Cignet Fined for HIPAA Violation.

The first civil money penalty of $4.3 million has been imposed by HHS on Cignet Health of Prince George’s County, Maryland. HHS and CMS have been very firm that violations will no longer be tolerated. With the enactment of HITECH, this type of penalty seemed inevitable.  An individual’s rights to the privacy of their personal information and access to their own medical records is of utmost importance and while beneficiary protection is a main theme of CMS, it appears HHS is a strong advocate of this as well.

OCR has issued a Notice of Final Determination finding that Cignet violated the Privacy Rule of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HHS has imposed a civil money penalty (CMP) of $4.3 million for the violations, representing the first CMP issued by the Department for a covered entity’s violations of the HIPAA Privacy Rule.  The CMP is based on the violation categories and increased penalty amounts authorized by Section 13410(d) of the Health Information Technology for Economic and Clinical Health (HITECH) Act.

“Ensuring that Americans’ health information privacy is protected is vital to our health care system and a priority of this Administration. The U.S. Department of Health and Human Services is serious about enforcing individual rights guaranteed by the HIPAA Privacy Rule,” said HHS Secretary Kathleen Sebelius.

In a Notice of Proposed Determination issued Oct. 20, 2010, OCR found that Cignet violated 41 patients’ rights by denying them access to their medical records when requested between September 2008 and October 2009. These patients individually filed complaints with OCR, initiating investigations of each complaint. The HIPAA Privacy Rule requires that a covered entity provide a patient with a copy of their medical records within 30 (and no later than 60) days of the patient’s request. The CMP for these violations is $1.3 million.  

During the investigations, Cignet refused to respond to OCR’s demands to produce the records. Additionally, Cignet failed to cooperate with OCR’s investigations of the complaints and produce the records in response to OCR’s subpoena. OCR filed a petition to enforce its subpoena in United States District Court and obtained a default judgment against Cignet on March 30, 2010. On April 7, 2010, Cignet produced the medical records to OCR, but otherwise made no efforts to resolve the complaints through informal means.

OCR also found that Cignet failed to cooperate with OCR’s investigations on a continuing daily basis from March 17, 2009, to April 7, 2010, and that the failure to cooperate was due to Cignet’s willful neglect to comply with the Privacy Rule. Covered entities are required under law to cooperate with the Department’s investigations. The CMP for these violations is $3 million.

“Covered entities and business associates must uphold their responsibility to provide patients with access to their medical records, and adhere closely to all of HIPAA’s requirements,” said OCR Director Georgina Verdugo.  “The U.S. Department of Health and Human Services will continue to investigate and take action against those organizations that knowingly disregard their obligations under these rules.”

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.

Clarity of Health Reform

The debate rages on regarding health reform and the focus has now shifted to the constitutionality of the legislation. A Virginia judge ruled the individual mandate was unconstitutional and a Florida judge ruled the entire legislation was unconstitutional. This has sparked the 26 states included in the fight against the health reform legislation to withhold from implementing the act. 

Such states as Alaska have openly commented they will not enact the legislation but begin developing their own plans for health reform within their state. Gov. Sean Parnell said the state would pursue lawful, market-based solutions of its own. That includes planning for a health insurance exchange, meant to offer a choice of health plans.

This action compelled the White House to quickly respond stating while the Virginia and Florida judge have sited unconstitutionality of the law the law must not be upheld and implementation must continue. 

The main theme cited was the cost savings associated with the Medicare payment reform on 100 million Medicare claims that are processed each month. As the constitutionality of health reform continues to be at the forefront it appears only a ruling by the Supreme Court can conclude the acts fate.

For more information, read the Associated Press article on the topic here and to learn more via webinar, click here.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.

State Medicaid Cutbacks?

Medicaid is a rapidly growing sector of the health care arena.  Today, 50 million low income people receive health benefits from their State Medicaid program.  The 50 million individuals are comprised of adults, large numbers of seniors and disabled patients in nursing homes, and 1 in 4 children in America.

Image Courtesy Of savemedicaid.org

Medicaid costs are the top expense of most state’s budget. With this in mind, states have asked HHS, Kathleen Sebelius for help. The states have requested to reduce enrollment within their respective states and raise eligibility criteria to foster this reduction. Another aspect of this request is their revenue shortfall of $175 billion. With the current administrations stimulus bill drying up at the end of this year all states are scrambling to find ways to survive.  The easy state budget cuts have been made and now hard realities must be reviewed. To make up this difference the states have asked to cut Medicaid enrollment and reduce eligibility. Currently each state much maintain a Medicaid enrollment level.

Secretary Sebelius urged states to find savings through other approaches, including charging higher co-payments for some services, limiting certain benefits, managing high-cost patients more efficiently, squeezing drugs costs, and cracking down on improper payments.

"We are committed to responsiveness and flexibility, and will expedite review of state proposals," Sebelius wrote. "My team stands ready to come to your state to discuss your priorities and how we can help achieve them."

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. Pam can be contacted at Pamela.Argeris@merrillcorp.com.