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"Can personal medical data that has been stripped of its identifiers to protect privacy later be used to identify a specific person? That is the question that the Health and Human Services Department is hoping a research contractor can answer. HHS intends to hire a contractor to demonstrate either the "ability or inability" to re-identify data from a data set that has been de-identified under the Health Information Portability and Accountability Act (HIPAA) Privacy Rule, according to a Jan. 4 notice on the Federal Business Opportunities Web site. De-identification and re-identification of patient data have become hot issues in the discussion about how to protect patient privacy while advancing adoption of electronic health records. The Obama administration is distributing at least $17 billion in incentive payments to doctors and hospitals who buy and use digital systems for medical data."

Hospital CIOs, chief information security officers, and privacy officers are working diligently to keep their names off that wall. But they are dealing with a regulatory environment that is still in flux. A final rule that will strengthen HIPAA privacy and security safeguards is due out before the end of the year. HHS also has proposed a rule for the accounting of disclosures from electronic records. The biggest shift under way may be a new enforcement regime as the HHS Office for Civil Rights (OCR) shifts gears from only reacting to data breach reports to begin random audits of the privacy and security safeguards of large and small providers and their business associates. Another new wrinkle under the HITECH Act is that state attorneys general can file civil lawsuits for HIPAA violations.

Health IT industry leaders and privacy advocates are watching carefully to see how the federal government will enforce expanded health data breach notification rules set to take effect this week, Federal Computer Week reports. HHS' breach-notification rule, which applies to HIPAA-covered entities and business associates, is scheduled to take effect tomorrow. The Federal Trade Commission's companion rule, which applies to personal health record vendors and other non-HIPAA-covered entities, is scheduled to take effect Thursday. The federal economic stimulus package mandated the creation of both rules.

The federal government has a key role to play in researching and organizing a national response to the problem of medical identity theft, authors of a government-funded study have concluded. Patients, providers, payers and other members of the healthcare community also must join in the effort to combat a problem that is serious, although as yet its scope is not fully known, the report stated. Contractor Booz Allen Hamilton released the report last week. It represents the final phase of the $450,000 study funded last year by the Office of the National Coordinator at HHS. The study consisted of three parts, the first being to review existing knowledge about medical identity theft as well as policies and practices to prevent it. Those findings were included in a research paper on the subject released last October. The second phase involved a public meeting Oct. 15, 2008, the same day the paper was released, to "open a dialogue about medical identity theft within the healthcare industry. The final phase, the 26-page report, includes 31 "potential actions," which are recommendations that could form a national policy on medical identity theft. While medical identity theft "may be categorized as healthcare fraud," according to the report, "there are unique and important distinctions of medical identity theft that need to become more commonly understood to address this issue effectively." One difference, the report authors noted, is that the primary motive behind healthcare fraud "is most often monetary gain, such as when fraudulent providers bill for more expensive services than those rendered. However, medical identity theft tends to be focused on the use of someone else's information to gain goods, services and healthcare." IT could hurt, help Therefore, undetected medical identity theft poses medical risks to its victims, since their medical records may contain inaccurate and potentially harmful information that may cause them not to be con

The Federal Trade Commission today approved a final consent order settling claims that CVS Caremark violated customers' privacy and the Health Information Portability and Accountability Act (HIPAA) when it failed to dispose of records properly last year. Earlier this year, CVS Caremark agreed to settle FTC charges that it failed to take reasonable and appropriate security measures to protect the sensitive financial and medical information of its customers and employees, in violation of federal law. In a separate but related agreement, the company's pharmacy chain also has agreed to pay $2.25 million to resolve Department of Health and Human Services allegations that it violated HIPAA regulations. "This is a case that will restore appropriate privacy protections to tens of millions of people across the country," said FTC chairman William Kovacic following the settlement. "It also sends a strong message to other organizations that possess consumers' protected personal information. They are required to secure consumers' private information." Under the final consent order, CVS Caremark is required to rebuild its security and confidentiality program, which will be audited every two years for the next 20 years. The HHS settlement requires the company to develop a new training program to instruct employees on how to handle patient data.

"The U.S. Department of Health and Human Services issued an interim final rule to beef up penalties for violations of the Health Insurance Portability and Accounting Act (HIPAA), as several Congressmen criticize the agency for leaving dangerous loopholes in the law. The new rules significantly increase penalty amounts that the U.S. Department of Health and Human Services can impose for HIPAA violations of patient privacy, according to a statement from HHS. The new rules reflect requirements enacted in the Health Information Technology for Economic and Clinical Health (HITECH) sections of the American Recovery and Reinvestment Act (ARRA) of 2009. Before HITECH, maximum penalties were $100 for each violation or $25,000 for all identical violations of the same provision. A covered health care provider, health plan, or clearinghouse could be exempt from civil financial penalties if it demonstrated it did not know it violated the HIPAA rule. The HITECH act increases civil financial penalties by establishing tiered ranges of increasing minimum penalties, with a maximum $1.5 million for all violations of identical provisions. And a "covered entity" can plead ignorance as a protection only if it fixes the violation within 30 days of discovery."

The Federal Trade Commission today announced that it has approved a Federal Register notice seeking public comment on a proposed rule that would require entities to notify consumers when the security of their electronic health information is breached. The American Recovery and Reinvestment Act of 2009 (the Recovery Act) includes provisions to advance the use of health information technology and, at the same time, strengthen privacy and security protections for health information. Among other things, the Recovery Act recognizes that there are new types of Web-based entities that collect or handle consumers' sensitive health information. Some of these entities offer personal health records, which consumers can use as an electronic, individually controlled repository for their medical information. Others provide online applications through which consumers can track and manage different kinds of information in their personal health records. For example, consumers can connect a device such as a pedometer to their computers and upload miles traveled, heart rate, and other data into their personal health records. These innovations have the potential to provide numerous benefits for consumers, which can only be realized if they have confidence that the security and confidentiality of their health information will be maintained. To address these issues, the Recovery Act requires the Department of Health and Human Services to conduct a study and report, in consultation with the FTC, on potential privacy, security, and breach notification requirements for vendors of personal health records and related entities. This study and report must be completed by February 2010. In the interim, the Act requires the Commission to issue a temporary rule requiring these entities to notify consumers if the security of their health information is breached. The proposed rule the Commission is announcing today is the first step in implementing this requirement. In keeping with the Recover

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Woonsocket-based CVS Caremark Corp., the largest U.S. drugstore chain, has agreed to pay $2.25 million to settle federal charges that company employees compromised customer privacy by throwing prescription records and drug bottles into open trash bins. The Federal Trade Commission said its investigation with the Health and Human Services Department followed media reports that trash bins behind CVS pharmacies contained pill bottles bearing patient names, credit-card and insurance information, and Social Security numbers. The company also did not have adequate policies for disposing of that information, and did not sufficiently train employees to dispose of the information properly, the agencies said. The items that were not properly discarded included pill bottles, medication instruction sheets, computer order forms, payroll information, job applications and credit-card and insurance information. Those labels and forms contained personal information including Social Security numbers and credit card and insurance information, and in some cases, driver's license numbers and account numbers. Names of the patients' doctors were also included. The settlement "will restore appropriate privacy protections to tens of millions of people across the country," FTC chairman William Kovacic said in a statement. "It also sends a strong message" that organizations "are required to secure consumers' private information," he said.

In May 2008, the Office of the National Coordinator for Health Information Technology (ONC) awarded an approximately $450,000 contract to Booz Allen Hamilton to assess and evaluate the scope of the medical identity theft problem in the U.S. Medical Identity Theft Medical identity theft is a specific type of identity theft which occurs when a person uses someone else's personal health identifiable information, such as insurance information, Social Security Number, health care file, or medical records, without the individual's knowledge or consent to obtain medical goods or services, or to submit false claims for medical services. There is limited information available about the scope, depth, and breadth of medical identity theft. Dr. Robert Kolodner, National Coordinator for Health Information Technology, has noted that medical identity theft stories are being documented at an increasing rate, bringing to light serious financial, fraud, and patient care issues. ONC recognizes that health IT is an important tool to combat the threat of medical identity theft. We are seeking input from the public and other government agencies to better understand how health IT can be utilized to prevent and detect medical identity theft as well as build consumer trust in electronic health information exchange. ONC believes it is imperative to obtain a more comprehensive understanding of this issue from a variety of perspectives, and to create an open forum for dialogue to work proactively to address medical identity theft. Medical Identity Theft final report. The report summarizing health IT and medical identity theft issues raised at the town hall was completed January 15, 2009 and sets forth potential actions the Federal government and other stakeholders can undertake in working toward prevention, detection, and remediation of medical identify theft.