On Tuesday, insurer Health Net reached a $250,000 settlement with Connecticut Attorney General Richard Blumenthal (D), who sued the company after it lost a computer hard drive in 2009, Dow Jones/Wall Street Journal reports.
The hard drive contained medical and financial information on about 500,000 members from the state (Solsman, Dow Jones/Wall Street Journal, 7/6).
Background
In November 2009, Health Net reported the loss of a portable external hard drive that contained seven years of medical and personal data on about 1.5 million members across four states (iHealthBeat, 11/19/09).
The missing data included 27.7 million scanned pages of more than 120 types of documents, including:
- Insurance claims forms;
- Appeals and grievances;
- Membership forms; and
- Medical records (Commins, HealthLeaders Media, 7/6).
Blumenthal then sued the insurer for failing to properly secure patient information and for waiting too long to inform consumers about the data breach (iHealthBeat, 1/14).
Blumenthal also claimed that Health Net delayed notifying law enforcement authorities about the missing hard drive, which the company said was probably stolen (Dow Jones/Wall Street Journal, 7/6).
Details of Settlement
Under the settlement, Health Net will provide affected consumers with:
- Two years of credit monitoring;
- $1 million of identity theft insurance; and
- Reimbursement for the costs of security freezes.
The insurer also may pay the state $500,000 if any identity fraud activity is linked to data from the missing hard drive (Dow Jones/Wall Street Journal, 7/6).
Corrective Action
In addition, Health Net will create a "corrective action plan" that includes several detailed changes to protect health information and other private data under the HIPAA privacy and security rules.
The plan includes identity theft protection, improved management and system controls, and improved training and awareness for Health Net employees (Sturdevant, "Insurance Capital," Hartford Courant, 7/6).
Health Net spokesperson Alice Ferreira said in a written statement that the improvements "will result in Health Net being in the forefront of securing member health information" (Blesch, Modern Healthcare, 7/6).