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Analysis

Premera Blue Cross to Pay $6.8M to Settle Data Breach

By John Commins  
   September 25, 2020

The Washington State-based health insurer self-reported the breach, which was discovered 2015 and may have affected more than 10.4 million beneficiaries over nearly nine months.

Premera Blue Cross will pay the federal government $6.85 million to settle potential violations of the Health Insurance Portability and Accountability Act Privacy and Security Rules for a nearly nine-month-long data breach that may have exposed the personal information of more than 10.4 million people, the Department of Health and Human Services Office of the Inspector General announced.

OCR Director Roger Severino said the settlement is the second-largest payment to resolve a HIPAA investigation in OCR history and should serve as a warning.

"If large health insurance entities don't invest the time and effort to identify their security vulnerabilities, be they technical or human, hackers surely will," Severino said. "This case vividly demonstrates the damage that results when hackers are allowed to roam undetected in a computer system for nearly nine months."

PBC self-reported the breach on March 17, 2015, stating that hackers had accessed its IT system, using a phishing email to install malware that gave them access to PBC’s IT system in May 2014.

The hack went unreported for nearly nine months until January 2015, and resulted in the disclosure of protected health information of more than 10.4 million people, including their names, addresses, dates of birth, email addresses, Social Security numbers, bank account information, and health plan clinical information. 

OCR's investigation found systemic noncompliance with HIPAA rules at PBC, including failure to conduct an enterprise-wide risk analysis, and failures to implement risk management, and audit controls.

PBC also agreed to a corrective action plan that includes two years of monitoring.

PBC operates is Washington State and Alaska and is the largest health insurer in the U.S. Pacific Northwest, covering more than 2 million lives.

“If large health insurance entities don't invest the time and effort to identify their security vulnerabilities, be they technical or human, hackers surely will.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

PBC self-reported the breach on March 17, 2015, stating that hackers had accessed its IT system, using a phishing email to install malware that gave them access to PBC’s IT system in May 2014.

The hack went unreported for nearly nine months until January 2015, and resulted in the disclosure of protected health information of more than 10.4 million people.

OCR's investigation found systemic noncompliance with HIPAA rules at PBC, including failure to conduct an enterprise-wide risk analysis, and failures to implement risk management, and audit controls.


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