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The recent U.S. stimulus bill includes $18 billion to catapult the health industry toward the world of electronic health records. This is sure to light a fire under every hungry security vendor to position itself as the essential product or service necessary to achieve HIPAA compliance. It should also motivate healthcare IT professionals to learn where their sensitive data is located and how it flows. To be sure, with federal money allocated through 2014 for the task of modernizing the healthcare industry there will be many consultant and vendor businesses that will thrive on stimulus money. Healthcare is unique in that storage of electronic health records is highly distributed between primary care physicians, specialist doctors, hospitals, and insurance/HMO organizations. Information has to be efficiently shared among these entities with great sensitivity towards patient privacy and legitimate claims processing. Patients want to prevent over zealous employers from performing unauthorized background checks on medical history; claim processors want to prevent paying fraudulent claims arising from targeted patient identity theft. The bill has two provisions which turn this into a tremendously challenging plan, and a daunting task for securing patient data: * Citizens will have the right to monitor and control use of their own health data. This implies a large centralized identity and access control service, or perhaps a federated network of patient registration directories. Authenticated users will be able to reach into the network of health databases audit use of their data and payment history. * Health organizations suffering loss of more than 500 patient records must publicly disclose the breach, starting with postings on the government's Health and Human Services website. This allows related organizations to trace the impact of the breach throughout the healthcare network, but care must be taken not to disclose vulnerabilities in the system to intruders

Data Privacy Trends: Randy Sabett, Information Security Attorney March 26, 2009 Activity at the State Level Points Toward a Federal Data Breach Notification Law Data privacy legislation -- the trend started in California and is being discussed heatedly in Massachusetts today. Data breach notification and privacy laws have now been enacted in 40 separate states, and government observers think we're close to seeing federal legislation proposed. In an exclusive interview, Randy Sabett, a noted privacy/information security attorney, discusses: Trends in state data privacy legislation; What these laws mean to businesses; The Obama Administration's approach to data privacy; Trends to keep an eye on throughout 2009. Randy V. Sabett, CISSP, is a partner in the Washington, D.C. office of Sonnenschein Nath & Rosenthal LLP, where he is a member of the Internet, Communications & Data Protection Practice. He counsels clients on information security, privacy, IT licensing, and patents, dealing with such issues as Public Key Infrastructure (PKI), digital and electronic signatures, federated identity, HIPAA, Gramm-Leach-Bliley, Sarbanes-Oxley, state and federal information security and privacy laws, identity theft and security breaches. He served as a Commissioner for the Commission on Cyber Security for the 44th Presidency.

With identity theft on the upswing, Aram Langhans thought he was simply being prudent when he asked the Yakima Heart Center to remove his Social Security number from its files. "They had my insurance card and my driver's license. What else did they need?" said Langhans, a retired public school teacher insured by Group Health. Langhans said he was initially hooked up to a portable heart monitor that he was to wear for 24 hours, but the disagreement over his Social Security number prompted upper-level personnel to change their minds. He said moments after the device was attached, he was sent to a restroom to remove it and turned away. Shawnie Haas, administrator of the Heart Center, an independent outpatient group practice, declined to discuss the incident. But she said in an e-mail statement that the practice protects patients' privacy. "The Yakima Heart Center is careful to collect data pertinent to ensuring accuracy of our patient's medical record. Routine information collected for all patients includes name, address, date of birth, Social Security number, gender, and other specific information that helps us verify that individual's identity and insurance enrollment or coverage data. We are careful to maintain confidentiality of all patient information in our system." According to state and federal regulators, private insurance companies have moved away from using Social Security numbers for patient identification. But health-care providers in the Yakima Valley say they routinely collect them as "backup" in the event that patients' insurance doesn't pay the claim.

Social networking users are more vulnerable than ever and taking more risks with their online privacy. According to the 'Bringing Social Security to the Online Community' poll by AVG, while the social networking community has serious concerns about the overall security of public spaces, few are taking the most basic of steps to protect themselves against online crimes. Participants indicated concern over growing phishing, spam and malware attacks, and nearly half of those surveyed are very concerned about their personal identity being stolen in an online community. Despite widespread use of social networks at home and/or at work, 64 per cent of users infrequently or never change their passwords on a regular basis, while 57 per cent infrequently or never adjust their privacy settings. Further, 21 per cent accept contact offerings from members they do not recognise, more than half let acquaintances or roommates access social networks on their machines, 64 per cent click on links offered by community members or contacts and 26 per cent share files within social networks. As a result of this widespread proliferation of links, files and unsolicited contacts, nearly 20 per cent have experienced identity theft, 47 per cent have been victims of malware infections and 55 per cent have seen phishing attacks.

Never mind landing the job. Now people on the lookout for employment have another cause for worry: identity theft. As the joblessness rate soars, scammers are ginning up fake Web sites or posing as recruiters to trick job seekers into giving up sensitive personal information. Corneilus Allison became a potential target after he applied for a position at Aetna (AET) in January, court documents show. In hopes of securing a position at the insurer, he entered required personal information into Aetna's job Web site. In May he received a response-but it wasn't an offer of employment. Aetna instead told him that his personal information, including his Social Security number, might have been compromised. Hackers had found their way into Aetna's job application site, managed by an outside vendor, nabbed e-mail addresses of job seekers, and sent correspondence as if from Aetna asking for additional personal information.

Symantec may not be concerned about the much-discussed Conficker virus, but the company is now dealing with an incident involving its own data security. Two weeks ago, the BBC published an investigative report in which reporters, working with an India-based middleman, bought credit-card information obtained from a Symantec call center. Cris Paden, a spokesman for the Cupertino, Calif., security-software firm, said it sent warning letters to the slightly more than 200 customers affected by the theft. It began an internal investigation immediately after being notified by the BBC. "We believe this was an isolated incident," Mr. Paden said, "but as the investigation continues, we will promptly notify any additional customers affected by the situation and will take appropriate action to protect their interests." In a letter to New Hampshire's attorney general, Symantec said, "We have no evidence that the credit card information of any United States resident was actually compromised." Mr. Paden added that to his knowledge, none of the stolen credit cards were used before their owners canceled them.

"The inspector general of the National Archives and Records Administration is investigating a potential data breach affecting tens of millions of records about U.S. military veterans, Wired.com has learned. The issue involves a defective hard drive the agency sent back to its vendor for repair and recycling without first destroying the data. The hard drive helped power eVetRecs, the system veterans use to request copies of their health records and discharge papers. When the drive failed in November of last year, the agency returned the drive to GMRI, the contractor that sold it to them, for repair. GMRI determined it couldn't be fixed, and ultimately passed it to another firm to be recycled. The incident was reported to NARA's inspector general by Hank Bellomy, a NARA IT manager, who charges that the move put 70 million veterans at risk of identity theft, and that NARA's practice of returning hard drives unsanitized was symptomatic of an irresponsible security mindset unbecoming to America's record-keeping agency."

"Yesterday, the U.S. District Court for the District of Columbia issued the attached opinion upholding the American Bar Association's challenge to the FTC's Identity Theft Red Flags Rule and enjoining the FTC from enforcing its Rule against lawyers. This memorandum opinion follows an October 29 oral argument and bench ruling. This ruling may have significance beyond the legal profession, and may limit the FTC's ability to enforce its Red Flags Rule against professionals, retailers, health care providers and other businesses that bill their clients and customers in a manner similar to lawyers. "

"The Identity Theft Resource Center (ITRC) reported its annual breach data for 2009 last week, and for the first time malicious attacks were more frequently identified as the source of those breaches than human error. In its "2009 Data Breach Report," the ITRC found 498 publicly disclosed breaches last year, down from 657 the year before. The downturn could have resulted from changes in breach disclosure, rather than a real drop-off in system compromises, the organization says. Interestingly, paper breaches now account for 26 percent of data leaks, up 46 percent compared to 2008. Malicious attacks outnumbered breaches attributed to human error for the first time in the three years the report has been compiled. The business sector accounted for 41 percent of data breaches, up from 21 percent the year before. Approximately 222 million records were compromised, the organization says -- and about 130 million of those came from the single breach at Heartland Payment Systems. Out of 498 breaches, only six reported they had either encryption or other strong security features protecting the exposed data, the ITRC says . "

Expect more action from the FTC on data privacy breeach

"As many as 68,000 members of CalOptima, the Medicaid plan for Orange County, California, may be at risk of identity theft and fraud after several CDs containing their personal information disappeared while in transit, the agency reported. "CalOptima's claims scanning vendor sent the electronic media devices to CalOptima through the U.S. Postal service by certified mail," the agency said. "On Tuesday, October 13, 2009, CalOptima discovered the apparent loss of the devices when the external packaging materials were delivered by the U.S. Postal Service without the box containing the devices." The missing discs include patient information such as names, addresses, Social Security numbers, diagnoses, and billing codes. CalOptima said it notified state and federal agencies of the breach on October 14, and posted an alert on its Web site on October 15."

Last week, the government took another step toward closing a legal loophole in federal privacy and security rules for emerging Health 2.0 information technology applications by issuing proposed rules aimed at covering an estimated 900 companies and organizations offering personal health records and electronic systems connected to them. The Federal Trade Commission was careful to point out its new interim proposed rule on federal breach notification requirements for the developers of electronic PHR systems did not apply to covered organizations or their business associates as defined by the Health Insurance Portability and Accountability Act of 1996, heretofore the key federal privacy and security regulation. The FTC, operating under new authority given it by the American Recovery and Reinvestment Act of 2009, noted that its new rule seeks to cover previously unregulated entities that are part of a Health 2.0 product mix. FTC staff estimates that about 200 PHR vendors, another 500 related entities and 200 third-party service providers will be subject to the new breach notification rule. The staffers estimate that the 900 affected companies and organizations, on average, will experience 11 breaches each per year at a total cost of about $1 million per group, per year. Costs include investigating the breach, notifying consumers and establishing toll-free numbers for explaining the breaches and providing additional information to consumers. Pam Dixon, founder and executive director of the World Privacy Forum, said that this isn't the first involvement of the FTC in healthcare-related regulation, noting the consumer protection agency joined with the Food and Drug Administration in a joint statement on the marketing of direct-to-consumer genetic tests. The FTC also has worked in the field of healthcare competition. She noted the compliance deadline with the FTC's "red flag rules" on provider organizations that provide consumer credit to patients for installment payment

IT and business both understand the need to protect regulated customer and business data -- so long as they're in business, analysts say. Here's a look at how some folding businesses are falling short protecting data and the possible liabilities for the IT group and CIO. From HIPPA to Sarbox, a slew of regulations to protect customer and employee data force CIOs to step lively to comply. The punishment for failure to do so is costly and even dire. But once a company folds-and more are folding every week given the economy-what happens to that data? Who in the business and IT could be hit by the splatter if it all hits the fan? "Certain companies have been disposing of records containing sensitive consumer information in very questionable ways, including by leaving in bags at the curb, tossing it in public dumpsters, leaving it in vacant properties and/or leaving it behind in the offices and other facilities once they've gone out of business and left those offices," says Jacqueline Klosek, a senior counsel in Goodwin Procter's Business Law Department and a member of its Intellectual Property Group. "In addition, company computers, often containing personal data, will find their ways to the auction block," she adds. "All too often, the discarded documents and computer files will sensitive data, such as credit card numbers, social security numbers and driver's licenses numbers. This is the just the kind of data that can be used to commit identity theft." Discarded and unguarded data is now low-hanging fruit for criminal harvesters and corporate spies. "Recent client activity supports that competitors are beginning to buy up such auction devices specifically with the intention of trying to salvage the data," says James DeLuccia, author of IT Compliance & Controls. "Hard drives are being removed and sold online, or whole servers are sold via Craigslist and Ebay." In some cases, the courts insist data be sold during a bankruptcy. "Company servers, once I restore

Incident demonstrates that even agencies that put in security controls are still vulnerable The Federal Aviation Administration was doing such a good job at protecting data in its computer systems that the Office of Management and Budget chose it in January to be one of four agencies to guide other federal agencies in their cybersecurity efforts. Just a month later, FAA officials had to admit that hackers breached one of the agency's servers, stealing 48 files. Two of the files contained information on 45,000 current and former FAA employees, including sensitive information that could potentially make them vulnerable to identity theft. The security breach, although significant and potentially far reaching, is not necessarily a reflection on FAA's security measures. Rather, it demonstrates the problems of securing federal computer systems and difficulty in evading every potential attack. "Every agency is living through the same problems," but most are being less forthcoming about reporting them, said Alan Paller, director of the SANS institute. "FAA should get kudos for rapid action. Slamming them shows a complete lack of understanding about the state of security in federal agencies."

Up to 21,000 Floridians may have been affected by a data breach at Wyndham Hotels & Resorts last year, prompting Attorney General Bill McCollum to ask consumers to keep a close eye on their credit statements. According to a statement released today, Wyndham reported to the Attorney General's Office that it contacted affected consumers in December and notified them that unauthorized access to Wyndham systems had potentially compromised their personal data on their debit and credit cards. The data breach has since been disabled. McCollum encouraged consumers to report any suspicious activity on their accounts to law enforcement. Affected consumers are encouraged to take precautionary steps, including obtaining a free fraud alert from one of the credit reporting agencies. Anyone who believes they may be a victim of identity theft should also request that the national credit bureaus place a fraud alert on their credit reports. Consumers should notify banks and creditors involved of questionable charges or accounts, keep records of all telephone calls and follow up in writing with credit bureaus, banks and creditors.

A recent data breach study commissioned by the state of Maine sheds light on the losses banks experienced as a result of the data breaches at TJX and Hannaford Brother's supermarkets. The state's banks said they incurred $2.1 million in expenses related to data breaches since January 1, 2007. The Hannaford breach had the largest impact, affecting 71 financial institutions and incurring $1.6 million in expenses according to the Maine Data Breach Study. Hannaford is based in Scarborough, Maine. The TJX breach accounted for $485,000 in expenses. The report was issued by the Main Bureau of Financial Institutions in November 2008. It studied the impact of data security breaches on Maine banks and credit unions. Fifty credit unions and 25 banks headquartered in Maine responded to the survey. Financial institutions reported more than 18 million records breached last year, according to the Identity Theft Research Center. The San Diego-based nonprofit found that data breach reports across five industry sectors jumped to 656 last year, up 47% from 2007. About 12% of the reports came from financial-services firms, up from 7% in 2007. In Maine, the Hannaford breach resulted in more than $318,000 in gross fraud losses, according to data reported by 22 financial institutions. More than 700 accounts were used to buy items fraudulently, although five of the 22 institutions that suffered a fraud loss did not report the number of accounts, according to the report. The Hannaford breach cost some banks as much as $58,000 to reissue credit cards to customers. Investigation expenses cost nearly $30,000 for some banks. Communication to customers cost nearly $28,000, some banks and credit unions reported. Fraud losses of nearly $45,000 were tied to the TJX data breach. The losses were reported by six financial institutions. The expenses for reissuing credit cards cost some banks as much as $32,000. Investigation expenses were as high as $21,000 for some banks. Communication to custom

Federal regulators on Tuesday met to hear about whether the benefits of cloud computing justify increased regulation, as privacy activists claim, or whether such an approach would do more harm than good. "We need to be smarter about dealing with technology, and cloud computing is posing (a) risk for us," said Hugh Stephenson, deputy director for international consumer protection at the Federal Trade Commission's Office of International Affairs. The FTC convened the two-day meeting in its offices here, which follows a series of similar workshops held in previous years on topics like spam, privacy, and behavioral advertising. The agency may file lawsuits to halt "unfair or deceptive acts or practices," meaning that if cloud computing is not unfair or deceptive, the FTC would likely not have jurisdiction. To secure personal information on the cloud, regulators may have to answer questions such as which entities have jurisdiction over data as it flows across borders, whether governments can access that information as it changes jurisdiction, and whether there is more risk in storing personal information in data centers that belong to a single entity rather than multiple data centers. The current panoply of laws at the state, national, and international level have had insufficient results; FTC Commissioner Pamela Jones Harbour cited a 2008 PricewaterhouseCoopers information security survey (PDF) in which 71 percent of organizations queried said they did not have an accurate inventory of where personal data for employees and customers is stored. With data management practices that are not always clear and are subject to change, companies that offer cloud-computing services are steering consumers into dangerous territory, said Marc Rotenberg, executive director of the Electronic Privacy Information Center. Already, problems of identity theft are skyrocketing, he said, and without more regulation, data management services may experience a collapse analogous to that

Reform legislation is expected to be introduced this spring to update the Federal Information Security and Management Act, known as FISMA. A major complaint about FISMA is that complying with its rules does not necessarily guarantee departmental and agency information systems are secure. In this exclusive interview, Sen. Tom Carper, chairman of the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security, discusses: Key provisions in the bill to improve ways to measure and determine the security of federal government information systems; Efforts to create a government-wide Chief Information Security Officer Council; His views on the most pressing cybersecurity challenges facing the nation: identity theft and the viability of financial institutions and threats by foreign nations to federal information systems.

The Interior Department's inspector general has found widespread mishandling and erratic tracking of special passports issued to department officials traveling overseas, alleging that in numerous instances employees violated federal privacy laws by improperly securing passports and passport application forms. In some cases, officials couldn't account for expired passports of former employees, and could not locate a passport once issued to former Interior secretary Gale Norton. The inspector general's report warned that such mismanagement and lax protection could result in cases of fraud or identity theft impacting current and former employees. "Given the risk of misuse that missing and unsecured passports, visas and passport applications pose, we cannot understate the importance of acting swiftly to address these violations and prevent their recurrence," Acting Inspector General Mary L. Kendall wrote in a memo sent with a copy of the report last week to Interior Secretary Ken Salazar.

Hackers, possibly from Asia, have stolen about a decade's worth of personal information on current and former UC-Berkeley students, the university announced Friday. The breaches involved records dating to 1999 at the school's health center that included Social Security numbers, health insurance information, immunization history and the names of treating physicians. No other treatment-related records were stolen, the university said, although self-reported medical histories of students who studied abroad were hacked. The school on Friday sent e-mails and letters to 160,000 people, including about 3,400 Mills College students who used or were eligible for University of California-Berkeley medical services. About 97,000 people are most at risk because their names and Social Security numbers could be connected by the hackers, said Steve Lustig, the university's associate vice chancellor for health and human services. "What's been taken is bits of data that the thief might put together into an identity," he said. The university traced the hackers back to Asia, possibly China, but the exact origin could not be pinpointed. UC and FBI investigators are probing the breaches, which apparently occurred over several months. An FBI spokesman said the agency was informed of the hacking immediately, but declined to provide more information. The thefts were discovered about a month ago, but system administrators did Advertisement not realize the breadth of the attack until April 21. The hackers disguised their work as routine operations and then left taunting messages for UC-Berkeley employees, said Shelton Waggener, the university's associate vice chancellor for information technology. The thieves accessed the information through the university Web site, he said. "You should think of it as a public building," Waggener said. "They got into the building properly, but then they broke into secure areas." Administrators at Mills College, which contracts with UC-Berkeley for

Four HIV-positive patients whose records were left behind on an MBTA train by a Massachusetts General Hospital employee are suing the hospital, claiming their privacy has been breached. In March the hospital notified 66 patients who received care at its Infectious Disease Associates outpatient practice that billing records bearing their names, Social Security numbers, doctors, and diagnoses had been lost by a manager who was riding the Red Line. She had brought the paperwork home for the weekend, but left it on the train when she returned to work the morning of Monday, March 9, according to hospital security reports. Last week two patients who are HIV-positive filed a suit in Suffolk Superior Court against the hospital and the unidentified billing manager. The unnamed plaintiffs have been joined by two other HIV-positive people. The legal action was first reported in the weekly newspaper Bay Windows. Their lawyer, John Yasi of the Salem law firm Yasi and Yasi, said in an interview he has filed a motion to make the suit a class action that could cover all 66 patients, a significant number of whom are also HIV-positive. "The damages that jump out are the emotional distress surrounding the loss of obviously very sensitive medical information and secondarily the loss of personal security information," he said. "A Social Security number in reality may lead to identity theft, which we all know is a nightmare."