Privacy and Security Enforcement—Trends, Lessons Learned in 2017 and Forecast for 2018

Bloomberg Law Insights

George B. Breen and Adam C. Solander, Members of the Firm, and Wenxi Li, Associate, in the Health Care and Life Sciences practice, in the firm’s Washington, DC, office, co-authored an article in Bloomberg Law Insights, titled “Privacy and Security Enforcement—Trends, Lessons Learned in 2017 and Forecast for 2018.” 

Following is an excerpt (see below to download the full version in PDF format):

Data and privacy breach issues continued to be in the national spotlight in 2017. For example, in May 2017, eClinicalWorks, an electronic health records (EHR) vendor, agreed to pay a $155 million to resolve a False Claims Act case alleging fraud and kickback charges associated with the accuracy and truthfulness of its EHR certifications. In September 2017, more than 145 million Americans potentially had their Social Security and driver's license numbers exposed in connection with a data breach suffered by Equifax, a major consumer credit-reporting agency. Uber revealed in November 2017 that hackers stole 57 million driver and rider accounts; Uber paid the hackers a $100,000 ransom to keep the breach a secret from government authorities and affected individuals for over a year.

Moreover, the Department of Health and Human Services Office for Civil Rights (OCR) remained vigilant in enforcing the Health Insurance Portability and Accountability Act (HIPAA). Roger Severino, the newly appointed OCR Director under President Trump, oversaw the collection of just under $20 million in HIPAA settlements and penalties in 2017. While 2017's fines fell short of the more than $23 million the OCR collected in 2016, covered entities and business associates under HIPAA should not think the OCR will halt its enforcement efforts in 2018 and must not be lulled into complacency.

The number of high-profile information security and enforcement actions in 2017, as well as lessons learned from how federal and state agencies handled breach and enforcement activities last year should inform the regulated community as to what it can expect in 2018.