HIPAA Privacy Settlement – $1 Million


With all the new enforcement efforts for privacy violations, better read this and take note.  If you are not sure you are HIPAA compliant MAS can provide security as well as chart and process assessment to help you.  This article is so important, I couldn’t find the short link so recopied exact with all Ms. Stamers contact information as well.

Rite Aid Agrees to Pay $1 Million to Settle HIPAA Privacy Case As Office of Civil Rights Proposes Tighter HIPAA Privacy & Security Regulations

August 4, 2010 <!–Cynthia Marcotte Stamer–>

Stay Tuned To Solutions Law Press For More Details

One of the nation’s largest drug store chains, Rite Aid Corporation and its 40 affiliated entities (Rite Aid) will pay $1 million to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule.  The U.S. Department of Health and Human Services (HHS) Office of Civil Rights announcement of the HIPAA resolution agreement with Rite Aid and the concurrent negotiation of a separate consent order of potential FTC Act violations between Rite Aid and the Federal Trade Commission (FTC) follows HHS’ announcement of proposed changes to its HIPAA Privacy Rules and associated penalties in response to changes enacted under the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act).  The Rite Aid settlement and the proposed Privacy Rule changes illustrate the growing penalty risks that health care providers, health plans, healthcare clearinghouses and their business associates (Covered Entities) face for violating the Privacy Rules.

Rite Aid Resolution Agreement

The Rite Aid resolution agreements settle charges that Rite Aid failed to appropriately safeguard the privacy of its customers when disposing of identifying information on pill bottle labels and other health information. The settlements apply to all of Rite Aid’s nearly 4,800 retail pharmacies and follow an extensive joint investigation by the HHS Office for Civil Rights (OCR) and the FTC.

OCR opened its investigation of Rite Aid after television media videotaped incidents in which pharmacies were shown to have disposed of prescriptions and labeled pill bottles containing individuals’ identifiable information in industrial trash containers that were accessible to the public in a variety of Rite Aid locations in cities across the United States.  OCR and FTC previously settled a similar case involving the national drug store chain CVS in February 2009.

The HIPAA Privacy Rule requires covered entities to safeguard the privacy of patient information and other “protected health information” including during its disposal.  In addition to the detailed requirements for protection and safeguarding of protected health information and electronic protected health information under the Privacy Rules, breach notification rules added to HIPAA under the HITECH Act also generally require that Covered Entities investigate and provide timely notification of breach to patients, OCR and in some cases the media when “unsecured protected heath information” is breached.  Meanwhile, the FTC Act and associated regulations require those retailers and certain other parties receiving personal financial information to comply with certain requirements for the protection and use of that information and to provide certain notifications of their privacy polices for protecting personal financial information.

The joint OCR and the FTC investigations raised concerns that:

  • Rite Aid failed to implement adequate policies and procedures to appropriately safeguard patient information during the disposal process;
  • Rite Aid failed to adequately train employees on how to dispose of such information properly; and
  • Rite Aid did not maintain a sanctions policy for members of its workforce who failed to properly dispose of patient information.

Under the HHS resolution agreement, Rite Aid agreed to pay a $1 million resolution amount to HHS and must implement a strong corrective action program under which Rite Aid agreed to:

  • Revise and distribute its policies and procedures regarding disposal of protected health information and sanctioning workers who do not follow them;
  • Train workforce members on these new requirements;
  • Conduct internal monitoring; and
  • Engage a qualified, independent third-party assessor to conduct compliance reviews and render reports to HHS.

In addition, under its FTC consent order, Rite Aid separately agreed to external, independent assessments of its pharmacy stores’ compliance with the FTC consent order.

The HHS corrective action plan will be in place for three years; the FTC order will be in place for 20 years.

Proposed Privacy Rule Changes

The Rite Aid resolution agreement and consent order follows the July 8, 2010 publication by OCR of proposed changes to its existing HIPAA Privacy, Security, and Enforcement Rules in response to amendments enacted under the HITECH Act. Because of the lead time required to implement needed changes in policies, technology and training, Covered Entities need to begin preparations to adjust their health information privacy and data security policies and practices in anticipation of the finalization and implementation of these rules as well as to act quickly to submit their comments about the proposed changes.  .

The more than 220 page Notice of Proposed Rulemaking (NPRM) proposes to revise the existing Standards for Privacy of Individually Identifiable Health Information (Privacy Rule); the Security Standards for the Protection of Electronic Protected Health Information (Security Rule); and the rules pertaining to Compliance and Investigations, Imposition of Civil Money Penalties, and Procedures for Hearings (Enforcement Rule) issued under HIPAA.

The author of this update, attorney Cynthia Marcotte Stamer, has extensive experience advising and assisting health care providers and other health industry clients with HIPAA and other privacy and data security, reimbursement, compliance, public policy, regulatory, staffing, and other operations and risk management matters. Ms. Stamer also is regularly conducts training on HIPAA and other health industry compliance, management and operations matters.  You can get more information about her health industry experience here.  If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872  or via e-mail here.  You may link to her on Plaxo and Linkedin as well where she posts she articles.

Medtrade Spring 2010 – Vegas


The HME & Pharmacy industry has been hit hard the last couple of years with reimbursement cuts, competitive bidding and much more.  The big focus on Medtrade Vegas 2010 is to help the suppliers be proactive and more efficient with their business.  Medical Auditing Solutions will be there to meet with clients and vendors as well to be an active participant in these solutions.

Angela Miller will be speaking Wednesday, May 12,  at 9:15am on “Developing a Risk Protocol for Auditing.”  This program will discuss how to identify the risk model(s) for your business.  Every business will have a different risk model.  The program will review areas for auditing the risk model.   This program will be a tool to help you develop your audit plan.

We look forward to speaking with you.  If you miss the session and would like to schedule a meeting with Ms. Miller, you may contact her by email (angela@medicalauditingsolutions.com) or by mobile (409.673.7103).  No sales calls will be accepted.  This is a time for our clients.

Angela Miller of Medical Auditing Solutions LLC has been in health care compliance, auditing, billing, collections and HIPAA for over 18 years.  Ms. Miller has made it the  focus of the business to help providers run their businesses efficiently, collect money, and maintain compliance with federal and state regulations and coverage criteria.  Ms. Miller is very experienced with Medicare & Payer audits.  Ms. Miller ran a very successful compliance program for over 5 years for the largest private held HME/Pharmacy provider in the US at the time.  Ms. Miller  also works as a contract compliance officer to provide an avenue to compliance training to staff, implementation of policies, as well as handling anything that affects cash flow from the initial intake to back-end collections. You can visit our website at Medical Auditing Solutions LLC.

Scope of Services for www.medicalauditingsolutions.com


We thought it would be helpful if in our first blog we explained our SCOPE OF SERVICES for the Medical Auditing Solutions LLC.  We work with all types of health care providers including Durable Medical Equipment, Respiratory Med Pharmacy, Sleep Labs, Home Health Agencies, Small Physician Practices and Hospital Systems.  Our clients revenues vary tremendously from $2M-well over $100M annually.  Our focus is to help you manage your business by giving your problem solving direction although we can perform the hands on work as well.

  • Compliance/HIPAA Audits
    • Review patient charts to ensure compliance with billing and regulatory requirements and exit with management to discuss any areas of weakness with a written report to follow
    • All improve collections and efficiency
  • Compliance Program Development and Training
    • We can review your existing program and provide updates
  • Due Diligence Audits
    • Review patient charts as above and provide general feedback on branch, personnel, location, etc.
    • See Compliance Audits
  • Investigations including audits, interviews, etc. in coordination with your attorney, if applicable
  • Medical Accounts Receivable Analysis for Improved Collections
    • Review a sample of writes for accuracy and potential recovery
  • Medical Accounts Receivable Aging claim filings and staff education
  • Regulatory Affairs Filings To Do Business (NPI, licensing, permits, DBA’s, Certificates of Authority, provider/supplier applications)
    • Handle all filings, follow-up and renewals
  • Assess Medical staff knowledge and positions
  • Assess overall location
  • Assist with Health Care Accreditation, HR, and Operations
  • Work with the business to improve overall efficiency and profits
  • Practice Management and Quality of Care Auditing
    • Other healthcare consulting as needed see website

Monthly Availability via a retainer at competitive rates customized for your needs and the time period needed.