U.S. Dept. of Health & Human Services

On July 15, 2008, the U.S. Department of Health & Human Services (“HHS”) entered into its first Resolution Agreement with a HIPAA-covered entity to settle alleged violations of the privacy and security regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Pursuant to the Resolution Agreement, a Seattle-based not-for-profit health system, Providence Health & Services and certain of its divisions (“Providence”), paid $100,000 to HHS and entered into a Corrective Action Plan with the government. HHS advised that Providence’s cooperation in the investigation helped it avoid a “civil monetary penalty.” Providence has been released from further civil fines to HHS arising out of the particular activities at issue in this matter, provided that Providence complies with the terms of the three-year Corrective Action Plan. The Resolution Agreement did not release Providence from any potential criminal liability.

Prior to this Resolution Agreement, HHS had not imposed any fines on any HIPAA-covered entities. In the more than five years that have passed since the compliance deadline for the HIPAA privacy regulations, HHS has received close to 40,000 complaints of violations, the majority of which were not eligible for enforcement. Of those where a violation was identified, HHS had previously resolved such cases by requiring changes in privacy practices and other corrective actions without entering into any formal settlement agreements or imposing any fines.