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Rite Aid's $1 Million Settlement: More Good Enforcement News

Rite Aid Corp. having to pay a $1 million settlement to possible Health Insurance Portability and Accountability Act (HIPAA) violations is another right step in the direction of enforcement.

It's also another glaring example of the lackadaisical attitude businesses and the medical community have toward securing patient medical records. Rite Aid Corp agreed to pay the $1 million to resolve Department of Health and Human Services allegations that the company didn't take the proper steps to protect the health data customers provided.

The investigation into Rite Aid started after a news organization, WTHR, essentially traveled to number of cities to dumpster dive (an old and wildly successful hacking tactic) into the trashcans of pharmacies. The reporters found pharmacy labels, job applications, and other sensitive data. Soon the HHS Office for Civil Rights (OCR) and the FTC were investigating potential HIPAA violations:

OCR, which enforces the HIPAA Privacy and Security Rules, opened its investigation of Rite Aid after television media videotaped incidents in which pharmacies were shown to have disposed of prescriptions and labeled pill bottles containing individuals’ identifiable information in industrial trash containers that were accessible to the public. These incidents were reported as occurring in a variety of cities across the United States. Rite Aid pharmacy stores in several of the cities were highlighted in media reports.

Disposing of individuals’ health information in an industrial trash container accessible to unauthorized persons is not compliant with several requirements of the HIPAA Privacy Rule and exposes the individuals’ information to the risk of identity theft and other crimes. This is the second joint investigation and settlement conducted by OCR and FTC. OCR and FTC settled a similar case involving another national drug store chain in February 2009.

The HIPAA Privacy Rule requires health plans, health care clearinghouses and most health care providers (covered entities), including most pharmacies, to safeguard the privacy of patient information, including such information during its disposal.

It sure does. And it's surely too often ignored as we covered similar incidents in recent posts Patient Data Dump Nets Urgent Care Center $50,000 Fine and Medical Records Keep Getting Dumped.

The investigation found that:

Rite Aid failed to implement adequate policies and procedures to appropriately safeguard patient information during the disposal process;

Rite Aid failed to adequately train employees on how to dispose of such information properly; and
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Rite Aid did not maintain a sanctions policy for members of its workforce who failed to properly dispose of patient information.

In addition to the $1 million resolution payment, Rite Aid must implement the following corrective actions:

Revising and distributing its policies and procedures regarding disposal of protected health information and sanctioning workers who do not follow them;

Training workforce members on these new requirements;

Conducting internal monitoring; and

Engaging a qualified, independent third-party assessor to conduct compliance reviews and render reports to HHS.

As with most FTC consent orders relating to privacy and security, Rite Aid will have to undergo external independent assessments of its stores' level of compliance to the consent order. And the action is in place for 20 years.

Hopefully (yet, unlikely) this will open the eyes of others who handle medical data to do so properly.

For my security and technology observations throughout the day, find me on Twitter.

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