Community Health Systems to Pay Huge Price for Breach

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Community Health Systems to Pay Huge Price for Breach

August 29, 2014 1 CommentData BreachBy Chandra Bilugu

Data breaches can cost healthcare entities a great deal. Proof to this is The Community Health Systems breach incident that exposed 4.5 million patients’ data in 29 states. According to a calculation at Forbes, this breach is likely to cost the entity anywhere between $75 million and $150 million. Soon after the breach was announced, a first class-action lawsuit was filed.

Experts believe that the HIPAA violations seen during the past year will be overshadowed by those coming in the next 12 months. The Office for Civil Rights has so far levied nine fines since June 2013, totaling over $10 million. This total also includes the record fine of $4.8 million announced against New York- Presbyterian Hospital and Columbia University in May.

Forbes lists out some of the major costs that may follow a healthcare data breach incident:

Technical, legal, and administrative remediation costs
Fines levied by OCR for HIPAA violations
Costs associated with Identity Theft Protection or Credit Monitoring for affected patients
Paying for defending against patient and shareholder lawsuits and settlements
The unimaginable cost of potential insurance fraud stemming from millions of exposed Social Security Numbers

For example, the Blue Cross Blue Shield of Tennessee estimated the total cost of breach at $17 million two years ago for compromise of 1 million patient records. This cost included $7 million for improving internal security and $1.5 million settlement with OCR. However, there were no patient or shareholder lawsuits in this case.

In the Community Health Systems breach however, the biggest potential cost is associated with the compromise of 4.5 million Social Security Numbers which could be used for medical insurance fraud. According to experts, hackers used the computer bug Heartbleed in this case, to access the systems. As per reports from Reuters, FBI has issued a ‘flash’ alert last week, warning entities that hackers are targeting healthcare organizations.

With Digital Signature and electronic data capture rapidly replacing manual, paper-based processes in medical practice, next-generation solutions are quickly emerging to help physicians and healthcare organizations to move ahead and optimize their workflows. The fact however is that with increasing volumes of electronic data, the risk of them being breached also increases. This is why healthcare organizations should adopt comprehensive data security solutions such as Aegify Security Posture Management, Aegify SecureGRC, or Aegify Risk Management to enable optimal use of technology while also ensuring that the risks associated with it are curbed.