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Expedite Readiness! OCR Confirms HIPAA Audits to Begin in Early 2016

Publisher: Day Pitney Alert
October 1, 2015
Day Pitney Author(s) James E. Bowers

Forced to respond to a stinging audit report recently released by the U.S. Department of Health and Human Services' (HHS) Office of Inspector General (OIG) that found less than effective enforcement of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) privacy standards,1 HHS' Office for Civil Rights (OCR) will commence its long-awaited HIPAA audits in early 2016. Ever since OCR completed its pilot audits in 2014, it has been widely expected that OCR would follow up with implementation of a permanent audit program, which never happened despite announcements and audit preparations by OCR to launch the second phase of its audit program.

In its report examining OCR's oversight of covered entities' compliance with the HIPAA Privacy Rule,2 OIG determined that OCR's oversight has been primarily reactive - responding to complaints in the overwhelming number of its investigations rather than fully implementing an audit program to proactively identify and assess covered entities' possible noncompliance with the privacy standards. Although the Health Information Technology for Economic and Clinical Health Act requirement for audits has been effective since early 2010, OCR has not fully implemented an audit program for covered entities. The concern is that covered entities (such as doctors, pharmacies, and health insurance companies) that do not adequately safeguard protected health information (PHI) (such as medical condition, prescriptions, or treatment history) could expose patients to an invasion of privacy, identity theft, or other harm. OIG's primary corrective action recommendation was that OCR immediately fully implement a permanent audit program. With its feet to the fire, OCR has accepted this finding and undertaken to launch audits in early 2016.

With the initiation of OCR's audit program fast approaching, potential targets must maintain readiness for audit examination because HIPAA noncompliance can be costly and disruptive to an organization. The most common deficiency found by OCR in its pilot audits was an organization's failure to conduct a security risk assessment to identify and mitigate risks to PHI (e.g., PHI on exposed servers, laptops unencrypted, default passwords not changed, security software not up-to-date, and inadequate training). As hard as it is to believe, many HIPAA entities still have not implemented this "lesson learned." As recently as a few weeks ago, OCR announced a $750,000 settlement with Indiana-based Cancer Care Group, P.C., because it had failed to conduct an enterprise-wide risk analysis and implement follow-on device and media control policies to protect the transportation of unencrypted PHI. OCR contends that a risk assessment could have identified the control weakness.3

For more information about the OIG privacy enforcement report or the HIPAA audit protocol, please contact one of the individuals listed in the side bar. To assist healthcare entities' readiness for a HIPAA audit, Day Pitney LLP has developed several tools to facilitate compliance with the HIPAA Privacy, Security, and Breach Notification Rules. Information on Day Pitney's compliance tools is available on request.


[1] U.S. Department of Health and Human Services, Office of Inspector General, "OCR Should Strengthen Its Oversight Of Covered Entities' Compliance With The HIPAA Privacy Standards," September 2015, OEI-09-10-00510.

[2] The HIPAA Privacy Rule provides standards for using, sharing, and disclosing patients' protected health information.

[3] U.S. Department of Health and Human Resources, News, Cancer Care Group, P.C.,, "$750,000 HIPAA settlement emphasizes the importance of risk analysis and device and media control policies," September 2, 2015.

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