August 8, 2013

Drinker Biddle’s HIPAA Compliance Update for Employee Benefit Plans August 2013

Breach Notification Rules under HIPAA Omnibus Rule  

This is the fourth in our series of bulletins on the Department of Health and Human Services’ (HHS) HIPAA Omnibus Final Rule. In our bulletins issued on February 28, 2013 and March 18, 2013, available here, we described the major provisions of this rule and explained how the provisions of the rule that strengthen the privacy and security of protected health information (PHI) impact employer sponsored group health plans, which are covered entities under the HIPAA privacy rules. In our bulletin issued on April 4, 2013, we focused on changes that will need to be made to business associate agreements under the Omnibus Final Rule. In this bulletin, we discuss the modifications to the breach notification rules made by the Omnibus Final Rule and provide health plan sponsors with information regarding the actions they must take to meet their breach notification obligations in the event of a breach of unsecured PHI.

Key Considerations for Health Plan Sponsors

  • Health plan sponsors must be able to identify when a breach occurs and when breach notification is required.
  • Health plan sponsors should review their procedures for evaluating potential breaches and should revise those procedures to incorporate the new “risk assessment” required under the Omnibus Final Rule.
  • Health plan sponsors should review their procedures for notifying individuals, HHS, and the media (to the extent required) when a breach of unsecured PHI occurs.
  • Health plan sponsors should make training workforce members about the breach notification rules a priority. Workforce members should be prepared to respond to breaches and potential breaches of unsecured PHI. A breach is treated as discovered by the covered entity on the first day a breach is known, or, by exercising reasonable diligence would have been known, to the covered entity. This standard is met if even one workforce member knows of the breach or would know of it by exercising reasonable diligence, and even if the breach is not immediately reported to the privacy officer. Discovery of the breach starts the clock ticking on the notification obligation and deadlines, which are described below.
  • Health plan sponsors should review each existing business associate agreement to make sure that responsibility for breach notification is allocated between the business associate and the health plan in a manner that is appropriate based on the business associate’s role with respect to PHI and the plan sponsor’s preferences for communicating with employees.

Health plan sponsors will want to review and revise, as necessary, the following to comply with the new rules described below: 

Compliance Checklist

Compliance Deadline

Group health plans have until September 23, 2013 to comply with the new requirements of the Omnibus Final Rule. During the period before compliance is required, group health plans are still required to comply with the breach notification requirements of the HITECH Act and the interim final regulations.

Of course, the best course of action is to maintain adequate safeguards to prevent any breach. A recent settlement of HIPAA violations resulting in a $1.7 million payment to HHS is discussed in a separate publication, available here.

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