HIPAA News

$1 Million to be Paid by Rite Aid to Settle HIPAA Privacy Case

(July 28’ 2010) – A decision has been taken by Rite Aid Corporation and its 40 affiliated entities (RAC to pay $1 million to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule, the U.S. Department of Health and Human Services (HHS) announced. In a coordinated action, RAC also signed a consent order with the Federal Trade Commission (FTC) to settle potential violations of the FTC Act.

Rite Aid, the largest drug store chains of nation, has also agreed to take corrective action to improve policies and procedures to safeguard the privacy of its customers when disposing of identifying information on pill bottle labels and other health information. The settlements apply to all of Rite Aid's nearly 4,800 retail pharmacies and follow an extensive joint investigation by the HHS Office for Civil Rights (OCR) and the FTC.
The OCR, which enforces the HIPAA Privacy and Security Rules, opened its investigation of RAC after television media videotaped incidents in which pharmacies were shown to have disposed of prescriptions and labeled pill bottles containing individuals' identifiable information in industrial trash containers that were accessible to the public. These incidents were reported as occurring in a variety of cities across the United States. Rite Aid pharmacy stores in several of the cities were highlighted in media reports.

Disposing of individuals' health information in an industrial trash container accessible to unauthorized persons is not compliant with several requirements of the HIPAA Privacy Rule and exposes the individuals' information to the risk of identity theft and other crimes. This is the second joint investigation and settlement conducted by OCR and FTC. OCR and FTC settled a similar case involving another national drug store chain in February 2009.

"It is critical that companies, large and small, build a culture of compliance to protect consumers' right to privacy and safeguard health information. OCR is committed to strong enforcement of HIPAA," said Georgina Verdugo, director of OCR. "We hope that this agreement will spur other health organizations to examine and improve their policies and procedures for protecting patient information during the disposal process."

The HIPAA Privacy Rule requires health plans, health care clearinghouses and most health care providers (covered entities), including most pharmacies, to safeguard the privacy of patient information, including such information during its disposal. Rite Aid has also agreed to external, independent assessments of its pharmacy stores' compliance with the FTC consent order. The HHS corrective action plan will be in place for three years; the FTC order will be in place for 20 years.

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