The Matrix

Data breaches in the healthcare industry are a costly and legally evolving issue. The sophistication of threat actors and their ability to navigate IT systems using constantly changing tactics has made it difficult to predict and, in some cases, respond to a breach. The recent aggressive enforcement by the Federal Trade Commission (the “FTC”) of its Health Breach Notification Rule (the “HBNR”), as well as its proposed changes to the HBNR, have expanded the factors companies must consider when analyzing and responding to potential breaches of health data.

Last week, the FTC and HHS’ Office for Civil Rights (OCR) sent a joint letter to approximately 130 hospitals and telehealth providers concerning the privacy and security risks related to the use of online tracking technologies integrated into their websites or mobile apps.  The agencies assert that these tracking technologies – such as the Meta/Facebook pixel and Google Analytics – gather identifiable information about users when they interact with a website or mobile app, often without users’ knowledge and in ways that are hard for users to avoid.

On January 14, 2021, the U.S. Court of Appeals for the Fifth Circuit issued its opinion vacating the $4.3 million penalty that the U.S. Department of Health and Human Services (“HHS”) had levied against the University of Texas M.D. Anderson Cancer Center (“M.D. Anderson”) for violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act of 2009 (the “HITECH Act”).  Eye-popping penalty amounts for HIPAA and HITECH Act violations have picked up steam in recent years. However, the M.D. Anderson case is among the first such settlement to be litigated. The Fifth Circuit decision contains some critical takeaways as to key requirements under HIPAA and the enforcement actions available to HHS, and should be of particular interest to healthcare providers and also insurers writing cybersecurity policies.