Feds Release HIPAA Omnibus Regulations, Will Cost Providers, Partners up to $225M

The U.S. Department of Health and Human Services last night released the long-delayed omnibus regulations package that contains wide-ranging changes related to healthcare information security, compliance, jurisdiction, and enforcement.

These regulations have been percolating for more than two years. HHS estimates that it will cost providers, insurers, and their respective partners as much as a $225.4 million to implement the changes.

The biggest impact will not be on providers, but on their business associates, such as collection partners, who will be required to spend as much as $113 million to come into compliance with the new regulations. Business associates will now be “directly liable for compliance,” according to HHS. The federal agency estimates that up to 400,000 business associates will be required to insure they have achieved security rule compliance.

You can download the entire omnibus final rule here (PDF, registration required):  (You must be logged in to download this file. Don't have an account? Register for free and you'll be returned to this page.)

The regulation package, “Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules under the Health Information Technology for Economic and Clinical Health Act and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules,” is as massive as its title, weighing in at 563 pages, and consisting of four final rules. What follows is HHS’s summary of the regulation changes:

1. Final modifications to the HIPAA Privacy, Security, and Enforcement Rules mandated by the Health Information Technology for Economic and Clinical Health (HITECH) Act, and certain other modifications to improve the Rules, which were issued as a proposed rule on July 14, 2010. These modifications:

• Make business associates of covered entities directly liable for compliance with certain of the HIPAA Privacy and Security Rules’ requirements.
• Strengthen the limitations on the use and disclosure of protected health information for marketing and fundraising purposes, and prohibit the sale of protected health information without individual authorization.
• Expand individuals’ rights to receive electronic copies of their health information and to restrict disclosures to a health plan concerning treatment for which the individual has paid out of pocket in full.
• Require modifications to, and redistribution of, a covered entity’s notice of privacy practices.
• Modify the individual authorization and other requirements to facilitate research and disclosure of child immunization proof to schools, and to enable access to decedent information by family members or others.
• Adopt the additional HITECH Act enhancements to the Enforcement Rule not previously adopted in the October 30, 2009, interim final rule (referenced immediately below), such as the provisions addressing enforcement of noncompliance with the HIPAA Rules due to willful neglect.

2. Final rule adopting changes to the HIPAA Enforcement Rule to incorporate the increased and tiered civil money penalty structure provided by the HITECH Act, originally published as an interim final rule on October 30, 2009.

3. Final rule on Breach Notification for Unsecured Protected Health Information under the HITECH Act, which replaces the breach notification rule’s “harm” threshold with a more objective standard and supplants an interim final rule published on August 24, 2009.

4. Final rule modifying the HIPAA Privacy Rule as required by the Genetic Information Nondiscrimination Act (GINA) to prohibit most health plans from using or disclosing genetic information for underwriting purposes, which was published as a proposed rule on October 7, 2009.