The Alarming Toll of HIPAA Breaches: Over 41 Million Individuals Affected in 2022

Each year, the Health and Human Services Office for Civil Rights (OCR) composes detailed reports on HIPAA compliance and breaches of unsecured Protected Health Information (PHI) and delivers them to Congress. The latest report is that of events from the 2022 calendar year. These reports can teach us about weaknesses in the HIPAA policies and procedures of other entities, the most common types of threats from malicious actors, and help educate staff on identifying vulnerabilities in the pharmacy’s safeguards during their next Risk Analysis.

Here are a few of the key takeaways from the 2022 Annual Report to Congress on HIPAA Privacy, Security, and Breach Notification Rule Compliance:

  • There was a 17% increase in the number of HIPAA complaints received from 2018 to 2022
  • There was a 107% increase in the number of large breaches reported from 2018 to 2022
  • OCR was able to resolve 87% of the complaints before initiating an investigation; pre-investigation closures could have resulted because:
    • The complaint was against an entity not covered by the HIPAA Rules
    • Allegations were about conduct that did not violate the HIPAA Rules
    • Complaints were untimely because they were not filed within 180 days of when the individual submitting the complaint knew or should have known about the act or omission that was the subject of their complaint
  • OCR completed 846 compliance reviews, of which 80% of the entities had to take corrective action or pay a civil money penalty
    • OCR may open a compliance review investigation “based on an event or incident brought to OCR’s attention, such as through the media, referrals from other agencies, or based upon patterns identified through multiple complaints alleging the same or similar violations against the same entity”
    • OCR initiated 676 compliance reviews that did not arise from complaints but were instead initiated by OCR after a breach report was filed. Of that 626 of these stemmed from breach reports affecting 500 or more individuals, 2 were from breach reports affecting less than 500 individuals, and 48 were brought to OCR’s attention by other means

The 2022 Annual Report to Congress on Breaches of Unsecured Protected Health Information had several key takeaways as well:

  • OCR received 626 notifications of breaches affecting 500 or more individuals
    • The total number of individuals affected by those breaches was approximately 41.7 million
    • 68% of these breaches were from health care providers, 19% from business associates, 13% from health plans, and <1% from health care clearinghouses
    • 74% of these breaches were reportedly due to hacking/IT incident of electronic equipment or a network service, 19% from unauthorized access or disclosure of records, 4% theft, <1% from a loss of electronic media or paper records containing PHI, and <1% was from improper disposal
    • The PHI was most commonly from network servers (58%), but also from email (22%), paper records (6%), electronic medical records (6%), desktop computer (4%), other portable electronic devices (3%), laptop computer (2%), and other (<1%)
  • The largest breach in 2022 was an incident where hackers utilized ransomware to compromise the servers of a healthcare provider with PHI on them, which affected over 3.3 million individuals
  • Other hacking/IT incidents included the use of malware, phishing, and the posting of PHI to public websites
  • Remedial actions often included:
    • Implementing multi-factor authentication for remote access
    • Revising policies and procedures
    • Training/retraining staff that handle PHI
    • Adopting encryption technologies
    • Imposing sanctions on workforce members who violated policies and procedures regarding the proper handling of PHI
    • Performing a new risk analysis

According to OCR, “There is a continued need for regulated entities to improve compliance with HIPAA Rules. In particular, the Security Rule standards and implementation of specifications of risk analysis, risk management, information system activity review, audit controls, response and reporting, and person or entity authentication were areas identified as needing improvement in 2022 OCR breach investigations.”

If you are not sure where to start, contact PAAS National® (608) 873-1342 for more information on PAAS’ FWA/HIPAA Compliance Program that is easy to set-up, web-based and customized for your pharmacy.

On-demand webinar: Cybersecurity Considerations for Pharmacies

On May 8, 2024 PAAS National® hosted “Cybersecurity Considerations for Pharmacies” webinar.

In a world where threats lurk around every digital corner, safeguarding sensitive information has never been more crucial. Recent events, such as the Change Healthcare cyberattack, serve as stark reminders of the pressing need for robust cybersecurity measures. In pharmacies, where compliance with regulations like HIPAA are of great importance, the stakes are higher than ever.

President of PAAS National®, Trent Thiede, discussed:

  • The importance of cybersecurity in pharmacy
  • The top threats facing healthcare cybersecurity
  • Components, and importance, of a HIPAA Security Risk Analysis

Access the recorded webinar

  • PAAS Audit Assistance members have access to the recorded webinar, in addition to many other tools and resources on the PAAS Member Portal.
  • PAAS FWA/HIPAA Compliance members also have access to this webinar under Resources upon logging into the Portal.

Distribution Required: Medicare Prescription Drug Coverage and Your Rights (CMS-10147)

When a pharmacy receives a rejection for a claim not being covered by Medicare Part D, the pharmacy must provide the patient with the CMS-10147 form, also known as the Medicare Prescription Drug Coverage and Your Rights. All pharmacies, including mail order, specialty, and LTC, must arrange for this form to be distributed to the patient. The notice instructs enrollees about their right to contact their Part D plan to request a coverage determination, including an exception.

While documentation is not required when distributing the CMS-10147, your pharmacy should have a policy and procedure in place addressing how and when the form is being distributed to patients. PBM field auditors may ask you questions about your process and will possibly want to see a copy of your form to ensure you have the most up-to-date version.

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  • Download the current version of the Medicare Prescription Drug Coverage and Your Rights (Form CMS-10147) at https://www.cms.gov/medicare/appeals-grievances/prescription-drug/plan-sponsor-notices-documents
    • The zip file includes copies of the notice in both English and Spanish, along with accompanying instructions
  • PAAS FWA/HIPAA Compliance Program members should review section 4.5 of their PAAS National® FWA/HIPAA Policy and Procedure manual
  • NCPDP reject code 569 requires distribution of the form and should state “Provide Notice: Medicare Prescription Drug Coverage and Your Rights”
  • The CMS-10147 form must be distributed even if you obtain an alternative therapy or medication
  • Obtaining a prior authorization does not waive the distribution requirement
  • Check with your pharmacy software vendor to see if the program can automatically print a copy of the CMS-10147 when required

Introducing PAAS Cybersecurity Training

In a world where threats lurk around every digital corner, safeguarding sensitive information has never been more crucial. Recent events, such as the Change Healthcare cyberattack, serve as stark reminders of the pressing need for robust cybersecurity measures. In pharmacies, where compliance with regulations like HIPAA are of great importance, the stakes are higher than ever.

PAAS National® is excited to announce the launching of a new training series to FWA/HIPAA Compliance Program members: PAAS Cybersecurity Training. This comprehensive training series, provided at no extra cost, represents a proactive step towards mitigating risks and fostering a culture of security awareness among pharmacy staff.

Comprising of five modules, each tailored to address specific cybersecurity challenges, PAAS’ training empowers employees with knowledge and best practices to hinder potential threats related to:

  1. Network Connected Medical Device Security
  2. Insider Data Loss
  3. Loss or Theft of Equipment and Data
  4. Ransomware
  5. Social Engineering

PAAS’ unique approach to training ensures its content resonates with all pharmacy staff. PAAS’ Cybersecurity Training will have the same look and feel that FWA/HIPAA compliance members are familiar with.

It’s important to recognize that cybersecurity is not a one-size-fits-all endeavor. The dynamic nature of threats necessitates continual adaptation and vigilance, tailored to the unique circumstances of each organization. While our training equips participants with essential knowledge, it does not provide foolproof safeguards.

We encourage FWA/HIPAA Compliance members to complement this training by reviewing their HIPAA Security Risk Analysis regularly, ensuring it remains current and aligned with evolving natural, human and environmental threats.

Why Do You Need a HIPAA Risk Analysis? Ask Change Healthcare…

If you have not been affected by the Change Healthcare cyberattack, you have no doubt heard about the sinister actions of the ALPHV Blackcat ransomware gang and the resulting chaos from their February data breach they caused. At the time of this article, the details of the Change Healthcare attack are still widely unknown to the public but two things are certain… (1) the attack should serve as a cautionary tale to all entities handling electronic protected health information (ePHI) and (2) it is a perfect reminder that a HIPAA Risk Analysis is a critical component to the security of your sensitive data.

A Risk Analysis is an accurate and thorough assessment of the potential threats, vulnerabilities and the associated risks to the confidentiality, integrity and availability of ePHI. According to the Guidance on Risk Analysis webpage from the U.S. Department of Health and Human Services (HHS), “All e-PHI created, received, maintained or transmitted by an organization is subject to the Security Rule. The Security Rule requires entities to evaluate risks and vulnerabilities in their environments and to implement reasonable and appropriate security measures to protect against reasonably anticipated threats or hazards to the security or integrity of e-PHI. Risk analysis is the first step in that process.”

The Office for Civil Rights (OCR) is responsible for enforcing federal HIPAA Rules and investigating complaints and violations. In many prior OCR investigations, pharmacies and other healthcare entities settling potential HIPAA violations are often cited with failure to perform an accurate and thorough risk analysis. Since HHS considers a risk analysis to be “the first step” in complying with the HIPAA Security Rule, OCR anticipates that a failure to complete the risk analysis will undoubtedly lead to other insufficiencies and a probable hefty monetary settlement.

As stated in the March 5, 2024 press release from HHS regarding the Change Healthcare cyberattack, “This incident is a reminder of the interconnectedness of the domestic health care ecosystem and of the urgency of strengthening cybersecurity resiliency across the ecosystem.” Take steps now to evaluate and strengthen the security and integrity of your ePHI!

PAAS Tips:

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  • A new risk analysis should be conducted at least annually, or whenever there is a significant change to the information systems or security policies and procedures
    • Deploying new computer equipment (i.e., anything that houses ePHI) or installing a new gate are situations that require updates to your risk analysis
  • Keep all documentation related to HIPAA for a minimum of six years after the last effective date
  • For more information from HHS regarding the Change Healthcare cyberattack and the coordinated efforts and flexibilities in place, refer to their March 5, 2024 press release
  • Check out the newly released HHS voluntary performance goals to enhance cybersecurity in the health sector and their new gateway website developed to increase accessibility and awareness of cybersecurity information and resources from HHS and other federal agencies
  • Feeling overwhelmed? Don’t know where to start? If your pharmacy does not currently have the PAAS FWA & HIPAA Compliance Program, we suggest scheduling a services overview to obtain additional information. The compliance program includes a custom HIPAA Risk Analysis. It is in your best interest to identify threats, and corresponding vulnerabilities associated with those threats, so you can develop reasonable safeguards, where practicable.

LIVE Webinar: Cybersecurity Considerations for Pharmacies

In a world where threats lurk around every digital corner, safeguarding sensitive information has never been more crucial. Recent events, such as the Change Healthcare cyberattack, serve as stark reminders of the pressing need for robust cybersecurity measures. In pharmacies, where compliance with regulations like HIPAA are of great importance, the stakes are higher than ever.

Join President of PAAS National®, Trent Thiede, on Wednesday, May 8, 2024 from 2:00-2:45 pm CT as he discusses:

  • The importance of cybersecurity in pharmacy
  • The top threats facing healthcare cybersecurity
  • Components, and importance, of a HIPAA Security Risk Analysis
REGISTER TODAY!

We will allow for some Q&A at the end of the webinar. If you would like to submit questions prior to the webinar, please click here.

PAAS Audit Assistance and FWA/HIPAA Compliance Program members will have access to the webinar recording following the LIVE event. 

Required: Proof of Patient Copay Collection

All PBM agreements contain language requiring pharmacies to collect copays and be able to prove those copays were collected if audited. Copays are used by insurers to help patients understand the cost of their medications and encourage less expensive alternatives. Pharmacies who reduce or waive copays adjudicated by the PBM risk full recoupment of those claims if audited, and possible contract termination.

How do you prove a copay was collected?

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Having an integrated point of sale (POS) system tying the prescription number, date of sale, amount collected, and method of payment all together is key to passing an audit. It has become increasingly difficult for pharmacies without a POS system to prove copays were collected at the point of sale.

Other things to consider when proof of copay collection is required:

Credit card receipts should include:

  • The last four digits of the credit card number
  • The transaction authorization number
  • The merchant ID number

Payment by check may require copies of cancelled checks, front and back.

Payment by cash may require proof of cash bank deposits being made during the timeframe under audit.

Reduction of copay due to a secondary payer (coupon or secondary insurer) may also require proof including:

  • A print screen showing adjudication to the secondary insurer
  • Secondary payer plan information like the BIN, PCN, Patient ID, and group number
  • Any eVoucher data applied by the switch
  • Amount paid and any remaining out of pocket amount

If using a house charge account, you should be able to produce the following:

  • Policy and Procedure for collection of monies due on the account
  • Documented attempts to collect payment in the form of dated invoices sent to the patient and logged phone calls attempting to collect
  • Itemized Accounts Receivable report showing payment received, tying the payment back to the prescription number, and any outstanding balance remaining

If waiving a copay due to financial hardship, you will need objective evidence of that hardship, like an application, tax returns, and a formal written Policy and Procedure. It cannot be advertised or promoted, nor funded, in whole or in part, by a third party. It also must meet all requirements and restrictions of applicable law.

Non-routine, unadvertised waivers of copayments based on individualized determinations of financial need for patients with Medicaid may be acceptable without a financial hardship Policy and Procedure.

PAAS Tips:

High AWP Omeprazole leads to $2.3M Medicaid Fraud Case

An Ohio pharmacist and owner of four pharmacies, along with a technician, have been found guilty by a federal jury for Medicaid fraud to the tune of $2.3M dollars. The recent announcement by the Department of Justice states each were convicted on one count of conspiracy to commit health care fraud and two counts of defrauding Medicaid. Each guilty count carries a maximum of 10 years in prison – they are currently awaiting sentencing.

Investigators discovered the pharmacist and technician conspired a plan to bill Medicaid for the highest reimbursed NDC for omeprazole but dispense over-the-counter product. The discovery was made when inventory purchases for the NDC billed fell short of the number of units billed to Medicaid. Upon further investigation, it was found the product dispensed for these claims was purchased over-the-counter at a big box store. The pharmacy also billed Medicaid for omeprazole when no prescriptions existed. The submission of these claims was cited as false and fraudulent, leading to the charges and conviction.

Ensure your pharmacy has internal controls in place to avoid potential invoice shortage issues (e.g., NDC scanners at the filling station). Pharmacy staff must be trained to understand the importance of billing, filling, and purchasing the correct NDCs.

More than just training, PAAS’ FWA/HIPAA compliance program can help pharmacies prevent and detect potential FWA in the workplace.

Employer Pays $4.75 Million after Employee Stole, then Sold, Protected Health Information

While HIPAA training may feel tedious and appear to be a waste of time and payroll, it’s crucial not to take shortcuts when it comes to compliance!

First, HIPAA Privacy and Security Rules were created to protect sensitive patient information and improve the quality of care patients receive. Patients should feel comfortable sharing their most private health information with healthcare providers during their examinations and treatments. If patients fear their information will not remain confidential, they are less likely to be transparent, potentially impacting the care they receive.

Second, as a Covered Entity under HIPAA, the pharmacy is responsibility to ensure staff are adequately trained and appropriate safeguards are in place to secure protected health information (PHI). Look no further than the February 6, 2024 press release from the U.S. Department of Health and Human Services Office for Civil Rights (OCR) to see how expensive brushing off your obligations to the HIPAA Security Rule can be. According to the release, Montefiore Medical Center settled with OCR for a jaw dropping sum of $4.75 million dollars for several potential violations of the HIPAA Security Rule. As outlined in the release, an employee stole the electronic PHI of 12,517 patients and sold that information to an identity theft ring. The police notified Montefiore Medical Center of the situation after they had “evidence of theft of a specific patient’s medical information”. Only after the police notified Montefiore, two years after the employee stole the data, did the Medical Center perform an internal investigation and find the breach.

During the OCR’s investigation, they found “multiple potential violations of the HIPAA Security Rule, including failures by Montefiore Medical Center to analyze and identify potential risks and vulnerabilities to protected health information, to monitor and safeguard its heath information systems’ activity, and to implement policies and procedures that record and examine activity in information systems containing or using protected health information. Without these safeguards in place, Montefiore Medical Center was unable to prevent the cyberattack or even detect the attack had happened until years later.”

Lastly, learn from Montefiore Medical Center mistakes and follow these PAAS Tips:

  • Prioritize having a comprehensive HIPAA training program
    • In place for all employees involved in the handling of PHI
    • Ensures HIPAA Rules are equally enforced across all levels of staff
    • Employees understand the importance of taking their training seriously.
    • HIPAA training should include information about civil, monetary, and criminal penalties for violations of the HIPAA Rules to reinforce the importance of compliance.
  • Review and update, no less then annually, your HIPAA Risk Analysis to ensure you have the proper safeguards in place. This is a required HIPAA form and must be retained for six years.
  • Ensure there are adequate safeguards in place to prevent and detect malicious behavior; for more information review the following Newsline articles:

If you are not sure where to start, contact PAAS National®® (608) 873-1342 for more information on PAAS’ FWA/HIPAA Compliance Program that is easy to set-up, web based and customized for your pharmacy.

Tip to Federal Agents Leads to Jail Time for Pharmacy Owner

The Department of Justice announced a Nebraska pharmacist, and owner of two pharmacies, was sentenced to two months of imprisonment, three years of supervised release, and ordered to pay restitution in the amount of $573,000.

The pharmacist was found guilty of making a false, fictitious, and fraudulent statement related to health care services. The investigation began in 2020 based on a tip to Federal Agents, and included pharmacy staff interviews, patient interviews and an inventory audit. The inventory audit reconciled claims billed to both Medicare and Medicaid with invoice purchases made by the pharmacy.

Upon completion of the investigation, the inventory audit identified significant shortages. Investigators discovered the pharmacist was billing for brand name drugs but ordering and dispensing the generics. Additionally, the pharmacist in question was submitting claims that were never dispensed to the patient.

PAAS Tips:

 Contact PAAS National®®  today and start your robust Fraud, Waste and Abuse and HIPAA Compliance Program, ensuring your pharmacy employees are informed and trained against fraudulent activities.