Blue Cross Blue Shield of Tennessee (BCBST) has agreed to pay the Department of Health and Human Services $1.5 million to settle potential violations of HIPAA privacy and security provisions. It is the first enforcement action resulting from the HITECH Breach Notification Rule.

Leon Rodriguez, director of the HHS Office for Civil Rights (OCR), said March 13 BCBST has also agreed to a corrective action plan to address gaps in its HIPAA compliance program.

The investigation followed a notice submitted by BCBST to HHS reporting that 57 unencrypted computer hard drives were stolen from a leased facility in Tennessee. The drives contained the protected health information (PHI) of more than one million individuals, including member names, social security numbers, diagnosis codes, dates of birth and health plan identification numbers. OCR’s investigation indicated BCBST failed to implement appropriate administrative safeguards to adequately protect information remaining at the leased facility by not performing the required security evaluation in response to operational changes.

In addition, the investigation showed a failure to implement appropriate physical safeguards by not having adequate facility access controls. Both of these safeguards are required by the HIPAA Security Rule.

“This settlement sends an important message that OCR expects health plans and healthcare providers to have in place a carefully designed, delivered, and monitored HIPAA compliance program,” said Rodriguez. “The HITECH Breach Notification Rule is an important enforcement tool and OCR will continue to vigorously protect patients’ right to private and secure health information.”

In addition to the $1.5 million settlement, the agreement requires BCBST to review, revise and maintain its privacy and security policies and procedures, to conduct regular and robust trainings for all BCBST employees covering employee responsibilities under HIPAA, and to perform monitor reviews to ensure BCBST compliance with the corrective action plan.

HHS Office for Civil Rights enforces the HIPAA Privacy and Security Rules. The HIPAA Privacy Rule gives individuals rights over their protected health information and sets rules and limits on who can look at and receive that health information. The HIPAA Security Rule protects health information in electronic form by requiring entities covered by HIPAA to use physical, technical and administrative safeguards to ensure that electronic protected health information remains private and secure.

The HITECH Breach Notification Rule requires covered entities to report an impermissible use or disclosure of protected health information, or a “breach,” of 500 individuals or more to HHS and the media. Smaller breaches affecting fewer than 500 individuals must be reported to the secretary on an annual basis.

Individuals who believe that a covered entity has violated their (or someone else’s) health information privacy rights or committed another violation of the HIPAA Privacy or Security Rule may file a complaint with OCR.