Children’s Medical Center of Dallas Pays $3.2 Million To Settle HIPAA Violations.

The Children’s Medical Center of Dallas (Children’s) recently settled with the US Department of Health and Human Services (HHS) over multiple failures to encrypt sensitive data in mobile devices. The settlement – $3.2 million dollars – is quite the figure, as is the timeline involved: It looks like an investigation could have been started as soon as July 5, 2013, and a final resolution was not reached until February 1, 2017.


Multiple Failures Over the Years

As the HHS complaint shows, Children’s had a number of data security breaches over the years.

  • Nov 2009 – loss of a BlackBerry. 3,800 individuals affected.
  • Dec 2010 – loss of an iPod. 22 individuals affected.
  • Apr 2013 – loss of a laptop. 2,462 individuals affected.

But, it’s not the number of data breaches that Children’s has had over the years that HHS takes exception to. Rather, it’s the fact that Children’s knew that they had a bomb ticking in their hands and didn’t do anything to rectify the situation… even as the bombs blew up time and again over the years. The need for better security was brought to Children’s attention numerous times:

  • Strategic Management Systems Gap Analysis and Assessment, February 2007
  • PwC Analysis, August 2008.
  • Office of the Inspector General, September 2012.

You’d imagine that a major hospital that’s been recommended to secure their devices (and the data in them, more specifically) would do so as soon as possible. Instead, they waited until “at least April 9, 2013.” Incidentally, that’s a little after the HHS’s final Omnibus Rule became effective, on March 26, 2013.

As far as I can tell, Children’s never had a problem after April 2013.


Interim Rules are Rules, Too

Data security has always mattered under HIPAA. That almost no one really paid attention to it for nearly twenty years just goes to show how important HITECH was in forcing hospitals, clinics, and other medical practices to take it seriously.

What really made people sit up and take notice was the 2011 fine of Massachusetts General Hospital. MGH paid $1 million to settle with the HHS over paperwork left on the subway. It affected less than 200 patients. And while all of this took place well before the Final Rule came into effect, monetary penalties had quite recently made it into the Interim Rules. MGH served as a preview of things to come, that the HHS meant business.

And it worked. So many covered entities started looking into encryption and other data security technologies that it was like Christmas had come early for IT companies that specialized in the medical sector.

I imagine that penalty was on the mind of Children’s managers when they suddenly decided to start encrypting their data in 2013; the clock was ticking and they didn’t exactly have a stellar record when it comes to not losing stuff. For their dallying, the hospital earned the fifth largest monetary penalty to date since HHS started fining people.


Security Issues Still Going Strong

If I were a betting man, I would say that Children’s will have plenty of company going forward. Unencrypted electronic devices that store protected health information are still getting lost today. With so many options for safeguarding patient data, it boggles the mind that this is still an issue.


Related Articles and Sites:

Comments (0)

Let us know what you think