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Those who are superstitious may believe that bad things happen on Friday the 13th, but we will leave it to each individual and entity to formulate conclusions regarding the Health Information Technology for Economic and Clinical Health Act (the HITECH Act), which Congress passed late on Friday, February 13, 2009, and President Obama officially signed into effect on February 17, 2009. The HITECH Act addresses various aspects relating to the use of health information technology (H.I.T.), including providing for federal funding by way of grants and incentive payments in order to promote H.I.T. implementation. This Alert focuses, however, on Subtitle D of the HITECH Act, which includes important, new and far-reaching provisions concerning the privacy and security of health information that will materially and directly affect more entities, businesses and individuals in more diverse ways than ever before. These changes are further elaborated upon below, but this Alert can only highlight certain prominent issues under the HITECH Act and is by no means a comprehensive review of this lengthy and complex Act. For questions and additional guidance on the HITECH Act, contact your Fox Rothschild attorney or the authors of this Alert. New Privacy and Security Requirements * Security Breach Notification Requirements: Security breach notification requirements under the HITECH Act go into effect 30 days after the date that interim final regulations are promulgated, which will be no later than 180 days after the date of enactment of the HITECH Act (August 16, 2009). Covered entities, business associates and vendors who handle personal health records are required to abide by breach notification requirements. Violations of this requirement by vendors would be treated as an unfair and deceptive act or practice in violation of the Federal Trade Commission Act. If a breach affects more than 500 individuals of a particular state, notice also must be provided to prominent media outl

A coalition of privacy groups today urged the Obama Administration to defend California's landmark financial privacy law against the banking industry's legal efforts to overturn it. The US Supreme Court is currently considering taking up the banks' appeal of a 2008 decision by the 9th Circuit Court upholding almost all provisions of the Financial Information Privacy Act of 2003 (SB 1 - Speier). On March 9th, the Supreme Court invited the Obama Administration to voice its opinion on the California privacy law. The case is American Bankers Association v. Brown, Supreme Court Docket Number 08-730. Letters to President Obama and Solicitor General Elena Kagan were signed by The Consumer Federation of California, Privacy Rights Clearinghouse, CALPIRG, Consumers Union, Consumer Action, The Older Women's League, The California Alliance for Retired Americans, and Chris Larsen, Propser Marketplace, and founder of Californians for Privacy Now, the organization that spearheaded a 2003 ballot initiative campaign that turned fierce banking industry opposition into acquiescence with SB 1. "This represents a defining moment for privacy rights" the letter states. We ask you to stand with consumers by telling the Supreme Court to reject the banks' appeal in Brown." Privacy advocates support the State of California's position in this legal matter, which is that there is no merit to the appeal filed by the American Bankers Association. At issue is whether federal laws preempt portions of California law that regulate the sharing of private consumer information within a financial institution's family of affiliates.

US senators have drafted legislation that would give the federal government unprecedented authority over the nation's critical infrastructure, including the power to shut down or limit traffic on private networks during emergencies. The bill would also establish a broad set of cybersecurity standards that would be imposed on the government and the private sector, including companies that provide software, IT work or other services to networks that are deemed to be critical infrastructure. It would also mandate licenses for all individuals administering to strategically important networks. The bill, which is being co-sponsored by Senate Commerce Committee chairman John Rockefeller IV and Senator Olympia Snowe, was expected to be referred to a senate committee on Wednesday. Shortly after a working draft of the legislation began circulating, some industry groups lined up to criticize it for giving the government too much control over the internet and the private companies that make it possible. "This gives the president too much power and there's too little oversight, if there's any at all," said Gregory Nojeim, senior counsel at the Center for Democracy and Technology. "It gives him the power to act in the interest of national security, a vague term that has been broadly defined." Nojeim was pointing to language in the bill that permits the president to "order the limitation or shutdown of internet traffic to and from any compromised federal government or United States critical infrastructure information system or network" after first declaring a national cybersecurity emergency. A separate provision allows the executive in chief to "order the disconnection of any federal government or United States critical infrastructure information systems or networks in the interest of national security." "It applies to any critical infrastructure," Nojeim added. "Surely, the internet is one." The bill would also require NIST, or the National Institute of Standards and Techn

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 country's largest office products store sold a returned computer hard-drive on clearance containing hundreds of personal files on it - a move privacy experts say violates key provisions of a privacy law requiring businesses to safeguard personal information of customers. The transaction occurred recently at a Staples Business Depot store in Ottawa, one of about 300 across the country. When the purchaser booted up the Maxtor mini, he found hundreds of files on the external hard drive. The files, totalling about 400, belonged to Jill Vickers, a retired political science professor from Carleton University. They included some research papers already in the public domain, but some were sensitive documents. "It is especially of concern to me as the files contain some 20 years of reference and assessment letters which are confidential documents," said Vickers, who recently purchased a new computer system for her home that initially included the Maxtor backup drive. When her son, who was tasked with transferring her files to the drive, noticed the daily automatic backup function was not functioning properly, he returned it to Staples. He thought he had deleted the files. "Even though it's not in my possession, it's my data. They should wipe it clean," Vickers said of Staples. Canwest News Service last week provided Staples with the model and serial number of equipment, as well as the receipt for the clearance purchase. A company spokeswoman said it required more time to gather the facts to comment on the specific incident. "We will continue to look into this," said Alessandra Saccal. In a statement, she reiterated, "privacy of any kind is of great concern to us, that is why we have procedures in place to clear any items with memory before being resold."

Industry Insiders Discuss HIT and HIPAA Issues March 30, 2009 by Astrid Fiano, Writer A significant part of President Obama's health care reform agenda is the push for implementing more health care technology. In the health care field privacy is always a major concern, and was the impetus of the Health Insurance Portability and Accountability Act of 1996--protecting the privacy of individually identifiable health information in all formats, and the confidentiality provisions of the Patient Safety Act--protecting identifiable information being used to analyze patient safety events. So those in the health care industry now wonder will the Administration's focus on health IT (HIT) present more challenges to privacy concerns? As part of a continuing focus on HIT issues, DOTmed interviewed industry expert Kirk J. Nahra, a partner in the Washington D.C. legal firm of Wiley Rein LLP, specializing in privacy and information security for the health care and insurance industries, and named an expert practitioner by the Guide to the Leading U.S. Healthcare Lawyers. DOTmed also interviewed Lise Rauzi, Vice President, Training Development, for Health Care Compliance Strategies (HCCS). HCCS provides online training compliance for employees. Nahra notes that regardless of the rising concern over privacy and the new HIT legislation, there have already been formal HIPAA security rules on electronic information in place for several years--the health care industry compliance has just been inconsistent. The problem -- to the extent there is one -- is that HIPAA rules are process-oriented, Nahra explained. The rules don't tell an entity what to do, but rather what to evaluate--a standard set of questions, but without a standard set of answers. For example, a covered entity has to have an internal audit, but the rules do not tell the entity how best to carry out that internal audit. Not surprisingly, different businesses have different ideas on how to implement their HIPAA evaluations

Top attorneys for Microsoft and Google today reiterated their companies' support for tougher government rules to protect consumer privacy. But when it comes to the details, some watchdog groups say they are concerned that Web firms will continue to fight against specific provisions that would limit the ways they can collect and use people's information to serve more targeted ads. Today's panel discussion, held here at the Computers, Freedom and Privacy conference, revisited a longstanding policy debate over the government's role in online privacy. The talk ran along some familiar plotlines, with Jeff Chester of the Center for Digital Democracy thundering about the detailed personal profiles being assembled by advertising companies who are using neuroscience to manipulate consumer behavior, while industry representatives assured the audience that their data-collection practices are benign, not to mention essential to providing free content and services on the Internet. But this wasn't just an idle debate. Rep. Rick Boucher, the Virginia Democrat who chairs a House subcommittee on the Internet, is developing legislation that could seek to impose sweeping restrictions on behavioral targeting. A few blocks up Pennsylvania Avenue at the Federal Trade Commission, the principal regulatory agency with authority over online advertising, newly minted Chairman Jon Leibowitz has spoken often about the need for industry to get serious about privacy. "The FTC's central concern here is transparency, consumer control," said Jessica Rich, assistant director of the agency's privacy and identity protection division. "We don't think consumers really know what's happening with their data."

Advertisers are your friend, and the government is here to help. If consumers don't take responsibility for their data, then all the regulation in the World won't matter.

The United States' 35-year-old federal privacy law and related policies should be updated to reflect the realities of modern technologies and information systems, and account for more advanced threats to privacy and security, according to a report sent today to OMB Director Orszag. In its 40-page paper, the National Institute of Standards and Technology's Information Security and Privacy Advisory Board calls for Congress to amend the 1974 Privacy Act and provisions of the 2002 E-Government Act to improve federal privacy notices; clearly cover commercial data sources; and update the definition of "system of records" to encompass relational and distributed systems based on government use of records, not just its possession of them. The panel included technology experts from industry and academia. The panel wants heightened government leadership on privacy and suggests the hiring of a full-time chief privacy officer at OMB and regular Privacy Act guidance updates from the office. Chief privacy officers should be hired at major agencies and a chief privacy officers' council should be created, much like the Chief Information Officers' Council that is chaired by OMB's e-government and IT administrator.

Google never fails to surprise. It's the scope and scale of their ambitions that impresses me ranging as they do from relatively simple applications that are just way cool such as Sky Map, through their Chrome Web browser (which is now looking pretty stable), to the subject of this newsletter: Google Health. Google Health, which was launched as a beta (of course) in spring 2008, is a free repository for your personal health information. Using the service you can create online health profiles for yourself, family members or others you care for (these profiles can include health conditions, medications, allergies and lab results), you can import medical records from hospitals and pharmacies, share your health records with "your care network" (which may include family members, friends and doctors), and browse an online health services directory to find services that are integrated with Google Health. After you sign up you can import your medical records from Allscripts, Anvita Health, The Beth Israel Deaconess Medical Center, Blue Cross Blue Shield of Massachusetts, The Cleveland Clinic, CVS Caremark, Healthgrades, Longs Drugs, Medco Health Solutions, Quest Diagnostics, RxAmerica and Walgreens. What you'll wind up with if you update all of the sections is a pretty complete health profile, which means that privacy has to be a concern. Interestingly, because becoming a subscriber is voluntary it appears that the service is exempt from the provisions of the Health Insurance Portability and Accountability Act of 1996.

DURING the Parliament session on Monday, MP of Ang Mo Kio GRC Ms Lee Bee Wah, asked the Minister of Information, Communications and Arts, Dr Lee Boon Yang, whether a comprehensive privacy law will be introduced to protect the privacy of individuals and their personal data. She also queried about the existing laws which are in place to protect people from spam mails and unauthorised sale of personal information, as well as protecting people whose photographs are posted on blogs and other new media platforms. Dr Lee's reply was: "The Government recognises the importance of data protection and the need to protect personal data. At the same time, we also appreciate the impact of data protection on businesses and the general public. I had previously informed the House that an Inter-Ministry Committee is reviewing Singapore's data protection regime. This review is on-going. We are currently looking into developing a data protection model that can best address Singapore's privacy concerns, commercial requirements and national interest. As data protection is a complex issue with extensive impact on all stakeholders, this review will take some time." With regards to unauthorised Use of personal data, he replied: "While there is currently no generic data protection law, it does not mean that there is no protection of personal data. In fact we have in place strict provisions in sectoral laws, such as the Banking Act and codes for medical professionals to protect sensitive financial and health information. There are also other industry codes of practices against the unauthorised use of personal information. For example, in the telecommunications sector, under the Telecom Competition Code, IDA requires licensees to take reasonable measures to prevent the unauthorised use of End User Service Information. A telecom licensee would be in breach of the Code if it shares with third parties its customers' information that was obtained from the use of its service, without the cust

The federal government would subsidize up to 65% of COBRA health insurance payments for many individuals who have lost their jobs since Sept. 1, 2008, under an $825 billion stimulus package unveiled by House Democrats. COBRA provisions are supported by health insurance groups, including America''s Health Insurance Plans and the National Business Group on Health. However, AHIP said other parts of the plan tying increased investment in health information technology to stricter scrutiny of how health IT records are handled would make it more difficult for plans to coordinate care and streamline administrative costs. Dubbed the American Recovery and Reinvestment Act, the House bill allocates $39 billion to aid individuals attempting to continue paying health insurance premiums through the 23-year-old Consolidated Omnibus Budget Reconciliation Act program. COBRA allows employees who are terminated or leave their jobs voluntarily to remain in their former employer''s group health plan for up to 18 months, which can be extended to 36 months for those with extenuating life circumstances. However, because COBRA enrollees can be charged up to 102% of the full cost of coverage, many find the plans prohibitively expensive and, according to Hewitt Associates Inc., only about 20% enroll. A recent report by the consumer group Families USA found monthly COBRA premiums for family coverage were $1,069, or 83.6% of the average monthly unemployment insurance benefit of $1,278. In nine states, average COBRA payments exceeded unemployment benefits, the group found. Health groups have been largely supportive of the proposal, with AHIP President Karen Ignagni writing in a letter to House Speaker Nancy Pelosi that the group believes the move would "help ensure continuity of coverage and serve as an important lifeline for many workers who do not qualify for Medicaid, but still need help paying their health insurance premiums."

A rule requiring healthcare providers, health plans, and other entities covered by the Health Insurance Portability and Accountability Act (HIPAA) to notify individuals of a breach of their unsecured protected health information will become effective September 23, 2009. The "breach notification" regulations implement provisions of the Health Information Technology for Economic and Clinical Health (HITECH) Act, which was part of the American Recovery and Reinvestment Act of 2009 (ARRA). The new "breach notification" regulations apply to HIPAA-covered entities and their business associates. HIPAA covered-entities include health plans, healthcare clearinghouses, and healthcare providers. A business associate is a person or entity (such as a healthcare benefits broker) who, on behalf of the covered entity, performs a function involving the use or disclosure of individually identifiable health information.

It was the annual crunch time between Thanksgiving and the new year, and Nuala O'Connor Kelly had just sent to the printer the first-ever report to Congress by a chief privacy officer. This was it, the historic reporta 40-page description of what O'Connor Kelly had been doing during her first year as the first CPO of the U.S. Department of Homeland Security. Like addressing concerns about DHS's policies with privacy officers from other countries. Examining the department's growing use of biometrics. And reading irate e-mails from the public about controversial initiatives like the Transportation Security Administration's passenger screening program. If O'Connor Kelly was nervous about the grilling she was likely to get once members of Congress got their mitts on her report, she wasn't letting on. "It's actually a great moment for the [privacy] office to sit back and take stock of where we are now and where we're going for the next two, three, four, five years," says O'Connor Kelly, dashing from one meeting to the next with one of her staff members. At the time, O'Connor Kelly was the only federal government CPO whose position was mandated by law and who was required to file an annual report to Congress. But this seemed on the brink of change. Congress's consolidated 2005 appropriations bill, signed by President Bush in December, contains a provision thatdepending on how the White House's Office of Management and Budget interprets itwould create a handful or more of CPOs at federal agencies.

Even as the Canadian government is fighting against "Buy American" policies that discriminate against Canadian firms, the federal government appears to be quietly continuing with policies that effectively block U.S. firms from winning some kinds of federal contracts. Case in point: a contract worth $150 million to help relocate nearly more than 18,000 public servants every year was awarded to the only Canadian bidder in mid-August. American firms were interested in the contract but say they were essentially blocked from the bidding because of a provision that personal information about Canadians cannot be stored on computerized databases outside of Canada. Canada Post, a Crown corporation, is about to award its own multimillion-dollar relocation services contract and it, too, has effectively blocked U.S. companies from bidding with a requirement that personal information be stored only on computers in Canada.

Google has released a more detailed privacy policy for its Google Books product, a move demanded in recent weeks by several critics of its settlement with publishers and authors. The company announced the new policy in a blog post late Thursday afternoon, saying it developed the policy following conversations with the U.S. Federal Trade Commission. Google had previously said it was unable to release a detailed policy because the Google Books product was incomplete due to the fact that the settlement allowing its Book Search project to display certain types of books has yet to be formally approved. However, criticism of Google's lack of detailed information on the subject appears to have forced its hand. "To provide all users with a clear understanding of our practices, and in response to helpful comments about needing to be clearer about the Books product from the FTC and others, we wanted to highlight key provisions of the main Google Privacy Policy in the context of the Google Books service, as well as to describe privacy practices specific to the Google Books service," wrote Jane Horvath, general privacy counsel for Google, in a blog post.

As I mentioned two weeks ago, a recent survey indicates that more than half of large companies have limited knowledge of which systems or applications their employees have access to. This marks a system access problem, and a growing risk during a period of frequent and large layoffs. If a company needs to turn off access manually (which is often the case), it may miss several user accounts that they don't realize exist. This leaves the door open for past employees, and others, to access important data, including financial information and customer information. To learn more about these open-door system risks, I asked Courion vice president Kurt Johnson about his firm's research.