Healthcare Information Security

HIPAA and Compliance News

HHS posts final HIPAA omnibus rule

By Patrick Ouellette

- The long-awaited HIPAA Omnibus Rule was posted by the Department of Health and Human Services (HHS) on the Federal Register public inspection desk yesterday. The new rule will give HIPAA a much-needed update, provide a clearer picture of covered entities’ responsibilities and flesh out overlaps and inconsistencies in the rule. The Final Rule is effective on March 26, 2013. According to HHS, covered entities and business associates of all sizes will have 180 days beyond the effective date of the final rule to come into compliance with most of its provisions.

As electronic health record requirements have advanced and healthcare technology in general, the rule needed more specific language that would allow entities more flexibility to adopt technology under the Health Information Technology for Economic and Clinical Health (HITECH) Act while meeting government standards for safety. And the HITECH Act’s Breach Notification Rule, which was enacted in 2009, was also altered to better meet current security needs.

The Final Rule is made up of four final rules, which have been combined to reduce the impact and number of times certain compliance activities need to be undertaken by the regulated entities.

First, there were final modifications to the HIPAA Privacy, Security, and Enforcement Rules mandated by the Health Information Technology for Economic and Clinical Health (HITECH) Act, as well as certain other modifications to improve the Rules, which were issued as a proposed rule on July 14, 2010.

- Make business associates of covered entities directly liable for compliance with certain of the HIPAA Privacy and Security Rules’ requirements.

- Strengthen the limitations on the use and disclosure of protected health information for marketing and fundraising purposes, and prohibit the sale of protected health information without individual authorization.

- Expand individuals’ rights to receive electronic copies of their health information and to restrict disclosures to a health plan concerning treatment for which the individual has paid out of pocket in full.

- Require modifications to, and redistribution of, a covered entity’s notice of privacy practices.

- Modify the individual authorization and other requirements to facilitate research and disclosure of child immunization proof to schools, and to enable access to decedent information by family members or others.

- Adopt the additional HITECH Act enhancements to the Enforcement Rule not previously adopted in the October 30, 2009, interim final rule (referenced immediately below), such as the provisions addressing enforcement of noncompliance with the HIPAA Rules due to willful neglect.

Second was the final rule that adopted changes to the HIPAA Enforcement Rule to incorporate the increased and tiered civil money penalty structure provided by the HITECH Act, originally published as an interim final rule on Oct. 30, 2009.

Third on the list was the final rule on Breach Notification for Unsecured Protected Health Information under the HITECH Act, which replaces the breach notification rule’s “harm” 5 threshold with a more objective standard and supplants an interim final rule published on Aug. 24, 2009.

Lastly, there was a final rule that modified the HIPAA Privacy Rule as required by the Genetic Information Nondiscrimination Act (GINA) to prohibit most health plans from using or disclosing genetic information for underwriting purposes, which was published as a proposed rule on October 7, 2009

This final rule is also expected to have an annual effect on the economy of $100 million or more, according to HHS, making it an economically significant rule under Executive Order 12866.  The total cost of compliance with the rule’s provisions is estimated to be between $114 million and $225.4 million in the first year of implementation and approximately $14.5 million annually thereafter.

Costs associated with the rule are:

(i) costs to HIPAA covered entities of revising and distributing new notices of privacy practices to inform individuals of their rights and how their information is protected; (ii) costs to covered entities related to compliance with breach notification requirements; (iii) costs to a portion of business associates to bring their subcontracts into compliance with business associate agreement requirements; and (iv) costs to a portion of business associates to achieve full compliance with the Security Rule.

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