HIPAA Breach Results In Lawsuit And Countersuit Between Aetna and KCC.

Reuters reported earlier this month that Aetna, the health insurance company, and Kurtzman Carson Consultants (KCC), an administrative-support services provider, have sued each other over a mishandled class action settlement notification.

Last year, Aetna settled a number of lawsuits regarding the fulfillment of HIV medication prescriptions. With the legal issues finalized, it was up to KCC to mail the settlement notifications and finally close the book on the situation. Unfortunately, the notifications were sent using envelopes with transparent windows, the ones where names and addresses show through. But in this case, there was a little more:

Most of the first sentence of the notification was also displayed – including the words “when filling prescriptions for HIV medications.” [reuters.com]

That’s as private as private information can get. Naturally, Aetna was sued for breach of patient privacy, which the company quickly settled. In turn, the company sued KCC “to indemnify…the entire cost of the notification disaster,” or nearly $20 million. Aetna claims that they didn’t know that envelopes with transparent windows would be used, that private information would be showing, etc.

Basically, it wasn’t Aetna’s fault.

KCC, however, has countersued, stating that “Aetna and Gibson Dunn [the insurance company’s legal representation] knew what the notifications would look like” and, allegedly, approved it prior to mailing out the settlement notifications.

Obviously, someone has to be lying. The calamities don’t end there, however.

 

No Encryption in this Day and Age?

KCC has also averred in their suit that,

When Aetna’s lawyers passed along the list of health plan members to be notified about the HIV prescription policy, there was no protective order in place. Nor did Gibson Dunn encrypt all of the data it sent to [KCC].

In fact, KCC states that private health information (PHI) wasn’t encrypted nor password-protected (not that password protection would do any good; it’s certainly not a HIPAA-compliant PHI security measure). And, they further claim that “more data than was necessary to perform the noticed function” was sent to them… which is not necessarily forbidden under HIPAA but is definitely frowned upon. In fact, it might be one of those red flags that spark an investigation by the Department of Health and Human Services (HHS).

On the other hand, passing sensitive patient data around without encryption? We all know how the HHS feels about that one.

The Reuter’s article summed up what’s at stake for Aetna and KCC in this manner:

For both Aetna and KCC, as you can see from the dueling complaints, responsibility for the botched settlement notifications is really an existential question. As a health insurer, Aetna has a moral and legal obligation to protect patient privacy. As a claims administrator, KCC is supposed to know – of all things! – how to mail out a settlement notification without violating recipients’ privacy.

The above is insightful and yet misses a number of observations.

It should be noted that KCC received the data from Aetna’s lawyers. So, if KCC’s allegations are true, then Aetna has another business associate that’s not paying attention to HIPAA/HITECH requirements. And, what’s true for KCC – that they should know how to properly mail out notifications because it’s their job – can also be said for lawyers that are sharing sensitive data that belongs to a HIPAA covered-entity. After all the law has specifics on how PHI data should be handled by business associates of HIPAA covered-entities. Business associates such as lawyers, who, by virtue of their profession and their client, should know not to pass around PHI unencrypted.

Also, the allegations open up a another can of worms for Aetna, seeing how it now has two business associates that have contravened HIPAA/HITECH data security rules in less than one year. It can take very little to get the HHS to open up an investigation into data security violations. Having three HIPAA incidents in a one-year period must certainly attract attention, and KCC’s allegations gives the HHS a reason to dig more in depth into Aetna’s adherence to HIPAA privacy and security rules.

Related Articles and Sites:
https://www.reuters.com/article/legal-us-otc-aetna/kcc-sues-aetna-blames-gibson-dunn-in-hiv-settlement-notice-fiasco-idUSKBN1FR2WB
https://www.reuters.com/article/us-otc-aetna/aetna-sues-claims-administrator-kcc-over-botched-notice-in-hiv-case-idUSKBN1FQ2SR



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