Health Insurer Pays $5.1 Million to Settle Data Breach Affecting Over 9.3 Million People

WASHINGTON, D.C. — Excellus Health Plan, Inc. has agreed to pay $5.1 million to the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) and to implement a corrective action plan to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules related to a breach affecting over 9.3 million people.  Excellus Health Plan is a New York health services corporation that provides health insurance coverage to over 1.5 million people in Upstate and Western New York.

On September 9, 2015, Excellus Health Plan filed a breach report stating that cyber-attackers had gained unauthorized access to its information technology systems.  Excellus Health Plan reported that the breach began on or before December 23, 2013, and ended on May 11, 2015.  The hackers installed malware and conducted reconnaissance activities that ultimately resulted in the impermissible disclosure of the protected health information of more than 9.3 million individuals, including their names, addresses, dates of birth, email addresses, Social Security numbers, bank account information, health plan claims, and clinical treatment information.

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OCR’s investigation found potential violations of the HIPAA Rules including failure to conduct an enterprise-wide risk analysis, and failures to implement risk management, information system activity review, and access controls.

“Hacking continues to be the greatest threat to the privacy and security of individuals’ health information.  In this case, a health plan did not stop hackers from roaming inside its health record system undetected for over a year which endangered the privacy of millions of its beneficiaries,” said OCR Director Roger Severino. “We know that the most dangerous hackers are sophisticated, patient, and persistent.  Health care entities need to step up their game to protect the privacy of people’s health information from this growing threat.”

In addition to the monetary settlement, Excellus Health Plan will undertake a corrective action plan that includes two years of monitoring. A copy of the resolution agreement and corrective action plan may be found at https://www.hhs.gov/sites/default/files/excellus-ra-cap.pdf.

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