By Leslie Francis
In a caustic opinion issued on January 14, the Fifth Circuit vacated penalties assessed by the U.S. Department of Health and Human Services (HHS) against the University of Texas M.D. Anderson Cancer Center for HIPAA security breaches.
As has happened to many other health care entities, M.D. Anderson had employees who were not careful with their laptops and thumb drives (and the data therein). A laptop with the unencrypted protected health care information of nearly 30,000 patients was stolen. Unencrypted thumb drives with information on another almost 6,000 patients were lost. M.D. Anderson disclosed the security breaches to HHS, which assessed civil monetary penalties for violation of HIPAA’s encryption and disclosure rules. M.D. Anderson then filed a petition for review, which resulted in the Fifth Circuit holding that the agency action was arbitrary and capricious for failure to consider an important aspect of the problem.
Commentators have already pointed out that this decision will reverberate throughout the HIPAA enforcement world. As it does, I hope it is met with scorn, for it trades on the informal logical fallacy of the false dilemma in two noteworthy ways.