Catholic Health Care Services Agrees to $650,000 HIPAA Violation Settlement

Catholic Health Care Services of the Archdiocese of Philadelphia (CHCS) will pay $650,000 as part of a settlement for potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule stemming from a data breach due to the theft of a CHCS mobile device.

According to a statement from the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR), CHCS provided management and information technology services as a business associate to six skilled nursing facilities and the theft of a CHCS mobile device compromised the protected health information (PHI) of 412 nursing home residents. The settlement included the $650,000 payment and a corrective action plan.

In the statement about the resolution agreement, HHS stated, “In determining the resolution amount, OCR considered that CHCS provides unique and much-needed services in the Philadelphia region to the elderly, developmentally disabled individuals, young adults aging out of foster care, and individuals living with HIV/AIDS.”

OCR will monitor CHCS for two years as part of this settlement agreement, helping ensure that CHCS will remain compliant with its HIPAA obligations while it continues to act as a Business Associate. 

“Business associates must implement the protections of the HIPAA Security Rule for the electronic protected health information they create, receive, maintain, or transmit from covered entities,” HHS OCR Director Jocelyn Samuels said in a statement. “This includes an enterprise-wide risk analysis and corresponding risk management plan, which are the cornerstones of the HIPAA Security Rule.”

According to the HHS statement, OCR initiated its investigation on April 17, 2014, after receiving notification that CHCS had experienced a breach of PHI involving the theft of a CHCS-issued employee iPhone. The iPhone was unencrypted and was not password protected. The information on the iPhone was extensive, and included social security numbers, information regarding diagnosis and treatment, medical procedures, names of family members and legal guardians, and medication information. “At the time of the incident, CHCS had no policies addressing the removal of mobile devices containing PHI from its facility or what to do in the event of a security incident; OCR also determined that CHCS had no risk analysis or risk management plan,” the HHS release stated.