Yet another Health Net breach raises disturbing questions

More is starting to come out about the Health  Net breach involving missing server drives that we first learned of earlier today in a press release from CT’s Attorney General. His press release was followed by a press release from Health Net. Now a few more details have emerged:

Kathy Robertson of the Sacramento Business Journal reports that the breach may affect 1.9 million people and that:

The California Department of Managed Health, the regulatory agency that oversees HMOs, announced Monday it has launched an investigation into Health Net’s security practices.

The agency estimates records for more than 622,000 members in health plans regulated by the Dept. of Managed Health Care may have been compromised, as well as records for 223,000 members in products regulated by the Department of Insurance. Records for some Medicare beneficiaries also may be lost.

The Dept. of Managed Heatlh Care’s press release can be found on their site.

The fact that we’re getting our information from sources other than Health Net does not speak well for Health Net, in my opinion. Indeed, the fact that their press release references “several” drives while Attorney General Jepsen’s press release and California’s press release indicate nine drives suggests that Health Net officials haven’t gotten the message about transparency and may be trying to downplay the extent of the incident rather than controlling the story by getting the details out in their own statements. In addition to failing to be straightforward about the number of drives involved:

  • Health Net’s press release did not provide any numbers –  even though they know they have to provide numbers to HHS that will be revealed publicly on HHS’s web site. As the Los Angeles Times reports:

Health Net would not say how many computer drives or people were affected. The managed health care department, citing Health Net as its source, said nine drives were missing, with information on 1.9 million current and former members.

  • Additionally, Health Net has not publicly revealed precisely when they first became aware of the unaccounted for drives and when those drives were last accounted for.

Of course, even though it is Health Net whose name is in the news for this breach, they really may be entitled to some empathy if the breach should turn out to be IBM’s responsibility as their IT vendor.  But — assuming for now that these drives weren’t encrypted or they wouldn’t be reporting this breach and offering two years’ of credit protection services:

  • Why weren’t the drives encrypted? Even if it was IBM’s responsibility to encrypt the drives (and I’m not sure it was), Health Net should still have been auditing or checking its vendor’s compliance with any security protocols in the contract.

There is much more we need to learn about this breach.  And hopefully, HHS will do a thorough investigation that considers Health Net’s past track record on losing devices with unencrypted PHI. A 2009 breach that occurred before the new HITECH reporting requirements went into effect resulted in fines and actions by both Connecticut and Vermont for late notification of both affected individuals and the states and failure to comply with HIPAA security requirements.   Will HHS take any enforcement action against Health Net over this breach? Only a lot of time will tell.

Cross-posted from

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