Connecticut AG Brings HIPAA Charges Against Health Net For Data Security Breach

In the first HIPAA action filed by a state attorney general, Connecticut Attorney General Richard Blumenthal filed a lawsuit yesterday against Health Net of Connecticut for failing to secure private medical and financial information concerning 446,000 of its Connecticut enrollees, and for subsequently neglecting to promptly notify affected individuals. Blumenthal is also seeking a court order to prevent Health Net from continued violations by requiring the company to encrypt any protected health information (“PHI”) contained on portable electronic devices. The lawsuit is the first action by a state attorney general to enforce HIPAA since the Health Information Technology for Economic and Clinical Health Act (“HITECH”) provided state attorneys general with the power to initiate civil actions on behalf of state residents for violations of HIPAA.

In May 2009, Health Net discovered that a portable computer disk drive containing social security numbers, health claim forms and bank account numbers for approximately 446,000 Connecticut enrollees was missing. According to Blumenthal, Health Net subsequently failed to promptly notify appropriate authorities and consumers of the incident. Blumenthal further alleges that Health Net failed to comply with its own policies and federal law regarding the protection of personal information, and failed to effectively train and supervise its workforce on the proper policies for maintaining, using, and disclosing PHI.

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