Cottage Health: 11,000 individuals, Dec 2015.

Cottage Health has agreed to pay $3 million to OCR and to adopt a substantial corrective action plan to settle potential violations of the HIPAA Rules. Cottage Health operates Santa Barbara Cottage Hospital, Santa Ynez Cottage Hospital, Goleta Valley Cottage Hospital and Cottage Rehabilitation Hospital, in California. OCR received two notifications from Cottage Health regarding breaches of unsecured electronic protected health information (ePHI) affecting over 62,500 individuals, one in December 2013 and another in December 2015.

The first breach arose when ePHI on a Cottage Health server was accessible from the internet. OCR's investigation determined that security configuration settings of the Windows operating system permitted access to files containing ePHI without requiring a username and password. As a result, patient names, addresses, dates of birth, diagnoses, conditions, lab results and other treatment information were available to anyone with access to Cottage Health's server. The second breach occurred when a server was misconfigured following an IT response to a troubleshooting ticket, exposing unsecured ePHI over the internet. This ePHI included patient names, addresses, dates of birth, social security numbers, diagnoses, conditions, and other treatment information.

OCR's investigation revealed that Cottage Health failed to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of the ePHI; failed to implement security measures sufficient to reduce risks and vulnerabilities to a reasonable and appropriate level; failed to perform periodic technical and non-technical evaluations in response to environmental or operational changes affecting the security of ePHI; and failed to obtain a written business associate agreement with a contractor that maintained ePHI on its behalf.

"Our record year underscores the need for covered entities to be proactive about data security if they want to avoid being on the wrong end of an enforcement action," said OCR Director Roger Severino. "The Cottage settlement reminds us that information security is a dynamic process and the risks to ePHI may arise before, during, and after implementation covered entity makes system changes."

In addition to the $3 million settlement, Cottage will undertake a robust corrective action plan to comply with the HIPAA Rules. The resolution agreement and corrective action plan may be found on the OCR website at https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/cottage/index.html.