Ten Examples of how insecure third-party vendors caused data breach of ePHI

The ability of the healthcare sector to provide patients with the best medical care depends on third-party vendors, who provide a wide variety of goods and services. But these suppliers may nevertheless result in a security breach for the parent company if they themselves are not HIPAA compliant. Electronic protected health information (ePHI) thefts could be the result of unreliable third-party vendors, which would violate HIPAA regulations. To protect ePHI and uphold adherence to the Health Insurance Portability and Accountability Act, healthcare companies must make sure that the vendors they use adhere to the stringent security standards, as specified in HIPAA. Organizations can greatly lower the risk of ePHI compromises and maintain a solid level of security by putting in place effective vendor risk management procedures and keeping an eye on the security procedures of third-party providers.

Here are ten examples of how insecure third-party vendors can cause data breaches of ePHI, leading to HIPAA compliance violations:

1. Vendor system breaches: Attackers can exploit vulnerabilities in a vendor’s system to gain access to ePHI stored or processed by the vendor.
2. Unauthorized access to ePHI: Insecure vendor access controls may allow unauthorized individuals to access sensitive patient data.
3. Inadequate encryption: A vendor’s failure to encrypt ePHI during storage or transmission can expose the data to unauthorized access or interception.
4. Insecure disposal of ePHI: Vendors that do not follow proper procedures for disposing of ePHI-containing devices or media can inadvertently expose sensitive patient data.
5. Vendor employee negligence: Improperly trained or careless vendor employees may inadvertently cause data breaches through human error or insider threats.
6. Compromised vendor credentials: Attackers can steal vendor credentials to gain unauthorized access to healthcare organizations’ systems and ePHI.
7. Unpatched vendor software: Vendors that fail to apply security updates to their software can leave healthcare organizations vulnerable to known security vulnerabilities.
8. Insecure data storage: Vendors that store ePHI in unsecured environments, such as public cloud services or unsecured servers, increase the risk of data breaches.
9. Inadequate vendor incident response: Vendors that lack proper incident response procedures may fail to detect, contain, or mitigate data breaches involving ePHI.
10. Insecure data transmission: Vendors that transmit ePHI using unsecured communication channels can expose sensitive patient data to interception or unauthorized access.

Real-world examples of insecure third-party vendors causing HIPAA violations

Medical and healthcare companies rely on third parties as suppliers, but if these relationships aren’t monitored and managed effectively, they may pose major security risks. If these third-party providers are not following the HIPAA regulations, they may impact HIPAA compliance for the medical facility itself. Electronically protected health information (ePHI) may be in imminent danger from these likely causes of data breaches, which could result in HIPAA compliance issues, monetary fines, reputational damage, and legal implications. As per the Health Insurance Portability and Accountability Act (HIPAA), these external/third-party contractors must adhere to comprehensive security regulations to protect ePHI.

Cataloging the five actual instances in the United States of America where unforthcoming third parties led to ePHI data breaches and HIPAA compliance violations:

1. Concentra Health Services (2014): Concentra, a nationwide healthcare provider, agreed to pay a $1.7 million settlement to the Office for Civil Rights (OCR) after an unencrypted laptop containing ePHI was stolen from a third-party vendor’s office. The breach affected over 870 patients.
2. Community Health Systems (2014): The confidential ePHI of around 4.5 million patients was compromised when one of the largest networks of hospitals suffered a data breach. The hackers exploited the Heartbleed vulnerability by cyber-attacking an external vendor.
3. Banner Health (2016): A cyberattack on Banner Health’s food and beverage point-of-sale systems, operated by a third-party vendor, exposed the ePHI of 3.7 million patients. The attack resulted in the theft of payment card data and patient information.
4. Quest Diagnostics (2019): A major data breach at the American Medical Collection Agency (AMCA), a third-party billing collections vendor, exposed the ePHI of nearly 12 million Quest Diagnostics patients. Confidential information about patients, including their social security numbers and other financial information, was exposed as a result of the hacking of Quest Diagnostic’s patient information database.
5. Premera Blue Cross (2021): The medical healthcare facility company had to pay $6.85 million in settlements when the confidential information of about 10.4 million patients was compromised. The breach was traced back to a third-party vendor’s software vulnerability, which allowed attackers to access the healthcare provider’s network and steal ePHI.

To know more about how insufficient backup and disaster recovery plans cause data breaches of ePHI, read this article.