Health plan pays for failing to erase data on leased equipment: two takeaways for companies handling electronic PHI

By Marcia L Augsburger, M Scott Koller and Tiffani V Williams

The Office for Civil Rights (OCR) has announced a settlement between the US Department of Health and Human Services and Affinity Health Plan Inc to address potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Affinity, a not-for-profit managed care plan serving the New York metropolitan area, paid more than $1.2m as part of the settlement, even though it was not clear that any protected health information (PHI) was actually misused or retained as a result of the breach.

Affinity notified OCR of a potential breach on 15 April 2010, after discovering that copiers it had leased and then returned still contained electronic PHI on their hard drives. At least one recipient of the leased equipment, CBS Evening News, reported this to Affinity, which in turn reported the incident to OCR…

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