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Loss of a Single Laptop Leads to $50k Fine Against Idaho Hospice 188

netbuzz writes "Losing a single laptop containing sensitive personal information about 441 patients will cost a non-profit Idaho hospice center $50,000, marking the first such HIPAA-related penalty involving fewer than 500 data-breach victims. Yes, the data was not encrypted. 'This action sends a strong message to the health care industry that, regardless of size, covered entities must take action and will be held accountable for safeguarding their patients' health information,' says the Department of Health and Human Services."
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Loss of a Single Laptop Leads to $50k Fine Against Idaho Hospice

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  • by Anonymous Coward on Monday January 07, 2013 @09:44PM (#42513415)

    Require the people in charge of an organization to store THEIR personal data in any such repository. Then maybe they'd have more incentive to make sure it gets PROPERLY encrypted.

  • What a Joke (Score:5, Interesting)

    by Charliemopps ( 1157495 ) on Monday January 07, 2013 @10:01PM (#42513605)

    Having worked on many projects involving various levels of government regulation and compliance, and seeing all the different facets of security and what-not, I can state for a fact that a case like this will be looked at like "It was only a $50k fine? This security hardening project is costing us well over $200k and we still might have a breach that would lead to such a fine. Why are we even bothering?"

    We had a project that was basically just a fuzzy match for numbers that looked like credit card or social security numbers and delete them if it found them, just in case they got into a part of the database they shouldn't (like a customers stuck their social security number into their address, and yes, it's happened before) That project cost us $22,000. It ended up being a single line of SQL that ran as part of a service every hour. $50k is laughable. Security breaches like this should nearly bankrupt a company, there is no other way they'll be taken seriously. I'm involved in 5 different projects right now, each of them billing out at over $100k each, 3 of them revolve around privacy issues and government compliance. The fines issued for such breaches aren't even in our paperwork as a concern. The cost of a breach in regards to public image however has a very specific, very large number near the top of the chart. But we're in a business where people are paying attention to such things. These fines should START in the millions because preventing them costs in the hundreds of thousands of dollars.

  • by Kaenneth ( 82978 ) on Monday January 07, 2013 @10:02PM (#42513613) Homepage Journal

    Question; is there a differance between 'effective' encryption, and 'HIPAA Approved' encryption?

    From a legal standpoint, would cheap/free encryption like Truecrypt/PGP be acceptable, or do you need HIPAA certified encryption with enterprise key management, etc. for $1000 a seat?

    What stops your medical records being 'encrypted' with ROT13?

  • Re:What a Joke (Score:4, Interesting)

    by jklovanc ( 1603149 ) on Tuesday January 08, 2013 @12:51AM (#42514913)

    Perhaps the fine was sized to cause pain to the organization and not kill it. Everyone makes mistakes and there are consequences but those consequences should not be fatal. Now if it happened a second time the fines should be much larger. A third time should bankrupt the company.

  • Shit software (Score:5, Interesting)

    by Jarno Hams ( 1362467 ) on Tuesday January 08, 2013 @04:52AM (#42516027)
    I am going to assume the hospice is in a similar boat we are... and i will explain how its not as simple as the wand waivers above try to make it sound. I'm essentially the brat mentioned above. Small practice with about 7 providers and about 50 machines... Probably 50/50 desktops and laps. we use a shitbox EHR that was shoved down our throats because our old vendor sold the code to the highest bidder to acquire clients. Me and and 3,000 other clients are stuck with a "new" shit product, $100,000 in debt and India to call for "support". we don't have $22k for one line of SQL code. the EHR requires local users to be admins. Mind blowing. A gpo restriction against data to the local renders the box useless. No matter how many learning moments, hand slaps and write ups you have , users will never understand the difference between My Documents and the shared network drive where stuff is supposed to go. Ironically doctors are the worst. I wrote hundreds of pages of HIPAA policy and then tried to figure out how to encrypt and secure 50 xp machines running on aging dell 2350's/3000's and d510's. state hipaa auditor says we need essentially another $100,000 worth of new stuff and encryption. There is zero IT budget. I just yanked all the drives and am pxe booting thinstation to a terminal session. in the follow up, the auditor agreed it satisfies the encryption issue 100%, and she had never heard of that or seen it done but applauded me. There are thousands of office just like me who have no budget and are already drowning in debt from the non-free software rapists. The number one argument you will get from the business owners is no budget. dwindling reimbursements coupled with exponentially expensive responsibilities like this article make for a rough combo. I feel bad for the chaps in bumblefuck Idaho. They are probably barely scraping by, then this... I'd pitch the same solution i used that passed the hipaa audit to any of these other offices out there you might find who need help but can't afford anything else. Pass it on. /$.02

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