Resolution agreement and corrective action plan

1 Resolution agreement I. Recitals 1. Parties. The Parties to this Resolution agreement ( agreement ) are A. The United States Department ofHealth and Human Services, Office for Civil Rights ("HHS"), which enforces. the Federal standards that govern the privacy of individually identifiable health information ( 45 .R. Part 160 and Subparts A and E of Part 164, the "Privacy Rule"), the Federal standards that govern the security of electronic individually identifiable health information ( 45 Part 160 and Subparts A and C ofPart 164, the "Security' Rule"), and the Federal standards for notification in the case ofbreach ofunsecured protected health information ( 45 Part 160 and Subparts A and D of45 Part 164, the "Breach Notification Rule").

2 HHS has the authority to conduct compliance reviews and investigations ofcomplaints alleging violations ofthe Privacy, Security, and Breach Notification Rules (the "HIPAA Rules") by covered entities and business associates, and covered entities and business associates must cooperate with HHS compliance reviews and investigations. See 45 (c), , and (b). B. South Broward Hospital District d/b/a Memorial Healthcare System ("MHS") is a covered entity, as defined at 45 , and therefore is required to comply with the HIP AA Rules. MHS is a non-profit corporation and an independent special tax district under the laws ofthe State ofFlorida which operates six hospitals, a nursing home, and a variety ofancillary health care facilities throughout the South Florida area.

3 MHS is the third largest public health care system in the nation. 1 HHS and MHS shall together be referred to herein as the "Parties." 2. Factual Background and Covered Conduct. OnApril 12, 2012, MHS submitted a breach report to HHS indicating that two MHS employees inappropriately accessed patient information, including names, dates ofbirth, and social security numbers. On July 11,2012, MHS submitted an additional addendum breach report to notify HHS that during its internal investigation, it discovered additional impermissible access by 12 users at affiliated physician offices, potentially affecting another 105,646 individuals.

4 2 Some of these instances led to federal charges relating to selling protected health information (PHI) and filing fraudulent tax returns. HHS's investigation the following conduct occurred ("Covered Conduct"): A. MHS impermissibly disclosed the PHI of80,000 individuals in violation ofthe Privacy 1 2 MHS reported a total of 111,650 affected individuals to OCR, but notified 115,143 individuals by letter. According to MHS's response on November 2, 2015, the latter number is accurate as the number affected. RA/CAP 12-141825 page 1 of 15 Rule (See 45 and (a)) when it provided access to such PHI to a former employee ofan affiliated physician practice from April 1, 2011,3 to April 27, ' B.

5 From January 1, 2011, to June 1, 2012, MHS failed to implement procedures to regularly review records ofinformation system activity, such as audit logs, access reports, and security incident tracking reports, as required by 45 .R. (a)(l)(ii)(D); and C. From January 1, 2011 until June l, 2012, MHS failed to implement policies and procedures that, based upon MHS's access authorization policies, establish, document, review, and modify a user's right ofaccess to a workstation, transaction, program, or process, as required by 45 (a)(4)(ii)(C). 3. No Admission. This agreement is not an admission of liability by MHS.

6 4. No Concession. This agreement is not a concession by HHS that MHS is not in violation ofthe HIP AA Rules and that MHS is not liable for civil money penalties. 5. Intention of Parties to Effect Resolution . This agreement is intended to resolve HHS Transaction Number: 12-141825 and any violations ofthe HIP AA Rules related to the Covered Conduct specified in Section I, Paragraph 2 ofthis agreement . In consideration of the Parties' interest in avoiding the uncertainty, burden, and expense offurther investigation and formal proceedings, the Parties agree to resolve this matter according to the Terms and Conditions below.

7 II. Terms and Conditions 6. Payment. MHS agrees to pay to HHS the amount of$ 5,500,000 (" Resolution Amount"). MHS agrees to pay the Resolution Amount on the Effective Date ofthis agreement , as defined in section II, paragraph 14, by automated clearing house transaction pursuant to written instructions to be provided by HHS. 7. corrective action plan . MHS has entered into and agrees to comply with the corrective action plan ("CAP"), attached as Appendix A, which is incorporated into this agreement by reference. IfMHS breaches the CAP, and fails to cure the breach as set forth in the CAP, then MHS will be in breach ofthis agreement and HHS will not be subject to the Release set forth in paragraph 8 ofsection II ofthis agreement .

8 8. Release by HHS. In consideration and conditioned upon MHS's performance ofits obligations under this agreement , HHS releases MHS from any it may have against MHS under the HIP AA Rules for the Covered Conduct identified in paragraph 2 ofsection I. HHS does not release MHS from, nor waive any rights, obligations, or causes ofaction 3 As reported by MHS in its breach report submitted July 11,2012. 4 This is the date suspicious activity ofusers ceased, as reported by the analysis ofProtiviti, the 3111 party auditing firm hired by MHS on May 15, 2012; See MHS's internal investigation provided to OCR on February 12,2014.

9 RA/CAP 12-141825 page 2 of 15 other than those specifically referred to in that paragraph. This release does not extend to actions that may be brought 1177 ofthe Social Security Act, 42 1320d-6. 9. agreement by Released Parties. MHS shall not contest the validity of its obligations to pay, nor the amount of, the Resolution Amount (Jr any other obligations agreed to under this agreement . MHS waives all procedural rights granted under Section 1128A ofthe Social Security Act (42 1320a-7a); 45 Part 160 Subpart E; and HHS Claims Collection regulations at 45 Part 30, including, but not limited to, notice, hearing, and appeal with respect to the Resolution Amount.)

10 10. Binding on Successors. This agreement is binding on MHS and its successors, heirs, transferees, and assigns. 11. Costs. Each Party to this agreement shall bear its own legal and other costs incurred in connection with this matter, including the preparation and performance ofthis agreement . 12. No Additional Releases. This agreement is intended to be for the benefit ofthe Parties only, and by this instrument the Parties do not release any claims against any other person or entity. 13. Effect of agreement . This agreement constitutes the complete agreement between the Parties. All material representations, understandings, and promises ofthe Parties are contained in this agreement .