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CIPP-US · Question #29

CIPP-US Question #29: Real Exam Question with Answer & Explanation

The correct answer is B. Because HealthCo did not conduct due diligence to verify or monitor CloudHealth's security. According to the HIPAA Security Rule, covered entities are responsible for ensuring that their business associates comply with the security standards and safeguards required by the rule. This includes conducting due diligence to assess the business associate's security capabiliti

Question

SCENARIO Please use the following to answer the next question: You are the chief privacy officer at HealthCo, a major hospital in a large U.S. city in statea. HealthCo is a HIPAA-covered entity that provides healthcare services to more than 100,000 patients. A third-party cloud computing service provider, CloudHealth, stores and manages the electronic protected health information (ePHI) of these individuals on behalf of HealthCo. CloudHealth stores the data in state B. As part of HealthCo's business associate agreement (BAA) with CloudHealth, HealthCo requires CloudHealth to implement security measures, including industry standard encryption practices, to adequately protect the data. However, HealthCo did not perform due diligence on CloudHealth before entering the contract, and has not conducted audits of CloudHealth's security measures. A CloudHealth employee has recently become the victim of a phishing attack. When the employee unintentionally clicked on a link from a suspicious email, the PHI of more than 10,000 HealthCo patients was compromised. It has since been published online. The HealthCo cybersecurity team quickly identifies the perpetrator as a known hacker who has launched similar attacks on other hospitals ?ones that exposed the PHI of public figures including celebrities and politicians. During the course of its investigation, HealthCo discovers that CloudHealth has not encrypted the PHI in accordance with the terms of its contract. In addition, CloudHealth has not provided privacy or security training to its employees. Law enforcement has requested that HealthCo provide its investigative report of the breach and a copy of the PHI of the individuals affected. A patient affected by the breach then sues HealthCo, claiming that the company did not adequately protect the individual's ePHI, and that he has suffered substantial harm as a result of the exposed data. The patient's attorney has submitted a discovery request for the ePHI exposed in the breach. What is the most significant reason that the U.S. Department of Health and Human Services (HHS) might impose a penalty on HealthCo?

Options

  • ABecause HealthCo did not require CloudHealth to implement appropriate physical and
  • BBecause HealthCo did not conduct due diligence to verify or monitor CloudHealth's security
  • CBecause HIPAA requires the imposition of a fine if a data breach of this magnitude has occurred
  • DBecause CloudHealth violated its contract with HealthCo by not encrypting the ePHI

Explanation

According to the HIPAA Security Rule, covered entities are responsible for ensuring that their business associates comply with the security standards and safeguards required by the rule. This includes conducting due diligence to assess the business associate's security capabilities and practices, and monitoring their performance and compliance. Failure to do so may result in a violation of the rule and a penalty by the HHS. In this scenario, HealthCo did not perform due diligence on CloudHealth before entering the contract, and did not conduct audits of CloudHealth's security measures. This is the most significant reason why HHS might impose a penalty on HealthCo, as it indicates a lack of oversight and accountability for the protection of

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