Northeast Surgical Group, PC: 15,298 individuals, Mar 2023.

Today the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) announced a settlement with Northeast Surgical Group, P.C. (NESG), a provider of surgical services in Michigan, for a potential violation under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule. OCR enforces the HIPAA Privacy, Security, and Breach Notification Rules, which set forth the requirements that covered entities (health plans, health care clearinghouses, and most health care providers), and business associates must follow to protect the privacy and security of protected health information (PHI). The HIPAA Security Rule establishes national standards to protect and secure our health care system by requiring administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and security of electronic PHI. The settlement resolves an investigation concerning a ransomware attack on NESG's information system.

"One of the first steps in implementing effective cybersecurity in health care is assessing the potential risks and vulnerabilities to electronic protected health information," said OCR Director Melanie Fontes Rainer. "A failure to conduct a HIPAA risk analysis will leave a health care entity vulnerable to cyberattacks, such as hacking and ransomware-which is bad for our health care system and bad for patients. We can and must do better."

Ransomware and hacking are the primary cyberthreats in health care. Ransomware is a type of malware (malicious software) designed to deny access to a user's data, usually by encrypting the data with a key known only to the hacker who deployed the malware, until a ransom is paid. Since 2018, there has been a 264% increase in large breaches reported to OCR involving ransomware attacks. The settlement also marks the fourth enforcement action in OCR's Risk Analysis Initiative. This enforcement initiative was created to focus select investigations on compliance with the HIPAA Security Rule Risk Analysis provision, a key Security Rule requirement, and the foundation for effective cybersecurity and the protection of ePHI; to increase the number of completed investigations; and to highlight the need for more attention and better compliance with this Security Rule requirement.

In March 2023, OCR received a breach report concerning a ransomware incident that had affected NESG's information system. NESG concluded that the protected health information of 15,298 patients had been encrypted and exfiltrated from its network. OCR's investigation determined that NESG had failed to conduct a compliant risk analysis to determine the potential risks and vulnerabilities to ePHI in NESG's systems.

Under the terms of the resolution agreement, NESG agreed to implement a corrective action plan that OCR will monitor for two years and paid $10,000 to OCR. Under the corrective action plan, NESG will take steps to ensure compliance with the HIPAA Security Rule and protect the security of ePHI, including:

Conducting an accurate and thorough risk analysis to determine the potential risks and vulnerabilities to the confidentiality, integrity, and availability of its ePHI;

Implementing a risk management plan to address and mitigate security risks and vulnerabilities identified in their risk analysis;

Developing, maintaining, and revising, as necessary, its written policies and procedures to comply with the HIPAA Rules; and

Training its workforce on its HIPAA policies and procedures.

The resolution agreement and corrective action plan may be found at: https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/northeast-surgical-group-ra-cap/index.html