Data security
charges that they potentially violated Health Insurance Portability and Accountability Act (HIPAA) rules.
The two institutions also agreed to “a substantive corrective action plan, which included undertaking a risk analysis, developing a risk providing progress reports.” The combined monetary assessment is the largest HIPAA settlement to date.
AVMED In late 2013, AvMed settled a $3 million class action lawsuit related to the December 2009 theft of two unencrypted laptops, which contained personal information—including names, addresses, SSNs, and medical data—on 1.2 million AvMed members. The settlement was unique, as theft. The agreement required AvMed to pay impacted customers $10 for each year they paid premiums prior to the theft, with a maximum of $30.
The settlement explained the amount as a ‘refund of premium
overpayment’—money that AvMed should have spent on data security. claim reimbursement from AvMed.
THE RESPONSIBILITY TO PROTECT PRIVATE DATA The regulatory environment, at both state and federal levels, has evolved more proactive in their requirements and enforcement actions pertaining to safeguarding PHI.
include various new requirements for healthcare organizations’ collection, storing, and processing of PHI, as well as standards for use 2014, covered healthcare organizations had to bring all of their Business Associate Agreements (BAAs) into compliance with the rules.
information (PII) and PHI to comply with numerous, sometimes organizations and business associates to monitor the changing regulatory landscape and maintain updated breach response plans.
SOLUTIONS Wells Fargo Insurance has the experience, knowledge, and market relationships to help your organization implement a comprehensive strategy for managing technology, network security, and privacy liability. Working with the industry’s leading insurance markets, we provide access
• Unauthorized access or use of computer systems; • Theft, loss, or wrongful disclosure of proprietary information; • Identity theft; • Data or network sabotage;
66 | HEALTHCARE RISK MANAGEMENT REVIEW | Annual 2014
“To ensure compliance, it is vital for healthcare organizations and business associates to monitor the changing regulatory landscape and maintain updated breach response plans.”
• • • Loss or theft of portable devices; • Errors and omissions related to technology and the internet; •
First-party business income loss and electronic data restoration expenses;
• • • For more information on this topic, contact Wells Fargo Insurance healthcare industry segment leader Terri Edwards at
terri.edwards@wellsfargo.com
This advisory is for informational purposes and is not intended to be exhaustive nor should any discussions or opinions be construed as legal advice. Readers should contact a broker for insurance advice or legal counsel for legal advice.
through third-party providers. Banking and insurance decisions are made independently
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