Business associates who handle private patient information for healthcare organizations are largely unprepared to meet the new data breach related obligations included in the HITECH Act, according to a new survey.

Those affected include billing operations, credit bureaus, benefits management, legal services, claims processing, insurance brokers, data processing firms, pharmacy chains, accounting firms, temporary office personnel and offshore transcription vendors.

HIMSS Analytics announced results of a national survey of hospitals and business associates to check their vulnerability to data breaches. The research, commissioned by ID Experts, revealed that approximately one-third of business associates surveyed were not aware that they need to adhere to federal Health Insurance Portability and Accountability Act (HIPAA) privacy and security requirements, compared to 87 percent of health providers.

Hospitals and health providers are taking action:

• 85 percent of health providers said they would take steps to ensure that data held by business associates will not be breached.
• Nearly half of hospitals, 47 percent, said they would terminate their contracts with their business associates for violations.

"Business associates could represent a risk to healthcare organizations, especially hospitals," said Lisa Gallagher, senior director of privacy and security for the Healthcare Information and Management Systems Society (HIMSS). "The lack of awareness of new federal regulations by business associates coupled with the large number of third parties hired by hospitals to control costs through outsourcing points to a potential area of concern. Hospitals, in partnership with their business associates, need to actively prepare to comply with the new rules when these breaches happen."

The research also found that:

• 50 percent of large hospitals have experienced at least one data breach this year;
• 68 percent of all hospitals indicated that the HITECH Act's expanded breach notification requirements will result in the discovery and reporting of more incidents, and 57 percent reported that they now have a greater level of awareness of data breaches and breach risk; and
• 90 percent indicated they have changed or plan to change policies and procedures to prevent and detect data breaches.

"This study highlights the tremendous risk exposure for healthcare organizations,"  said Bob Gregg, CEO of ID Experts. "Despite an increase in risk assessments conducted, data breach is on the rise and patients are at a high-risk level for medical identity theft and fraud where an unknown person will use an identity to illegally receive benefits or services."