A fascinating enforcement action under the Health Insurance Portability and Accountability Act (HIPAA) shows what really matters in the world of privacy regulation.
The U.S. Department of Health and Human Services has imposed a $4.3 million civil penalty against Maryland‐based Cignet Health for violations of its regulations. HHS’s Office for Civil Rights (OCR) found that Cignet violated 41 patients’ HIPAA rights by denying them access to their medical records, which they requested between September 2008 and October 2009. The penalty for these violations is $1.3 million.
But Cigna’s real crime was willful disobedience of the government. Who knows why, but according to the government:
During the investigations, Cignet refused to respond to OCR’s demands to produce the records. Additionally, Cignet failed to cooperate with OCR’s investigations of the complaints and produce the records in response to OCR’s subpoena. OCR filed a petition to enforce its subpoena in United States District Court and obtained a default judgment against Cignet on March 30, 2010. On April 7, 2010, Cignet produced the medical records to OCR, but otherwise made no efforts to resolve the complaints through informal means.
OCR also found that Cignet failed to cooperate with OCR’s investigations on a continuing daily basis from March 17, 2009, to April 7, 2010, and that the failure to cooperate was due to Cignet’s willful neglect to comply with the Privacy Rule. Covered entities are required under law to cooperate with the Department’s investigations.
The penalty for that was $3 million.
Notably, the HHS release says nothing about the condition of the aggrieved parties. How are they doing with their $31,000 a piece? Does it fully compensate for their inability to access medical records during the relevant period?
Just kidding! Nobody really cares.
This enforcement action has nothing to do with remedying a genuine breach of privacy—an annoyance and genuine paperwork problem, yes—and everything to do with sending a message: You will respect my authoritah!