HHS’ Office for Civil Rights Settles Ransomware Cyber-Attack Investigation

OCR Settles with Business Associate in attack affecting over 200,000 individuals

Yesterday, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) announced a settlement under the Health Insurance Portability and Accountability Act (HIPAA) with Doctors’ Management Services, a Massachusetts medical management company that provides a variety of services, including medical billing and payor credentialing. The HIPAA Privacy, Security, and Breach Notification Rules set forth the requirements that HIPAA-regulated entities must follow to protect the privacy and security of health information. The $100,000 settlement resolves a large breach report regarding a ransomware attack that affected the electronic protected health information of 206,695 individuals. Ransomware is a type of malware (malicious software) designed to deny access to a user’s data, usually by encrypting the data with a key known only to the hacker who deployed the malware, until a ransom is paid. This marks the first ransomware agreement OCR has reached.

October is Cybersecurity Awareness Month, and OCR has been working with health insurers, providers, and clearinghouses covered by HIPAA to ensure better data security. Ransomware and hacking are the primary cyber-threats in health care. In the past four years, there has been a 239% increase in large breaches reported to OCR involving hacking and a 278% increase in ransomware. This trend continues in 2023, where hacking accounts for 77% of the large breaches reported to OCR. Additionally, the large breaches reported this year have affected over 88 million individuals, a 60% increase from last year.

“Our settlement highlights how ransomware attacks are increasingly common and targeting the health care system. This leaves hospitals and their patients vulnerable to data and security breaches.” said OCR Director, Melanie Fontes Rainer. “In this ever-evolving space, it is critical that our health care system take steps to identify and address cybersecurity vulnerabilities along with proactively and regularly review risks, records, and update policies. These practices should happen regularly across an enterprise to prevent future attacks.”

On April 22, 2019, Doctors’ Management Services filed a breach report with HHS stating that approximately 206,695 individuals were affected when their network server was infected with GandCrab ransomware. The initial unauthorized access to the network occurred on April 1, 2017; however, Doctors’ Management Services did not detect the intrusion until December 24, 2018, after ransomware was used to encrypt their files. In April 2019, OCR began its investigation.

OCR’s investigation found evidence of potential failures by Doctors’ Management Services to have in place an analysis to determine the potential risks and vulnerabilities to electronic protected health information across the organization. Other findings included insufficient monitoring of its health information systems’ activity to protect against a cyber-attack, and a lack of policies and procedures in place to implement the requirements of the HIPAA Security Rule to protect the confidentiality, integrity, and availability of electronic protected health information.

Under the terms of the settlement agreement, OCR will monitor Doctors’ Management Services for three years to ensure compliance with HIPAA. In addition, Doctors’ Management Services has agreed to pay $100,000 to OCR and to implement a corrective action plan, which identifies steps that Doctors’ Management Services will take to resolve potential violations of the HIPAA Privacy and Security Rules and protect the security of electronic protected health information, including:

  • Review and update its Risk Analysis to identify the potential risks and vulnerabilities to Doctor’s Management Services data to protect the confidentiality, integrity, and availability of electronic protected health information.
  • Update its enterprise-wide Risk Management Plan (strategy to protect the confidentiality, integrity, and availability of ePHI) to address and mitigate any security risks and vulnerabilities found in the updated Risk Analysis.
  • Review and revise, if necessary, its written policies and procedures to comply with the Privacy and Security Rules.
  • Provide workforce training on HIPAA policies and procedures.

OCR recommends health care providers, health plans, clearinghouses, and business associates that are covered by HIPAA take the following best practices to mitigate or prevent cyber-threats:

  • Review all vendor and contractor relationships to ensure business associate agreements are in place as appropriate and address breach/security incident obligations.
  • Risk analysis and risk management should be integrated into business processes; conducted regularly and when new technologies and business operations are planned.
  • Ensure audit controls are in place to record and examine information system activity.
  • Implement regular review of information system activity.
  • Utilize multi-factor authentication to ensure only authorized users are accessing ePHI.
  • Encrypt ePHI to guard against unauthorized access to ePHI.
  • Incorporate lessons learned from incidents into the overall security management process.
  • Provide training specific to organization and job responsibilities and on regular basis; reinforce workforce members’ critical role in protecting privacy and security.

OCR regularly provides guidance and information to the health care industry to support data privacy and security.  In October, which is Cybersecurity Awareness month, OCR did the following to support improved cybersecurity:

The resolution agreement and corrective action plan may be found at: https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/dms-ra-cap/index.html

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