be accessed by video at this link.


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