Government Finalizing Medical Data Breach Notification Rules

Medical data breaches are on the rise. Much in the same way that credit card breach notifications skyrocketed following California's enactment of SB 1386, California's medical breach laws are doing the same now with patient data. Unlike financial breaches, however, federal rules are now coming into play.Since January, following California's medical data breach rule, which requires health care organizations to report both suspected and known data breaches of patient data, California officials received 800 reports of health data breaches.

Brace yourself: there will be many more medical data breaches to be reported going forward, thanks to steps being taken by the federal government.

Last week, the Federal Trade Commission finalized its rules to determine what types of businesses must inform consumers when the security or privacy of their PHI has been compromised. The move is part of the American Recovery and Reinvestment Act of 2009, and it applies to organizations that are not currently covered by HIPAA. From the FTC statement:

"The rule applies to both vendors of personal health records - which provide online repositories that people can use to keep track of their health information - and entities that offer third-party applications for personal health records. These applications could include, for example, devices such as blood pressure cuffs or pedometers whose readings consumers can upload into their personal health records. Consumers may benefit by using these innovations, but only if they are confident that their health information is secure and confidential."

The move is aimed to fill the gap between HIPAA covered entities, and new Web and Internet-based services that are not insurance companies or health care providers.

According to the FTC, a final report will be issued by the Department of Health and Human Services by February 2010, on the potential privacy, security, and breach-notification requirements for vendors of personal health records and related entities that are not subject to HIPAA. This "final" rule issued today applies only to the mandate that covered entities notify their consumers of breaches. More information is available from the FTC here.

Shortly thereafter, the U.S. Dept. of Health and Human Services (HHS) released its own interim final rule on health data breach notification that applies to HIPAA covered entities. From the HHS's statement:

"The regulations, developed by the HHS Office for Civil Rights (OCR), require health care providers and other HIPAA covered entities to promptly notify affected individuals of a breach, as well as the HHS Secretary and the media in cases where a breach affects more than 500 individuals. Breaches affecting fewer than 500 individuals will be reported to the HHS Secretary on an annual basis. The regulations also require business associates of covered entities to notify the covered entity of breaches at or by the business associate."

The public has 60 days to comment and the Breach Notification Interim Final Regulation is available in this PDF.

Whether or not such notifications actually help consumers, or force companies to improve security are questions for a future post. For now, all we know is more medical data breach notifications are on the horizon.