Rite Aid Agrees to Pay $1 Million to Settle HIPAA Privacy Case

[Jake Kouns <jkouns () opensecurityfoundation org>]

http://www.databreaches.net/?p=12716

Rite Aid Corporation and its 40 affiliated entities (RAC) have agreed
to pay $1 million to settle potential violations of the Health
Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy
Rule, the U.S. Department of Health and Human Services (HHS) announced
today. In a coordinated action, RAC also signed a consent order with
the Federal Trade Commission (FTC) to settle potential violations of
the FTC Act.

Rite Aid, one of the nation’s largest drug store chains, has also
agreed to take corrective action to improve policies and procedures to
safeguard the privacy of its customers when disposing of identifying
information on pill bottle labels and other health information. The
settlements apply to all of Rite Aid’s nearly 4,800 retail pharmacies
and follow an extensive joint investigation by the HHS Office for
Civil Rights (OCR) and the FTC.

The OCR, which enforces the HIPAA Privacy and Security Rules, opened
its investigation of RAC 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.

“It is critical that companies, large and small, build a culture of
compliance to protect consumers’ right to privacy and safeguard health
information. OCR is committed to strong enforcement of HIPAA,” said
Georgina Verdugo, director of OCR. “We hope that this agreement will
spur other health organizations to examine and improve their policies
and procedures for protecting patient information during the disposal
process.”

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.

Among other issues, the reviews by OCR and the FTC indicate 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
Rite Aid did not maintain a sanctions policy for members of its
workforce who failed to properly dispose of patient information.

Under the HHS resolution agreement, RAC agreed to pay a $1 million
resolution amount to HHS and must implement a strong corrective action
program that includes:

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.

Rite Aid has also agreed to external, independent assessments of its
pharmacy stores’ compliance with the FTC consent order. The HHS
corrective action plan will be in place for three years; the FTC order
will be in place for 20 years.

The HHS Resolution Agreement and Corrective Action Plan can be found
on the OCR website at
http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/index.html.

OCR has FAQs that address the HIPAA Privacy Rule requirements for
disposal of protected health information.  They can be found on the
OCR website at http://www.hhs.gov/ocr/privacy/index.html.
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