CBR Systems Inc., a cord blood bank vendor, has settled with the Federal Trade Commission and agreed to a proposed consent order to improve its information security practices following a major breach of protected health information in December 2010.
Under the order, which does not include an admission of violating any laws, the company further agreed to submit to independent security audits every other year for 20 years. The breach occurred when an unencrypted laptop and unencrypted hard drive were stolen from the car of an employee. Data compromised for approximately 298,000 individuals included some or all of the following: name, gender, date and time of birth, Social Security number, drivers’ license number, email address, phone number, and type of adoption. The FTC also charged that network information on the devices such as passwords and protocols put additional personal health information at risk.
The FTC does not levy a fine as part of the consent order, but notes it carries the force of law and any future violations of the order could result in a penalty of up to $16,000 for each violation. The order will be published soon in the Federal Register with a 30-day public comment period. “After thirty days, the Commission will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement and take appropriate action or make the final the agreement’s proposed order,” according to the FTC.
The proposed consent order is available here.
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