• Puerto Rico Imposes Massive Fine for Insurer’s Data Breachl
  • February 26, 2014 | Author: Erin Brisbay McMahon
  • Law Firm: Wyatt, Tarrant & Combs, LLP - Lexington Office
  • The Puerto Rico Health Insurance Administration has fined Triple-S Salud Inc. (TSS) $6.8 million for failure to safeguard Medicare beneficiary numbers. This far exceeds any fine imposed by or settlement reached by the United States Office of Civil Rights to date for HIPAA data breaches. How did the fine reach such a staggering amount? What lessons can be learned?

    The fine stems from a mailing of a pamphlet last September to 13,336 Dual Eligible Medicare beneficiaries, which inadvertently displayed the recipient’s Medicare beneficiary number. Ricardo Rivera Cardona explained that TSS’s contract with the agency allows the latter to impose fines of $500-$100,000 per member. In addition, the fine included $100,000 for TSS’ alleged failure to cooperate with the investigation. See Huge Fine in Local Puerto Rico Breach: Local Official Promises More Hefty Fines in Other Cases, available at: http://www.govinfosecurity.com/huge-fine-in-puerto-rico-breach-a-6518/op-1.

    In addition to the fines, TSS has been suspended from enrolling new Dual Eligible Medicare beneficiaries and is required to notify affected individuals that they have the right to disenroll from TSS.

    All this brings to mind the old adage, “An ounce of prevention is worth a pound of cure.” Providers, health plans, and other HIPAA covered entities should have a process to check the content of mailings containing protected health information as well as how the outside of the mailing looks before sending mailings to patients/beneficiaries. All too often, mailings to patients/beneficiaries contain information on other patients/beneficiaries or, as appears to be the case in this instance, highly sensitive information is visible to anyone handling the envelope. Unfortunately, many copy/mailing jobs are contracted out to companies that don’t have a review process in place. Even if they did, would they recognize a problem when they saw it?

    TSS has the right to request a hearing to challenge the findings and proposed penalties.