UCLA Health System has agreed to pay $865,500 to settle potential federal violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Announced Thursday, the settlement follows an investigation that alleged UCLA Health System employees violated privacy rules when they examined the electronic protected health information of celebrity patients.

The investigation by the U.S. Department of Health and Human Services' (HHS') Office for Civil Rights (OCR) was sparked by two separate complaints filed with OCR on behalf of two celebrity patients who received care at UCLA Health System.

The complaints alleged that hospital employees repeatedly and without permission examined the electronic protected health information of these patients. OCR's investigation into the complaints revealed that from 2005-2008, unauthorized employees repeatedly looked at the electronic protected health information of numerous other UCLA Health System patients.

"Covered entities are responsible for the actions of their employees. This is why it is vital that trainings and meaningful policies and procedures, including audit trails, become part of the everyday operations of any health care provider," OCR director, Georgina Verdugo, said in a statement. "Employees must clearly understand that casual review for personal interest of patients' protected health information is unacceptable and against the law."

Through policies and procedures, entities covered under HIPAA must reasonably restrict access to patient information to only those employees with a valid reason to view the information and must sanction any employee who is found to have violated these policies.

While HHS did not disclose the names of the celebrity patients who filed the complaints, the hospital disclosed in 2008 that employees were snooping on the personal health records of celebrities such as Tom Cruise and Farrah Fawcett.

In 2008, former hospital administrative specialist, Lawanda Jackson, pleaded guilty to selling information to the National Enquirer from the files of Britney Spears, Farrah Fawcett, and other high-profile celebrities. She died from complications of breast cancer before she could be sentenced.

In 2010, Huping Zhou, a former medical school researcher at the hospital, was sentenced to four months in federal prison and fined $2,000 for reading the confidential medical files of co-workers and celebrities such as Drew Barrymore, Arnold Schwarzenegger, and Tom Hanks.

In the meantime, the hospital said it will commit to a corrective action plan and implement measures that will bring its systems into greater compliance with patient privacy rules.

The plan requires the hospital to implement privacy and security policies and procedures approved by OCR, to conduct regular and robust trainings for all UCLA Health System employees who use protected health information, to sanction offending employees, and to designate an independent monitor who will assess UCLA Health System compliance with the plan over three years.

In a statement issued by the hospital, Dr. David Feinberg, CEO of the UCLA Hospital System and associate vice chancellor for health sciences, said patients' privacy is of paramount importance.

"We appreciate the involvement and recommendations made by OCR in this matter and will fully comply with the plan of correction it has formulated. We remain vigilant and proactive to ensure that our patients' rights continue to be protected at all times," Feinberg said.

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