Rite Aid pays HHS $1M over HIPAA violations

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Rite Aid, along with its 40 affiliated entities, have agreed 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, the company also signed a consent order with the Federal Trade Commission (FTC) to settle potential violations of the FTC Act.

Rite Aid, a U.S. drug store chain, has 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. HHS said the settlements apply to all of Rite Aid’s nearly 4,800 retail pharmacies and follow an extensive joint investigation by its Office for Civil Rights (OCR) and the FTC.

The OCR, which enforces the HIPAA Privacy and Security Rules, opened its investigation of the company 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, according to the HHS. These incidents were reported as occurring in cities across the U.S., aired in various 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, the agency said.

Among other issues, the reviews by OCR and the FTC indicated that:

  • Rite Aid failed to implement adequate policies and procedures to appropriately safeguard patient information during the disposal process;
  • Rite Aid failed to adequately train employees on how to dispose of such information properly; and
  • Rite Aid did not maintain a sanctions policy for members of its workforce who failed to properly dispose of patient information.

Under the HHS resolution agreement, the chain agreed to pay a $1 million resolution amount to HHS and must implement a corrective action program that includes:

  • Revising and distributing its policies and procedures regarding disposal of protected health information and sanctioning workers who do not follow them;
  • Training workforce members on these new requirements;
  • Conducting internal monitoring; and
  • Engaging a qualified, independent third-party assessor to conduct compliance reviews and render reports to HHS.

Rite Aid has also agreed to external, independent assessments of its pharmacy stores’ compliance with the FTC consent order, according to HHS. The HHS corrective action plan will be in place for three years; the FTC order will be in place for 20 years.