Doctors Management Services, Inc.

About this report

Today, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) announced a settlement under the Health Insurance Portability and Accountability Act (HIPAA) with Doctors’ Management Services, a Massachusetts medical management company that provides a variety of services, including medical billing and payor credentialing. The HIPAA Privacy, Security, and Breach Notification Rules set forth the requirements that HIPAA-regulated entities must follow to protect the privacy and security of health information. The $100,000 settlement resolves a large breach report regarding a ransomware attack that affected the electronic protected health information of 206,695 individuals. Ransomware is a type of malware (malicious software) designed to deny access to a user’s data, usually by encrypting the data with a key known only to the hacker who deployed the malware, until a ransom is paid. This marks the first ransomware agreement OCR has reached. October is Cybersecurity Awareness Month, and OCR has been working with health insurers, providers, and clearinghouses covered by HIPAA to ensure better data security. Ransomware and hacking are the primary cyber-threats in health care. In the past four years, there has been a 239% increase in large breaches reported to OCR involving hacking and a 278% increase in ransomware. This trend continues in 2023, where hacking accounts for 77% of the large breaches reported to OCR. Additionally, the large breaches reported this year have affected over 88 million individuals, a 60% increase from last year. “Our settlement highlights how ransomware attacks are increasingly common and targeting the health care system. This leaves hospitals and their patients vulnerable to data and security breaches.” said OCR Director, Melanie Fontes Rainer. “In this ever-evolving space, it is critical that our health care system take steps to identify and address cybersecurity vulnerabilities along with proactively and regularly review risks, records, and update policies. These practices should happen regularly across an enterprise to prevent future attacks.” On April 22, 2019, Doctors’ Management Services filed a breach report with HHS stating that approximately 206,695 individuals were affected when their network server was infected with GandCrab ransomware. The initial unauthorized access to the network occurred on April 1, 2017; however, Doctors’ Management Services did not detect the intrusion until December 24, 2018, after ransomware was used to encrypt their files. In April 2019, OCR began its investigation. OCR’s investigation found evidence of potential failures by Doctors’ Management Services to have in place an analysis to determine the potential risks and vulnerabilities to electronic protected health information across the organization. Other findings included insufficient monitoring of its health information systems’ activity to protect against a cyber-attack, and a lack of policies and procedures in place to implement the requirements of the HIPAA Security Rule to protect the confidentiality, integrity, and availability of electronic protected health information. Under the terms of the settlement agreement, OCR will monitor Doctors’ Management Services for three years to ensure compliance with HIPAA. In addition, Doctors’ Management Services has agreed to pay $100,000 to OCR and to implement a corrective action plan, which identifies steps that Doctors’ Management Services will take to resolve potential violations of the HIPAA Privacy and Security Rules and protect the security of electronic protected health information.

Summary as published by the HHS Office for Civil Rights.