By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Total Cost of a HIPAA Violation: 18.5 Million
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > eHealth > Medical Records > Total Cost of a HIPAA Violation: 18.5 Million
Medical Records

Total Cost of a HIPAA Violation: 18.5 Million

onlinetech
onlinetech
Share
4 Min Read
SHARE

Who: Blue Cross Blue Shield of Tennessee (BCBST)

Who was affected: Over 1 million members of the BCBST had their information stolen, including names, SSNs, diagnosis codes, birthdates and health plan IDs.

What: 57 unencrypted hard drives were stolen from a leased facility in Tennessee, out of a data storage closet. According to the resolution agreement, the BCBST were relocating staff from the facility and had not yet moved the servers from the closet to their new location.

Who: Blue Cross Blue Shield of Tennessee (BCBST)

More Read

Top 11 Trends for 2012 in Healthcare Data
The Electronic Medical Record Doesn’t Tell You the Story
GAO Report on Health Information Exchange Focuses on Standards
How Smart Doctors Protect and Encrypt Their Patients Information
Tips from Real Users on How to Succeed with Electronic Medical Records

Who was affected: Over 1 million members of the BCBST had their information stolen, including names, SSNs, diagnosis codes, birthdates and health plan IDs.

What: 57 unencrypted hard drives were stolen from a leased facility in Tennessee, out of a data storage closet. According to the resolution agreement, the BCBST were relocating staff from the facility and had not yet moved the servers from the closet to their new location.

Charged with: The OCR (Office of Civil Rights, official HIPAA-enforcement entity) found the BCBST failed to have ‘adaquate facility access controls,’ according to their press release. This put them in violation of implementing the appropriate physical safeguards as listed in the HIPAA Security Rule.

They were also found in violation of the administrative safeguards by failing to perform a security evaluation after operational changes.

What they could have done differently: Encrypt all data at rest, including their archived data stored on hard drives. This is a strongly recommended best practice for healthcare organizations that need to meet HIPAA compliance.

They also could have chosen to store their data in a secure, offsite location that had the appropriate physical safeguards/access controls, another important feature of HIPAA compliant data centers.

When: BCBST was alerted October 2, 2009 of an unresponsive server at the facility, but didn’t investigate until October 5, 2009. Official completion date of review, audit and affected individual notification was October 29, 2010.

How much did it cost them: Although the settlement case required BCBST to pay HHS 1.5 million, the company has spent nearly $17 million in investigation, notification and protection costs to date, bringing the total to 18.5 million. Affected individuals received free credit monitoring services, free identity monitoring, consultation, and restoration.

What are their next steps: BCBST encrypted all of its at-rest data, which they claim to be “a voluntary effort which goes above and beyond current industry standards.” While it might not be explicitly required by HIPAA standards, it’s pretty close (read Encrypting Data to Meet HIPAA Compliance for tips) :

A covered entity must, in accordance with §164.306… Implement a mechanism to encrypt and decrypt electronic protected health information.” (45 CFR § 164.312(a)(2)(iv))

BCBST entered a 450 day corrective action plan, which includes sending their written PHI security policies and procedures to HHS, monitoring their employees to ensure they’re trained and following HIPAA compliant policies and procedures, and conduct a risk management plan.

For more on HIPAA violations and the effects of data breaches, try reading How a HIPAA Breach Can Negatively Impact Your Business, or Sutter Health HIPAA Breach: Lessons Learned.

References:
HHS Resolution Agreement
BlueCross, HHS Reach Settlement in 2009 Hard Drive Data Theft
Eastgate Hard Drive Theft
HHS Settles HIPAA Case With BCBST for $1.5 Million

TAGGED:HIPAA violations
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

dental care
Importance of Good Dental Care for Health and Confidence
Dental health Specialties
October 2, 2025
AI in Healthcare
AI in Healthcare: Technology is Transforming the Global Landscape
Global Healthcare Policy & Law Technology
October 1, 2025
Choosing the Right Swimwear for Health and Safety
News
September 30, 2025
sports concussions
Concussion In Sports: How Common They Are And What You Need To Know
Infographics
September 28, 2025

You Might also Like

Health Information Exchange: Meaningful Consent

July 25, 2014
Doctor and scribe, source New York Times
eHealthMedical RecordsTechnology

Flipping the Clinic Visit

January 21, 2014

Medical Billing: A Paper Blizzard Not Addressed by EHR

May 25, 2013
ePatients
Global HealthcareHealth ReformHospital AdministrationMedical EducationMedical InnovationsMedical RecordsMobile HealthPublic HealthRemote DiagnosticsSocial Media

ePatients: What’s the Big Deal?

March 15, 2013
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?