Healthcare Data Legislation
Healthcare Data Legislation: Protecting Sensitive Information in the Modern Era
Legislation surrounding the protection of electronic data and consumer privacy continues to evolve rapidly. New laws and regulations are shaping how healthcare organizations manage protected health information (PHI) and personally identifiable information (PII), and how they respond to breaches.
HIPAA regulations, augmented by the HITECH Act of 2009, established fines and penalties for PHI breaches and extended obligations beyond healthcare providers to include third parties, such as billing companies, labs, and other service providers that handle patient data.
Another major role has been played by state legislation. California introduced the California Consumer Privacy Act (CCPA) in 2018 and the California Privacy Rights Act (CPRA) in 2020, granting consumers private rights of action and statutory damages for data violations. Penalties range from $100 to $750 per consumer per incident, even if there is no proof of actual harm, and regulatory fines can reach $2,500 to $7,500 per violation. Currently, only a few states have comprehensive privacy laws, but nearly 20 more are considering similar legislation.
In the corporate space, the SEC finalized rules in July 2023, requiring rapid reporting of cybersecurity incidents. Companies need to disclose material incidents within four days and provide annual reports on their cybersecurity risk management and governance practices. These rules emphasize transparency and accountability for public companies managing sensitive data.
There are also significant implications for biometric privacy laws. Illinois’ Biometric Information Privacy Act (BIPA), passed in 2008, allows damages up to $1,000 per violation, or $5,000 for intentional or reckless violations. This creates strong incentives for organizations to manage biometric data responsibly. The Illinois Supreme Court has confirmed that damages can be applied on a “per violation” basis, potentially multiplying liability in class-action lawsuits.
In a case of high-profile litigation, such as the lawsuits against Meta for its use of tracking pixels, we see how legislative frameworks intersect with real-world enforcement. Improper collection or use of PHI and PII can lead to violations of HIPAA, CCPA, or BIPA, demonstrating the potential consequences of non-compliance.
Federal and state authorities, including the Department of Health and Human Services’ Office for Civil Rights (OCR) and various attorneys general, are actively enforcing these regulations. Organizations that fail to demonstrate proper policies, procedures, and training around HIPAA or CCPA compliance may face penalties running into millions of dollars.
The conclusion is clear. It is crucial for organizations that are handling sensitive data to stay up to date on healthcare data legislation, implement robust policies, and maintain thorough documentation to mitigate regulatory and legal risks.
