[Federal Register Volume 68, Number 34 (Thursday, February 20, 2003)]
[Rules and Regulations]
[Pages 8334-8381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3877]
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Part II
Department of Health and Human Services
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Office of the Secretary
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45 CFR Parts 160, 162, and 164
Health Insurance Reform: Security Standards; Final Rule
Federal Register / Vol. 68, No. 34 / Thursday, February 20, 2003 /
Rules and Regulations
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
45 CFR Parts 160, 162, and 164
[CMS-0049-F]
RIN 0938-AI57
Health Insurance Reform: Security Standards
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule adopts standards for the security of
electronic protected health information to be implemented by health
plans, health care clearinghouses, and certain health care providers.
The use of the security standards will improve the Medicare and
Medicaid programs, and otherFederal health programs and private health
programs, and the effectiveness and efficiency of the health care
industry in general by establishing a level of protection for certain
electronic health information. This final rule implements some of the
requirements of the Administrative Simplification subtitle of the
Health Insurance Portability andAccountability Act of 1996 (HIPAA).
DATES: Effective Date: These regulations are effective on April 21,
2003.
Compliance Date: Covered entities, with the exception of small
health plans, must comply with the requirements of this final rule by
April 21, 2005. Small health plans must comply with the requirements of
this final rule by April 21, 2006.
FOR FURTHER INFORMATION CONTACT: William Schooler, (410) 786-0089.
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I. Background
The Department of Health and Human Services (HHS) Medicare Program,
other Federal agencies operating health plans or providing health care,
State Medicaid agencies, private health plans, health care providers,
and health care clearinghouses must assure their customers (for
example, patients, insured individuals, providers, and health plans)
that the integrity, confidentiality, and availability of electronic
protected health information they collect, maintain, use, or transmit
is protected. The confidentiality of health information is threatened
not only by the risk of improper access to stored information, but also
by the risk of interception during electronic transmission of the
information. The purpose of this final rule is to adopt national
standards for safeguards to protect the confidentiality, integrity, and
availability of electronic protected health information. Currently, no
standard measures exist in the health care industry that address all
aspects of the security of electronic health information while it is
being stored or during the exchange of that information between
entities.
This final rule adopts standards as required under title II,
subtitle F, sections 261 through 264 of the Health Insurance
Portability and Accountability Act of 1996 (HIPAA), Pub. L. 104-191.
These standards require measures to be taken to secure this information
while in the custody of entities covered by HIPAA (covered entities) as
well as in transit between covered entities and from covered entities
to others.
The Congress included provisions to address the need for
safeguarding electronic health information and other administrative
simplification issues in HIPAA. In subtitle F of title II of that law,
the Congress added to title XI of the Social Security Act a new part C,
entitled ``Administrative Simplification'' (hereafter, we refer to the
Social Security Act as ``the Act''; we refer to the other laws cited in
this document by their names). The purpose of subtitle F is to improve
the Medicare program under title XVIII of the Act, the Medicaid program
under title XIX of the Act, and the efficiency and effectiveness of the
health care system, by encouraging the development of a health
information system through the establishment of standards and
requirements to enable the electronic exchange of certain health
information.
Part C of title XI consists of sections 1171 through 1179 of the
Act. These sections define various terms and impose requirements on
HHS, health plans, health care clearinghouses, and certain health care
providers. These statutory sections are discussed in the Transactions
Rule, at 65 FR 50312, on pages 50312 through 50313, and in the final
rules adopting Standards for Privacy of Individually Identifiable
Health Information, published on December 28, 2000 at 65 FR 82462
(Privacy Rules), on pages 82470 through 82471, and on August 14, 2002
at 67 FR 53182. The reader is referred to those discussions.
Section 1173(d) of the Act requires the Secretary of HHS to adopt
security standards that take into account the technical capabilities of
record systems used to maintain health information, the costs of
security measures, the need to train persons who have access to health
information, the value of audit trails in computerized record systems,
and the needs and capabilities of small health care providers and rural
health care providers. Section 1173(d) of the Act also requires that
the standards ensure that a health care clearinghouse, if part of a
larger organization, has policies and security procedures that isolate
the activities of the clearinghouse with respect to processing
information so as to prevent unauthorized access to health information
by the larger organization. Section 1173(d) of the Act provides that
covered entities that maintain or transmit health information are
required to maintain reasonable and appropriate administrative,
physical, and technical safeguards to ensure the integrity and
confidentiality of the information and to protect against any
reasonably anticipated threats or hazards to the security or integrity
of the information and unauthorized use or disclosure of the
information. These safeguards must also otherwise ensure compliance
with the statute by the officers and employees of the covered entities.
II. General Overview of the Provisions of the Proposed Rule
On August 12, 1998, we published a proposed rule (63 FR 43242) to
establish a minimum standard for security of electronic health
information. We proposed that the standard would require the
safeguarding of all electronic health information by covered entities.
The proposed rule also proposed a
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standard for electronic signatures. This final rule adopts only
security standards. All comments concerning the proposed electronic
signature standard, responses to these comments, and a final rule for
electronic signatures will be published at a later date. A detailed
discussion of the provisions of the August 12, 1998 proposed rule can
be found at 63 FR 43245 through 43259.
We originally proposed to add part 142, entitled ``Administrative
Requirements,'' to title 45 of the Code of Federal Regulations (CFR).
It has now been determined that this material will reside in subchapter
C of title 45, consisting of parts 160, 162, and 164. Subpart A of part
160 contains the general provisions applicable to all the
Administrative Simplification rules; other subparts of part 160 will
contain other requirements applicable to all standards. Part 162
contains the standards for transactions and code sets and will contain
the identifier standards. Part 164 contains the standards relating to
privacy and security. Subpart A of part 164 contains general provisions
applicable to part 164; subpart E contains the privacy standards.
Subpart C of part 164, which is adopted in this final rule, adopts
standards for the security of electronic protected health information.
III. Analysis of, and Responses to, Public Comments on the Proposed
Rule
We received approximately 2,350 timely public comments on the
August 12, 1998 proposed rule. The comments came from professional
associations and societies, health care workers, law firms, health
insurers, hospitals, and private individuals. We reviewed each
commenter's letter and grouped related comments. Some comments were
identical. After associating like comments, we placed them in
categories based on subject matter or based on the section(s) of the
regulations affected and then reviewed the comments.
In this section of the preamble, we summarize the provisions of the
proposed regulations, summarize the related provisions in this final
rule, and respond to comments received concerning each area.
It should be noted that the proposed Security Rule contained
multiple proposed ``requirements'' and ``implementation features.'' In
this final rule, we replace the term ``requirement'' with ``standard.''
We also replace the phrase ``implementation feature'' with
``implementation specification.'' We do this to maintain consistency
with the use of those terms as they appear in the statute, the
Transactions Rule, and the Privacy Rule. Within the comment and
response portion of this final rule, for purposes of continuity,
however, we use ``requirement'' and ``implementation feature'' when we
are referring specifically to matters from the proposed rule. In all
other instances, we use ``standard'' and ``implementation
specification.''
The proposed rule would require that each covered entity (as now
described in Sec. 160.102) engaged in the electronic maintenance or
transmission of health information pertaining to individuals assess
potential risks and vulnerabilities to such information in its
possession in electronic form, and develop, implement, and maintain
appropriate security measures to protect that information. Importantly,
these measures would be required to be documented and kept current.
The proposed security standard was based on three basic concepts
that were derived from the Administrative Simplification provisions of
HIPAA. First, the standard should be comprehensive and coordinated to
address all aspects of security. Second, it should be scalable, so that
it can be effectively implemented by covered entities of all types and
sizes. Third, it should not be linked to specific technologies,
allowing covered entities to make use of future technology
advancements.
The proposed standard consisted of four categories of requirements
that a covered entity would have to address in order to safeguard the
integrity, confidentiality, and availability of its electronic health
information pertaining to individuals: administrative procedures,
physical safeguards, technical security services, and technical
mechanisms. The implementation features described the requirements in
greater detail when that detail was needed. Within the four categories,
the requirements and implementation features were presented in
alphabetical order to convey that no one item was considered to be more
important than another.
The four proposed categories of requirements and implementation
features were depicted in tabular form along with the electronic
signature standard in a combined matrix located at Addendum 1. We also
provided a glossary of terms, at Addendum 2, to facilitate a common
understanding of the matrix entries, and at Addendum 3, we mapped
available existing industry standards and guidelines to the proposed
security requirements.
A. General Issues
The comment process overwhelmingly validated our basic assumptions
that the entities affected by this regulation are so varied in terms of
installed technology, size, resources, and relative risk, that it would
be impossible to dictate a specific solution or set of solutions that
would be useable by all covered entities. Many commenters also
supported the concept of technological neutrality, which would afford
them the flexibility to select appropriate technology solutions and to
adopt new technology over time.
1. Security Rule and Privacy Rule Distinctions
As many commenters recognized, security and privacy are
inextricably linked. The protection of the privacy of information
depends in large part on the existence of security measures to protect
that information. It is important that we note several distinct
differences between the Privacy Rule and the Security Rule.
The security standards below define administrative, physical, and
technical safeguards to protect the confidentiality, integrity, and
availability of electronic protected health information. The standards
require covered entities to implement basic safeguards to protect
electronic protected health information from unauthorized access,
alteration, deletion, and transmission. The Privacy Rule, by contrast,
sets standards for how protected health information should be
controlled by setting forth what uses and disclosures are authorized or
required and what rights patients have with respect to their health
information.
As is discussed more fully below, this rule narrows the scope of
the information to which the safeguards must be applied from that
proposed in the proposed rule, electronic health information pertaining
to individuals, to protected health information in electronic form.
Thus, the scope of information covered in this rule is consistent with
the Privacy Rule, which addresses privacy protections for ``protected
health information.'' However, the scope of the Security Rule is more
limited than that of the Privacy Rule. The Privacy Rule applies to
protected health information in any form, whereas this rule applies
only to protected health information in electronic form. It is true
that, under section 1173(d) of the Act, the Secretary has authority to
cover ``health information,'' which, by statute, includes information
in other than electronic form. However, because the proposed rule
proposed to cover only health information in electronic form, we do not
include security standards for health information in non-electronic
form in this final rule.
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We received a number of comments that pertained to privacy issues.
These issues were considered in the development of the Privacy Rule and
many of these comments were addressed in the preamble of the Privacy
Rule. Therefore, we are referring the reader to that document for a
discussion of those issues.
2. Level of Detail
We solicited comments as to the level of detail expressed in the
required implementation features; that is, we specifically wanted to
know whether commenters believe the level of detail of any proposed
requirement went beyond what is necessary or appropriate. We received
numerous comments expressing the view that the security standards
should not be overly prescriptive because the speed with which
technology is evolving could make specific requirements obsolete and
might in fact deter technological progress. We have accordingly written
the final rule to frame the standards in terms that are as generic as
possible and which, generally speaking, may be met through various
approaches or technologies.
3. Implementation Specifications
In addition to adopting standards, this rule adopts implementation
specifications that provide instructions for implementing those
standards.
However, in some cases, the standard itself includes all the
necessary instructions for implementation. In these instances, there
may be no corresponding implementation specification for the standard
specifically set forth in the regulations text. In those instances, the
standards themselves also serve as the implementation specification. In
other words, in those instances, we are adopting one set of
instructions as both the standard and the implementation specification.
The implementation specification would, accordingly, in those instances
be required.
In this final rule, we adopt both ``required'' and ``addressable''
implementation specifications. We introduce the concept of
``addressable implementation specifications'' to provide covered
entities additional flexibility with respect to compliance with the
security standards.
In meeting standards that contain addressable implementation
specifications, a covered entity will ultimately do one of the
following: (a) Implement one or more of the addressable implementation
specifications; (b) implement one or more alternative security
measures; (c) implement a combination of both; or (d) not implement
either an addressable implementation specification or an alternative
security measure. In all cases, the covered entity must meet the
standards, as explained below.
The entity must decide whether a given addressable implementation
specification is a reasonable and appropriate security measure to apply
within its particular security framework. This decision will depend on
a variety of factors, such as, among others, the entity's risk
analysis, risk mitigation strategy, what security measures are already
in place, and the cost of implementation. Based upon this decision the
following applies:
(a) If a given addressable implementation specification is
determined to be reasonable and appropriate, the covered entity must
implement it.
(b) If a given addressable implementation specification is
determined to be an inappropriate and/or unreasonable security measure
for the covered entity, but the standard cannot be met without
implementation of an additional security safeguard, the covered entity
may implement an alternate measure that accomplishes the same end as
the addressable implementation specification. An entity that meets a
given standard through alternative measures must document the decision
not to implement the addressable implementation specification, the
rationale behind that decision, and the alternative safeguard
implemented to meet the standard. For example, the addressable
implementation specification for the integrity standard calls for
electronic mechanisms to corroborate that data have not been altered or
destroyed in an unauthorized manner (see 45 CFR 164.312(c)(2)). In a
small provider's office environment, it might well be unreasonable and
inappropriate to make electronic copies of the data in question.
Rather, it might well be more practical and afford a sufficient
safeguard to make paper copies of the data.
(c) A covered entity may also decide that a given implementation
specification is simply not applicable (that is, neither reasonable nor
appropriate) to its situation and that the standard can be met without
implementation of an alternative measure in place of the addressable
implementation specification. In this scenario, the covered entity must
document the decision not to implement the addressable specification,
the rationale behind that decision, and how the standard is being met.
For example, under the information access management standard, an
access establishment and modification implementation specification
reads: ``implement policies and procedures that, based upon the
entity's access authorization policies, establish, document, review,
and modify a user's right of access to a workstation, transaction,
program, or process'' (45 CFR 164.308(a)(4)(ii)(c)). It is possible
that a small practice, with one or more individuals equally responsible
for establishing and maintaining all automated patient records, will
not need to establish policies and procedures for granting access to
that electronic protected health information because the access rights
are equal for all of the individuals.
a. Comment: A large number of commenters indicated that mandating
69 implementation features would result in a regulation that is too
burdensome, intrusive, and difficult to implement. These commenters
requested that the implementation features be made optional to meet the
requirements. A number of other commenters requested that all
implementation features be removed from the regulation.
Response: Deleting the implementation specifications would result
in the standards being too general to understand, apply effectively,
and enforce consistently. Moreover, a number of implementation
specifications are so basic that no covered entity could effectively
protect electronic protected health information without implementing
them. We selected 13 of these mandatory implementation specifications
based on (1) the expertise of Federal security experts and generally
accepted industry practices and, (2) the recommendation for immediate
implementation of certain technical and organizational practices and
procedures described in Chapter 6 of For The Record: Protecting
Electronic Health Information, a 1997 report by the National Research
Council (NRC). These mandatory implementation specifications are
referred to as required implementation specifications and are reflected
in the NRC report's recommendations. Risk Analysis and Risk management
are found in the NRC recommendation title System Assessment; Sanction
Policy is required in the Sanctions recommendation; Information system
Activity Review is discussed in Audit Trails; Response and Reporting
circumstances.
In addition, a number of voluntary national and regional
organizations have been formed to address HIPAA implementation issues
and to facilitate
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communication among trading partners. These include the Strategic
National Implementation Process (SNIP) developed under the auspices of
the Workgroup for Electronic Data Interchange (WEDI), an organization
named in the HIPAA statute to consult with the Secretary of HHS on
HIPAA issues. Some of these organizations have developed white papers,
tools, and recommended best practices addressing a number of HIPAA
issues, including security. Covered entities may wish to examine these
products to determine if they are relevant and useful in their own
implementation efforts. A partial list of these organizations can be
found at http://www.wedi/snip./org. We believe that these and other
future industry-developed guidelines and/or models may provide valuable
assistance to covered entities implementing these standards but must
caution that HHS does not rate or endorse any such guidelines and/or
models and the value of its content must be determine by the user.
b. Comment: Many commenters asked us to develop guidelines and
models to aid in complying with the Security Rule. Several commenters
either offered to participate in the development of guidelines and
models or suggested entities that should be invited to participate.
Response: We agree that creation of compliance tools and guidelines
for different business environments could assist covered entities to
implement the HIPAA Security Rule. We plan to issue guidance documents
after the publication of this final rule. However, it is critical for
each covered entity to establish policies and procedures that address
its own unique risks and circumstances.
In addition, a number of voluntary national and regional
organizations have been formed to address HIPAA implementation issues
and to facilitate communication among trading partners. These include
the Strategic National Implementation Process (SNIP) developed under
the auspices of the Workgroup for Electronic Data Interchange (WEDI),
an organization named in the HIPAA statute to consult with the
Secretary of HHS on HIPAA issues. Some of these organizations have
developed white papers, tools, and recommended best practices
addressing a number of HIPAA issues, including security.
Covered entities may wish to examine these products to determine if
they are relevant and useful in their own implementation efforts. A
partial list of these organizations can be found at http://www.snip.wedi.org. We believe that these and other future industry-
developed guidelines and/or models may provide valuable assistance to
covered entities implementing these standards but must caution that HHS
does not rate or endorse any such guidelines and/or models and the
value of its content must be determined by the user.
4. Examples
Comment: We received a number of comments that demonstrated
confusion regarding the purpose of the examples of security solutions
that were included throughout the proposed rule. Commenters stated that
they could not, or did not wish to, adopt various security measures
suggested in examples. Other commenters asked that we include
additional options within the examples. Some commenters referred
specifically to the example provided in the proposed rule demonstrating
how a small or rural provider might comply with the standards. One
commenter asked for clarification that the examples are not mandatory
measures that are required to demonstrate compliance, but are merely
meant as a guide when implementing the security standards. Another
commenter expressed support for the use of examples to clarify the
intent of text descriptions.
Response: We wish to clarify that examples are used only as
illustrations of possible approaches, and are included to serve as a
springboard for ideas. The steps that a covered entity will actually
need to take to comply with these regulations will be dependent upon
its own particular environment and circumstances and risk assessment.
The examples do not describe mandatory measures, nor do they represent
the only, or even the best, way of achieving compliance. The most
appropriate means of compliance for any covered entity can only be
determined by that entity assessing its own risks and deciding upon the
measures that would best mitigate those risks.
B. Applicability (Sec. 164.302)
We proposed that the security standards would apply to health
plans, health care clearinghouses, and to health care providers that
maintain or transmit health information electronically. The proposed
security standards would apply to all electronic health information
maintained or transmitted, regardless of format (standard transaction
or a proprietary format). No distinction would be made between internal
corporate entity communication or communication external to the
corporate entity. Electronic transmissions would include transactions
using all media, even when the information is physically moved from one
location to another using magnetic tape, disk, or other machine
readable media. Transmissions over the Internet (wide-open), extranet
(using Internet technology to link a business with information only
accessible to collaborating parties), leased lines, dial-up lines, and
private networks would be included. We proposed that telephone voice
response and ``faxback'' systems (a request for information made via
voice using a fax machine and requested information returned via that
same machine as a fax) would not be included but we solicited comments
on this proposed exclusion.
This final rule simplifies the applicability statement greatly.
Section 164.302 provides that the security standards apply to covered
entities; the scope of the information covered is specified in Sec.
164.306 (see the discussion under that section below regarding the
changes and revisions to the scope of information covered).
1. Comment: A number of commenters requested clarification of who
must comply with the standards. The preamble and proposed Sec. 142.102
and Sec. 142.302 stated: ``Each person described in section 1172(a) of
the Act who maintains or transmits health information shall maintain
reasonable and appropriate administrative, technical, and physical
safeguards.'' Commenters suggested that this statement is in conflict
with the law, which defines a covered entity as a health plan, a
clearinghouse, or a health care provider that conducts certain
transactions electronically. The commentors apparently did not realize
that section 1172(a) of the Act contains the definition of covered
entities.
Response: Section 164.302 below makes the security standards
applicable to ``covered entities.'' The term ``covered entity'' is
defined at Sec. 160.103 as one of the following: (1) A health plan;
(2) a health care clearinghouse; (3) a health care provider who
transmits any health information in electronic form in connection with
a transaction covered by part 162 of title 45 of the Code of Federal
Regulations (CFR). The rationale for the use and the meaning of the
term ``covered entity'' is discussed in the preamble to the Privacy
Rule (65 FR 82476 through 82477).
As that discussion makes clear, the standards only apply to health
care providers who engage electronically in the transactions for which
standards have been adopted.
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2. Comment: Several commenters recommended expansion of
applicability, either to other specific entities, or to all entities
involved in health care. Others wanted to know whether the standards
apply to entities such as employers, public health organizations,
medical schools, universities, research organizations, plan brokers, or
non-EDI providers. One commenter asked whether the standards apply to
State data organizations operating in capacities other than as plans,
clearinghouses, or providers. Still other commenters stated that it was
inappropriate to include physicians and other health care professionals
in the same category as plans and clearinghouses, arguing that
providers should be subject to different, less burdensome requirements
because they already protect health information.
Response: The statute does not cover all health care entities that
transmit or maintain individually identifiable health information.
Section 1172(a) of the Act provides that only health plans, health care
clearinghouses, and certain health care providers (as discussed above)
are covered. With respect to the comments regarding the difference
between providers and plans/clearinghouses, we have structured the
Security Rule to be scalable and flexible enough to allow different
entities to implement the standards in a manner that is appropriate for
their circumstances. Regarding the coverage of entities not within the
jurisdiction of HIPAA, see the Privacy Rule at 82567 through 82571.
3. Comment: One commenter asked whether the standards would apply
to research organizations, both to those affiliated with health care
providers and those that are not.
Response: Only health plans, health care clearinghouses, and
certain health care providers are required to comply with the security
standards. Researchers who are members of a covered entity's work force
may be covered by the security standards as part of the covered entity.
See the definition of ``workforce'' at 45 CFR 160.103. Note, however,
that a covered entity could, under appropriate circumstances, exclude a
researcher or research division from its health care component or
components (see Sec. 164.105(a)). Researchers who are not part of the
covered entity's workforce and are not themselves covered entities are
not subject to the standards.
4. Comment: Several commenters stated that internal networks and
external networks should be treated differently. One commenter asked
for further clarification of the difference between what needs to be
secured external to a corporation versus the security of data movement
within an organization. Another stated that complying with the security
standards for internal communications may prove difficult and costly to
monitor and control. In contrast, one commenter stated that the
existence of requirements should not depend on whether use of
information is for internal or external purposes.
Another commenter argued that the regulation goes beyond the intent
of the law, and while communication of electronic information between
entities should be covered, the law was never intended to mandate
changes to an entity's internal automated systems. One commenter
requested that raw data that are only for the internal use of a
facility be excluded, provided that reasonable safeguards are in place
to keep the raw data under the control of the facility.
Response: Section 1173(d)(2) of the Act states: Each person
described in section 1172(a) who maintains or transmits health
information shall maintain reasonable and appropriate administrative,
technical, and physical safeguards--(A) to ensure the integrity and
confidentiality of the information; (B) to protect against any
reasonably anticipated--(i) threats or hazards to the security or
integrity of the information; and (ii) unauthorized uses or disclosures
of the information; and (C) otherwise to ensure compliance with this
part by the officers and employees of such person.
This language draws no distinction between internal and external
data movement. Therefore, this final rule covers electronic protected
health information at rest (that is, in storage) as well as during
transmission. Appropriate protections must be applied, regardless of
whether the data are at rest or being transmitted. However, because
each entity's security needs are unique, the specific protections
determined appropriate to adequately protect information will vary and
will be determined by each entity in complying with the standards (see
the discussion below).
5. Comment: Several commenters found the following statement in the
proposed rule (63 FR 43245) at section II.A. confusing and asked for
clarification: ``With the exception of the security standard,
transmission within a corporate entity would not be required to comply
with the standards.''
Response: In the final Transactions Rule, we revised our approach
concerning the transaction and code set exemptions, replacing this
concept with other tests that determine whether a particular
transaction is subject to those standards (see the discussion in the
Transactions Rule at 65 FR 50316 through 50318). We also note that the
Privacy Rule regulates a covered entity's use, as well as disclosure,
of protected health information.
6. Comment: One commenter stated that research would be hampered if
proposed Sec. 142.306(a) applied. The commenter believes that research
uses of health information should be excluded or the standard should be
revised to allow appropriate flexibility for research depending on the
risk to patients or subjects (for example, if the information is
anonymous, there is no risk, and it would not be necessary to meet the
security standards).
Response: If electronic protected health information is de-
identified (as truly anonymous information would be), it is not covered
by this rule because it is no longer electronic protected health
information (see 45 CFR 164.502(d) and 164.514(a)). Electronic
protected health information received, created, or maintained by a
covered entity, or that is transmitted by covered entities, is covered
by the security standards and must be protected. To the extent a
researcher is a covered entity, the researcher must comply with these
standards with respect to electronic protected health information.
Otherwise, the conditions for release of such information to
researchers is governed by the Privacy Rule. See, for example, 45 CFR
164.512(i), 164.514(e) and 164.502(d). These standards would not apply
to the researchers as such in the latter circumstances.
7. Comment: One commenter asked to what extent individual patients
are subject to the standards. For example, some telemedicine practices
support the use of diagnostic systems in the patient's home, which can
be used to conduct tests and send results to a remote physician. In
other cases, patients may be responsible for the filing of insurance
claims directly and will need the ability to verify facts, confirm
receipt of claims, and so on. The commenter asked if it is the intent
of the rule to include electronic transmission to or from the patient.
Response: Patients are not covered entities and, thus, are not
subject to these standards. With respect to transmissions from covered
entities, covered entities must protect electronic protected health
information when they transmit that information. See also the
discussion of encryption in section III.G.
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C. Transition to the Final Rule
The proposed rule included definitions for a number of terms that
have now already been promulgated as part of the Transactions Rule or
the Privacy Rule. Comments related to the definitions of ``code set,''
``health care'' clearinghouse,'' ``health plan,'' ``health care
provider,'' ``small health plan,'' ``standard'' and ``transaction,''
are addressed in the Transactions Rule at 65 FR 50319 through 50320.
Comments concerning the definition of ``individually identifiable
health information'' are discussed below, but are also addressed in the
Privacy Rule at 65 FR 82611 through 82613. In addition, a few terms
were redefined in the final Standards for Privacy of Individually
Identifiable Health Information (67 FR 53182), issued on August 14,
2002 (Privacy Modifications). Certain terms that were defined in the
proposed rule are not used in the final rule because they are no longer
necessary. Other terms defined in the proposed rule are defined within
the explanation of the standards in the final rule and are discussed in
the preamble discussions in Sec. 164.308 through Sec. 164.312.
Definitions of terms relevant to the security standards now appear
in the regulations text provisions as indicated below:
Sec. 160.103: Definitions of the following terms relevant to this
rule appear in Sec. 160.103: ``business associate,'' ``covered
entity,'' ``disclosure,'' ``electronic media,'' ``electronic protected
health information,'' ``health care,'' ``health care clearinghouse,''
``health care provider,'' ``health information,'' ``health plan,''
``individual,'' ``individually identifiable health information,''
``implementation specification,'' ``organized health care
arrangement,'' ``protected health information,'' ``standard,'' ``use,''
and ``workforce.'' These terms were discussed in connection with the
Transaction and Privacy Rules and with the exception of the terms
``covered entity'' ``disclosure'' ``electronic protected health
information,'' ``health information,'' ``individual,'' ``organized
health care arrangement,'' ``protected health information,'' and
``use,'' we will not discuss them in this document. We note that the
definition of those terms are not changed in the final rule.
Sec. 162.103: We have moved the definition of ``electronic media''
at Sec. 162.103 to Sec. 160.103 and have modified it to clarify that
the term includes storage of information. The term ``electronic media''
is used in the definition of ``protected health information.'' Both the
privacy and security standards apply to information ``at rest'' as well
as to information being transmitted.
We note that we have deleted the reference to Sec. 162.103 in
paragraph (1)(ii) of the definition of ``protected health
information,'' since both definitions, ``electronic media'' and
``protected health information,'' have been moved to this section.
Also, it is unnecessary, because the definitions of Sec. 160.103 apply
to all of the rule in parts 160, 162, and 164.
We have also clarified that the physical movement of electronic
media from place to place is not limited to magnetic tape, disk, or
compact disk. This clarification removes a restriction as to what is
considered to be physical electronic media, thereby allowing for future
technological innovation. We further clarified that transmission of
information not in electronic form before the transmission, for
example, paper or voice, is not covered by this definition.
Sec. 164.103: The following term ``plan sponsor'' now appears in
the new Sec. 164.103, which consists of definitions of terms common to
both subpart C and subpart E (the privacy standards). This definition
was moved, without substantive change, from Sec. 164.501 and has the
meaning given to it in that section, and comments relating to this
definition are discussed in connection with that section in the Privacy
Rule at 65 FR 82607, 82611 through 82613, 82618 through 82622, and
82629.
Sec. 164.304: Definitions specifically applicable to the Security
Rule appear in Sec. 164.304, and these are discussed below. These
definitions are from, or derived from, currently accepted definitions
in industry publications, such as, the International Organization for
Standards (ISO) 7498-2 and the American Society for Testing and
Materials (ASTM) E1762-95.
The following terms in Sec. 164.304 are taken from the proposed
rule text or the glossary in Addendum 2 of the proposed rule (63 FR
43271), were not commented on, and/or are unchanged or have only minor
technical changes for purposes of clarification and are not discussed
below: ``access,'' ``authentication,'' ``availability,''
``confidentiality,'' ``encryption,'' ``password,'' and ``security.''
Sec. 164.314: Four terms were defined in Sec. 164.504(a) of the
Privacy Rule (``common control,'' ``common ownership,'' ``health care
component,'' and ``hybrid entity''). Because these terms apply to both
security and privacy, their definitions have been moved to Sec.
164.103 without change. Those terms are discussed in the Privacy Rule
at 65 FR 82502 through 82503 and at 67 FR 53203 through 53207.
1. Covered Entity (Sec. 160.103)
Comment: One commenter asked if transcription services were covered
entities. The question arose because transcription is often the first
electronic or printed source of clinical information. Concern was
expressed about the application of physical safeguard standards to the
transcribers working for transcription companies or health care
providers, either as employees or as independent contractors.
Another commenter expressed concern that scalability was limited to
only small providers. The commenter explained that Third Party
Administrators (TPAs) allow claim processors to work at home. Some TPAs
have noted that it would be impossible to comply with the security
standards for home-based claims processors.
Response: A covered entity's responsibility to implement security
standards extends to the members of its workforce, whether they work at
home or on-site. Because a covered entity is responsible for ensuring
the security of the information in its care, the covered entity must
include ``at home'' functions in its security process. While an
independent transcription company or a TPA may not be covered entities,
they will be a business associate of the covered entity because their
activities fall under paragraph (1)(i)(a) of the definition of that
term. For business associate provisions see proposed preamble section
III.E.8. and Sec. 164.308(b)(1) and Sec. 164.314(c) of this final
rule.
2. Health Care and Medical Care (Sec. 160.103)
Comment: One commenter asked whether ``medical care,'' which is
defined in the proposed rule, and ``health care,'' which is not, are
synonymous.
Response: The term ``medical care,'' as used in the proposed rule
(63 FR 43242), was intended to be synonymous with ``health care.'' The
term ldquo;medical care'' is not included in this final rule. It is,
however, included in the definition of ``health plan,'' where its
meaning is not synonymous with ``health care.'' For a full discussion
of this issue and its resolution, see the Privacy Rule (65 FR 82578).
[[Page 8340]]
3. Health Information and Individually Identifiable Health Information
160.103)
We note that the definitions of ``health information'' and
``individually identifiable health information'' remain unchanged from
those published in the Transactions and Privacy Rules.
a. Comment: A number of commenters asked that the definition of
``health information'' be expanded to include information collected by
additional entities. Several commenters wanted the definition to
include health information collected, maintained, or transmitted by any
entity, and one commenter suggested the inclusion of aggregated
information not identifiable to an individual. Several commenters asked
that eligibility information be excluded from the definition of
information. Several commenters wanted the definition broadened to
include demographics.
Response: Our definition of health information is taken from the
definition in section 1171(4) of the Act, which provides that health
information relates to the health or condition of an individual, the
provision of health care to an individual, or payment for the provision
of health care to an individual. The statutory definition also
specifies the entities by which health information is created or
received. We note that, because ``individually identifiable health
information'' is a subset of ``health information'' and by statute
includes demographic information, ``health information'' necessarily
includes demographic information. We think this is clear as a matter of
statutory construction and does not require further regulatory change.
b. Comment: Several commenters asked that we clarify the difference
between ``health information'' and ``individually identifiable'' and
``health information pertaining to an individual'' as used in the
August 12, 1998 proposed rule (63 FR 43242). Additionally, commenters
asked that we be more consistent in the use of these terms and
recommended use of the term ``individually identifiable health
information.''
Two commenters stated that it is important to distinguish between
``health information pertaining to an individual'' and ``individually
identifiable health information,'' as in reporting statistics at
various levels there will always be a need to bring forth information
pertaining to an individual.
One commenter recommended that the standards apply only to
individually identifiable health information. Another stated that in
Sec. 142.306(b) of the proposed rule, ``health information pertaining
to an individual'' should be changed to ``individually identifiable
health information,'' as nonidentifiable information can be used for
utilization review and other purposes. As written, the regulation text
could limit the ability to use data, for example, from a clearinghouse
for compliance monitoring.
Response: In general, we agree with these commenters, and note that
these comments are largely mooted by the decision, reflected in Sec.
164.306 below and discussed in section III.D.1. of this final rule, to
cover only electronic protected health information in this final rule.
c. Comment: Several commenters stated that the definition of
``individually identifiable health information'' is not in the
regulations and should be added.
Response: We note that the definition of ``individually
identifiable health information'' appears at Sec. 160.103, which
applies to this final rule.
4. Protected Health Information (Sec. 160.103)
This term is moved from Sec. 164.501 to Sec. 160.103 because it
applies to both subparts C (security) and E (privacy). See 67 FR 53192
through 531936 regarding the definition of ``protected health
information.''
Also, the term ``electronic media'' is included in paragraphs
(1)(i) and (ii) of the definition of ``protected health information,''
as specified in this section.
In addition, we added the definitions of ``covered functions,''
``plan sponsor,'' and ``Required by law'' to Sec. 164.103.
5. Breach (Sec. 164.304)
Comment: One commenter asked that ``breach'' be defined.
Response: The term ``breach'' has been deleted and therefore not
defined. Instead, we define the term ``security incident,'' which
better describes the types of situations we were referring to as
breaches.
6. Facility (Sec. 164.304)
This new term has been added as a result of changing the name of
the ``physical access control'' standard to ``facility access
control.'' This change was made based on comments indicating that the
original term was not descriptive. We have defined the term
``facility'' as the physical premises and interior and exterior of a
building.
7. Security Incident (Sec. 164.304)
Comment: We received comments asking that this term be defined.
Response: This final rule defines ``Security incident'' in Sec.
164.304 as ``the attempted or successful unauthorized access, use,
disclosure, modification, or destruction of information or interference
with system operations in an information system.''
8. System (Sec. 164.304)
Comment: One commenter asked that ``system'' be defined.
Response: This final rule defines ``system,'' in the context of an
information system, in Sec. 164.304 as ``an interconnected set of
information resources under the same direct management control that
shares common functionality. A system normally includes hardware,
software, information, data, applications, communications, and
people.''
9. Workstation (Sec. 164.304)
Comment: One commenter expressed concern that the use of the term
``workstation'' implied limited applicability to fixed devices (such as
terminals), excluding laptops and other portable devices.
Response: We have added a definition of the term ``workstation'' to
clarify that portable devices are also included. This final rule
defines workstation as ``an electronic computing device, for example, a
laptop or desktop computer, or any other device that performs similar
functions, and electronic media stored in its immediate environment.''
10. Definitions Not Adopted
Several definitions in the proposed regulations text and glossary
are not adopted as definitions in the final rule: ``participant,''
``contingency plan,'' ``risk,'' ``role-based access control,'' and
``user-based access control.'' The terms ``participant,'' ``role-based
access control,'' and ``user-based access control'' are not used in
this final rule and thus are not defined. ``Risk'' is not defined as
its meaning is generally understood. While we do not define the term,
we address ``contingency plan'' as a standard in Sec. 164.308(a)(7)
below.
a. Comment: We received comments requesting that we define the
following terms: ``token'' and ``documentation.''
Response: These terms were defined in Addendum 2 of the proposed
rule. In this final rule, we do not adopt a definition for ``token''
because it is not used in the final rule. ``Documentation'' is
discussed in Sec. 164.316 below.
b. Comment: We received several comments that ``small'' and
``rural'' should be defined as those terms apply
[[Page 8341]]
to providers. We received an equal number of comments stating that
there is no need to define these terms. One commenter stated that
definitions for these terms would be necessary only if special
exemptions existed for small and rural providers. Several commenters
suggested initiation of a study to determine limitations and potential
barriers small and rural providers will have in implementing these
regulations.
Response: The statute requires that we address the needs of small
and rural providers. We believe that we have done this through the
provisions, which require the risk assessment and the response to be
assessment based on the needs and capabilities of the entity. This
scalability concept takes the needs of those providers into account and
eliminates any need to define those terms.
c. Comment: In the proposed rule, we proposed the following
definition for the term ``Access control'': ``A method of restricting
access to resources, allowing only privileged entities access. Types of
access control include, among others, mandatory access control,
discretionary access control, time-of-day, classification, and subject-
object separation.'' One commenter believed the proposed definition is
too restrictive and requested revision of the definition to read:
``Access control refers to a method of restricting access to resources,
allowing access to only those entities which have been specifically
granted the desired access rights.'' Another commenter wanted the
definition expanded to include partitioned rule-based access control
(PRBAC).
Response: We agree with the commenter who suggested that the
definition as proposed seemed too restrictive. In this case, as in many
others, a number of commenters believed the examples given in the
proposed rule provided the only acceptable compliance actions. As
previously noted, in order to clarify that the examples listed were not
to be considered all-inclusive, we have generalized the proposed
requirements in this final rule. In this case, we have also generalized
the requirements and placed the substantive provisions governing access
control at Sec. 164.308(a)(4), Sec. 164.310(a)(1), and Sec.
164.312(a)(1). With respect to PRBAC, the access control standard does
not exclude this control, and entities should adopt it if appropriate
to their circumstances.
D. General Rules (Sec. 164.306)
In the proposed rule, we proposed to cover all health information
maintained or transmitted in electronic form by a covered entity. We
proposed to adopt, in Sec. 142.308, a nation-wide security standard
that would require covered entities to implement security measures that
would be technology-neutral and scalable, and yet integrate all the
components of security (administrative procedures, physical safeguards,
technical security services, and technical security mechanisms) that
must be in place to preserve health information confidentiality,
integrity, and availability (three basic elements of security). Since
no comprehensive, scalable, and technology-neutral set of standards
currently exists, we proposed to designate a new standard, which would
define the security requirements to be fulfilled.
The proposed rule proposed to define the security standard as a set
of scalable, technology-neutral requirements with implementation
features that providers, plans, and clearinghouses would have to
include in their operations to ensure that health information
pertaining to an individual that is electronically maintained or
electronically transmitted remains safeguarded. The proposed rule would
have required that each affected entity assess its own security needs
and risks and devise, implement, and maintain appropriate security to
address its own unique security needs. How individual security
requirements would be satisfied and which technology to use would be
business decisions that each entity would have to make.
In the final rule we adopt this basic framework. In Sec. 164.306,
we set forth general rules pertaining to the security standards. In
paragraph (a), we describe the general requirements. Paragraph (a)
generally reflects section 1173(d)(2) of the Act, but makes explicit
the connection between the security standards and the privacy standards
(see Sec. 164.306(a)(3)). In Sec. 164.306(a)(1), we provide that the
security standards apply to all electronic protected health information
the covered entity creates, receives, maintains, or transmits. In
paragraph (b)(1), we provide explicitly for the scalability of this
rule by discussing the flexibility of the standards, and paragraph
(b)(2) of Sec. 164.306 discusses various factors covered entities must
consider in complying with the standards.
The provisions of Sec. 164.306(c) provide the framework for the
security standards, and establish the requirement that covered entities
must comply with the standards. The administrative, physical, and
technical safeguards a covered entity employs must be reasonable and
appropriate to accomplish the tasks outlined in paragraphs (1) through
(4) of Sec. 164.306(a). Thus, an entity's risk analysis and risk
management measures required by Sec. 164.308(a)(1) must be designed to
lead to the implementation of security measures that will comply with
Sec. 164.306(a).
It should be noted that the implementation of reasonable and
appropriate security measures also supports compliance with the privacy
standards, just as the lack of adequate security can increase the risk
of violation of the privacy standards. If, for example, a particular
safeguard is inadequate because it routinely permits reasonably
anticipated uses or disclosures of electronic protected health
information that are not permitted by the Privacy Rule, and that could
have been prevented by implementation of one or more security measures
appropriate to the scale of the covered entity, the covered entity
would not only be violating the Privacy Rule, but would also not be in
compliance with Sec. 164.306(a)(3) of this rule.
Paragraph (d) of Sec. 164.306 establishes two types of
implementation specifications, required and addressable. It provides
that required implementation specifications must be met. However, with
respect to implementation specifications that are addressable, Sec.
164.306(d)(3) specifies that covered entities must assess whether an
implementation specification is a reasonable and appropriate safeguard
in its environment, which may include consideration of factors such as
the size and capability of the organization as well as the risk. If the
organization determines it is a reasonable and appropriate safeguard,
it must implement the specification. If an addressable implementation
specification is determined not to be a reasonable and appropriate
answer to a covered entity's security needs, the covered entity must do
one of two things: implement another equivalent measure if reasonable
and appropriate; or if the standard can otherwise be met, the covered
entity may choose to not implement the implementation specification or
any equivalent alternative measure at all. The covered entity must
document the rationale behind not implementing the implementation
specification. See the detailed discussion in section II.A.3.
Paragraph (e) of Sec. 164.306 addresses the requirement for
covered entities to maintain the security measures
[[Page 8342]]
implemented by reviewing and modifying the measures as needed to
continue the provision of reasonable and appropriate protections, for
example, as technology moves forward, and as new threats or
vulnerabilities are discovered.
1. Scope of Health Information Covered by the Rule (Sec. 164.306(a))
We proposed to cover health information maintained or transmitted
by a covered entity in electronic form. We have modified, by narrowing,
the scope of health information to be safeguarded under this rule from
that which was proposed. The statute requires the privacy standards to
cover individually identifiable health information. The Privacy Rule
covers all individually identifiable information except for: (1)
Education records covered by the Family and Educational Rights and
Privacy Act (FERPA); (2) records described in 20 U.S.C.
1232g(a)(4)(B)(iv); and (3) employment records. (see the Privacy Rule
at 65 FR 82496. See also 67 FR 53191 through 53193). The scope of
information covered in the Privacy Rule is referred to as ``protected
health information.'' Based upon the comments we received, we align the
requirements of the Security and Privacy Rules with regard to the scope
of information covered, in order to eliminate confusion and ease
implementation. Thus, this final rule requires protection of the same
scope of information as that covered by the Privacy Rule, except that
it only covers that information if it is in electronic form.
We note that standards for the security of all health information
or protected health information in nonelectronic form may be proposed
at a later date.
a. Comment: One commenter stated that the rule should apply to
aggregate information that is not identifiable to an individual. In
contrast, another commenter asked that health information used for
statistical analysis be exempted if the covered entity may reasonably
expect that the removed information cannot be used to re-identify an
individual.
Response: As a general proposition, any electronic protected health
information received, created, maintained, or transmitted by a covered
entity is covered by this final rule. We agree with the second
commenter that certain information, from which identifiers have been
stripped, does not come within the purview of this final rule.
Information that is de-identified, as defined in the Privacy Rule at
Sec. 164.502(d) and Sec. 164.514(a), is not ``individually
identifiable'' within the meaning of these rules and, thus, does not
come within the definition of ``protected health information.'' It
accordingly is not covered by this final rule. For a full discussion of
the issues of de-identification and re-identification of individually
identifiable health information see 65 FR 82499 and 82708 through 82712
and 67 FR 53232 through 53234.
b. Comment: Several commenters asked whether systems that determine
eligibility of clients for insurance coverage under broad categories
such as medical coverage groups are considered health information. One
commenter asked that we specifically exclude eligibility information
from the standards.
Response: We cannot accept the latter suggestion. Eligibility
information will typically be individually identifiable, and much
eligibility information will also contain health information. If the
information is ``individually identifiable'' and is ``health
information,'' (with three very specific exceptions noted in the
general discussion above) and it is in electronic form, it is covered
by the security standards if maintained or transmitted by a covered
entity.
c. Comment: Several commenters requested clarification as to
whether the standards apply to identifiable health information in paper
form. Some commenters believed the rule should be applicable to paper;
others argued that it should apply to all confidential, identifiable
health information.
Response: While we agree that protected health information in paper
or other form also should have appropriate security protections, the
proposed rule proposing the security standards proposed to apply those
standards to health information in electronic form only. We are,
accordingly, not extending the scope in this final rule.
We may establish standards to secure protected health information
in other media in a future rule, in accordance with our statutory
authority to do so. See discussion, supra, responding to a comment on
the definition of ``health information'' and ``individually
identifiable health information.''
d. Comment: The proposed rule would have excluded ``telephone voice
response'' and ``faxback'' systems from the security standards, and we
specifically solicited comments on that issue. A number of commenters
agreed that telephone voice response and faxback should be excluded
from the regulation, suggesting that the privacy standards rather than
the security standards should apply. Others wanted those systems
included, on the grounds that inclusion is necessary for consistency
and in keeping with the intent of the Act. Still others specifically
wanted personal computer-fax transmissions included. One commenter
asked for clarification of when we would cover faxes, and another
commenter asked why we were excluding them. Several commenters
suggested that the other security requirements provide for adequate
security of these systems.
Response: In light of these comments, we have decided that
telephone voice response and ``faxback'' (that is, a request for
information from a computer made via voice or telephone keypad input
with the requested information returned as a fax) systems fall under
this rule because they are used as input and output devices for
computers, not because they have computers in them. Excluding these
features would provide a huge loophole in any system concerned with
security of the information contained and/or processed therein. It
should be noted that employment of telephone voice response and/or
faxback systems will generally require security protection by only one
of the parties involved, and not the other. Information being
transmitted via a telephone (either by voice or a DTMP tone pad) is not
in electronic form (as defined in the first paragraph of the definition
of ``electronic media'') before transmission and therefore is not
subject to the Security Rule. Information being returned via a
telephone voice response system in response to a telephone request is
data that is already in electronic form and stored in a computer. This
latter transmission does require protection under the Security Rule.
Although most recently made electronic devices contain
microprocessors (a form of computer) controlled by firmware (an
unchangeable form of computer program), we intend the term ``computer''
to include only software programmable computers, for example, personal
computers, minicomputers, and mainframes. Copy machines, fax machines,
and telephones, even those that contain memory and can produce multiple
copies for multiple people are not intended to be included in the term
``computer.'' Therefore, because ``paper-to-paper'' faxes, person-to-
person telephone calls, video teleconferencing, or messages left on
voice-mail were not in electronic form before the transmission, those
activities are not covered by this rule. See also the definition of
``electronic media'' at Sec. 160.103.
[[Page 8343]]
We note that this guidance differs from the guidance regarding the
applicability of the Transactions Rule to faxback and voice response
systems. HHS has stated that faxback and voice response systems are not
required to follow the standards mandated in the Transactions Rule.
This new guidance refers only to this rule.
e. Comment: One commenter asked whether there is a need to
implement special security practices to address the shipping and
receiving of health information and asked that we more fully explain
our expectations and solutions in the final rules.
Response: If the handling of electronic protected health
information involves shipping and receiving, appropriate measures must
be taken to protect the information. However, specific solutions are
not provided within this rule, as discussed in section III.A.3 of this
final rule. The device and media controls standard under Sec.
164.310(d)(1) addresses this situation.
f. Comment: One commenter wanted the ``HTML'' statement reworded to
eliminate a specific exemption for HTML from the regulation.
Response: The Transactions Rule did not adopt the proposed
exemption for HTML. The use of HTML or any other electronic protocol is
not exempt from the security standards. Generally, if protected health
information is contained in any form of electronic transmission, it
must be appropriately safeguarded.
g. Comment: One commenter asked to what degree ``family history''
is considered health information under this rule and what protections
apply to family members included in a patient's family history.
Response: Any health-related ``family history'' contained in a
patient's record that identifies a patient, including a person other
than the patient, is individually identifiable health information and,
to the extent it is also electronic protected health information, must
be afforded the security protections.
h. Comment: Two commenters asked that the rule prohibit re-
identification of de-identified data. In contrast, several commenters
asked that we identify a minimum list or threshold of specific re-
identification data elements (for example, name, city, and ZIP) that
would fall under this final rule so that, for example, the rule would
not affect numerous systems, for example, network adequacy and
population-based clinical analysis databases. One commenter asked that
we establish a means to use re-identified information if the entity
already has access to the information or is authorized to have access.
Response: The issue of re-identification is addressed in the
Privacy Rule at Sec. 164.502(d) and Sec. 164.514(c). The reader is
referred to those sections and the related discussion in the preamble
to the Privacy Rule (65 FR 82712) and the preamble to the Privacy
Modifications (67 FR 53232 through 53234) for a full discussion of the
issues of re-identification. We note that once information in the
possession (or constructive possession) of a covered entity is re-
identified and meets the definition of electronic protected health
information, the security standards apply.
2. Technology-Neutral Standards
Comment: Many commenters expressed support for our efforts to
develop standards for the security of health information. A number of
comments were made in support of the technology-neutral approach of the
proposed rule. For example, one commenter stated, ``By avoiding
prescription of the specific technologies health care entities should
use to meet the law's requirements, you are opening the door for
industry to apply innovation. Technologies that don't currently exist
or are impractical today could, in the near future, enhance health
information security while minimizing the overall cost.'' Several other
commenters stated that the requirements should be general enough to
withstand changes to technology without becoming obsolete. One
commenter anticipates no problems with meeting the standards.
In contrast, one commenter suggested that whenever possible,
specific technology recommendations should provide sufficient detail to
promote systems interoperability and decrease the tendency toward
adoption of multiple divergent standards. Several commenters stated
that by letting each organization determine its own rules, the rules
impose procedural burdens without any substantive benefit to security.
Response: The overwhelming majority of comments supported our
position. We do not believe it is appropriate to make the standards
technology-specific because technology is simply moving too fast, for
example, the increased use and sophistication of internet-enabled hand
held devices. We believe that the implementation of these rules will
promote the security of electronic protected health information by (1)
providing integrity and confidentiality; (2) allowing only authorized
individuals access to that information; and (3) ensuring its
availability to those authorized to access the information. The
standards do not allow organizations to make their own rules, only
their own technology choices.
3. Miscellaneous Comments
a. Comment: Some commenters stated that the requirements and
implementation features set out in the proposed rule were not specific
enough to be considered standards, and that the actual standards are
delegated to the discretion of the covered entities, at the expense of
medical record privacy. Several commenters stated that it was
inappropriate to balance the interests of those seeking to use
identifiable medical information without patient consent against the
interest of patients. Several other commenters believe that allowing
covered entities to make their own decisions about the adequacy and
balance of security measures undermined patient confidentiality
interests, and stated that the proposed rule did not appear to
adequately consider patient concerns and viewpoints.
Response: Again, the overwhelming majority of commenters supported
our approach. This final rule sets forth requirements with which
covered entities must comply and labels those requirements as standards
and implementation specifications. Adequate implementation of this
final rule by covered entities will ensure that the electronic
protected health information in a covered entity's care will be as
protected as is feasible for that entity.
We disagree that covered entities are given complete discretion to
determine their security polices under this rule, resulting in effect,
in no standards. While cost is one factor a covered identity may
consider in determining whether to implement a particular
implementation specification, there is nonetheless a clear requirement
that adequate security measures be implemented, see 45 CFR 164.306(b).
Cost is not meant to free covered entities from this responsibility.
b. Comment: Several commenters requested we withdraw the
regulations, citing resource shortages due to Y2K preparation, upcoming
privacy legislation, and/or the ``excessive micro-management''
contained in the rules. One commenter stated that, to insurers, these
rules were onerous, not necessary, and not justified as cost-effective,
as they already have effective practices for computer security and are
subject to rigorous State laws for the safeguarding of health
information. Another
[[Page 8344]]
commenter stated that these rules would adversely affect a provider's
practice environment.
Response: The HIPAA statute requires us to promulgate a rule
adopting security standards for health information. Resource concerns
due to Y2K should no longer be an issue. Covered entities will have 2
years (or, in the case of small health plans, 3 years) from the
adoption of this final rule in which to comply. Concerns relative to
effective and compliance dates and the Privacy Rule are discussed under
Sec. 164.318, Compliance dates for initial implementation, below and
at 65 FR 82751 through 82752.
We disagree that these standards will adversely affect a provider's
practice environment. The scalability of the standards allows each
covered entity to implement security protections that are appropriate
to its specific needs, risks, and environments. These protections are
necessary to maintain the confidentiality, integrity, and availability
of patient data. A covered entity that lacks adequate protections risks
inadvertent disclosure of patient data, with resulting loss of public
trust, and potential legal action. For example, a covered entity with
poor facility access controls and procedures would be susceptible to
hacking of its databases. A provider with appropriate security
protections already in place would only need to ensure that the
protections are documented and are reassessed periodically to ensure
that they continue to be appropriate and are actually being
implemented. Our decision to classify many implementation
specifications as addressable, rather than mandatory, provides even
more flexibility to covered entities to develop cost-effective
solutions. We believe that insurers who already have effective security
programs in place will have met many of the requirements of this
regulation.
c. Comment: One commenter believes the rule is arbitrary and
capricious in its requirements without any justification that they will
significantly improve the security of medical records and with the
likelihood that their implementation may actually increase the
vulnerability of the data. The commenter noted that the data backup
requirements increase access to data and that security awareness
training provides more information to employees.
Response: The standards are based on generally accepted security
procedures, existing industry standards and guidelines, and
recommendations contained in the National Research Council's 1997
report For The Record: Protecting Electronic Health Information,
Chapter 6. We also consulted extensively with experts in the field of
security throughout the health care industry. The standards are
consistent with generally accepted security principles and practices
that are already in widespread use.
Data backup need not result in increased access to that data.
Backups should be stored in a secure location with controlled access.
The appropriate secure location and access control will vary, based
upon the security needs of the covered entity. For example, a procedure
as simple as locking backup diskettes in a safe place and restricting
who has access to the key may be suitable for one entity, whereas
another may need to store backed-up information off-site in a secure
computer facility. The information provided in security awareness
training heightens awareness of security anomalies and helps to prevent
security incidents.
d. Comment: Several commenters suggested that the proposed rule
appears to reflect the Medicare program's perspective on security risks
and solutions, and that it should be noted that not all industry
segments share all the same risks as Medicare. One commenter stated
that as future proposed rules are drafted, we should solicit input from
those most significantly affected, for example, providers, plans, and
clearinghouses.
Others stated that Medicaid agencies were not sufficiently involved
in the discussions and debate. Still another stated that States would
be unable to perform some basic business functions if all the standards
are not designed to meet their needs.
Response: We believe that the standards are consistent with common
industry practices and equitable, and that there has been adequate
consultation with interested parties in the development of the
standards. These standards are the result of an intensive process of
public consultation. We consulted with the National Uniform Billing
Committee, the National Uniform Claim Committee, the American Dental
Association, and the Workgroup for Electronic Data Interchange, in the
course of developing the proposed rule. Those organizations were
specifically named in the Act to advise the Secretary, and their
membership is drawn from the full spectrum of industry segments. In
addition, the National Committee on Vital and Health Statistics
(NCVHS), an independent advisory group to the Secretary, held numerous
public hearings to obtain the views of interested parties. Again, many
segments of the health care industry, including provider groups, health
plans, clearinghouses, vendors, and government programs participated
actively. The NCVHS developed recommendations to the Secretary, which
were relied upon as we developed the proposed rule. Finally, we note
that the opportunity to comment was available to all during the public
comment period.
e. Comment: One commenter stated that there is a need to ensure the
confidentiality of risk analysis information that may contain sensitive
information.
Response: The information included in a risk analysis would not be
subject to the security standards if it does not include electronic
protected health information. We agree that risk analysis data could
contain sensitive information, just as other business information can
be sensitive. Covered entities may wish to develop their own business
rules regarding access to and protections for risk analysis data.
f. Comment: One commenter expressed concern over the statement in
the preamble of the proposed rule (63 FR 43250) that read: ``No one
item is considered to be more important than another.'' The commenter
suggested that security management should be viewed as most critical
and perhaps what forms the foundation for all other security actions.
Response: The majority of comments received on this subject
requested that we prioritize the standards. In response, we have
regrouped the standards and implementation specifications in what we
believe is a logical order within each of three categories:
``Administrative safeguards,'' ``Physical safeguards,'' and ``Technical
safeguards.'' In this final rule, we order the standards in such a way
that the ``Security management process'' is listed first under the
``Administrative safeguards'' section, as we believe this forms the
foundation on which all of the other standards depend. The
determination of the specific security measures to be implemented to
comply with the standards will, in large part, be dependent upon
completion of the implementation specifications within the security
management process standard (see Sec. 164.308(a)(1)). We emphasize,
however, that an entity implementing these standards may choose to
implement them in any order, as long as the standards are met.
g. Comment: One commenter stated that there is a need for
requirements concerning organizational practices (for example,
education, training, and security and confidentiality policies), as
[[Page 8345]]
well as technical practices and procedures.
Response: We agree. Section 164.308 of this final rule describes
administrative safeguards that address these topics. Section 164.308
requires covered entities to implement standards and required
implementation specifications, as well as consider and implement, when
appropriate and reasonable, addressable implementation specifications.
For example, the security management process standard requires
implementation of a risk analysis, risk management, a sanction policy,
and an information system activity review. The information access
management standard requires consideration, and implementation where
appropriate and reasonable, of access authorization and access
establishment and modification policies and procedures. Other areas
addressed are assigned security responsibility, workforce security,
security awareness and training, security incident procedures,
contingency planning, business associate contracts, and evaluation.
h. Comment: One commenter stated that internal and external
security requirements should be separated and dealt with independently.
Response: The presentation of the standards within this final rule
could have been structured in numerous ways, including by addressing
separate internal and external security standards. We chose the current
structure as we considered it a logical breakout for purposes of
display within this final rule. Under our structure a covered entity
may apply a given standard to internal activities and to external
activities. Had we displayed separately the standards for internal
security and the standards for external security, we would have needed
to describe a number of the standards twice, as many apply to both
internal and external security. However, a given entity may address the
standards in whatever order it chooses, as long as the standards are
met.
i. Comment: Two commenters stated that the standards identified in
Addendum 3 of the proposed rule may not all have matured to
implementation readiness.
Response: Addendum 3 of the proposed rule cross-referred individual
requirements on the matrix to existing industry standards of varying
levels of maturity. Addendum 3 was intended to show what we evaluated
in searching for existing industry standards that could be adopted on a
national level. No one standard was found to be comprehensive enough to
be adopted, and none were proposed as the standards to be met under the
Security Rule.
j. Comment: One commenter suggested we include a revised preamble
in the final publication. Another questioned how clarification of
points in the preamble will be handled if the preamble is not part of
the final regulation.
Response: Preambles to proposed rules are not republished in the
final rule. The preamble in this final rule contains summaries of the
information presented in the preamble of the proposed rule, summaries
of the comments received during the public comment period, and
responses to questions and concerns raised in those comments and a
summary of changes made. Additional clarification will be provided by
HHS on an ongoing basis through written documents and postings on HHS's
websites.
k. Comment: One commenter asked that we clarify that no third party
can require implementation of more security features than are required
in the final rule, for example, a third party could not require
encryption but may choose to accept it if the other party so desires.
Response: The security standards establish a minimum level of
security to be met by covered entities. It is not our intent to limit
the level of security that may be agreed to between trading partners or
others above this floor.
l. Comment: One commenter asked how privacy legislation would
affect these rules. The commenter inquired whether covered entities
will have to reassess and revise actions already taken in the spirit of
compliance with the security regulations.
Response: We cannot predict if or how future legislation may affect
the rules below. At present, the privacy standards at subpart E of 42
CFR part 164 have been adopted, and this final rule is compatible with
them.
m. Comment: One commenter stated that a data classification policy,
that is a method of assigning sensitivity ratings to specific pieces of
data, should be part of the final regulations.
Response: We did not adopt such a policy because this final rule
requires a floor of protection of all electronic protected health
information. A covered entity has the option to exceed this floor. The
sensitivity of information, the risks to and vulnerabilities of
electronic protected health information and the means that should be
employed to protect it are business determinations and decisions to be
made by each covered entity.
n. Comment: One commenter stated that this proposed rule conflicts
with previously stated rules that acceptable ``standards'' must have
been developed by ANSI-recognized Standards Development Organizations
(SDOs).
Response: In general, HHS is required to adopt standards developed
by ANSI-accredited SDOs when such standards exist. The currently
existing security standards developed by ANSI-recognized SDOs are
targeted to specific technologies and/or activities. No existing
security standard, or group of standards, is technology-neutral,
scaleable to the extent required by HIPAA, and broad enough to be
adopted in this final rule. Therefore, this final rule adopts standards
under section 1172(c)(2)(B) of the Act, which permits us to develop
standards when no industry standards exist.
o. Comment: One commenter stated that this regulation goes beyond
the scope of the law, unjustifiably extending into business practices,
employee policies, and facility security.
Response: We do not believe that this regulation goes beyond the
scope of the law. The law requires HHS to adopt standards for
reasonable and appropriate security safeguards concerning such matters
as compliance by the officers and employees of covered entities,
protection against reasonably anticipated unauthorized uses and
disclosures of health information, and so on. Such standards will
inevitably address the areas the commenter pointed to.
The intent of this regulation is to provide standards for the
protection of electronic protected health information in accordance
with the Act. In order to do this, covered entities are required to
implement administrative, physical, and technical safeguards. Those
entities must ensure that data are protected, to the extent feasible,
from inappropriate access, modification, dissemination, and
destruction. As noted above, however, this final rule has been modified
to increase flexibility as to how this protection is accomplished.
p. Comment: One commenter stated that all sections regarding
confidentiality and privacy should be removed, since they do not belong
in this regulation.
Response: As the discussion in section III.A above of this final
rule makes clear, the privacy and security standards are very closely
related. Section 1173(d)(2) of the Act specifically mentions
``confidentiality'' and authorizes uses and disclosures of information
as part of what security safeguards must address. Thus, we cannot omit
all references to confidentiality and privacy in discussions of the
security standards.
[[Page 8346]]
However, we have relocated material that relates to both security and
privacy (including definitions) to the general section of part 164.
q. Comment: One commenter asked that data retention be addressed
more specifically, since this will become a significant issue over
time. It is recommended that a national work group be convened to
address this issue.
Response: The commenter's concern is noted. While the documentation
relating to Security Rule implementation must be retained for a period
of 6 years (see Sec. 164.316(b)(2)), it is not within the scope of
this final rule to address data retention time frames for
administrative or clinical records.
r. Comment: One commenter stated that requiring provider practices
to develop policies, procedures, and training programs and to implement
record keeping and documentation systems would be tremendously
resource-intensive and increase the costs of health care.
Response: We expect that many of the standards of this final rule
are already being met in one form or another by covered entities. For
example, as part of normal business operations, health care providers
already take measures to protect the health information in their
keeping. Health care providers already keep records, train their
employees, and require employees to follow office policies and
procedures. Similarly, health plans are already frequently required by
State law to keep information confidential. While revisions to a
practice's or plan's current activities may be necessary, the
development of entirely new systems or procedures may not be necessary.
s. Comment: One commenter stated that there is no system for which
risk has been eliminated and expressed concern over phrases such as
covered entities must ``assure that electronic health information
pertaining to an individual remains secure.''
Response: We agree with the commenter that there is no such thing
as a totally secure system that carries no risks to security.
Furthermore, we believe the Congress' intent in the use of the word
``ensure'' in section 1173(d) of the Act was to set an exceptionally
high goal for the security of electronic protected health information.
However, we note that the Congress also recognized that some trade-offs
would be necessary, and that ``ensuring'' protection did not mean
providing protection, no matter how expensive. See section
1173(d)(1)(A)(ii) of the Act. Therefore, when we state that a covered
entity must ensure the safety of the information in its keeping, we
intend that a covered entity take steps, to the best of its ability, to
protect that information. This will involve establishing a balance
between the information's identifiable risks and vulnerabilities, and
the cost of various protective measures, and will also be dependent
upon the size, complexity, and capabilities of the covered entity, as
provided in Sec. 164.306(b).
E. Administrative Safeguards (Sec. 164.308)
We proposed that measures taken to comply with the rule be
appropriate to protect the health information in a covered entity's
care. Most importantly, we proposed to require that both the measures
taken and documentation of those measures be kept current, that is,
reviewed and updated periodically to continue appropriately to protect
the health information in the care of covered entities. We would have
required the documentation to be made available to those individuals
responsible for implementing the procedure.
We proposed a number of administrative requirements and supporting
implementation features, and required documentation for those
administrative requirements and implementation features.
In this final rule, we have placed these administrative standards
in Sec. 164.308. We have reordered them, deleted much of the detail of
the proposed requirements, as discussed below, and omitted two of the
proposed sets of requirements (system configuration requirements and a
requirement for a formal mechanism for processing records) as discussed
in paragraph 10 of the discussion of Sec. 164.308 of section III.E. of
this preamble. Otherwise, the basic elements of the administrative
safeguards are adopted in this final rule as proposed.
1. Security Management Process (Sec. 164.308(a)(1)(i))
We proposed the establishment of a formal security management
process to involve the creation, administration, and oversight of
policies to address the full range of security issues and to ensure the
prevention, detection, containment, and correction of security
violations. This process would include implementation features
consisting of a risk analysis, risk management, and sanction and
security policies.
We also proposed, in a separate requirement under administrative
procedures, an internal audit, which would be an in-house review of the
records of system activity (for example, logins, file accesses, and
security incidents) maintained by an entity.
In this final rule, risk analysis, risk management, and sanction
policy are adopted as required implementation specifications although
some of the details are changed, and the proposed internal audit
requirement has been renamed as ``information system activity review''
and incorporated here as an additional implementation specification.
a. Comment: Three commenters asked that this requirement be
deleted. Two commenters cited this requirement as a possible burden.
Several commenters asked that the implementation features be made
optional.
Response: This standard and its component implementation
specifications form the foundation upon which an entity's necessary
security activities are built. See NIST SP 800-30, ``Risk Management
Guide for Information Technology Systems,'' chapters 3 and 4, January
2002. An entity must identify the risks to and vulnerabilities of the
information in its care before it can take effective steps to eliminate
or minimize those risks and vulnerabilities. Some form of sanction or
punishment activity must be instituted for noncompliance. Indeed, we
question how the statutory requirement for safeguards ``to ensure
compliance * * * by a [covered entity's] officers and employees'' could
be met without a requirement for a sanction policy. See section
1176(d)(2)(C) of the Act. Accordingly, implementation of these
specifications remains mandatory. However, it is important to note that
covered entities have the flexibility to implement the standard in a
manner consistent with numerous factors, including such things as, but
not limited to, their size, degree of risk, and environment. We have
deleted the implementation specification calling for an organizational
security policy, as it duplicated requirements of the security
management and training standard.
We note that the implementation specification for a risk analysis
at Sec. 164.308(a)(1)(ii)(A) does not specifically require that a
covered entity perform a risk analysis often enough to ensure that its
security measures are adequate to provide the level of security
required by Sec. 164.306(a). In the proposed rule, an assurance of
adequate security was framed as a requirement to keep security measures
``current.'' We continue to believe that security measures must remain
current, and have added regulatory language in Sec. 164.306(e) as a
more precise way of communicating that security measures
[[Page 8347]]
in general that must be periodically reassessed and updated as needed.
The risk analysis implementation specification contains other terms
that merit explanation. Under Sec. 164.308(a)(1)(ii)(A), the risk
analysis must look at risks to the covered entity's electronic
protected health information. A thorough and accurate risk analysis
would consider ``all relevant losses'' that would be expected if the
security measures were not in place. ``Relevant losses'' would include
losses caused by unauthorized uses and disclosures and loss of data
integrity that would be expected to occur absent the security measures.
b. Comment: Relative to the development of an entity's sanction
policy, one commenter asked that we describe the sanction penalties for
breach of security. Another suggested establishment of a standard to
which one's conduct could be held and adoption of mitigating
circumstances so that the fact that a person acted in good faith would
be a factor that could be used to reduce or otherwise minimize any
sanction imposed. Another commenter suggested sanction activities not
be implemented before the full implementation and testing of all
electronic transaction standards.
Response: The sanction policy is a required implementation
specification because--(1) the statute requires covered entities to
have safeguards to ensure compliance by officers and employees; (2) a
negative consequence to noncompliance enhances the likelihood of
compliance; and (3) sanction policies are recognized as a usual and
necessary component of an adequate security program. The type and
severity of sanctions imposed, and for what causes, must be determined
by each covered entity based upon its security policy and the relative
severity of the violation.
c. Comment: Commenters requested the definitions of ``risk
analysis'' and ``breach.''
Response: ``Risk analysis'' is defined and described in the
specification of the security management process standard, and is
discussed in the preamble discussion of Sec. 164.308(a)(1)(ii)(A) of
this final rule. The term breach is no longer used and is, therefore,
not defined.
d. Comment: One commenter asked whether all health information is
considered equally ``sensitive,'' the thought being that, in
determining risk, an entity may consider the loss of a smaller amount
of extraordinarily sensitive data to be more significant than the loss
of a larger amount of routinely collected data. The commenter stated
that common reasoning would suggest that the smaller amount of data
would be considered more sensitive.
Response: All electronic protected health information must be
protected at least to the degree provided by these standards. If an
entity desires to protect the information to a greater degree than the
risk analysis would indicate, it is free to do so.
e. Comment: One commenter asked that we add ``threat assessment''
to this requirement.
Response: We have not done this because we view threat assessment
as an inherent part of a risk analysis; adding it would be redundant.
f. Comment: We proposed a requirement for internal audit, the in-
house review of the records of system activity (for example, logins,
file accesses, and security incidents) maintained by an entity. Several
commenters wanted this requirement deleted. One suggested the audit
trail requirement should not be mandatory, while another stated that
internal audits would be unnecessary if physical security requirements
are implemented.
A number of commenters asked that we clarify the nature and scope
of what an internal audit covers and what the audit time frame should
be. Several commenters offered further detail concerning what should
and should not be required in an internal audit for security purposes.
One commenter stated that ongoing intrusion detection should be
included in this requirement. Another wanted us to specify the
retention times for archived audit logs.
Several commenters had difficulty with the term ``audit'' and
suggested we change the title of the requirement to ``logging and
violation monitoring.''
A number of commenters stated this requirement could result in an
undue burden and would be economically unfeasible.
Response: Our intent for this requirement was to promote the
periodic review of an entity's internal security controls, for example,
logs, access reports, and incident tracking. The extent, frequency, and
nature of the reviews would be determined by the covered entity's
security environment. The term ``internal audit'' apparently, based on
the comments received, has certain rigid formal connotations we did not
intend. We agree that the implementation of formal internal audits
could prove burdensome or even unfeasible, to some covered entities due
to the cost and effort involved. However, we do not want to overlook
the value of internal reviews. Based on our review of the comments and
the text to which they refer, it is clear that this requirement should
be renamed for clarity and that it should actually be an implementation
specification of the security management process rather than an
independent standard. We accordingly remove ``internal audit'' as a
separate requirement and add ``information system activity review''
under the security management process standard as a mandatory
implementation specification.
2. Assigned Security Responsibility (Sec. 164.308(a)(2))
We proposed that the responsibility for security be assigned to a
specific individual or organization to provide an organizational focus
and importance to security, and that the assignment be documented.
Responsibilities would include the management and supervision of (1)
the use of security measures to protect data, and (2) the conduct of
personnel in relation to the protection of data.
In this final rule, we clarify that the final responsibility for a
covered entity's security must be assigned to one official. The
requirement for documentation is retained, but is made part of Sec.
164.316 below. This policy is consistent with the analogous policy in
the Privacy Rule, at 45 CFR 164.530(a), and the same considerations
apply. See 65 FR 82744 through 87445. The same person could fill the
role for both security and privacy.
a. Comment: Commenters were concerned that delegation of assigned
security responsibility, especially in large organizations, needs to be
to more than a single individual. Commenters believe that a large
health organization's security concerns would likely cross many
departmental boundaries requiring group responsibility.
Response: The assigned security responsibility standard adopted in
this final rule specifies that final security responsibility must rest
with one individual to ensure accountability within each covered
entity. More than one individual may be given specific security
responsibilities, especially within a large organization, but a single
individual must be designated as having the overall final
responsibility for the security of the entity's electronic protected
health information. This decision also aligns this rule with the final
Privacy Rule provisions concerning the Privacy Official.
b. Comment: One commenter disagreed with placing assigned security
responsibility as part of physical safeguards. The commenter suggested
that assigned security responsibility should be included under the
Administrative Procedures.
[[Page 8348]]
Response: Upon review of the matrix and regulations text, we agree
with the commenter, because this requirement involves an administrative
decision at the highest levels of who should be responsible for
ensuring security measures are implemented and maintained. Assigned
security responsibility has been removed from ``Physical safeguards''
and is now located under ``Administrative safeguards'' at Sec.
164.308.
3. Workforce Security (Sec. 164.308(a)(3)(i))
We proposed implementation of a number of features for personnel
security, including ensuring that maintenance personnel are supervised
by a knowledgeable person, maintaining a record of access
authorizations, ensuring that operating and maintenance personnel have
proper access authorization, establishing personnel clearance
procedures, establishing and maintaining personnel security policies
and procedures, and ensuring that system users have proper training.
In this final rule, to provide clarification and reduce
duplication, we have combined the ``Assure supervision of maintenance
personnel by authorized, knowledgeable person'' implementation feature
and the ``Operating, and in some cases, maintenance personnel have
proper access authorization'' feature into one addressable
implementation specification titled ``Authorization and/or
supervision.''
In a related, but separate, requirement entitled ``Termination
procedures,'' we proposed implementation features for the ending of an
employee's employment or an internal or external user's access. These
features would include things such as changing combination locks,
removal from access lists, removal of user account(s), and the turning
in of keys, tokens, or cards that allow access.
In this final rule, ``Termination procedures'' has been made an
addressable implementation specification under ``Workforce security.''
This is addressable because in certain circumstances, for example, a
solo physician practice whose staff consists only of the physician's
spouse, formal procedures may not be necessary.
The proposed ``Personnel security policy/procedure'' and ``record
of access authorizations'' implementation features have been removed
from this final rule, as they have been determined to be redundant.
Implementation of the balance of the ``Workforce security''
implementation specifications and the other standards contained within
this final rule will result in assurance that all personnel with access
to electronic protected health information have the required access
authority as well as appropriate clearances.
a. Comment: The majority of comments concerned the supervision of
maintenance personnel by an authorized knowledgeable person. Commenters
stated this would not be feasible in smaller settings. For example, the
availability of technically knowledgeable persons to ensure this
supervision would be an issue. We were asked to either reword this
implementation feature or delete it.
Response: We agree that a ``knowledgeable'' person may not be
available to supervise maintenance personnel. We have accordingly
modified this implementation specification so that, in this final rule,
we are adopting an addressable implementation specification titled,
``Authorization and/or supervision,'' requiring that workforce members,
for example, operations and maintenance personnel, must either be
supervised or have authorization when working with electronic protected
health information or in locations where it resides (see Sec.
164.308(a)(3)(ii)(A)). Entities can decide on the feasibility of
meeting this specification based on their risk analysis.
b. Comment: The second largest group of comments requested
assurance that, with regard to the proposed ``Personnel clearance
procedure'' implementation feature, having appropriate clearances does
not mean performing background checks on everyone. We were asked to
delete references to ``clearance'' and use the term ``authorization''
in its place.
Response: We agree with the commenters concerning background
checks. This feature was not intended to be interpreted as an absolute
requirement for background checks. We retain the use of the term
``clearance,'' however, because we believe that it more accurately
conveys the screening process intended than does the term
``authorization.'' We have attempted to clarify our intent in the
language of Sec. 164.308(a)(3)(ii)(B), which now reads, ``Implement
procedures to determine that the access of a workforce member to
electronic protected health information is appropriate.'' The need for
and extent of a screening process is normally based on an assessment of
risk, cost, benefit, and feasibility as well as other protective
measures in place. Effective personnel screening processes may be
applied in a way to allow a range of implementation, from minimal
procedures to more stringent procedures based on the risk analysis
performed by the covered entity. So long as the standard is met and the
underlying standard of Sec. 164.306(a) is met, covered entities have
choices in how they meet these standards. To clarify the intent of this
provision, we retitle the implementation specification ``Workforce
clearance procedure.''
c. Comment: One commenter asked that we expand the implementation
features to include the identification of the restrictions that should
be placed on members of the workforce and others.
Response: We have not adopted this comment in the interest of
maintaining flexibility as discussed in Sec. 164.306. Restrictions
would be dependent upon job responsibilities, the amount and type of
supervision required and other factors. We note that a covered entity
should consider in this regard the applicable requirements of the
Privacy Rule (see, for example, Sec. 164.514(d)(2) (relating to
minimum necessary requirements), and Sec. 164.530(c) (relating to
safeguards).
Comment: One commenter believes that the proposed ``Personnel
security'' requirement was reasonable, since an administrative
determination of trustworthiness is needed before allowing access to
sensitive information. Two commenters asked that we delete the
requirement entirely. A number of commenters requested that we delete
the implementation features. Another commenter stated that all the
implementation features may not be applicable or even appropriate to a
given entity and should be so qualified.
Response: While we do not believe this requirement should be
eliminated, we agree that all the implementation specifications may not
be applicable or even appropriate to a given entity. For example, a
personal clearance may not be reasonable or appropriate for a small
provider whose only assistant is his or her spouse. The implementation
specifications are not mandatory, but must be addressed. This final
rule has been changed to reflect this approach (see Sec.
164.308(a)(3)(ii)(B)).
e. Comment: The majority of commenters on the ``Termination
procedures'' requirement asked that it be made optional, stating that
it may not be applicable or even appropriate in all circumstances and
should be so qualified or posed as guidelines. A number of commenters
stated that the requirement should be deleted. One commenter stated
that much of the material covered under the ``Termination procedures''
requirement is already covered in ``Information access control.'' A
number of commenters stated that this requirement
[[Page 8349]]
was too detailed and some of the requirements excessive.
Response: Based upon the comments received, we agree that
termination procedures should not be a separate standard; however,
consideration of termination procedures remains relevant for any
covered entity with employees, because of the risks associated with the
potential for unauthorized acts by former employees, such as acts of
retribution or use of proprietary information for personal gain. We
further agree with the reasoning of the commenters who asked that these
procedures be made optional; therefore, ``Termination procedures'' is
now reflected in this final rule as an addressable implementation
specification. We also removed reference to all specific termination
activities, for example, changing locks, because, although the
activities may be considered appropriate for some covered entities,
they may not be reasonable for others.
f. Comment: One commenter asked whether human resource employee
termination policies and procedures must be documented to show the
types of security breaches that would result in termination.
Response: Policies and procedures implemented to adhere to this
standard must be documented (see Sec. 164.316 below). The purpose of
termination procedure documentation under this implementation
specification is not to detail when or under which circumstances an
employee should be terminated. This information would more
appropriately be part of the entity's sanction policy. The purpose of
termination procedure documentation is to ensure that termination
procedures include security-unique actions to be followed, for example,
revoking passwords and retrieving keys when a termination occurs.
4. Information Access Management (Sec. 164.308(a)(4))
We proposed an ``information access control'' requirement for
establishment and maintenance of formal, documented policies and
procedures defining levels of access for all personnel authorized to
access health information, and how access is granted and modified. In
Sec. 164.308(a)(4)(ii)(B) and (C) below, the proposed implementation
features are made addressable specifications. We have added in Sec.
164.308(a)(4)(ii)(A), a required implementation specification to
isolate health care clearinghouse functions to address the provisions
of section 1173(d)(1)(B) of the Act which related to this area.
a. Comment: One commenter asked that the requirement be deleted,
expressing the opinion that this requirement goes beyond ``reasonable
boundaries'' into regulating common business practices. In contrast,
another asked that we expand this requirement to identify participating
parties and access privileges relative to specific data elements.
Response: We disagree that this requirement improperly imposes upon
business functions. Restricting access to those persons and entities
with a need for access is a basic tenet of security. By this mechanism,
the risk of inappropriate disclosure, alteration, or destruction of
information is minimized. We cannot, however, specifically identify
participating parties and access privileges relative to data elements
within this regulation. These will vary depending upon the entity, the
needs within the user community, the system in which the data resides,
and the specific data being accessed. This standard is consistent with
Sec. 164.514(d) in the Privacy Rule (minimum necessary requirements
for use and disclosure of protected health information), and is,
therefore, being retained.
b. Comment: Several commenters asked that we not mandate the
implementation features, but leave them as optional, a suggested means
of compliance. The commenters noted that this might make the rules more
scalable and flexible, since this approach would allow providers to
implement safeguards that best addressed their needs. Along this line,
one commenter expressed the belief that each organization should
implement features deemed necessary based on its own risk assessment.
Response: While the information access management standard in this
final rule must be met, we agree that the implementation specifications
at Sec. 164.308(a)(4)(ii)(B) and (C) should not be mandated but posed
as a suggested means of compliance, which must be addressed. These
specifications may not be applicable to all entities based on their
size and degree of automation. A fully automated covered entity
spanning multiple locations and involving hundreds of employees may
determine it has a need to adopt a formal policy for access
authorization, while a small provider may decide that a desktop
standard operating procedure will meet the specifications. The final
rule has been revised accordingly.
c. Comment: Clarification was requested concerning the meaning of
''formal.''
Response: The word ``formal'' has caused considerable concern among
commenters, as it was thought ``formal'' carried the connotation of a
rigidly defined structure similar to what might be found in the
Department of Defense instructions. As used in the proposed rule, this
word was not intended to convey such a strict structure. Rather, it was
meant to convey that documentation should be an official organizational
statement as opposed to word-of-mouth or cryptic notes scratched on a
notepad. While documentation is still required (see Sec. 164.316), to
alleviate confusion, the word ``formal'' has been deleted.
d. Comment: One commenter asked that we clarify that this
requirement relates to both the establishment of policies for the
access control function and to access control (the implementation of
those policies).
Response: ``Information access management'' does address both the
establishment of access control policies and their implementation. We
use the term ``implement'' to clarify that the procedures must be in
use, and we believe that the requirement to implement policies and
procedures requires, as an antecedent condition, the establishment or
adaptation of those policies and procedures.
5. Security Awareness and Training (Sec. 164.308(a)(5)(i))
We proposed, under the requirement ``Training,'' that security
training be required for all staff, including management. Training
would include awareness training for all personnel, periodic security
reminders, user education concerning virus protection, user education
in the importance of monitoring login success/failure, and how to
report discrepancies, and user education in password management.
In this final rule, we adopt this proposed requirement in modified
form. For the standard ``Security awareness and training,'' in Sec.
164.308(a)(5), we require training of the workforce as reasonable and
appropriate to carry out their functions in the facility. All proposed
training features have been combined as implementation specifications
under this standard. Specific implementation specifications relative to
content are addressable. The ``Virus protection'' implementation
feature has been renamed ``protection from malicious software,''
because we did not intend by the nomenclature to exclude coverage of
malicious acts that might not come within the prior term, such as
worms.
a. Comment: One commenter believes that security awareness training
for all
[[Page 8350]]
system users would be too difficult to do in a large organization.
Response: We disagree with the commenter. Security awareness
training is a critical activity, regardless of an organization's size.
This feature would typically become part of an entity's overall
training program (which would include privacy and other information
technology items as well). For example, the Government Information
Systems Reform ACT (GISRA) of 2000 requires security awareness training
as part of Federal agencies' information security programs, including
Federal covered entities, such as the Medicare program. In addition,
National Institute of Standards and Technology (NIST) SP 800-16,
Information Technology Security Training Requirements, A role and
performance base model, April 1998, provides an excellent source of
information and guidance on this subject and is targeted at industry as
well as government activities. We also note that covered entities must
have discretion in how they implement the requirement, so they can
incorporate this training in other existing activities. One approach
would be to require this training as part of employee orientation.
b. Comment: A number of commenters asked that this requirement be
made optional or used as a guideline only. Several commenters stated
that this requirement is too specific and is burdensome. Several asked
that the implementation features be removed.
Several others stated that this requirement is not appropriate for
agents or contractors. One commenter asked how to apply this
requirement to outsiders having access to data. Another asked if this
requirement included all subcontractor staff. Others stated that
contracts, signed by entities such as consultants, that address
training should be sufficient.
Response: Security training remains a requirement because of its
criticality; however, we have revised the implementation specifications
to indicate that the amount and type of training needed will be
dependent upon an entity's configuration and security risks. Business
associates must be made aware of security policies and procedures,
whether through contract language or other means. Covered entities are
not required to provide training to business associates or anyone else
that is not a member of their workforce.
c. Comment: Several commenters questioned why security awareness
training appeared in two places, under ``Physical safeguards'' as well
as ``Administrative safeguards.'' Others questioned the appropriateness
of security awareness training under ``Physical safeguards.''
Response: We reviewed the definitions of the proposed ``Awareness
training for all personnel'' (``Administrative safeguards'')
implementation feature and the proposed ``Security awareness training''
(``Physical safeguards'') requirement. We agree that, to avoid
confusion and eliminate redundancy, security awareness and training
should appear in only one place. We believe the appropriate location
for it is under ``Administrative safeguards,'' as such training is
essentially an administrative function.
d. Comment: Several commenters objected to the blanket requirement
for security awareness training of individuals who may be on site for a
limited time period (for example, a single day).
Response: Each individual who has access to electronic protected
health information must be aware of the appropriate security measures
to reduce the risk of improper access, uses, and disclosures. This
requirement does not mean lengthy training is appropriate in every
instance; there are alternative methods to inform individuals of
security responsibilities (for example, provisions of pamphlets or
copies of security policies, and procedures).
e. Comment: One commenter asked that ``training'' be changed to
``orientation.''
Response: We believe the term ``training,'' as presented within
this rule is the more appropriate term. The rule does not contemplate a
one-time type of activity as connoted by ``orientation,'' but rather an
on-going, evolving process as an entity's security needs and procedures
change.
f. Comment: Several commenters asked how often training should be
conducted and asked for a definition of ``periodic,'' as it appears in
the proposed implementation feature ``Periodic security reminders.''
One asked if the training should be tailored to job need.
Response: Amount and timing of training should be determined by
each covered entity; training should be an on-going, evolving process
in response to environmental and operational changes affecting the
security of electronic protected health information. While initial
training must be carried out by the compliance date, we provide
flexibility for covered entities to construct training programs.
Training can be tailored to job need if the covered entity so desires.
6. Security Incident Procedures (Sec. 164.308(a)(6))
We proposed a requirement for implementation of accurate and
current security incident procedures: formal, documented report and
response procedures so that security violations would be reported and
handled promptly. We adopt this standard in the final rule, along with
an implementation specification for response and reporting, since
documenting and reporting incidents, as well as responding to incidents
are an integral part of a security program.
a. Comment: Several commenters asked that we further define the
scope of a breach of security. Along this same line, another commenter
stated that the proposed security incident procedures were too vague as
stated. We were asked to specify what a security incident would be,
what the internal chain for reporting procedures would be, and what
should be included in the documentation (for example, hardware/
software, personnel responses).
Response: We define a security incident in Sec. 164.304. Whether a
specific action would be considered a security incident, the specific
process of documenting incidents, what information should be contained
in the documentation, and what the appropriate response should be will
be dependent upon an entity's environment and the information involved.
An entity should be able to rely upon the information gathered in
complying with the other security standards, for example, its risk
assessment and risk management procedures and the privacy standards, to
determine what constitutes a security incident in the context of its
business operations.
b. Comment: One commenter asked what types of incidents must be
reported to outside entities. Another commented that we clarify that
incident reporting is internal.
Response: Internal reporting is an inherent part of security
incident procedures. This regulation does not specifically require any
incident reporting to outside entities. External incident reporting is
dependent upon business and legal considerations.
c. Comment: One commenter stated that network activity should be
included here.
Response: We see no reason to exclude network activity under this
requirement. Improper network activity should be treated as a security
incident, because, by definition, it represents an improper instance of
access to or use of information.
[[Page 8351]]
d. Comment: One commenter stated that this requirement should
address suspected misuse also.
Response: We agree that security incidents include misuse of data;
therefore, this requirement is addressed.
e. Comment: Several commenters asked that this requirement be
deleted. One commenter asked that we delete the implementation
features.
Response: As indicated above, we have adopted the proposed standard
and combined the implementation specifications.
7. Contingency Plan (Sec. 164.308(a)(7)(i))
We proposed that a contingency plan must be in effect for
responding to system emergencies. The plan would include an
applications and data criticality analysis, a data backup plan, a
disaster recovery plan, an emergency mode operation plan, and testing
and revision procedures.
In this final rule, we make the implementation specifications for
testing and revision procedures and an applications and data
criticality analysis addressable, but otherwise require that the
contingency features proposed be met.
a. Comment: Several commenters suggested the contingency plan
requirement be deleted. Several thought that this aspect of the
proposed regulation went beyond its intended scope. Another believed
that more discussion and development is needed before developing
regulatory guidance on contingency plans. Others wanted this to be an
optional requirement. In contrast, one commenter requested more
guidance concerning contingency planning. Still others wanted to
require that a contingency plan be in place but stated that we should
not regulate its contents. One comment stated that data backup,
disaster recovery, and emergency mode operation should not be part of
this requirement.
Response: A contingency plan is the only way to protect the
availability, integrity, and security of data during unexpected
negative events. Data are often most exposed in these events, since the
usual security measures may be disabled, ignored, or not observed.
Each entity needs to determine its own risk in the event of an
emergency that would result in a loss of operations. A contingency plan
may involve highly complex processes in one processing site, or simple
manual processes in another. The contents of any given contingency plan
will depend upon the nature and configuration of the entity devising
it.
While the contingency plan standard must be met, we agree that the
proposed testing and revision implementation feature should be an
addressable implementation specification in this final rule. Dependent
upon the size, configuration, and environment of a given covered
entity, the entity should decide if testing and revision of all parts
of a contingency plan should be done or if there are more reasonable
alternatives. The same is true for the proposed applications and data
criticality analysis implementation feature. We have revised the final
rule to reflect this approach.
b. Comment: One commenter believed that adhering to this
requirement could prove burdensome. Another stated that testing of
certain parts of a contingency plan would be burdensome, and even
infeasible, for smaller entities.
Response: Without contingency planning, a covered entity has no
assurance that its critical data could survive an emergency situation.
Recent events, such as September 11, 2001, illustrate the importance of
such planning. Contingency planning will be scalable based upon, among
other factors, office configuration, and risk assessment. However, in
response to the scalability issue raised by the commenter, we have made
the testing and revision implementation specification addressable (see
Sec. 164.308(a)(7)(ii)).
c. Comment: Two commenters considered a 2-year implementation time
frame for this requirement inadequate for large health plans. Another
commenter stated that implementation of measures against natural
disaster would be too big an issue for this regulation.
Response: The statute sets forth the compliance dates for the
initial standards. The statute requires that compliance with initial
standards is not later than 2 years after adoption of the standards for
all covered entities except small health plans for which the compliance
date is not later than 3 years after adoption.
The final rule calls for covered entities to consider how natural
disasters could damage systems that contain electronic protected health
information and develop policies and procedures for responding to such
situations. We consider this to be a reasonable precautionary step to
take since in many cases the risk would be deemed to be low.
d. Comment: A commenter requested clarification of the term
``Emergency mode'' with regard to the proposed ``Emergency mode
operation plan'' implementation feature.
Response: We have clarified the ``Emergency mode operations plan''
to show that it only involves those critical business processes that
must occur to protect the security of electronic protected health
information during and immediately after a crisis situation.
8. Evaluation (Sec. 164.308(a)(8))
We proposed that certification would be required and could be
performed internally or by an external accrediting agency. We solicited
input on appropriate mechanisms to permit an independent assessment of
compliance. We were particularly interested in input from those
engaging in health care electronic data interchange (EDI), as well as
independent certification and auditing organizations addressing issues
of documentary evidence of steps taken for compliance; need for, or
desirability of, independent verification, validation, and testing of
system changes; and certifications required for off-the-shelf products
used to meet the requirements of this regulation. We also solicited
comments on the extent to which obtaining external certification would
create an undue burden on small or rural providers.
In this final rule, we require covered entities to periodically
conduct an evaluation of their security safeguards to demonstrate and
document their compliance with the entity's security policy and the
requirements of this subpart. Covered entities must assess the need for
a new evaluation based on changes to their security environment since
their last evaluation, for example, new technology adopted or responses
to newly recognized risks to the security of their information.
a. Comment: We received several comments that certification should
be performed externally. A larger group of commenters preferred self-
certification. The majority of the comments, however, were to the
effect that external certification should be encouraged but not
mandated.
A number of commenters thought that mandating external
certification would create an undue financial burden, regardless of the
size of the entity being certified. One commenter stated that external
certification would not place an undue burden on a small or rural
provider.
Response: Evaluation by an external entity is a business decision
to be left to each covered entity. Evaluation is required under Sec.
164.308(a)(8), but a covered entity may comply with this standard
either by using its own workforce or an external accreditation agency,
which would be acting as a business associate. External evaluation may
be too costly an option for small entities.
[[Page 8352]]
b. Comment: Several commenters stated that the certification should
cover all components of the proposed rule, not just the information
systems.
Response: We agree. We have revised this section to reflect that
evaluation would be both technical and nontechnical components of
security.
c. Comment: A number of commenters expressed a desire for the
creation of certification guides or models to complement the rule.
Response: We agree that creation of compliance guidelines or models
for different business environments would help in the implementation
and evaluation of HIPAA security requirements and we encourage
professional associations and others to do so. We may develop technical
assistance materials, but do not intend to create certification
criteria because we do not have the resources to address the large
number of different business environments.
d. Comment: Some commenters asked how certification is possible
without specifying the level of risk that is permissible.
Response: The level of risk that is permissible is specified by
Sec. 164.306(a). How such risk is managed will be determined by a
covered entity through its security risk analysis and the risk
mitigation activities it implements in order to ensure that the level
of security required by Sec. 164.306 is provided.
e. Comment: Several commenters requested creation of a list of
Federally ``certified'' security software and off-the-shelf products.
Several others stated that this request was not feasible. Regarding
certification of off-the-shelf products, one commenter thought this
should be encouraged, but not mandated; several thought this would be
an impractical endeavor.
Response: While we will not assume the task of certifying software
and off-the-shelf products for the reason described above, we have
noted with interest that other Government agencies such as the National
Institute of Standards and Technology (NIST) are working towards that
end. The health care industry is encouraged to monitor the activity of
NIST and provide comments and suggestions when requested (see http://www.niap.nist.gov.).
f. Comment: One commenter stated, ``With HCFA's publishing of these
HIPAA standards, and their desire to retain the final responsibility
for determining violations and imposing penalties of the statute, it
also seems appropriate for HCFA to also provide certifying services to
ensure security compliance.''
Response: In view of the enormous number and variety of covered
entities, we believe that evaluation can best be handled through the
marketplace, which can develop more usable and targeted evaluation
instruments and processes.
8. Business Associate Contracts or Other Arrangements (Sec.
164.308(b)(1))
In the proposed rule Sec. 142.308(a)(2) ``Chain of trust''
requirement, we proposed that covered entities be required to enter
into a chain of trust partner agreement with their business partners,
in which the partners would agree to electronically exchange data and
protect the integrity, confidentiality, and availability of the data
exchanged. This standard has been modified from the proposed
requirement to reflect, in Sec. 164.308(b)(1) ``Business associate
contracts and other arrangements,'' the business associate structure
put in place by the Privacy Rule.
In this final rule, covered entities must enter into a contract or
other arrangement with persons that meet the definition of business
associate in Sec. 160.103. The covered entity must obtain satisfactory
assurances from the business associate that it will appropriately
safeguard the information in accordance with these standards (see Sec.
164.314(a)(1)).
The comments received on the proposed chain of trust partner
agreements are discussed in section 2 ``Business associate contracts
and other arrangements'' of the discussion of Sec. 164.314 below.
9. Proposed Requirements Not Adopted in This Final Rule
a. Security Configuration Management
We proposed that an organization would be required to implement
measures, practices, and procedures regarding security configuration
management. They would be coordinated and integrated with other system
configuration management practices for the security of information
systems. These would include documentation, hardware and/or software
installation and maintenance review and testing for security features,
inventory procedures, security testing, and virus checking.
Comment: Several commenters asked that the entire requirement be
deleted. Several others asked that the inventory and virus checking
implementation features be removed as they believe those features are
not germane to security configuration management. A number of
commenters requested that security testing be deleted because this
implementation feature is too detailed, unreasonable, impractical, and
beyond the scope of the legislation. Others stated that the testing
would be very complex and expensive. Others wanted more clarification
of what we intend by security testing, and how much would be enough. A
number of commenters asked that all of the implementation features be
deleted. Others asked that the implementation features be made
optional. Several commenters wanted to know the scope of organizational
integration required. Several others asked if what we meant by Security
Configuration Management was change or version control.
Response: Upon review, this requirement appears unnecessary because
it is redundant of other requirements we are adopting in this rule. A
covered entity will have addressed the activities described by the
features under this proposed requirement by virtue of having
implemented the risk analysis, risk management measures, sanction
policies, and information systems criticality review called for under
the security management process. The proposed documentation
implementation feature has been made a separate standard (see Sec.
164.316). As a result, the Security Configuration Management
requirement is not adopted in this final rule.
b. Formal Mechanism for Processing Records
The proposed rule proposed requiring a formal mechanism for
processing records, and documented policies and procedures for the
routine and nonroutine receipt, manipulation, storage, dissemination,
transmission, and/or disposal of health information. This requirement
has not been adopted in the final rule.
Comment: Several commenters thought this requirement concerned the
regulation of formal procedures for how an entity does business and
stated that such procedures should not be regulated. Others asked for
additional clarification of what is meant by this requirement. One
commenter thought the requirement too ambiguous and asked for
clarification as to whether we meant such things as ``the proper
handling of storage media, databases, transmissions,'' or ``the
clinical realm of processes.''
Two commenters asked how extensive this requirement would be and
whether systems' user manuals and policies and procedures for handling
health information would suffice and what level of detail would be
expected.
[[Page 8353]]
Several thought this requirement could result in a significant
resource and monetary burden to develop and maintain formal procedures.
Two asked for an explanation of the benefit to be derived from this
requirement.
One asked that covered entities be required to document processes
that create a security risk only and suggested that a risk assessment
would determine the need for this documentation.
Response: We agree with the commenters that the standard is
ambiguous, and upon review, is unnecessary because the remaining
standards, for example, device and media controls, provide adequate
safeguards. Accordingly, this requirement is not adopted in this final
rule.
F. Physical Safeguards (Sec. 164.310)
We proposed requirements and implementation features for documented
physical safeguards to guard data integrity, confidentiality, and
availability. We proposed to require safeguards in the following areas:
Assigned security responsibility; media controls; physical access
controls; policies and guidelines on workstation use; a secure
workstation location; and security awareness training. A number of
specific implementation features were proposed under the media controls
and physical access controls requirements.
In Sec. 164.310 of this final rule, most of the proposed
implementation features are adopted as addressable implementation
specifications. The proposed requirements for the assigned security
responsibility and security awareness training requirements are
relocated in Sec. 164.308.
1. General Comments
a. Comment: Several commenters made suggestions to modify the
language to more clearly describe ``Physical safeguards.''
Response: In response to comments, we have revised the definition
of ``Physical safeguards'' to read as follows: ``Physical safeguards
are security measures to protect a covered entity's electronic
information systems and related buildings and equipment, from natural
and environmental hazards, and unauthorized intrusion.''
b. Comment: One commenter was concerned that electronic security
systems could not be used in lieu of physical security systems.
Response: This final rule does not preclude the use of electronic
security systems in lieu of, or in combination with, physical security
systems to meet a ``Physical safeguard'' standard.
2. Facility Access Controls (Sec. 164.310(a)(1))
We proposed, under the ``Physical access controls'' requirement,
formal, documented policies and procedures for limiting physical access
to an entity while ensuring that properly authorized access is allowed.
These controls would include the following implementation features:
disaster recovery, emergency mode operation, equipment control (into
and out of site), a facility security plan, procedures for verifying
access authorizations before physical access, maintenance records,
need-to-know procedures for personnel access, sign-in for visitors and
escort, if appropriate, and testing and revision.
In Sec. 164.310(a)(2) below, we combine and restate these as
addressable implementation specifications. These are contingency
operations, facility security plan, access control and validation
procedures, and maintenance records.
a. Comment: Many commenters were concerned because the proposed
language would require implementation of all physical access control
features. Other commenters were concerned that the language did not
allow entities to use the results of their risk assessment and risk
management process to arrive at the appropriate solutions for them.
Response: We agree that implementation of all implementation
specifications may not be appropriate in all situations. While the
facility access controls standard must be met, we agree that the
implementation specifications should not be required in all
circumstances, but should be addressable. In this final rule, all four
implementation specifications are addressable.
We have also determined, based on ``level of detail'' comments
requesting consolidation of the list of implementation features, that
the proposed implementation feature ``Equipment control (into and out
of site)'' was redundant. ``Equipment control'' is already covered
under the ``Device and media controls'' standard at Sec.
164.310(d)(1). Accordingly, we have eliminated it as a separate
implementation specification.
b. Comment: One commenter raised the issue of a potential conflict
of authority between those having access to the data and those
responsible for checking and maintaining access controls.
Response: Any potential conflicts should be identified, addressed,
and resolved in the policies and procedures developed according to the
standards under Sec. 164.308.
c. Comment: Several commenters questioned whether ``Physical Access
Controls'' was a descriptive phrase to describe a technology to be
used, or whether the phrase referred to a facility.
Response: We agree that the term ``Physical'' may be misleading; to
remove any confusion, the requirement is reflected in this final rule
as a standard titled ``Facility access controls.'' We believe this is a
more precise term to describe that the standard, and its associated
implementation specifications, is applicable to an entity's business
location or locations.
d. Comment: Several commenters requested that the disaster recovery
and emergency mode operations features be moved to ``Administrative
safeguards.'' Other commenters recommended that disaster recovery and
emergency mode operations should be replaced by, and included in, a
``Contingency Operations'' implementation feature.
Response: The ``Administrative safeguards'' section addresses the
contingency planning that must be done to contend with emergency
situations. The placement of the disaster recovery and emergency mode
operations implementation specifications in the ``Physical safeguards''
section is also appropriate, however, because ``Physical safeguards''
defines the physical operations (processes) that provide access to the
facility to implement the associated plans, developed under Sec.
164.308. We agree, however, that the term ``contingency operations''
better describes, and would include, disaster recovery and emergency
mode operations, and have modified the regulation text accordingly (see
Sec. 164.310(a)(1)).
e. Comment: Commenters were concerned about having to address in
their facility security plan the exterior/interior security of a
building when they are one of many occupants rather than the sole
occupant. Additional commenters were concerned that the responsibility
for physical security of the building could not be delegated to a third
party when the covered entity shares the building with other offices.
Response: The facility security plan is an addressable
implementation specification. However, the covered entity retains
responsibility for considering facility security even where it shares
space within a building with other organizations. Facility security
measures taken by a third party must be considered and documented in
the covered entity's facility security plan, when appropriate.
[[Page 8354]]
3. Workstation Use (Sec. 164.310(b))
We proposed policy and guidelines on workstation use that included
documented instructions/procedures delineating the proper functions to
be performed and the manner in which those functions are to be
performed (for example, logging off before leaving a workstation
unattended) to maximize the security of health information. In this
final rule, we adopt this standard.
Comment: One commenter was concerned most people may be misled by
the use of ``terminal'' as an example in the definition of workstation.
The concern was that the standard only addresses ``fixed location
devices,'' while in many instances the workstation has become a laptop
computer.
Response: For clarity, we have added the definition of
``workstation'' to Sec. 164.304 and deleted the word ``terminal'' from
the description of workstation use in Sec. 164.310(b).
4. Workstation Security (Sec. 164.310(c))
We proposed that each organization would be required to put in
place physical safeguards to restrict access to information. In this
final rule, we retain the general requirement for a secure workstation.
Comment: Comments were directed toward the example profiled in the
definition of a secure workstation location. It was believed that what
constitutes a secure workstation location must be dependent upon the
entity's risk management process.
Response: We agree that what constitutes an appropriate solution to
a covered entity's workstation security issues is dependent on the
entity's risk analysis and risk management process. Because many
commenters incorrectly interpreted the examples as the required and
only solution for securing the workstation location, we have modified
the regulations text description to generalize the requirement (see
Sec. 164.310(c)). Also, for clarity, the title ``Secure workstation
location'' has been changed to ``Workstation security'' (see also the
definition of ``Workstation'' at Sec. 164.304).
5. Device and Media Controls (Sec. 164.310(d)(1))
We proposed that covered entities have media controls in the form
of formal, documented policies and procedures that govern the receipt
and removal of hardware and/or software (for example, diskettes and
tapes) into and out of a facility. Implementation features would have
included ``Access control,'' ``Accountability'' (tracking mechanism),
``Data backup,'' ``Data storage,'' and ``Disposal.''
In this final rule, we adopt most of these provisions as
addressable implementation specifications and add a specification for
media re-use. We change the name from ``Media controls'' to ``Device
and media controls'' to more clearly reflect that this standard
concerns hardware as well as electronic media. The proposed ``Access
control'' implementation feature has been removed, as it is addressed
as part of other standards (see section III.C.12.c of this preamble).
a. Comment: One commenter was concerned about the exclusion of
removable media devices from examples of physical types of hardware
and/or software.
Response: The media examples used were not intended to represent
all possible physical types of hardware and/or software. Removable
media devices, although not specifically listed, are not intended to be
excluded.
b. Comment: Comments were made that the issue of equipment re-use
or recycling of media containing mass storage was not addressed in
``Media controls.''
Response: We agree that equipment re-use or recycling should be
addressed, since this equipment may contain electronic protected health
information. The ``Device and media controls'' standard is accordingly
expanded to include a required implementation specification that
addresses the re-use of media (see Sec. 164.310(d)(2)(ii)).
c. Comment: Several commenters asked for a definition of the term
``facility,'' as used in the proposed ``Media controls'' requirement
description. Commenters were unclear whether we were talking about a
corporate entity or the physical plant.
Response: The term ``facility'' refers to the physical premises and
the interior and exterior of a building(s). We have added this
definition to Sec. 164.304.
d. Comment: Several commenters believe the ``Media controls''
implementation features are too onerous and should be deleted.
Response: While the ``Device and media controls'' standard must be
met, we believe, based upon further review, that implementation of all
specifications would not be necessary in every situation, and might
even be counter-productive in some situations. For example, small
providers would be unlikely to be involved in large-scale moves of
equipment that would require systematic tracking, unlike, for example,
large health care providers or health plans. We have, therefore,
reclassified the ``Accountability and data backup'' implementation
specification as addressable to provide more flexibility in meeting the
standard.
e. Comment: One commenter was concerned about the accountability
impact of audit trails on system resources and the pace of system
services.
Response: The proposed audit trail implementation feature appears
as the addressable ``Accountability'' implementation specification. The
name change better reflects the purpose and intended scope of the
implementation specification. This implementation specification does
not address audit trails within systems and/or software. Rather it
requires a record of the actions of a person relative to the receipt
and removal of hardware and/or software into and out of a facility that
are traceable to that person. The impact of maintaining accountability
on system resources and services will depend upon the complexity of the
mechanism to establish accountability. For example, the appropriate
mechanism for a given entity may be manual, such as receipt and removal
restricted to specific persons, with logs kept. Maintaining
accountability in such a fashion should have a minimal, if any, effect
on system resources and services.
f. Comment: A commenter was concerned about the resource
expenditure (system and fiscal) for total e-mail backup and wanted a
clarification of the extensiveness of data backup.
Response: The data an entity needs to backup, and which operations
should be used to carry out the backup, should be determined by the
entity's risk analysis and risk management process. The data backup
plan, which is part of the required contingency plan (see Sec.
164.308(a)(7)(ii)(A)), should define exactly what information is needed
to be retrievable to allow the entity to continue business ``as usual''
in the face of damage or destruction of data, hardware, or software.
The extent to which e-mail backup would be needed would be determined
through that analysis.
G. Technical Safeguards (Sec. 164.312)
We proposed five technical security services requirements with
supporting implementation features: Access control; Audit controls;
Authorization control; Data authentication; and Entity authentication.
We also proposed specific technical security mechanisms for data
transmitted over a communications network, Communications/network
controls with supporting implementation features; Integrity controls;
Message authentication; Access controls;
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Encryption; Alarm; Audit trails; Entity authentication; and Event
reporting.
In this final rule, we consolidate these provisions into Sec.
164.312. That section now includes standards regarding access controls,
audit controls, integrity (previously titled data authentication),
person or entity authentication, and transmission security. As
discussed below, while certain implementation specifications are
required, many of the proposed security implementation features are now
addressable implementation specifications. The function of
authorization control has been incorporated into the information access
management standard under Sec. 164.308, Administrative safeguards.
1. Access Control (Sec. 164.312(a)(1))
In the proposed rule, we proposed to require that the access
controls requirement include features for emergency access procedures
and provisions for context-based, role-based, and/or user-based access;
we also proposed the optional use of encryption as a means of providing
access control. In this final rule, we require unique user
identification and provision for emergency access procedures, and
retain encryption as an addressable implementation specification. We
also make ``Automatic logoff'' an addressable implementation
specification. ``Automatic logoff'' and ``Unique user identification''
were formerly implementation features under the proposed ``Entity
authentication'' (see Sec. 164.312(d)).
a. Comment: Some commenters believe that in specifying ``Context,''
``Role,'' and ``User'' based controls, use of other controls would
effectively be excluded, for example, ``Partition rule-based access
controls,'' and the development of new access control technology.
Response: We agree with the commenters that other types of access
controls should be allowed. There was no intent to limit the
implementation features to the named technologies and this final rule
has been reworded to make it clear that use of any appropriate access
control mechanism is allowed. Proposed implementation features titled
``Context-based access,'' ``Role-based access,'' and ``User-based
access'' have been deleted and the access control standard at Sec.
164.312(a)(1) states the general requirement.
b. Comment: A large number of comments were received objecting to
the identification of ``Automatic logoff'' as a mandatory
implementation feature. Generally the comments asked that we not be so
specific and allow other forms of inactivity lockout, and that this
type of feature be made optional, based more on the particular
configuration in use and a risk assessment/analysis.
Response: We agree with the comments that mandating an automatic
logoff is too specific. This final rule has been written to clarify
that the proposed implementation feature of automatic logoff now
appears as an addressable access control implementation specification
and also permits the use of an equivalent measure.
c. Comment: We received comments asking that encryption be deleted
as an implementation feature and stating that encryption is not
required for ``data at rest.''
Response: The use of file encryption is an acceptable method of
denying access to information in that file. Encryption provides
confidentiality, which is a form of control. The use of encryption, for
the purpose of access control of data at rest, should be based upon an
entity's risk analysis. Therefore, encryption has been adopted as an
addressable implementation specification in this final rule.
d. Comment: We received one comment stating that the proposed
implementation feature ``Procedure for emergency access,'' is not
access control and recommending that emergency access be made a
separate requirement.
Response: We believe that emergency access is a necessary part of
access controls and, therefore, is properly a required implementation
specification of the ``Access controls'' standard. Access controls will
still be necessary under emergency conditions, although they may be
very different from those used in normal operational circumstances. For
example, in a situation when normal environmental systems, including
electrical power, have been severely damaged or rendered inoperative
due to a natural or man-made disaster, procedures should be established
beforehand to provide guidance on possible ways to gain access to
needed electronic protected health information.
2. Audit Controls (Sec. 164.312(b))
We proposed that audit control mechanisms be put in place to record
and examine system activity. We adopt this requirement in this final
rule.
a. Comment: We received a comment stating that ``Audit controls''
should be an implementation feature rather than the standard, and
suggesting that we change the title of the standard to
``Accountability,'' and provide additional detail to the audit control
implementation feature.
Response: We do not adopt the term ``Accountability'' in this final
rule because it is not descriptive of the requirement, which is to have
the capability to record and examine system activity. We believe that
it is appropriate to specify audit controls as a type of technical
safeguard. Entities have flexibility to implement the standard in a
manner appropriate to their needs as deemed necessary by their own risk
analyses. For example, see NIST Special Publication 800-14, Generally
Accepted Principles and Practices for Securing Information Technology
Systems and NIST Special Publication 800-33, Underlying Technical
Models for Information Technology Security.
b. Comment: One commenter recommended that this final rule state
that audit control mechanisms should be implemented based on the
findings of an entity's risk assessment and risk analysis. The
commenter asserted that audit control mechanisms should be utilized
only when appropriate and necessary and should not adversely affect
system performance.
Response: We support the use of a risk assessment and risk analysis
to determine how intensive any audit control function should be. We
believe that the audit control requirement should remain mandatory,
however, since it provides a means to assess activities regarding the
electronic protected health information in an entity's care.
c. Comment: One commenter was concerned about the interplay of
State and Federal requirements for auditing of privacy data and
requested additional guidance on the interplay of privacy rights, laws,
and the expectation for audits under the rule.
Response: In general, the security standards will supercede any
contrary provision of State law. Security standards in this final rule
establish a minimum level of security that covered entities must meet.
We note that covered entities may be required by other Federal law to
adhere to additional, or more stringent security measures. Section
1178(a)(2) of the statute provides several exceptions to this general
rule. With regard to protected health information, the preemption of
State laws and the relationship of the Privacy Rule to other Federal
laws is discussed in the Privacy Rule beginning at 65 FR 82480; the
preemption provisions of the rule are set out at 45 CFR part 160,
subpart B.
It should be noted that although the Privacy Rule does not
incorporate a requirement for an ``audit trail'' function, it does call
for providing an accounting of certain disclosures of protected health
information to an
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individual upon request. There has been a tendency to assume that this
Privacy Rule requirement would be satisfied via some sort of process
involving audit trails. We caution against assuming that the Security
Rule's requirement for an audit capability will satisfy the Privacy
Rule's requirement regarding accounting for disclosures of protected
health information. The two rules cover overlapping, but not identical
information. Further, audit trails are typically used to record uses
within an electronic information system, while the Privacy Rule
requirement for accounting applies to certain disclosures outside of
the covered entity (for example, to public health authorities).
3. Integrity (Sec. 164.312(c)(1))
We proposed under the ``Data authentication'' requirement, that
each organization be required to corroborate that data in its
possession have not been altered or destroyed in an unauthorized manner
and provided examples of mechanisms that could be used to accomplish
this task. We adopt the proposed requirement for data authentication in
the final rule as an addressable implementation specification
``Mechanism to authenticate data,'' under the ``Integrity'' standard.
a. Comment: We received a large number of comments requesting
clarification of the ``Data authentication'' requirement. Many of these
comments suggested that the requirement be called ``Data integrity''
instead of ``Data authentication.'' Others asked for guidance regarding
just what ``data'' must be authenticated. A significant number of
commenters indicated that this requirement would put an extraordinary
burden on large segments of the health care industry, particularly when
legacy systems are in use. Requests were received to make this an
``optional'' requirement, based on an entity's risk assessment and
analysis.
Response: We adopt the suggested ``integrity'' terminology because
it more clearly describes the intent of the standard. We retain the
meaning of the term ``Data authentication'' under the addressable
implementation specification ``Mechanism to authenticate data,'' and
provide an example of a potential means to achieve data integrity.
Error-correcting memory and magnetic disc storage are examples of
the built-in data authentication mechanisms that are ubiquitous in
hardware and operating systems today. The risk analysis process will
address what data must be authenticated and should provide answers
appropriate to the different situations faced by the various health
care entities implementing this regulation.
Further, we believe that this standard will not prove difficult to
implement, since there are numerous techniques available, such as
processes that employ digital signature or check sum technology to
accomplish the task.
b. Comment: We received numerous comments suggesting that ``Double
keying'' be deleted as a viable ``Data authentication'' mechanism,
since this practice was generally associated with the use of punched
cards.
Response: We agree that the process of ``Double keying'' is
outdated. This final rule omits any reference to ``Double keying.''
4. Person or Entity Authentication (Sec. 164.312(d))
We proposed that an organization implement the requirement for
``Entity authentication'', the corroboration that an entity is who it
claims to be. ``Automatic logoff'' and ``Unique user identification''
were specified as mandatory features, and were to be coupled with at
least one of the following features: (1) A ``biometric'' identification
system; (2) a ``password'' system; (3) a ``personal identification
number''; and (4) ``telephone callback,'' or a ``token'' system that
uses a physical device for user identification.
In this final rule, we provide a general requirement for person or
entity authentication without the specifics of the proposed rule.
Comment: We received comments from a number of organizations
requesting that the implementation features for entity authentication
be either deleted in their entirety or at least be made optional. On
the other hand, comments were received requesting that the use of
digital signatures and soft tokens be added to the list of
implementation features.
Response: We agree with the commenters that many different
mechanisms may be used to authenticate entities, and this final rule
now reflects this fact by not incorporating a list of implementation
specifications, in order to allow covered entities to use whatever is
reasonable and appropriate. ``Digital signatures'' and ``soft tokens''
may be used, as well as many other mechanisms, to implement this
standard.
The proposed mandatory implementation feature, ``Unique user
identification,'' has been moved from this standard and is now a
required implementation specification under ``Access control'' at Sec.
164.312(a)(1). ``Automatic logoff'' has also been moved from this
standard to the ``Access control'' standard and is now an addressable
implementation specification.
5. Transmission Security (Sec. 164.312(e)(1))
Under ``Technical Security Mechanisms to Guard Against Unauthorized
Access to Data that is Transmitted Over a Communications Network,'' we
proposed that ``Communications/network controls'' be required to
protect the security of health information when being transmitted
electronically from one point to another over open networks, along with
a combination of mandatory and optional implementation features. We
proposed that some form of encryption must be employed on ``open''
networks such as the Internet or dial-up lines.
In this final rule, we adopt integrity controls and encryption, as
addressable implementation specifications.
a. Comment: We received a number of comments asking for overall
clarification as well as a definition of terms used in this section. A
definition for the term ``open networks'' was the most requested
action, but there was a general expression of dislike for the manner in
which we approached this section, with some comments suggesting that
the entire section be rewritten. A significant number of comments were
received on the question of encryption requirements when dial-up lines
were to be employed as a means of connectivity. The overwhelming
majority strongly urged that encryption not be mandatory when using any
transmission media other than the Internet, but rather be considered
optional based on individual entity risk assessment/analysis. Many
comments noted that there are very few known breaches of security over
dial-up lines and that nonjudicious use of encryption can adversely
affect processing times and become both financially and technically
burdensome. Only one commenter suggested that ``most'' external traffic
should be encrypted.
Response: In general, we agree with the commenters who asked for
clarification and revision. This final rule has been significantly
revised to reflect a much simpler and more direct requirement. The term
``Communications/network controls'' has been replaced with
``Transmission security'' to better reflect the requirement that, when
electronic protected health information is transmitted from one point
to another, it must be protected in a manner commensurate with the
associated risk.
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We agree with the commenters that switched, point-to-point
connections, for example, dial-up lines, have a very small probability
of interception.
Thus, we agree that encryption should not be a mandatory
requirement for transmission over dial-up lines. We also agree with
commenters who mentioned the financial and technical burdens associated
with the employment of encryption tools. Particularly when considering
situations faced by small and rural providers, it became clear that
there is not yet available a simple and interoperable solution to
encrypting e-mail communications with patients. As a result, we decided
to make the use of encryption in the transmission process an
addressable implementation specification. Covered entities are
encouraged, however, to consider use of encryption technology for
transmitting electronic protected health information, particularly over
the internet.
As business practices and technology change, there may arise
situations where electronic protected health information being
transmitted from a covered entity would be at significant risk of being
accessed by unauthorized entities. Where risk analysis showed such risk
to be significant, we would expect covered entities to encrypt those
transmissions, if appropriate, under the addressable implementation
specification for encryption.
We do not use the term ``open network'' in this final rule because
its meaning is too broad. We include as an addressable implementation
specification the requirement that transmissions be encrypted when
appropriate based on the entity's risk analysis.
b. Comment: We received comments requesting that the implementation
features be deleted or made optional. Three commenters asked that the
requirement for an alarm be deleted.
Response: This final rule has been revised to reflect deletion of
the following implementation features: (1) The alarm capability; (2)
audit trail; (3) entity authentication; and (4) event reporting. These
features were associated with a proposed requirement for
``Communications/network controls'' and have been deleted since they
are normally incorporated by telecommunications providers as part of
network management and control functions that are included with the
provision of network services. A health care entity would not expect to
be responsible for these technical telecommunications features.
``Access controls'' has also been deleted from the implementation
features since the consideration of the use of encryption will satisfy
the intent of this feature. We retain as addressable implementation
specifications two features: (1) ``Integrity controls'' and
``encryption''. ``Message authentication'' has been deleted as an
implementation feature because the use of data authentication codes
(called for in the ``integrity controls'' implementation specification)
satisfies the intent of ``Message authentication.''
c. Comment: A number of comments were received asking that this
final rule establish a specific (or at least a minimum) cryptographic
algorithm strength. Others recommended that the rule not specify an
encryption strength since technology is changing so rapidly. Several
commenters requested guidelines and minimum encryption standards for
the Internet. Another stated that, since an example was included (small
or rural providers for example), the government should feel free to
name a specific encryption package. One commenter stated that the
requirement for encryption on the Internet should reference the ``CMS
Internet Security Policy.''
Response: We remain committed to the principle of technology
neutrality and agree with the comment that rapidly changing technology
makes it impractical and inappropriate to name a specific technology.
Consistent with this principle, specification of an algorithm strength
or specific products would be inappropriate. Moreover, rapid advances
in the success of ``brute force'' cryptanalysis techniques suggest that
any minimum specification would soon be outmoded. We maintain that it
is much more appropriate for this final rule to state a general
requirement for encryption protection when necessary and depend on
covered entities to specify technical details, such as algorithm types
and strength. Because ``CMS Internet Security Policy'' is the policy of
a single organization and applies only to information sent to CMS, and
not between all covered entities, we have not referred to it here.
d. Comment: The proposed definition of ``Integrity controls''
generated comments that asked that the word ``validity'' be changed to
``Integrity.'' Commenters were concerned about the ability of an entity
to ensure that information was ``valid.''
Response: We agree with the commenters about the meaning of the
word ``validity'' in the context of the proposed definition of
``Integrity controls.'' We have named ``integrity controls'' as an
implementation specification in this final rule to require mechanisms
to ensure that electronically transmitted information is not improperly
modified without detection (see Sec. 164.312(c)(1)).
e. Comment: Three commenters asked for clarification and guidance
regarding the unsolicited electronic receipt of health information in
an unsecured manner, for example, when the information was submitted by
a patient via e-mail over the Internet. Commenters asked for guidance
as to what was their obligation to protect data received in this
manner.
Response: The manner in which electronic protected health
information is received by a covered entity does not affect the
requirement that security protection must subsequently be afforded to
that information by the covered entity once that information is in
possession of the covered entity.
6. Proposed Requirements Not Adopted in This Final Rule
a. Authorization Control
We proposed, under ``Technical Security Services to Guard Data
Integrity, Confidentiality, and Availability,'' that a mechanism be
required for obtaining consent for the use and disclosure of health
information using either ``Role-based access'' or ``User-based access''
controls. In this final rule, we do not adopt this requirement.
Comment: We received a large number of comments regarding use of
the word ``consent.'' It was pointed out that this could be construed
to mean patient consent to the use or disclosure of patient
information, which would make this a privacy issue, rather than one of
security. Other comments suggested deletion of the requirement in its
entirety. We received a comment asking for clarification about the
distinction between ``Access control'' and ``Authorizations.''
Response: These requirements were intended to address authorization
of workforce members and others for the use and disclosure of health
information, not patient consent. Upon reviewing the differences
between ``Access control'' and ``Authorization control,'' we found it
to be unnecessary to retain ``Authorization control'' as a separate
requirement. Both the access control and the authorization control
proposed requirements involved implementation of types of automated
access controls, that is, role-based access and user-based access. It
can be argued that the process of managing access involves allowing and
restricting access to those individuals that have been authorized to
access the data. The intent of the proposed authorization control
implementation feature is now
[[Page 8358]]
incorporated in the access authorization implementation specification
under the information access management standard in Sec.
164.308(a)(4). Under the information access management standard, a
covered entity must implement, if appropriate and reasonable to its
situation, policies and procedures first to authorize a person to
access electronic protected health information and then to actually
establish such access. These policies and procedures will enable
entities to follow the Privacy Rule minimum necessary requirements,
which provide when persons should have access to information.
H. Organizational Requirements (Sec. 164.314)
We proposed that each health care clearinghouse must comply with
the security standards to ensure all health information and activities
are protected from unauthorized access. If the clearinghouse is part of
a larger organization, then unauthorized access by the larger
organization must be prevented. We also proposed that parties
processing data through a third party would be required to enter into a
chain of trust partner agreement, a contract in which the parties agree
to electronically exchange data and to protect the transmitted data in
accordance with the security standards.
In this final rule, we have adopted the concepts of hybrid and
affiliated entities, as previously defined in Sec. 164.504, and now
defined in Sec. 164.103, and business associates as defined in Sec.
160.103, to be consistent with the Privacy Rule. General organizational
requirements related to affiliated covered entities and hybrid entities
are now contained in a new Sec. 164.105. The proposed chain of trust
partner agreement has been replaced by the standards for business
associate contracts or other arrangements and the standards for group
health plans. Consistent with the statute and the policy of the Privacy
Rule, this final rule does not require noncovered entities to comply
with the security standards.
1. Health Care Clearinghouses
The proposed rule proposed that if a health care clearinghouse were
part of a larger organization, it would be required to ensure that all
health information pertaining to an individual is protected from
unauthorized access by the larger organization; this statement closely
tracked the statutory language in section 1173(d)(1)(B) of the Act.
Since the point of the statutory language is to ensure that health care
information in the possession of a health care clearinghouse is not
inappropriately accessed by the larger organization of which it is a
part, this final rule implements the statutory language through the
information access management provision of Sec. 164.308(a)(4)(ii)(A).
The final rule, at Sec. 164.105, makes the health care component
and affiliated entity standards of the Privacy Rule applicable to the
security standards. Therefore, we have not changed those standards
substantively. In pertaining to the Privacy Rule, we have simply moved
them to a new location in part 164. Any differences between Sec.
164.105 and Sec. 164.504(a) through (d) reflects the addition of
requirements specific to the security standards.
The health care component approach was developed in response to
extensive comment received principally on the Privacy Rule. See 65 FR
82502 through 82503 and 82637 through 82640 for a discussion of the
policy concerns underlying the health care component approach. Since
the security standards are intended to support the protection of
electronic information protected by the Privacy Rule, it makes sense to
incorporate organizational requirements that parallel those required of
covered entities by the Privacy Rule. This policy will also minimize
the burden of complying with both rules.
a. Comment: Relative to the following preamble statement (63 FR
43258): ``If the clearinghouse is part of a larger organization, then
security must be imposed to prevent unauthorized access by the larger
organization.'' One commenter asked what is considered to be ``the
larger organization.'' For example, if a clearinghouse function occurs
in a department of a larger business entity, will the regulation cover
all internal electronic communication, such as e-mail, within the
larger business and all external electronic communication, such as e-
mail with its owners?
Response: The ``larger organization'' is the overall business
entity that a clearinghouse would be part of. Under the Security Rule,
the larger organization must assure that the health care clearinghouse
function has instituted measures to ensure only that electronic
protected health information that it processes is not improperly
accessed by unauthorized persons or other entities, including the
larger organization. Internal electronic communication within the
larger organization will not be covered by the rule if it does not
involve the clearinghouse, assuming that it has designated health care
components, of which the health care clearinghouse is one. External
communication must be protected as sent by the clearinghouse, but need
not be protected once received.
b. Comment: One commenter asked that the first sentence in Sec.
142.306(b) of the proposed rule, ``If a health care clearinghouse is
part of a larger organization, it must assure all health information is
protected from unauthorized access by the larger organization'' be
expanded to read, ``If a health care clearinghouse or any other health
care entity is part of a larger organization . . .''
Response: The Act specifically provides, at section 1173(d)(1)(B),
that the Secretary must adopt standards to ensure that a health care
clearinghouse, if part of a larger organization, has policies and
security procedures to protect information from unauthorized access by
the larger organization.
Health care providers and health plans are often part of larger
organizations that are not themselves health care providers or health
plans. The security measures implemented by health plans and covered
health care providers should protect electronic protected health
information in circumstances such as the one identified by the
commenter. Therefore, we agree with the comment that the requirement
should be expanded as suggested by the commenter. In this final rule,
those components of a hybrid entity that are designated as health care
components must comply with the security standards and protect against
unauthorized access with respect to the other components of the larger
entity in the same way as they must deal with separate entities.
2. Business Associate Contracts and Other Arrangements
We proposed that parties processing data through a third party
would be required to enter into a chain of trust partner agreement, a
contract in which the parties agree to electronically exchange data and
to protect the transmitted data. This final rule narrows the scope of
agreements required. It essentially tracks the provisions in Sec.
164.502(e) and Sec. 164.504(e) of the Privacy Rule, although
appropriate modifications have been made in this rule to the required
elements of the contract.
In this final rule, a contract between a covered entity and a
business associate must provide that the business associate must--(1)
implement safeguards that reasonably and appropriately protect the
confidentiality, integrity, and availability of the electronic
protected health information that it creates,
[[Page 8359]]
receives, maintains, or transmits on behalf of the covered entity; (2)
ensure that any agent, including a subcontractor, to whom it provides
this information agrees to implement reasonable and appropriate
safeguards; (3) report to the covered entity any security incident of
which it becomes aware; (4) make its policies and procedures, and
documentation required by this subpart relating to such safeguards,
available to the Secretary for purposes of determining the covered
entity's compliance with this subpart; and (5) authorize termination of
the contract by the covered entity if the covered entity determines
that the business associate has violated a material term of the
contract.
When a covered entity and its business associate are both
governmental entities, an ``other arrangement'' is sufficient. The
covered entity is in compliance with this standard if it enters into a
memorandum of understanding with the business associate that contains
terms that accomplish the objectives of the above-described business
associate contract. However, the covered entity may omit from this
memorandum the termination authorization required by the business
associate contract provisions if this authorization is inconsistent
with the statutory obligations of the covered entity or its business
associate. If other law (including regulations adopted by the covered
entity or its business associate) contains requirements applicable to
the business associate that accomplish the objectives of the above-
described business associate contract, a contract or agreement is not
required. If a covered entity enters into other arrangements with
another governmental entity that is a business associate, such
arrangements may omit provisions equivalent to the termination
authorization required by the business associate contract, if
inconsistent with the statutory obligation of the covered entity or its
business associate.
If a business associate is required by law to perform a function or
activity on behalf of a covered entity or to provide a service
described in the definition of business associate in Sec. 160.103 of
this subchapter to a covered entity, the covered entity may permit the
business associate to receive, create, maintain, or transmit electronic
protected health information on its behalf to the extent necessary to
comply with the legal mandate without meeting the requirements of the
above-described business associate contract, provided that the covered
entity attempts in good faith to obtain satisfactory assurances as
required by the above described business associate contract and
documents the attempt and the reasons that these assurances cannot be
obtained.
We have added a standard for group health plans that parallels the
provisions of the Privacy Rule. It became apparent during the course of
the security and privacy rulemaking that our original chain of trust
approach was both overly broad in scope and failed to address
appropriately the circumstances of certain covered entities,
particularly the ERISA group health plans. These latter considerations
and the solutions arrived at in the Privacy Rule are described in
detail in the Privacy Rule at 65 FR 82507 through 82509. Because the
purpose of the security standards is in part to reinforce privacy
protections, it makes sense to align the organizational policies of the
two rules. This decision should also make compliance less burdensome
for covered entities than would a decision to have different
organizational requirements for the two sets of rules.
Thus, we have added at Sec. 164.314(b) a standard for group health
plan that tracks the standard at Sec. 164.504(f) very closely. The
purpose of these provisions is to ensure that, except when the
electronic protected health information disclosed to a plan sponsor is
summary health information or enrollment or disenrollment information
as provided for by Sec. 164.504(f), group health plan documents
provide that the plan sponsor will reasonably and appropriately
safeguard electronic protected health information created, received,
maintained or transmitted to or by the plan sponsor on behalf of the
group health plan. The plan documents of the group health plan must be
amended to incorporate provisions to require the plan sponsor to
implement reasonable and appropriate safeguards to protect the
confidentiality, integrity, and availability of the electronic
protected health information that it creates, receives, maintains, or
transmits on behalf of the group health plan; ensure that the adequate
separation required by Sec. 164.504(f)(2)(iii) is supported by
reasonable and appropriate security measures; ensure that any agents,
including a subcontractor, to whom it provides this information agrees
to implement reasonable and appropriate safeguards to protect the
information; report to the group health plan any security incident of
which it becomes aware; and make its policies and procedures and
documentation relating to these safeguards available to the Secretary
for purposes of determining the group health plan's compliance with
this subpart.
a. Comment: Several commenters expressed confusion concerning the
applicability of proposed Sec. 142.104 to security.
Response: The proposed preamble included language generally
applicable to most of the proposed standards under HIPAA. Proposed
Sec. 142.104 concerned general requirements for health plans relative
to processing transactions. We proposed that plans could not refuse to
conduct a transaction as a standard transaction, or delay or otherwise
adversely affect a transaction on the grounds that it was a standard
transaction; health information transmitted and received in connection
with a transaction must be in the form of standard data elements; and
plans conducting transactions through an agent must ensure that the
agent met all the requirements that applied to the health plan. Except
for the statement that a plan's agent (``business associate'' in the
final rule) must meet the requirements (which would include security)
that apply to the health plan, this proposed section did not pertain to
the security standards and was addressed in the Transaction Rule.
b. Comment: The majority of comments concerned proposed rule
language stating ``the same level of security will be maintained at all
links in the chain * * *'' Commenters believed the current language
will have an adverse impact on one of the security standard's basic
premises, which is scalability. It was requested that the language be
changed to indicate that, while appropriate security must be
maintained, all partners do not need to maintain the same level of
security.
A number of commenters expressed some confusion concerning their
responsibility for the security of information once it has passed from
their control to their trading partner's control, and so on down the
trading partner chain. Requests were made that we clarify that chain of
trust partner agreements were really between two parties, and that, if
a trading partner agreement has been entered into, any given partner
would not be responsible, or liable, for the security of data once it
is out of his or her control.
In line with this concern, several commenters were concerned that
they would have some responsibility to ensure the level of security
maintained by their trading partner.
Several commenters believe a chain of trust partner agreement
should not be a security requirement. One commenter stated that because
covered entities must already conform to the regulation
[[Page 8360]]
requirements, a ``chain of trust'' agreement does not add to overall
security. Compliance with the regulation should be sufficient.
Response: We believe the commenters are correct that the rule as
proposed would--(1) not allow for scalability; and (2) would lead an
entity to believe it is responsible, and liable, for making sure all
entities down the line maintain the same level of security. The
confusion here seems to come from the phrase ``same level of
security.'' Our intention was that each trading partner would maintain
reasonable and appropriate safeguards to protect the information. We
did not mean that partners would need to implement the same security
technology or measures and procedures.
We have replaced the proposed ``Chain of trust'' standard with a
standard for ``Business associate contracts and other arrangements.''
When another entity is acting as a business associate of a covered
entity, we require the covered entity to require the other entity to
protect the electronic protected health information that it creates,
receives, maintains or transmits on the covered entity's behalf. The
level of security afforded particular electronic protected health
information should not decrease just because the covered entity has
made the business decision to entrust a business associate with using
or disclosing that information in connection with the performance of
certain functions instead of doing those functions itself. Thus, the
rule below requires covered entities to require their business
associates to implement certain safeguards and take other measures to
ensure that the information is safeguarded (see Sec. 164.308(b)(1) and
Sec. 164.314(a)(1)).
The specific requirements of Sec. 164.314(a)(1) are drawn from the
analogous requirements at 45 CFR 164.504(e) of the Privacy Rule,
although they have been adapted to reflect the objectives and context
of the security standards. Compare, in particular, 45 CFR
164.504(e)(2)(ii) with Sec. 164.314(a)(1). We have not imported all of
the requirements of 45 CFR 164.504(e), however, as many have no clear
analog in the security context (see, for example, 45 CFR
164.504(e)(2)(i) regarding permitted and required uses and disclosures
made by a business associate). HHS had previously committed to
reconciling its security and privacy policies regarding business
associates (see 65 FR 82643). The close relationship of many of the
organizational requirements in section 164.314 with the analogous
requirements of the Privacy Rule should facilitate the implementation
and coordination of security and privacy policies and procedures by
covered entities.
In contrast, when another entity is not acting as a business
associate for the covered entity, but rather is acting in the capacity
of some other sort of trading partner, we do not require the covered
entity to require the other entity to adopt particular security
measures, as previously proposed. This policy is likewise consistent
with the general approach of the Privacy Rule (see the discussion in
the Privacy Rule at 65 FR 82476). The covered entity is free to
negotiate security arrangements with its non-business associate trading
partners, but this rule does not require it to do so.
A similar approach underlies Sec. 164.314(b) below. These
provisions are likewise drawn from, and intended to support, the
analogous privacy protections provided for by 45 CFR 164.504(f) (see
the discussion of Sec. 164.504(f) of the Privacy Rule at 65 FR 82507
through 82509, and 82646 through 82648). As with the business associate
contract provisions, however, they are imported and adapted only to the
extent they make sense in the security context. Thus, for example, the
requirement at Sec. 164.504(f)(2)(ii)(C) prohibits the plan documents
from permitting disclosure of protected health information to the plan
sponsor for employment-related purposes. As this prohibition goes
entirely to the permissibility of a particular type of disclosure, it
has no analog in Sec. 164.314(b).
c. Comment: Several commenters stated that if security features are
determined by agreements established between ``trading partners,'' as
stated in the proposed regulations, there should be some guidelines or
boundaries for those agreements so that extreme or unusual provisions
are not permitted.
Response: This final rule sets a baseline, or minimum level, of
security measures that must be taken by a covered entity and stipulates
that a business associate must also implement reasonable and
appropriate safeguards. This final rule does not, however, prohibit a
covered entity from employing more stringent security measures or from
requiring a business associate to employ more stringent security
measures. A covered entity may determine that, in order to do business
with it, a business associate must also employ equivalent measures.
This would be a business decision and would not be governed by the
provisions of this rule. Security mechanisms relative to the
transmission of electronic protected health information between
entities may need to be agreed upon by both parties in order to
successfully complete the transmission. However, the determination of
the specific transmission mechanisms and the specific security features
to be implemented remains a business decision.
d. Comment: Several commenters asked whether existing contracts
could be used to meet the requirement for a trading partner agreement,
or does the rule require entry into a new contract specific to this
purpose. Also, the commenters want to know about those whose working
agreements do not involve written contractual agreement: Do they now
need to set up formal agreements and incur the additional expense that
would entail?
Response: This final rule requires written agreements between
covered entities and business associates. New contracts do not have to
be entered into specifically for this purpose, if existing written
contracts adequately address the applicable requirements (or can be
amended to do so).
e. Comment: Several commenters asked whether covered entities are
responsible for the security of all individual health information sent
to them, or only information sent by chain of trust partners. They also
asked if they can refuse to process standard transactions sent to them
in an unsecured fashion. In addition, they inquired if they can refuse
to send secured information in standard transactions to entities not
required by law to secure the information. One commenter asked if there
is a formula for understanding in any particular set of relationships
where the ultimate responsibility for compliance with the standards
would lie.
Response: Pursuant to the Transactions Rule, if a health plan
receives an unsecured standard transaction, it may not refuse to
process that transaction simply because it was sent in an unsecured
manner. The health plan is not responsible under this rule, for how the
transaction was sent to it (unless the transmission was made by a
business associate, in which case different considerations apply);
however, once electronic protected health information is in the
possession of a covered entity, the covered entity is responsible for
the security of the electronic protected health information received.
The covered entity must implement technical security mechanisms to
guard against unauthorized access to electronic protected health
information that is transmitted over an electronic communication
network. In addition, the rule requires the transmitting
[[Page 8361]]
covered entity to obtain written assurance from a business associate
receiving the transmission that it will provide an adequate level of
protection to the information. For the business associate provisions,
see Sec. 164.308(b) and Sec. 164.314(a) of this final rule.
f. Comment: One commenter asked what security standards a vendor
having access to a covered entity's health information during
development, testing, and repair must meet and wanted to know whether
the rule anticipates having a double layer of security compliance (one
at the user level and one at the vendor level). If so, the commenter
believes this will cause duplication of work.
Response: In the situation described, the vendor would be acting as
a business associate. The covered entity must require the business
associate to implement reasonable and appropriate security protections
of electronic protected health information. This requirement, however,
does not impose detailed requirements for how that level of protection
must be achieved. The resulting flexibility should permit entities and
their business associates to adapt their security safeguards in ways
that make sense in their particular environments.
g. Comment: A number of commenters requested sample contract
language or models of contracts. We also received one comment that
suggested that we should not dictate the contents of contracted
agreements.
Response: We will consider developing sample contract language as
part of our guideline development.
I. Policies and Procedures and Documentation Requirements (Sec.
164.316)
We proposed requiring documented policies and procedures for the
routine and nonroutine receipt, manipulation, storage, dissemination,
transmission, and/or disposal of health information. We proposed that
the documentation be reviewed and updated periodically.
We have emphasized throughout this final rule the scalability
allowed by the security standards. This final rule requires covered
entities to implement policies and procedures that are reasonably
designed, taking into account the size and type of activities of the
covered entity that relate to electronic protected health information,
and requires that the policies and procedures must be documented in
written form, which may be in electronic form. This final rule also
provides that a covered entity may change its policies and procedures
at any time, provided that it documents and implements the changes in
accordance with the applicable requirements. Covered entities must also
document designations, for example, of affiliation between covered
entities (see Sec. 164.105(b)), and other actions, as required by
other provisions of the subpart.
1. Comment: One commenter wanted development of written policies
regarding such things as confidentiality and privacy rights for access
to medical records, and approval of research by a review board when
appropriate.
Response: These issues are covered in the Privacy Rule (65 FR
82462) (see, in particular, Sec. 164.512(i), Sec. 164.524, and Sec.
164.530(i)).
2. Comment: One commenter asked if standards will override
agreements that require others to maintain hardcopy documentation (for
example, signature on file) and no longer require submitters to
maintain hardcopy documentation.
Response: The security standards will require a minimum level of
documentation of security practices. Any agreements between trading
partners for the exchange of electronic protected health information
that impose additional documentation requirements will not be
overridden by this final rule.
3. Comment: One commenter stated that there should be a requirement
to document only applications deemed necessary by an applications and
data criticality assessment.
Response: Electronic protected health information must be afforded
security protection under this rule regardless of what application it
resides in. The measures taken to protect that information must be
documented.
4. Comment: One commenter asked how detailed the documentation must
be. Another commenter asked what ``kept current'' meant.
Response: Documentation must be detailed enough to communicate the
security measures taken and to facilitate periodic evaluations pursuant
to Sec. 164.308(a)(8). While the term ``current'' is not in the final
rule, this concept has been adopted in the requirement that
documentation must be updated as needed to reflect security measures
currently in effect.
5. Comment: We received one comment concerning review and updating
of implementing documentation suggesting that ``periodically'' be
changed to ``at least annually.''
Response: We believe that the requirement should remain as written,
in order to allow individual entities to establish review and update
cycles as deemed necessary. The need for review and update will vary
dependent upon a given entity's size, configuration, environment,
operational changes, and the security measures implemented.
J. Compliance Dates for Initial Implementation (Sec. 164.318)
We proposed that how the security standard would be implemented by
each covered entity would be dependent upon industry trading partner
agreements for electronic transmissions. Covered entities would be able
to adapt the security matrix to meet business needs. We suggested that
requirements of the security standard may be implemented earlier than
the compliance date. However, we would require implementation to be
complete by the applicable compliance date, which is 24 months after
adoption of the standard, and 36 months after adoption of the standard
for small health plans, as provided by the Act. In the proposed rule,
we suggested that an entity choosing to convert from paper to standard
EDI transactions, before the effective date of the security standard,
consider implementing the security standard at the same time.
In this final rule the dates by which entities must be in
compliance with the standards are called ``compliance dates,''
consistent with our practice in the Transactions, Privacy, and Employer
Identifier Rules. Section 164.318 in this final rule is also organized
consistent with the format of those rules. The substantive
requirements, which are statutory, remain unchanged.
Many of the comments received concerning effective dates and
compliance dates, including the compliance dates for modifications of
standards, were addressed in the Transactions Rule. Those that were not
addressed in that publication are presented below.
1. Comment: A number of commenters expressed support for the
effective dates of the rules and stated that they should not be
delayed. In contrast, one commenter stated that we should delay this
rule to allow for an open consensus building debate to occur concerning
security. One commenter asked that the rule be delayed until after
implementation of the ICD-CM changes.
A number of comments were received expressing the opinion that the
security regulation should not be published until either the Congress
has enacted legislation governing standards with respect to the privacy
of individually identifiable health information, or the Secretary of
HHS has promulgated final regulations containing these standards. One
commenter stated, ``we find
[[Page 8362]]
ourselves in the difficult position of reacting to proposed rules
setting the standards for how information should be physically and
electronically protected, without having reached agreement on the
larger issues of consent for and disclosure of individual medical
information.''
Response: The effective date of the final rule is 60 days after
this final rule is published in the Federal Register. The statute sets
forth the compliance dates for the standards. Covered entities must
comply with this final rule no later than 24 months (36 months for
small plans) after the effective date.
The final Privacy Rule has already been published. We note that
numerous comments concerning the timing of the adoption of privacy and
security standards were also received in the privacy rulemaking and are
discussed in the Privacy Rule at 65 FR 82752.
2. Comment: One commenter asked that proposed Sec. 142.312 be
rewritten to separate the effective dates for the Security Rule and the
Transactions Rule.
Response: The proposed rule incorporated general language
applicable to all the proposed Administrative Simplification standards.
Language concerning standards other than Security is not included in
Sec. 164.318. Because this final rule is adopted after the
Transactions Rule was adopted, the compliance dates for the security
standards differ from those for the transactions standards. Comments
concerning general effective dates were addressed in the Transactions
Rule. Comments specific to the security standards are addressed here.
3. Comment: Several commenters suggested that we not allow early
implementation of the Security Rules. A number of others asked that we
allow, but not require, early implementation by willing trading
partners. Another commenter suggested that early implementation by
willing trading partners be allowed as long as the data content
transmitted is equal to that required by statute. Another commenter
requested that it be stipulated that entities cannot implement less
than 1 year from the date of this final rule and then only after
successful testing, and that a ``start testing by'' date be defined.
Response: Whether or not to implement before the compliance date is
a business decision that each covered entity must make. Moreover, the
vast majority of the standards address internal policies and procedures
that can be implemented at any time without any impact on trading
partners.
4. Comment: One commenter asked us to establish a research site or
test laboratory for a trial implementation.
Response: The concept of a ``trial implementation'' that would have
widespread relevance is inconsistent with our basic principles of
flexibility, scalability, and technology-neutrality.
5. Comment: One commenter stated that the 2-year time frame for
implementation of a contingency plan is too short for health plans that
serve multiple regions of the country.
Response: The Congress mandated that entities must be in compliance
2 years from the initial standard's adoption date (3 years for small
plans).
K. Appendix
The proposed rule contained three addenda. Addendum 1 set out in
matrix form the proposed requirements and related implementation
features of the proposed rule. Addendum 2 set out in list form a
glossary of terms with citations to the sources of those terms.
Addendum 3 identified and mapped areas of overlap in the proposed
security standard and implementation features.
This final rule retains only the first proposed addendum, the
matrix, as an appendix, that is modified to reflect the changes in the
administrative, physical, and technical safeguard portions of the rule
below. Numerous terms in the glossary now appear in the rule below,
typically (but not always) as definitions.
1. Comment: Over two-thirds of the comments received on this topic
asked that the matrix be incorporated into the final rule. One
commenter asked that a simplified version be made part of the final
rule. Six commenters wanted it kept in this final rule as an addendum.
One commenter stated that it should be in an appendix to the rule,
while others stated that it should not be included in this final rule.
Response: Since a significant majority of commenters requested
retention of the matrix, it has been incorporated into this final rule
as an appendix. The matrix displays, in tabular form, the
administrative, physical, and technical safeguard standards and
relating implementation specifications described in this final rule in
Sec. 164.308, Sec. 164.310, and Sec. 164.312. It should be noted
that the requirements of Sec. 164.105, Sec. 164.314, and Sec.
164.316 are not presented in the matrix.
2. Comment: A large majority of commenters stated that the glossary
located in Addendum 2 of the proposed rule should be included as part
of the final rule. Several commenters asked that it be incorporated
into the definitions section of the final rule. One commenter stated
that the glossary should not be part of this final rule.
Response: The terms defined in the glossary in Addendum 2 of the
proposed rule are found throughout this final rule, either as part of
the text of Sec. 164.306 through Sec. 164.312 or under Sec. 164.304,
as appropriate. We included only terms relevant to the particular
standards and implementation specifications being adopted.
3. Comment: Several commenters requested that the mapped matrix
located in Addendum 3 of the proposed rule be included in this final
rule, either as part of the rule or as an addendum, while others stated
that it should not be part of this final rule. Several commenters cited
items to be added to the mapped matrix.
Response: The mapped matrix was merely a snapshot of current
standards and guidelines that the implementation team was able to
obtain for review during the development of the security and electronic
signature requirements and was provided in the proposed rule as
background material. Since this matrix has not been fully populated or
kept up-to-date, it is not being published as part of this final rule.
Where relevant, we do reference various standards and guidelines
indicated in the matrix in this preamble.
L. Miscellaneous Issues
1. Preemption
The statute requires generally that the security standards
supersede contrary provisions of State law including State law
requiring medical or health plan records to be maintained or
transmitted in written rather than electronic formats. The statute
provides certain exceptions to the general rule; section 1178(a)(2) of
the Act identifies conditions under which an exception applies. The
proposed rule did not provide for a process for making exception
determinations; rather, a process was proposed in the privacy
rulemaking and was adopted with the Privacy Rule (see part 160, subpart
B). This process applies to exception determinations for all of the
Administrative Simplification rules, including this rule.
a. Comment: Several commenters stated that the proposed rule does
not include substantive protections for the privacy rights of patients'
electronic medical records, while the rule attempts to preempt State
privacy laws with respect to these records. Comments stated that, by
omitting a clarification of State privacy law applicability, the
proposed rule creates confusion. They believe that the rule must
contain
[[Page 8363]]
express and specific exemptions of State laws with respect to medical
privacy.
Response: The Privacy Rule establishes standards for the rights of
patients in regard to the privacy of their medical records and for the
allowable uses and disclosures of protected health information. The
identified concerns were discussed in the Privacy Rule (see 65 FR 82587
through 82588). The security standards do not specifically address
privacy but will safeguard electronic protected health information
against unauthorized access or modification.
b. Comment: One commenter asked how these regulations relate to
confidentiality laws, which vary from State to State.
Response: It is difficult to respond to this question in the
abstract without the benefit of reference to a specific State statute.
However, in general, these security standards will preempt contrary
State laws. Per section 1178(a)(2) of the Act, this general rule would
not hold if the Secretary determines that a contrary provision of State
law is necessary for certain identified purposes to prevent fraud and
abuse; to ensure appropriate State regulation of insurance and health
plans; for State reporting on health care delivery costs; or if it
addresses controlled substances. See 45 CFR part 160 subpart B. In such
case, the contrary provision of State law would preempt a Federal
provision of these security standards. State laws that are related but
not contrary to this final rule, will not be affected.
Section 1178 of the Act also limits the preemptive effect of the
Federal requirements on certain State laws other than where the
Secretary makes certain determinations. Section 1178(b) of the Act
provides that State laws for reporting of disease and other conditions
and for public health surveillance, investigation, or intervention are
not invalidated or limited by the Administrative Simplification rules.
Section 1178(c) of the Act provides that the Federal requirements do
not limit States' abilities to require that health plans report or
provide access to certain information.
c. Comment: Several commenters stated that allowing State law to
establish additional security restrictions conflicts with the purpose
of the Federal rule and/or would make implementation very difficult.
One commenter asked for clarification as to whether additional
requirements tighter than the requirements outlined in the proposed
rule may be imposed.
Response: The general rule is that the security standards in this
final rule supersede contrary State law. Only where the Secretary has
granted an exception under section 1178(a)(2)(A) of the Act, or in
situations under section 1178(b) or (c) of the Act, will the general
rule not hold true. Covered entities may be required to adhere to
stricter State-imposed security measures that are not contrary to this
final rule.
2. Enforcement
The proposed rule did not contain specific enforcement provisions.
This final rule likewise does not contain specific enforcement
provisions; it is expected that enforcement provisions applicable to
all Administrative Simplification rules will be proposed in a future
rulemaking.
a. Comment: One commenter voiced support for the proposed rule's
approach. Another stated that the process is poorly defined. One
commenter stated that fines should be eliminated, or the scope of
activity subject to fines should be more narrowly defined.
While a number of commenters were of the opinion that HHS must
retain enforcement responsibility, stating that it would be
unconstitutional to give it to a private entity, several others stated
that it may not be practical for HHS to retain the responsibility for
determining violations and imposing penalties specified by the statute.
A concern was voiced over HHS's ability to fairly and consistently
apply the rules due to budget constraints. Several commenters support
industry solutions to enforcement with some level of government
involvement. One commenter recommended a single audit process using
accrediting bodies already in place. Another stated that entities
providing accreditation services should not be involved in enforcement
as this would result in a conflict of interest.
Clarification was requested, including the use of examples,
concerning what constitutes a violation, and how a penalty applies to a
``person.'' Commenters asked if the term ``person'' referred to the
people responsible for the system and how penalties would apply to
corporations and other entities.
Response: It is expected that enforcement of HIPAA standards will
be addressed in regulations to be issued at a later date.
b. Comment: Several commenters stated that enforcement of the
security standards will be arbitrarily delegated to private businesses
that compete with physicians and with each other.
Response: These comments are premature for the reasons stated
above.
3. Comment Period
The comment period on the proposed rule was 60 days.
Comment: We received comments suggesting that significant changes
to the standards could occur in the final rule as a result of changes
made in response to comments. The commenter believes such changes could
adversely affect payers and providers, and suggested that the rule
should be republished as a proposed rule with a new comment period to
allow additional comments concerning any changes. A ``work-in-
progress'' approach was also suggested, to give all stakeholders time
to read, analyze, and comment upon evolving versions of a particular
proposed rule.
Response: We have not accepted these suggestions. The numerous
comments received were thoughtful, analytical, detailed, and addressed
every area of the proposed rule. This response to the proposed rule
indicates that the public had ample time to read, analyze, and comment
upon the proposed rule. If we were to treat the rule as a ``work-in-
progress'' and issue evolving versions, allowing for comments to each
version, we would never implement the statute and achieve
administrative simplification as directed by the Congress.
M. Proposed Impact Analysis
The preamble to the Transactions Rule contains comments and
responses on the impact of all the administrative simplification
standards in general except privacy. Comments and responses specific to
the relative impact of implementing this final rule are presented
below.
a. Comment: Several commenters stated that the proposed security
standards are complex, costly, administratively burdensome, and could
result in decreased use of EDI. One commenter stated that this rule
runs counter to the explicit intent of Administrative Simplification
that requires, ``any standard adopted under this part shall be
consistent with the objective of reducing the administrative costs of
providing and paying for health care.''
Several commenters expressed concern that there was no cost benefit
analysis provided for these proposed regulations, stating that, faced
with increasingly limited resources, it is essential that a security
standards cost/benefit analysis for all health care trading partners be
provided. Another said an independent cost estimate by the General
Accounting Office (GAO) should be performed on these rules and
[[Page 8364]]
HHS cost estimates should be publicized for comparison purposes.
Still another commenter stated that HHS must provide accurate
public sector implementation cost figures and provide funds to offset
the cost burden.
One commenter asked for cost benefit evaluations to understand the
relationship between competing technologies, levels of security and
potential threats to be guarded against. These would demonstrate the
costs and the benefits to be gained for both large and small
organizations and would provide an understanding of how the levels of
security vary by organization size and what the inducements and support
available to facilitate adoption are. One commenter suggested that we
establish a workgroup to more fully assess the costs and provide
Federal funds to offset implementation costs.
One commenter noted a seeming disconnect between two statements in
the preamble. Section A, Security standards, states, ``no individual
small entity is expected to experience direct costs that exceed
benefits as a result of this rule.'' In contrast, section E, Factors in
establishing the security standards reads, ``We cannot estimate the
per-entity cost of implementation because there is no information
available regarding the extent to which providers', plans', and
clearinghouses' current security practices are deficient.''
Response: We are unable to estimate, of the nation's 2 million-plus
health plans and 1 million-plus providers that conduct electronic
transactions, the number of entities that would require new or modified
security safeguards and procedures beyond what they currently have in
place. Nor are we able to estimate the number of entities that neither
conduct electronic transactions nor maintain individually identifiable
electronic health information but may become covered entities at some
future time. As we are unable to estimate the number of entities and
what measures are or are not already in place, or what specific
implementation will be chosen to meet the requirements of the
regulation, we are also unable to estimate the cost to those entities.
However, the use of electronic technology to maintain or transmit
health information results in many new and potentially large risks.
These risks represent expected costs, both monetary and social. Leaving
risk assessment up to individual entities will minimize the impact and
ensure that security effort is proportional to security risk.
As discussed earlier, the security requirements are both scalable
and technically flexible. We have made significant changes to this
final rule, reducing the number of required implementation features and
providing for greater flexibility in satisfaction of the requirements.
In other words, we have focused more on what needs to be done and less
on how it should be accomplished.
We have removed the statement regarding the extent of costs versus
benefits for small entities.
b. Comment: One commenter stated that on page 43262 of the proposed
rule, it indicate that complexity of conversion to the security
standards would be affected by the choice to use a clearinghouse. The
commenter stated that this choice would have little effect on
implementation of security standards. Another commenter stated that the
complexity (and cost) of the conversion to meet the security standards
is affected by far more than just the ``volume of claims health plans
process electronically and the desire to transmit the claims or to use
the services of a VAN or clearinghouse'' as is stated on page 43262.
Because the security standards apply to internal systems as well as to
transactions between entities, a number of additional factors must be
considered, for example, modification of existing security mechanisms,
legacy systems, architecture, and culture.
Response: We agree. We have modified the Regulatory Impact Analysis
section to take into account that there are other factors involved,
such as the architecture and technology limitations of existing
systems.
c. Comment: One commenter stated that States will need 90 percent
funding of development and implementation, without the burden of an
advanced planning documents requirement, from us for this costly
process to succeed. Any new operational obligation should be 100
percent funded. Also human resource obligations will be significant.
Some States believe they will have difficulty obtaining the budget
funds for the State share of the costs. State Medicaid agencies, as
purchasers, may also face paying the implementation costs of health
care providers, clearinghouses, and health plans in the form of higher
rates.
Response: The statute does not authorize any new or special funding
for implementation of the regulations. Medicaid system changes, simply
because they are ``HIPAA related'' do not automatically qualify for 90
percent Federal funding participation. As with any systems request, the
usual rules will be applied to determine funding eligibility for State
HIPAA initiatives. Nevertheless, HHS recognizes that there are
significant issues regarding the funding and implementation of HIPAA by
Medicaid State agencies, and intends to address them through normal
channels of communication with States.
d. Comment: One commenter stated that the proposed rule does not
establish how the security standards will contribute to reduced cost
for providers. One commenter expected the unintended result of this
regulation will be impediment of EDI growth and perhaps even a decline
in EDI use by providers. Another stated that the proposed rule actively
discourages physician EDI participation by suggesting a fallback to
paper processing for those unable to meet the cost of highly complex
security compliance.
Response: Ensuring the integrity of an electronic message, its
delivery to the correct person, and its confidentiality must be an
integral part of conducting electronic commerce. We believe that the
consistent application of the measures provided in this rule will
actually encourage use of EDI because it will provide increased
confidence in the reliability and confidentiality of health information
to all parties involved. Also, the implementation of these security
requirements will reduce the potential overall cost of risk to a
greater extent than additional security controls will increase costs.
Put another way, the potential cost of not reasonably addressing
security risks could substantially exceed the cost of compliance.
e. Comment: One commenter stated that the implementation impact of
the technical safeguards is clearly understated for physicians who use
digitally-based equipment that has been in place for some time. The
commenter believes that the rule will likely have greatest impact on
the installed base of digital systems, including imaging modalities and
other medical devices that store or transmit patient information
because software for legacy systems will likely require retrofitting or
replacement to come into compliance. The commenter believes that this
is a negative impact and would outweigh any benefits derived from the
potential risk of security breaches. The commenter recommended
compliance for digital imaging devices be extended by an additional 3
years to allow time to upgrade systems and defray the associated costs.
Response: Compliance dates for the initial implementation of the
initial standards are statutorily prescribed; therefore, we are unable
to allow additional time outside of the statutory timeframes for
compliance.
f. Comment: A commenter stated that, as a new regulatory mandate,
HIPAA
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costs must be factored into any base year calculations for the proposed
prospective payment system. Without an adjustment, this will be another
regulatory mandate that comes at the cost of patient care.
Response: Costs included in the prospective payment system are
legislatively mandated. The Congress did not direct the inclusion of
HIPAA costs into the system, so they are not included. However, the
Department believes that the HIPAA standards will provide savings to
the provider community over the next 10 years.
g. Comment: One commenter suggested that we include requirements
for how a compliant business could dually operate--(1) in a HIPAA
compliant manner; and (2) in their former noncompliant manner in order
to accommodate doing business with other organizations that are not yet
compliant.
Response: The statute imposes a 2-year implementation period
between the adoption of the initial standards and the date by which
covered entities (except small health plans) must be in compliance. An
entity may come into compliance at any point in time during the 2
years. Therefore, the rule does not require a covered entity to comply
before the established compliance date. Those entities that come into
compliance before the 2-year deadline should decide how best to deal
with entities that are not yet compliant. Further, we note that,
generally speaking, compliance by a covered entity with these security
rules will not hinge on compliance by other entities.
h. Comment: One commenter stated that privacy legislation could
impose significant changes to written policies and procedures on
authorization, access to health information, and how sensitive
information is disclosed to others. The commenter believes these
changes could mean the imposition of security requirements different
from those contained in the proposed rule, and money spent complying
with the security provisions could be ill spent if significant new
requirements result from the privacy legislation.
Response: The privacy standards at subpart E of 42 CFR part 164 are
now in effect, and this final rule is compatible with them. If, in the
future, the Congress passes a law whose provisions differ from these
standards, the standards would have to be modified.
i. Comment: One commenter stated that the private sector should
develop educational tools or models in order to assist physicians,
other providers, and health plans to comply with the security
regulations.
Response: We agree. The health care industry is striving to do
this. HHS is also considering provider outreach and education
activities.
IV. Provisions of the Final Regulation
We have made the following changes to the provisions of the August
12, 1998 proposed rule. Specifically, we have--
[sbull] Changed the CFR part from 142 to 164.
[sbull] Removed information throughout the document pertaining to
electronic signature standards. Electronic signature standards will be
published in a separate final rule.
[sbull] Replaced the word ``requirement,'' when referring to a
standard, with ``standard.'' Replaced ``Implementation feature'' with
``Implementation specification.''
[sbull] Made minor modifications to the text throughout the
document for purposes of clarity.
[sbull] Modified numerous implementation features so that they are
now addressable rather than mandatory.
[sbull] Removed the word ``formal'' when referring to
documentation.
[sbull] Revised the phrase ``health information pertaining to an
individual'' to ``electronic protected health information.''
[sbull] Added the following definitions to Sec. 160.103:
``Disclosure,'' ``Electronic protected health information,''
``Electronic media,'' ``Organized health care arrangement,'' and
``Use.''
[sbull] Removed proposed Sec. 142.101 as this information is
conveyed in Sec. 160.101 and Sec. 160.102 of the Privacy Rule (65 FR
82798). Removed proposed Sec. 142.102 as it is redundant.
[sbull] Removed the following definitions from proposed Sec.
142.103 since they are pertinent to other administrative simplification
regulations and are defined elsewhere: code set, health care
clearinghouse, health care provider, health information, health plan,
medical care, small health plan, standard, and transaction.
[sbull] Moved the following definitions from Sec. 164.501 to Sec.
164.103 (proposed Sec. 142.103): `` ``Plan sponsor'' and ``Protected
health information.'' Added definitions of ``Covered functions'' and
``Required by law.''
[sbull] Removed proposed Sec. 142.104, ``General requirements for
health plans,'' and proposed Sec. 142.105, ``Compliance using a health
care clearinghouse,'' since these sections are not pertinent to the
security standards.
[sbull] Removed proposed Sec. 142.106, ``Effective dates of a
modification to a standard or implementation specification,'' since
this information is covered in the ``Standards for Electronic
Transactions'' final rule (65 FR 50312).
[sbull] Moved proposed Sec. 142.302 to Sec. 164.302. Changed the
section heading from ``Applicability and scope'' to ``Applicability.''
Modified language to state that covered entities must comply with the
security standards.
[sbull] Moved proposed Sec. 142.304 to Sec. 164.304. Modified
language to remove definitions of words and concepts not used in this
final rule: ``Access control,'' ``Contingency plan,'' ``Participant,''
``Role-based access control,'' ``Token,'' and ``User-based access.''
[sbull] Moved proposed Sec. 142.304 to Sec. 164.304. Modified
language to add definitions requested by commenters; previously
published in Addendum 2 but not in the draft regulation itself; or
necessitated by the change of scope to electronic protected health
information and alignment with the Privacy Rule to include:
``Administrative safeguards,'' ``Availability,'' ``Confidentiality,''
``Data,'' ``Data authentication Code,'' ``Integrity,'' ``Electronic
protected health information,'' ``Facility,'' ``Information System,''
``Security or security measures,'' ``Security incident,'' ``Technical
safeguards,'' ``User,'' and ``Workstation.''
[sbull] Moved definitions related to privacy from Sec. 164.504 to
new Sec. 164.103: ``Common control,'' ``Common ownership,'' ``Health
care component,'' ``Hybrid entity.''
[sbull] Moved proposed Sec. 142.306, ``Rules for the security
Standard,'' to Sec. 164.306. Modified language to more clearly state
the general requirements of the final rule relative to the standards
and implementation specifications contained therein. Retitled the
section as ``Security standards: General Rules.''
[sbull] Moved proposed Sec. 142.308 to Sec. 164.308. Where this
section was proposed to contain all of the security standards in
paragraphs (a) through (d), it now encompasses the Administrative
safeguards.
[sbull] Moved and reorganized proposed Sec. 142.308 (a) through
(d) requirements to Sec. 164.308, Sec. 164.310, and Sec. 164.312.
[sbull] Moved proposed Sec. 142.308(a)(1), ``Certification,'' to
Sec. 164.308(a)(8). Modified language to indicate both technical and
nontechnical evaluation is involved and renamed ``Evaluation''.
[sbull] Moved proposed Sec. 142.308(a)(2), ``Chain of trust,'' to
Sec. 164.308(b)(1), renamed to ``Business associate contracts and
other arrangements,'' and revised language to redefine who must enter
into a contract under this rule for the protection of electronic
protected health information.
[sbull] Moved proposed Sec. 142.308(a)(3), ``Contingency plan,''
to
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Sec. 164.308(a)(7)(i). Modified language to state that two
implementation specifications, ``Applications and data criticality
analysis'' and ``Testing and revision procedures,'' are addressable.
[sbull] Removed ``Formal mechanism for processing records''
(proposed Sec. 142.308(a)(4)) since this requirement was determined to
be in part intrusive into business functions and in part redundant.
[sbull] Moved proposed Sec. 142.308(a)(5), ``Information access
control,'' to Sec. 164.308(a)(4)(i) and renamed as ``Information
access management.'' Removed the word ``formal'' from description.
Modified language to state that two implementation specifications
(``Access Authorization'' and Access Establishment and Modification'')
are addressable.
[sbull] Moved proposed Sec. 142.308(a)(6), ``Internal audit,'' to
Sec. 164.308(a)(1)(ii)(D) as an implementation specification under the
``Security management process'' standard since this was determined to
be a more logical placement of this item. Retitled, for clarity,
``Information system activity review.''
[sbull] Moved proposed Sec. 142.308(a)(7), ``Personnel security,''
to Sec. 164.308(a)(3)(i) and retitled ``Workforce security.'' Modified
language to state that implementation specifications are addressable.
[sbull] Combined proposed Sec. 142.308(a)(7)(i), and Sec.
142.308(a)(7)(iii) (``Assuring supervision of maintenance personnel by
an authorized, knowledgeable person'' and ``Assuring that operations
and maintenance personnel have proper access authorization,'') under
Sec. 164.308(a)(3)(ii)(A) and renamed to ``Authorization and/or
supervision.'' Modified description for clarity.
[sbull] Moved proposed Sec. 142.308(a)(7)(iv), ``Personnel
clearance procedure,'' to Sec. 164.308(a)(3)(ii)(B), renamed to
``Workforce clearance procedure,'' and modified description for
clarity.
[sbull] Removed proposed Sec. 142.308(a)(7)(v), ``Personnel
security policies and procedures,'' as this feature was determined to
require redundant effort.
[sbull] Removed proposed Sec. 142.308(a)(7)(vi), ``Security
awareness training.'' Information concerning this subject has been
incorporated under Sec. 164.308(a)(5)(i), ``Security awareness and
training.''
[sbull] Removed proposed Sec. 142.308(a)(8), ``Security
configuration management,'' and all implementation features, except
``Documentation'' (hardware and/or software installation, Inventory,
Security testing, and Virus checking), since this requirement was
determined to be redundant. ``Documentation'' has been made a discrete
standard at Sec. 164.316.
[sbull] Moved proposed Sec. 142.308(a)(9), ``Security incident
procedures,'' to Sec. 164.308(a)(6)(i) and reworded for clarity.
Combined ``Report procedures'' and ``Response procedures'' features
into a single required implementation specification, named ``Response
and Reporting'' at Sec. 164.308(a)(6)(ii).
[sbull] Moved proposed Sec. 142.308(a)(10), ``Security management
process,'' to Sec. 164.308(a)(1).
[sbull] Moved proposed Sec. 142.308(a)(10)(i), ``Risk analysis,''
to Sec. 164.308(a)(1)(ii)(A).
[sbull] Moved proposed Sec. 142.308(a)(10)(ii), ``Risk
management,'' to Sec. 164.308(a)(1)(ii)(B).
[sbull] Moved proposed Sec. 142.308(a)(10)(iii), ``Sanction
policy,'' to Sec. 164.308(a)(1)(ii)(C).
[sbull] Removed proposed Sec. 142.308(a)(10)(iv), ``Security
policy,'' since this requirement was determined to be redundant.
[sbull] Moved proposed Sec. 142.308(a)(11), ``Termination,'' to
Sec. 164.308(a)(3)(ii)(C) as an addressable implementation
specification under the ``Workforce security'' standard, and renamed as
``Termination procedures''. Removed ``Termination'' implementation
features (changing locks, removal from access lists, removal of user
accounts, turning in of keys, tokens, or cards) since these were
determined to be too specific.
[sbull] Moved proposed Sec. 142.308(a)(12), ``Training,'' to Sec.
164.308(a)(5)(i) and renamed as ``Security awareness and training.''
Language modified to incorporate all training information under this
one standard. Revised and made addressable all implementation
specifications under this standard.
[sbull] Moved proposed Sec. 142.308(b), ``Physical safeguards to
guard data integrity, confidentiality and availability,'' to Sec.
164.310 and renamed as ``Physical safeguards.'' Removed specific
reference to locks and keys.
[sbull] Moved proposed Sec. 142.308(b)(1), ``Assigned security
responsibility requirement,'' to Sec. 164.308(a)(2) since this has
been determined to be an administrative procedure. Modified language to
clarify that responsibility could be assigned to more than one
individual.
[sbull] Moved proposed Sec. 142.308(b)(2), ``Media controls,'' to
Sec. 164.310(d)(1) and renamed as ``Device and media controls.''
Removed the word ``formal.'' Added ``Media re-use'' as a required
implementation specification at Sec. 164.310(d)(2)(ii).
[sbull] Removed proposed Sec. 142.308(b)(2)(i), ``Access
control,'' implementation feature as it was determined to be redundant.
[sbull] Moved proposed Sec. 142.308(b)(2)(ii), ``Accountability''
implementation feature to Sec. 164.310(d)(2)(iii), and made it an
addressable implementation specification.
[sbull] Combined proposed Sec. 142.308(b)(2)(iii), ``Data
backup,'' implementation feature with proposed Sec. 142.308(b)(2)(iv),
``Data storage'' implementation feature, renamed as ``Data backup and
storage'', moved to Sec. 164.310(d)(2)(iv), and made it an addressable
implementation specification.
[sbull] Moved proposed Sec. 142.308(b)(2)(v), ``Data disposal,''
implementation feature to Sec. 164.310(d)(2)(i) and made it a required
implementation specification.
[sbull] Moved proposed Sec. 142.308(b)(3),``Physical access
controls,'' to Sec. 164.310(a)(1) and renamed as ``Facility access
controls.'' Removed word ``formal.''
[sbull] Moved proposed Sec. 142.308(b)(3)(i), ``Disaster
recovery,'' implementation feature to Sec. 164.310(a)(2)(i). It is now
part of the ``Contingency operations'' implementation specification.
[sbull] Moved proposed Sec. 142.308(b)(3)(ii), ``Emergency mode
operations,'' implementation feature to Sec. 164.310(a)(2)(i). It is
now part of the ``Contingency operations'' implementation
specification.
[sbull] Removed proposed Sec. 142.308(b)(3)(iii), ``Equipment
control (into and out of site),'' as this information is now covered
under Sec. 164.310(d)(1), ``Device and media controls.''
[sbull] Moved proposed Sec. 142.308(b)(3)(iv), ``A facility
security plan,'' to Sec. 164.310(a)(2)(ii).
[sbull] Moved proposed Sec. 142.308(b)(3)(v), ``Procedure for
verifying access authorizations,'' to Sec. 164.310(a)(2)(iii) and
renamed as ``Access control and validation procedures.'' Removed the
word ``formal'' from text.
[sbull] Moved proposed Sec. 142.308(b)(3)(vi), ``Maintenance
records,'' to Sec. 164.310(a)(2)(iv).
[sbull] Moved proposed Sec. 142.308(b)(3)(vii), ``Need to know
procedures for personnel access,'' to sect; 164.310(a)(2)(iii) and
renamed as ``Access control and validation procedures.''
[sbull] Moved proposed Sec. 142.308(b)(3)(viii), ``Procedures to
sign in visitors and provide escort, if appropriate,'' to Sec.
164.310(a)(2)(iii) and renamed as ``Access control and validation
procedures.''
[[Page 8367]]
[sbull] Moved proposed Sec. 142.308(b)(3)(ix), ``Testing and
revision,'' to Sec. 164.310(a)(2)(iii) and renamed as ``Access control
and validation procedures.''
[sbull] Moved proposed Sec. 142.308(b)(4), ``Policy and guidelines
on workstation use,'' to Sec. 164.310(b) and renamed as ``Workstation
use.''
[sbull] Moved proposed Sec. 142.308(b)(5), ``Secure work station
location,'' to Sec. 164.310(c) and renamed as ``Workstation
security.''
[sbull] Removed proposed Sec. 142.308(b)(6), ``Security awareness
training,'' as a separate requirement. This requirement has been
incorporated under Sec. 164.308(a)(5)(i), ``Security awareness and
training.''
[sbull] Combined and moved proposed Sec. 142.308(c) and Sec.
142.308(d), ``Technical security services to guard data integrity,
confidentiality and availability'' and ``Technical security
mechanisms,'' to Sec. 164.312 and renamed as ``Technical safeguards.''
[sbull] Removed proposed Sec. 142.308(c)(1) since it is no longer
pertinent.
[sbull] Moved proposed Sec. 142.308(c)(1)(i), ``Access control,''
to Sec. 164.312(a)(1).
[sbull] Moved proposed Sec. 142.308(c)(1)(i)(A), ``Procedure for
emergency access,'' to Sec. 164.312(a)(2)(ii), and renamed as
``Emergency access procedures.''
[sbull] Removed proposed Sec. 142.308(c)(1)(i)(B).
[sbull] Removed proposed Sec. 142.308(c)(1)(i)(B)(1), ``Context-
based access,'' Sec. 142.308(c)(1)(i)(B)(2), ``Role-based access,''
and Sec. 142.308(c)(1)(i)(B)(3), ``User-based access,'' since these
features were deemed too specific and were perceived as the only
options permissible.
[sbull] Moved proposed Sec. 142.308(c)(1)(i)(C), ``Optional use of
encryption,'' to Sec. 164.312(a)(2)(iv) and retitled ``Encryption and
decryption.''
[sbull] Moved proposed Sec. 142.308(c)(1)(ii), ``Audit controls,''
to Sec. 164.312(b).
[sbull] Removed proposed Sec. 142.308(c)(1)(iii), ``Authorization
control,'' and all implementation features (Role-based access, User-
based access) since this function has been incorporated into Sec.
164.308(a)(4), ``Information access management.''
[sbull] Moved proposed Sec. 142.308(c)(1)(iv), ``Data
authentication,'' to Sec. 164.312(c)(1), and retitled as
``Integrity.'' Reworded part of description and placed in Sec.
164.312(c)(2), ``Mechanism to authenticate data,'' a new, addressable
implementation specification. Removed reference to double keying.
[sbull] Moved proposed Sec. 142.308(c)(1)(v), ``Entity
authentication,'' to Sec. 164.312(d) and retitled as ``Person or
entity authentication.''
[sbull] Moved proposed Sec. 142.308(c)(1)(v)(A), ``Automatic
logoff,'' to Sec. 164.312(a)(2)(iii).
[sbull] Moved proposed Sec. 142.308(c)(1)(v)(B), ``Unique user
identification,'' to Sec. 164.312(a)(2)(i).
[sbull] Removed proposed Sec. 142.308(c)(1)(v)(C) since text is no
longer pertinent.
[sbull] Removed proposed Sec. 142.308(c)(1)(v)(C)(2),
``Password,'' as too specific.
[sbull] Removed proposed Sec. 142.308(c)(1)(v)(C)(3), ``PIN,'' as
too specific.
[sbull] Removed proposed Sec. 142.308(c)(1)(v)(C)(4), ``Telephone
callback,'' as too specific.
[sbull] Removed proposed Sec. 142.308(c)(1)(v)(C)(5), ``Token,''
as too specific.
[sbull] Removed proposed Sec. 142.308(c)(2), as no longer
relevant.
[sbull] Moved proposed Sec. 142.308(d)(1), ``Communications or
network controls,'' to Sec. 164.312(e)(1) and renamed as
``Transmission security.''
[sbull] Removed proposed Sec. 142.308(d)(1)(i), since it is no
longer pertinent.
[sbull] Moved proposed Sec. 142.308(d)(1)(i)(A), ``Integrity
controls,'' to Sec. 164.312(e)(2)(i) and reworded for clarity.
[sbull] Removed proposed Sec. 142.308(d)(1)(i)(B), ``Message
authentication,'' since this subject is now covered under Sec.
164.312(e)(2)(i), ``Integrity controls.''
[sbull] Removed proposed Sec. 142.308(d)(1)(ii) text since it is
no longer pertinent.
[sbull] Removed proposed Sec. 142.308(d)(1)(ii)(A), ``Access
controls.''
[sbull] Moved proposed Sec. 142.308(d)(1)(ii)(B), ``Encryption,''
to Sec. 164.312(e)(2)(ii) and reworded to enhance flexibility and
scalability.
[sbull] Removed proposed Sec. 142.308(d)(2) text regarding:
``Network controls,'' and all implementation features (``Alarm,''
``Audio trail,'' ``Entity authentication,'' ``Event reporting'').
[sbull] Removed proposed Sec. 142.310, ``Electronic signature,''
and all subheadings. This section will be issued as a separate future
regulation.
[sbull] Moved proposed Sec. 142.310 ``Electronic signature
Standard,'' to Sec. 164.310. Where this section was proposed to
contain the electronic signature standard, it now encompasses the
``Physical safeguards.''
[sbull] Moved proposed Sec. 142.312, ``Effective date of the
implementation of the security and electronic signature standards,'' to
Sec. 164.318 and retitled as ``Compliance dates for the initial
implementation of the security standards.'' Reworded and retitled
subsections.
[sbull] Added Sec. 164.105, ``Organizational requirements,'' with
two standards, ``Health care component and ``Affiliated covered
entities'' with related implementation specifications.
[sbull] Added Sec. 164.310(d)(2)(ii), ``Media re-use procedures,''
implementation specification.
[sbull] Added Sec. 164.312, ``Technical safeguards,'' encompassing
the combined technical services and technical mechanisms standards
(proposed Sec. 142.308(c) and (d)).
[sbull] Added Sec. 164.314, ``Organizational requirements.''
[sbull] Added Sec. 164.314(a)(1), ``Business associate contracts
or other arrangements'' standard and related implementation
specifications.
[sbull] Added Sec. 164.314(b)(1), ``Requirements for group health
plans'' standard and related implementation specifications.
[sbull] Added Sec. 164.316, ``Policies and procedures and
documentation requirements.''
[sbull] Added Sec. 164.316(a), ``Policies and procedures''
standard.
[sbull] Added Sec. 164.316(b)(1), ``Documentation'' standard and
related implementation specifications.
[sbull] Added Sec. 164.318, ``Compliance dates for the initial
implementation of the security standards.''
[sbull] Renamed Addendum 1 as Appendix A.
[sbull] Removed Addendum 2. Definitions of terms used in this final
rule are now incorporated into Sec. 164.103 and Sec. 164.304, or
within the rule itself.
[sbull] Removed Addendum 3.
V. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 (PRA) requires that we solicit comment on the following issues:
[sbull] The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
[sbull] The accuracy of our estimate of the information collection
burden.
[sbull] The quality, utility, and clarity of the information to be
collected.
[[Page 8368]]
[sbull] Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
As discussed below, we are soliciting comment on the recordkeeping
requirements, as referenced in Sec. 164.306, Sec. 164.308, Sec.
164.310, Sec. 164.314, and Sec. 164.316 of this document.
Section 164.306 Security Standards: General Rules
Under paragraph (d), a covered entity must, if implementing the
implementation specification is not reasonable and appropriate,
document why it would not be reasonable and appropriate to implement
the implementation specification.
We estimate that 75,000 entities will be affected by this
requirement and that they will have to create documentation 3 times for
this requirement. We estimate each instance of documentation will take
.25 hours, for a one-time total burden of 56,250 hours.
Section 164.308 Administrative Safeguards
Under this section, a covered entity must document known security
incidents and their outcomes.
We estimate that there will be 50 known incidents annually and that
it will take 8 hours to document this requirement, for an annual burden
of 400 hours.
This section further requires that each entity have a contingency
plan, with specified components.
We estimate that there will be 60,000 entities affected by this
requirement and that it will take each entity 8 hours to comply, for a
total one-time burden of 480,000 hours.
This section also requires that the written contract or other
arrangement with a business associate document the satisfactory
assurances that the business associate will appropriately safeguard the
information through a written contract or other arrangement with the
business associate that meets the applicable requirements of Sec.
164.314(a).
We believe that the burden associated with this requirement is not
subject to the PRA. It is good business practice for entities to
document their arrangements via written contracts and as such is usual
and customary among the entities subject to them. A burden associated
with a requirement conducted in the normal course of business is exempt
from the PRA as defined in 5 CFR 1320.3(b)(2).
Section 164.310 Physical Safeguards
This section requires that a covered entity implement policies and
procedures to document repairs and modifications to the physical
components of a facility that are related to security (for example,
hardware, walls, doors, and locks).
We believe that 15,500 entities will have to repair or modify
physical components, most of which will need to be done in the first
year of implementation. In the following years, we estimate that 500
entities will need to make repairs or modifications. We estimate that
it will take 10 minutes to document each repair or modification for a
burden of 2,583 hours the first year and 83 hours annually
subsequently.
This section requires that a covered entity create a retrievable,
exact copy of electronic protected health information, where needed,
before movement of equipment.
We believe that the burden associated with this requirement is not
subject to the PRA. It is good business practice for entities to backup
their data files, and as such is usual and customary among the entities
subject to them. A burden associated with a requirement conducted in
the normal course of business is exempt from the PRA as defined in 5
CFR 1320.3(b)(2).
Section 164.314 Organizational Requirements
This section requires that a covered entity report to the Secretary
problems with a business associate's pattern of an activity or practice
of the business associate that constitute a material breach or
violation of the business associate's obligation under the contract or
other arrangement if it is not feasible to terminate the contract or
arrangement.
We believe that 10 entities will need to comply with this reporting
requirement and that it will take them 60 minutes to comply with this
requirement for an annual burden of 10 hours.
This section also requires that a covered entity may, if a business
associate is required by law to perform a function or activity on
behalf of a covered entity or to provide a service described in the
definition of business associate as specified in Sec. 160.103 of this
subchapter to a covered entity, permit the business associate to
create, receive, maintain, or transmit electronic protected health
information on its behalf to the extent necessary to comply with the
legal mandate without meeting the requirements of paragraph (a)(2)(i)
of this section, provided that the covered entity attempts in good
faith to obtain satisfactory assurances as required by paragraph
(a)(2)(ii)(A) of this section, and documents the attempt and the
reasons that these assurances cannot be obtained.
We believe that this situation will affect 20 entities and that it
will take 60 minutes to document attempts to obtain assurances and the
reasons they cannot be obtained for an annual burden of 20 hours.
This section further requires that business associate contracts or
other arrangements and group health plans must require the business
entity and plan sponsor, respectively, to report to the covered entity
any security incident of which it becomes aware.
We believe that the burden associated with this requirement is not
subject to the PRA. It is good business practice for entities to
document their agreements via written contracts, and as such is usual
and customary among the entities subject to them. A burden associated
with a requirement conducted in the normal course of business is exempt
from the PRA as defined in 5 CFR 1320.3(b)(2).
Section 164.316 Policies and Procedures and Documentation Requirements
Paragraph (b)(1), Standard: Documentation, of this section requires
a covered entity to--
(i) Maintain the policies and procedures implemented to comply with
this subpart in written (which may be electronic) form; and
(ii) If an action, activity, assessment, or designation is required
by this subpart to be documented, maintain a written (which may be
electronic) record of the action, activity, assessment, or designation.
We estimate that it will take the 4,000,000 entities covered by
this final rule 16 hours to document their policies and procedures, for
a total one-time burden of 64,000,000 hours.
The total annual burden of the information collection requirements
contained in this final rule is 64,539,264 hours. These information
collection requirements will be submitted to OMB for review under the
PRA and will not become effective until approved by OMB.
If you comment on these information collection and recordkeeping
requirements, please mail copies directly to the following:
Centers for Medicare and Medicaid Services, Office of Strategic
Operations and Regulatory Affairs, Regulations Development and
Issuances Group, Attn: Reports
[[Page 8369]]
Clearance Officer, 7500 Security Boulevard, Baltimore, MD 21244-1850,
Attn: Julie Brown, CMS-0049-F; and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attn: Brenda Aguilar, CMS Desk Officer.
IV. Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 (as amended by Executive Order 13258, which
merely reassigns responsibility of duties) directs agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
Although we cannot determine the specific economic impact of the
standards in this final rule (and individually each standard may not
have a significant impact), the overall impact analysis makes clear
that, collectively, all the standards will have a significant impact of
over $100 million on the economy. Because this rule affects over 2
million entities, a requirement as low as $50 per entity would render
this rule economically significant. This rule requires each of these
entities to engage in, for example, at least some risk assessment
activity; thus, this rule is almost certainly economically significant
even though we do not have an estimate of the marginal impact of the
additional security standards. However, the standards adopted in this
rule are considerably more flexible than those anticipated in the
overall impact analysis. Therefore, their implementation costs should
be lower than those assumed in the impact analysis.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government agencies.
Most hospitals and most other providers and suppliers are small
entities, either by nonprofit status or by having revenues of $6
million to $29 million in any 1 year. While each standard may not have
a significant impact on a substantial number of small entities, the
combined effects of all the standards are likely to have a significant
effect on a substantial number of small entities. Although we have
certified this rule as having a significant impact, we have previously
discussed the impact of small entities in the RFA published as part of
the August 17, 2000 final regulation for the Standards for Electronic
Transactions (65 FR 50312), on pages 50359 through 50360. That analysis
included the impact of the set of HIPAA standards regulations
(transactions and code sets, identifiers, and security). Although we
discussed the impact on small entities in the previous analysis, we
would like to discuss how this final rule has been structured to
minimize the impact on small entities, compared to the proposed rule.
The proposed rule mandated 69 implementation features for all
entities. A large number of commenters indicated that mandating such a
large number would be burdensome for all entities. As a result, we have
restructured this final rule to permit greater flexibility. While all
standards must be met, we are now only requiring 13 implementation
specifications. The remainder of the implementation specifications is
``addressable.'' For addressable specifications, an entity decides
whether each specification is a reasonable and appropriate security
measure to apply within its particular security framework. This
decision is based on a variety of factors, for example, the entity's
risk analysis, what measures are already in place, the particular
interest to small entities, and the cost of implementation.
Based on the decision, an entity can--(1) implement the
specification if reasonable and appropriate; (2) implement an
alternative security measure to accomplish the purposes of the
standard; or (3) not implement anything if the specification is not
reasonable and appropriate and the standard can still be met.
This approach will provide flexibility for all entities, and
especially small entities that would be most concerned about the cost
and complexity of the security standards. Small entities can look at
the addressable implementation specifications and tailor their
compliance based on their risks and capabilities of addressing those
risks.
The required risk analysis is also a tool to allow flexibility for
entities in meeting the requirements of this final rule. The risk
analysis requirement is designed to allow entities to look at their own
operations and determine the security risks involved. The degree of
response is determined by the risks identified. We assume that smaller
entities, who deal with smaller amounts of information would have
smaller physical facilities, smaller work forces, and therefore, would
assume less risk. The smaller amount of risk involved means that the
response to that risk can be developed on a smaller scale than that for
larger organizations.
Individuals and States are not included in the definition of a
small entity. However, the security standards will affect small
entities, such as providers and health plans, and vendors in much the
same way as they affect any larger entities. Small providers who
conduct electronic transactions and small health plans must meet the
provisions of this regulation and implement the security standards. A
more detailed analysis of the impact on small entities is part of the
impact analysis published on August 17, 2000 (65 FR 50312), which
provided the impact for all of the HIPAA standards, except privacy. As
we discussed above, the scalability factor of the standards means that
the requirements placed upon small providers and plans would be
consistent with the complexity of their operations. Therefore, small
providers and plans with appropriate security processes in place would
need to do relatively little in order to comply with the standards.
Moreover, small plans will have an additional year to come into
compliance.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. While this rule may have
a significant impact on small rural hospitals, the impact should be
minimized by the scalability factors of the standards, as discussed
above in the impact on all small entities. In addition, we have
previously discussed the impact of small entities in the RIA published
as part of the August 17, 2000 final regulation for the Standards for
Electronic Transactions.
Section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995
[[Page 8370]]
also requires that agencies assess anticipated costs and benefits
before issuing any rule that may result in expenditure in any 1 year by
State, local, or tribal governments, in the aggregate, or by the
private sector, of $110 million. We estimate that implementation of all
the standards will require the expenditure of more than $110 million by
the private sector. Therefore, the rule establishes a Federal private
sector mandate and is a significant regulatory action within the
meaning of section 202 of UMRA (2 U.S.C. 1532). We have included the
statements to address the anticipated effects of these rules under
section 202.
These standards also apply to State and local governments in their
roles as health plans or health care providers. Because these entities,
in their roles as health plans or providers, must implement the
requirements in these rules, the rules impose unfunded mandates on
them. Further discussion of this issue can be found in the previously
published impact analysis for all standards (65 FR 50360 through
50361).
The anticipated benefits and costs of the security standards, and
other issues raised in section 202 of the UMRA, are addressed in the
analysis below, and in the combined impact analysis. In addition, as
required under section 205 of the UMRA (2 U.S.C. 1535), having
considered a reasonable number of alternatives as outlined in the
preamble to this rule, HHS has concluded that this final rule is the
most cost-effective alternative for implementation of HHS's statutory
objective of administrative simplification.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. The proposed rule was published before the enactment of
Executive Order 13132 of August 4, 1999, Federalism (published in the
Federal Register on August 10, 1999 (64 FR 43255)), which required
meaningful and timely input by State and local officials in the
development of rules that have Federalism implications). However, we
received and considered comments on the proposed rule from State
agencies and from entities who conduct transactions with State
agencies. Several of the comments referred to the costs that will
result from implementation of the HIPAA standards. As we stated in the
impact analysis, we are unable to estimate the cost of implementing
security features as implementation needs will vary dependent upon a
risk assessment and upon what is already in place. However, the
previously referenced impact analysis in the August 17, 2000 final rule
(65 FR 50312) showed that Administrative Simplification costs will be
offset by future savings.
In complying with the requirements of part C of title XI, the
Secretary established interdepartmental implementation teams who
consulted with appropriate State and Federal agencies and private
organizations. These external groups consisted of the National
Committee on Vital and Health Statistics (NCVHS) Subcommittee on
Standards and Security, the Workgroup for Electronic Data Interchange
(WEDI), the National Uniform Claim Committee (NUCC), the National
Uniform Billing Committee (NUBC), and the American Dental Association
(ADA). The teams also received comments on the proposed regulation from
a variety of organizations, including State Medicaid agencies and other
Federal agencies.
B. Anticipated Effects
The analysis in the August 2000, Transaction Rule included the
expected costs and benefits of the administrative simplification
regulations related to electronic systems for 10 years. Although only
the electronic transaction standards were promulgated in the
transaction rule, HHS expected affected parties to make systems
compliance investments collectively because the regulations are so
integrated. Moreover, the data available to us were also based on the
collective requirements of this regulation. It is not feasible to
identify the incremental technological and computer costs for each
regulation. Although HHS is issuing rules under HIPAA sequentially,
affected entities and vendors are bundling services, that is, they have
been anticipating the various needs and are designing relatively
comprehensive systems as they develop hardware and software. For
example, a vendor developing a system for electronic billing would also
anticipate and include security features, even in the absence of any
regulation. Moreover, a draft of the security rule was first published
in 1998. Even though the final is different (and less burdensome),
vendors had a reasonable indication of the direction policy would go.
Thus, in preparing the electronic transaction rule, we recognized and
included costs that might theoretically be associated with security or
other HIPPA rules. Hence, some of the ``costs'' of security have
already been accounted for in the Standards for Electronic Transactions
cost estimate (45 CFR parts 160 and 162), which was published in the
Federal Register on August 17, 2000 (65 FR 50312).
This analysis showed that the combined impact of the Administrative
Simplification standards is expected to save the industry $29.9 billion
over 10 years. We are including in each subsequent rule an impact
analysis that is specific to the standard or standards in that rule,
but the impact analysis will assess only the incremental cost of
implementing a given standard over another. Thus, the following
discussion contains the impact analysis for the marginal costs of the
security standards in this final rule.
The following describes the specific impacts that relate to the
security standards. The security of electronic protected health
information is, and has been for some time, a basic business
requirement that health care entities ignore at their peril. Instances
of ``hacking'' and other security violations may be widely publicized,
and can seriously damage an institution's community standing.
Appropriate security protections are crucial for encouraging the growth
and use of electronic data interchange. The synergistic effect of the
employment of the security standards will enhance all aspects of
HIPAA's Administrative Simplification requirements. In addition, it is
important to recognize that security is not a one-time project, but
rather an on-going, dynamic process.
C. Changes From the 1998 Impact Analysis
The overall impact analysis for Administrative Simplification was
first published on May 7, 1998 (63 FR 25320) in the proposed rule for
the National Provider Identifier standard (45 CFR part 142), the first
of the proposed Administrative Simplification rules. That impact
analysis was based on the industry situation at that time, used
statistics which were current at that time, and assumed that all of the
HIPAA standards would be implemented at roughly the same time, which
would permit software changes to be made less expensively. While the
original impact analysis represented our best information at that time,
we realize that the state of the industry, and of security technology,
has changed since 1998. We discuss several of those changes and how
they affect the impact of this regulation.
1. Changes in Technology
The state of technology for health care security has changed since
1998. New
[[Page 8371]]
technologies to protect information have been developed over the past
several years. As a result, HHS has consulted with the Gartner Group, a
leading technology assessment organization, regarding what impact these
changes in the industry might have on the expected impact of this
regulation. The Gartner analysis indicated that the cost of meeting the
requirements of a reasonable interpretation of the security rule in
2002 is probably less than 10 percent higher in 2002 than it was in
1998. This increase is mainly driven by more active threats and
increased personnel costs offsetting decreases in technology costs over
the past 4 years. However, spending by companies who have anticipated
the security rule or who have independently made business decisions to
implement security policies and procedures as good business practice(s)
has already occurred, and probably will cancel out the increased costs
of implementation. Therefore, Gartner expects the cost of complying
with the HIPAA security standards to be about the same now as it was in
1998.
2. Synchronizing Standards
The timelines for the implementation of the initial HIPAA standards
(transactions, identifiers, and security) are no longer closely
synchronized. However, we do not believe that this lack of
synchronization will have a significant impact on the cost of
implementing security. The analysis provided by the Gartner group
indicated that implementing security standards is being viewed by
entities as a separate task from implementing the transaction
standards, and that this is not having a significant impact on costs.
As with other HIPAA standards, most current entities will have a 2-year
implementation period before compliance with the standards is required.
Covered entities will develop their own implementation schedules, and
may phase in various security measures over that time period.
3. Relationship to Privacy Standards
The publication of the final Privacy Rules (45 CFR parts 160 and
164) on December 28, 2000 in the Federal Register (65 FR 82462) and on
August 14, 2002 (67 FR 53182) has affected the impact of this
regulation significantly. Covered entities must implement the privacy
standards by April 14, 2003 (April 14, 2004 for small health plans).
The implementation of privacy standards reduces the cost of
implementing the security standards in two significant areas.
First, we have made substantial efforts to ensure that the many
requirements in the security standards parallel those for privacy, and
can easily be satisfied using the solutions for privacy. Administrative
requirements like the need for written policies, responsible officers,
and business associate agreements that are already required by the
Privacy Rule can also serve to meet the security standards without
significant additional cost. The analysis of data flows and data uses
that covered entities are doing so as to comply with the Privacy Rule
should also serve as the starting point for parallel analysis required
by this final rule.
Second, it is likely that covered entities will meet a number of
the requirements in the security standards through the implementation
of the privacy requirements. For example, in order to comply with the
Privacy Rule requirements to make reasonable efforts to limit the
access of members of the work force to specified categories of
protected health information, covered entities may implement some of
the administrative, physical, and technical safeguards that the
entity's risk analysis and assessment would require under the Security
Rule. E-mail authentication procedures put into place for privacy
protection may also meet the security standards, thereby eliminating
the need for additional investments to meet these standards. As a
result, covered entities that have moved forward in implementing the
privacy standards are also implementing security measures at the same
time. Since the proposed security standards proposed rule represents
the most authoritative guidance now available on the nature of these
standards, some entities have been using them to develop their security
measures. Those entities should face minimal incremental costs in
implementing the final version of these standards.
We are unable to quantify these overlaps, but we believe they may
reduce the cost of implementing these security standards. The analysis
provided to the HHS by the Gartner Group also stated that compliance
with the Privacy Rule will have a moderate effect on the cost of
compliance with the Security Rule, reducing it slightly.
4. Sensitivity to Security Concerns as a Result of September 11, 2001
In our discussions with the Gartner Group, they indicated that they
saw little evidence of increased security awareness in health care
organizations as a result of the events of September 11, 2001. However,
a survey conducted by Phoenix Health Systems in the winter of 2002
showed that 65 percent of the respondents to the survey (hospitals,
payers, vendors, and clearinghouses) have moderately to greatly
increased their attention on overall security. If these organizations
have already made investments in security that meet some of the
requirements of this rule, it will reduce their added costs of
compliance. However, HHS can make no clear statement of the impact of
this attention.
D. Guiding Principles for Standard Selection
The implementation teams charged with designating standards under
the statute have defined, with significant input from the health care
industry, a set of common criteria for evaluating potential standards.
These criteria are based on direct specifications in the HIPAA, the
purpose of the law, and principles that support the regulatory
philosophy set forth in the E.O. 12866 of September 30, 1993, and the
Paperwork Reduction Act of 1995. In order to be designated as such, a
standard should do the following:
[sbull] Improve the efficiency and effectiveness of the health care
system by leading to cost reductions for or improvements in benefits
from electronic health care transactions. This principle supports the
regulatory goals of cost-effectiveness and avoidance of burden.
[sbull] Meet the needs of the health data standards user community,
particularly health care providers, health plans, and health care
clearinghouses. This principle supports the regulatory goal of cost-
effectiveness.
[sbull] Be consistent and uniform with the other HIPAA standards
(that is, their data element definitions and codes, and their privacy
and security requirements) and, secondarily, with other private and
public sector health data standards. This principle supports the
regulatory goals of consistency and avoidance of incompatibility, and
it establishes a performance objective for the standard.
[sbull] Have low additional development and implementation costs
relative to the benefits of using the standard. This principle supports
the regulatory goals of cost-effectiveness and avoidance of burden.
[sbull] Be supported by an ANSI-accredited standards developing
organization or other private or public organization that would ensure
continuity and efficient updating of the standard over time. This
principle supports the regulatory goal of predictability.
[sbull] Have timely development, testing, implementation, and
updating procedures to achieve administrative simplification benefits
faster. This
[[Page 8372]]
principle establishes a performance objective for the standard.
[sbull] Be technologically independent of the computer platforms
and transmission protocols used in health transactions, except when
they are explicitly part of the standard. This principle establishes a
performance objective for the standard and supports the regulatory goal
of flexibility.
[sbull] Be precise and unambiguous but as simple as possible. This
principle supports the regulatory goals of predictability and
simplicity.
[sbull] Keep data collection and paperwork burdens on users as low
as is feasible. This principle supports the regulatory goals of cost-
effectiveness and avoidance of duplication and burden.
[sbull] Incorporate flexibility to adapt more easily to changes in
the health care infrastructure (for example, new services,
organizations, and provider types) and information technology. This
principle supports the regulatory goals of flexibility and
encouragement of innovation.
We assessed a wide variety of security standards and guidelines
against the principles listed above, with the overall goal of achieving
the maximum benefit for the least cost. As we stated in the proposed
rule, we found that no single standard for security exists that
encompasses all the requirements that were listed in the law. However,
we believe that the standards we are adopting in this final rule
collectively accomplish these goals.
E. Affected Entities
1. Health Care Providers
Covered health care providers may incur implementation costs for
establishing or updating their security systems. The majority of costs
to implement the security standard (purchase and installation of
appropriate computer hardware and software, and physical safeguards)
would generally be incurred in the initial implementation period for
the specific requirements of the security standard. Health care
providers that do not conduct electronic transactions for which
standards have been adopted are not affected by these regulations.
2. Health Plans
All health plans, as the term is defined in regulation at 45 CFR
160.103, must comply with these security standards. In addition, health
plans that engage in electronic health care transactions may have to
modify their systems to meet the security standards. Health plans that
maintain electronic health information may also have to modify their
systems to meet the security standards. This conversion would have a
one-time cost impact on Federal, State, and private plans alike.
We recognize that this conversion process has the potential to
cause business disruption of some health plans. However, health plans
would be able to schedule their implementation of the security
standards and other standards in a way that best fits their needs, as
long as they meet the deadlines specified in the HIPAA law and
regulations. Moreover, small plans (many of which are employer-
sponsored) will have an additional year in which to achieve compliance.
Small health plans are defined at 45 CFR 160.103 as health plans with
annual receipts of $5 million or less.
3. Clearinghouses
All health care clearinghouses must meet the requirements of this
regulation. Health care clearinghouses would face effects similar to
those experienced by health care providers and health plans. However,
because clearinghouses represent one way in which providers and plans
can achieve compliance, the clearinghouses' costs of complying with
these standards would probably be passed along to those entities, to be
shared over the entire customer base.
4. System Vendors
Systems vendors that provide computer software applications to
health care providers and other billers of health care services would
likely be affected. These vendors would have to develop software
solutions that would allow health plans, providers, and other users of
electronic transactions to protect these transactions and the
information in their databases from unauthorized access to their
systems. Their costs would also probably be passed along to their
customer bases.
F. Factors in Establishing the Security Standard
1. General Effect
In assessing the impact of these standards, it is first necessary
to focus on the general nature of the standards, their scalability, and
the fact that they are not dependent upon specific technologies. These
factors will make it possible for covered entities to implement them
with the least possible impact on resources. Because there is no
national security standard in widespread use throughout the industry,
adopting any of the candidate standards would require most health care
providers, health plans, and health care clearinghouses to at least
conduct an assessment of how their current security measures conform to
the new standards. However, we assume that most, if not all, covered
entities already have at least some rudimentary security measures in
place. Covered entities that identify gaps in their current measures
would need to establish or revise their security precautions.
It is also important to note that the standards specify what goals
are to be achieved, but give the covered entity some flexibility to
determine how to meet those goals. This is different from the
transaction standards, where all covered entities must use the exact
same implementation guide. With respect to security, covered entities
will be able to blend security processes now in place with new
processes. This should significantly reduce compliance costs.
Based on our analysis and comments received, the security standards
adopted in this rule do not impose a greater burden on the industry
than the options we did not select, and they present significant
advantages in terms of universality and flexibility.
We understand that some large health plans, health care providers,
and health care clearinghouses that currently exchange health
information among trading partners may already have security systems
and procedures in place to protect the information from unauthorized
access. These entities may not incur significant costs to meet the
security standards. Large entities that have sophisticated security
systems in place may only need minor revisions or updates to their
systems to meet the security standards, or indeed, may not need to make
any changes in their systems.
While small providers are not likely to have implemented
sophisticated security measures, they are also not as likely to need
them as larger covered entities. The scalability principle allows
providers to adopt measures that are appropriate to their own
circumstances.
2. Complexity of Conversion
The complexity of the conversion to the security standards could be
significantly affected by the volume of transactions that covered
entities transmit and process electronically and the desire to transmit
directly or to use the services of a Value Added Network (VAN) or a
clearinghouse. If a VAN or clearinghouse is used, some of the
conversion activities would be carried out by that organization, rather
than by the covered entity. This would simplify conversion for the
covered entity, but makes the covered entity dependent on the success
of its business associate. The architecture, and specific technology
[[Page 8373]]
limitations of existing systems could also affect the complexity of the
conversion (for example, certain practice management software that does
not contain password protection will require a greater conversion
effort than software that has a password protection option already
built into it).
3. Cost of Conversion
Virtually all providers, health plans, and clearinghouses that
transmit or store data electronically have already implemented some
security measures and will need to assess existing security, identify
areas of risk, and implement additional measures in order to come into
compliance with the standards adopted in this rule. We cannot estimate
the per-entity cost of implementation because there is no information
available regarding the extent to which providers', plans', and
clearinghouses' current security practices are deficient. Moreover,
some security solutions are almost cost-free to implement (for example,
reminding employees not to post passwords on their monitors), while
others are not.
Affected entities will have many choices regarding how they will
implement security. Some may choose to assess security using in-house
staff, while others will use consultants. Practice management software
vendors may also provide security consultation services to their
customers. Entities may also choose to implement security measures that
require hardware and/or software purchases at the time they do routine
equipment upgrades.
The security standards we adopt in this rule were developed with
considerable input from the health care industry, including providers,
health plans, clearinghouses, vendors, and standards organizations.
Industry members strongly advocated the flexible approach we adopt in
this rule, which permits each affected entity to develop cost-effective
security measures appropriate to their particular needs. We believe
that this approach will yield the lowest implementation cost to
industry while ensuring that electronic protected health information is
safeguarded.
All of the nation's health plans (over 2 million) and providers
(over 600,000) will need to conduct some level of gap analysis to
assess current procedures against the standards. However, we cannot
estimate the number of covered entities that would have to implement
additional security systems and procedures to meet the adopted
standards. Also, we are not able to estimate the number of providers
that do not conduct electronic transactions today but may choose to do
so at some future time (these would be entities that send and receive
paper transactions and maintain paper records and thus would not be
affected). We believe that the security standards represent the minimum
necessary for adequate protection of health information in an
electronic format and as such should be implemented by all covered
entities. As discussed earlier in this preamble, the security
requirements are both scalable and technically flexible; and while the
law requires each health plan that is not a small plan to comply with
the security and electronic signature requirements no later than 24
months after the effective date of the final rule, small plans will be
allowed an additional 12 months to comply.
Since we are unable to estimate the number of entities that may
need to make changes to meet the security standards, we are also unable
to estimate the cost for those entities. However, we believe that the
cost of establishing security systems and procedures is a portion of
the costs associated with converting to the administrative
simplification standards that are required under HIPAA, which are
estimated in the previously referenced impact analysis.
This discussion on conversion costs relates only to health plans,
health care providers, and health care clearinghouses that are required
to implement the security standards. The cost of implementing security
systems and procedures for entities that do not transmit, receive, or
maintain health information electronically is not a cost imposed by the
rule, and thus, is not included in our estimates.
G. Alternatives Considered
In developing this final rule, the Department considered some
alternatives. One alternative was to not issue a final rule. However,
this would not meet the Department's obligations under the HIPAA
statute. It would also leave the health industry without a set of
standards for protecting the security of health information. The vast
majority of commenters supported our efforts in developing a set of
standards. Thus, we concluded that not publishing a final rule was not
in the best interests of the industry and not in the best interests of
persons whose medical information will be protected by these measures.
A second alternative was to publish the final rule basically
unchanged from the proposed rule. Although most commenters supported
the approach of the proposed rule, there were significant objections to
the number of required specifications, concerns about the scope of
certain requirements, duplication and ambiguity of some requirements,
and the overall complexity of the approach. Based on those comments, it
was clear that revisions had to be made. In addition, the proposed rule
was developed before the Privacy Rule requirements were developed.
Thus, it did not allow for any alignment of requirements between the
Privacy and Security standards.
As a result, the Department determined that an approach that
modified the proposed rule and aligned the requirements with the
Privacy standards was the preferred alternative.
V. Federalism
Executive Order 13132 of August 4, 1999, Federalism, published in
the Federal Register on August 10, 1999 (64 FR 43255), requires us to
ensure meaningful and timely input by State and local officials in the
development of rules that have Federalism implications. Although the
proposed rule for security standards was published before the enactment
of this Executive Order, the Department consulted with State and local
officials as part of an outreach program in the process of developing
the proposed regulation. The Department received comments on the
proposed rule from State agencies and from entities that conduct
transactions with State agencies. Many of these comments were concerned
with the burden that the proposed security standards would place on
their organizations. In response to those comments, we have modified
the security standards to make them more flexible and less burdensome.
In complying with the requirements of part C of Title XI, the
Secretary established an interdepartmental team who consulted with
appropriate State and Federal agencies and private organizations. These
external groups included the NCVHS Workgroup on Standards and Security,
the Workgroup for Electronic Data Interchange, the National Uniform
Claim Committee, and the National Uniform Billing Committee. Most of
these groups have State officials as members. We also received comments
on the proposed regulation from these organizations.
In accordance with the provisions of Executive Order 12866, this
rule has been reviewed by the Office of Management and Budget.
List of Subjects
45 CFR Part 160
Electronic transactions, Employer benefit plan, Health, Health
care, Health facilities, Health insurance, Health
[[Page 8374]]
records, Medicaid, Medical research, Medicare, Privacy, Reporting and
record keeping requirements.
45 CFR Part 162
Administrative practice and procedure, Health facilities, Health
insurance, Hospitals, Medicaid, Medicare, report and recordkeeping
requirement.
45 CFR Part 164
Administrative practice and procedure, Health facilities, Health
insurance, Hospitals, Medicaid, Medicare, Electronic Information
System, Security, Report and recordkeeping requirement.
For the reasons set forth in the preamble, the Department of Health
and Human Services amends title 45, subtitle A, subchapter C, parts
160, 162, and 164 as set forth below:
PART 160--GENERAL ADMINISTRATIVE REQUIREMENTS
1. The authority citation for part 160 continues to read as
follows:
Authority: Sec. 1171 through 1179 of the Social Security Act,
(42 U.S.C. 1320d-1329d-8) as added by sec. 262 of Pub. L. 104-191,
110 Stat. 2021-2031 and sec. 264 of Pub. L. 104-191 (42 U.S.C.
1320d-2(note)).
2. In Sec. 160.103, the definitions of ``disclosure'',
``electronic media'', ``electronic protected health information,''
``individual,'' ``organized health care arrangement'', ``protected
health information,'' and ``use'' are added in alphabetical order to
read as follows:
Sec. 160.103 Definitions.
* * * * *
Disclosure means the release, transfer, provision of, access to, or
divulging in any other manner of information outside the entity
holding the information.
* * * * *
Electronic media means:
(1) Electronic storage media including memory devices in computers
(hard drives) and any removable/transportable digital memory medium,
such as magnetic tape or disk, optical disk, or digital memory card; or
(2) Transmission media used to exchange information already in
electronic storage media. Transmission media include, for example, the
internet (wide-open), extranet (using internet technology to link a
business with information accessible only to collaborating parties),
leased lines, dial-up lines, private networks, and the physical
movement of removable/transportable electronic storage media. Certain
transmissions, including of paper, via facsimile, and of voice, via
telephone, are not considered to be transmissions via electronic media,
because the information being exchanged did not exist in electronic
form before the transmission.
Electronic protected health information means information that
comes within paragraphs (1)(i) or (1)(ii) of the definition of
protected health information as specified in this section.
* * * * *
Individual means the person who is the subject of protected health
information.
* * * * *
Organized health care arrangement means:
(1) A clinically integrated care setting in which individuals
typically receive health care from more than one health care provider;
(2) An organized system of health care in which more than one
covered entity participates and in which the participating covered
entities:
(i) Hold themselves out to the public as participating in a joint
arrangement; and
(ii) Participate in joint activities that include at least one of
the following:
(A) Utilization review, in which health care decisions by
participating covered entities are reviewed by other participating
covered entities or by a third party on their behalf;
(B) Quality assessment and improvement activities, in which
treatment provided by participating covered entities is assessed by
other participating covered entities or by a third party on their
behalf; or
(C) Payment activities, if the financial risk for delivering health
care is shared, in part or in whole, by participating covered entities
through the joint arrangement and if protected health information
created or received by a covered entity is reviewed by other
participating covered entities or by a third party on their behalf for
the purpose of administering the sharing of financial risk.
(3) A group health plan and a health insurance issuer or HMO with
respect to such group health plan, but only with respect to protected
health information created or received by such health insurance issuer
or HMO that relates to individuals who are or who have been
participants or beneficiaries in such group health plan;
(4) A group health plan and one or more other group health plans
each of which are maintained by the same plan sponsor; or
(5) The group health plans described in paragraph (4) of this
definition and health insurance issuers or HMOs with respect to such
group health plans, but only with respect to protected health
information created or received by such health insurance issuers or
HMOs that relates to individuals who are or have been participants or
beneficiaries in any of such group health plans.
Protected health information means individually identifiable health
information:
(1) Except as provided in paragraph (2) of this definition, that
is:
(i) Transmitted by electronic media;
(ii) Maintained in electronic media; or
(iii) Transmitted or maintained in any other form or medium.
(2) Protected health information excludes individually identifiable
health information in:
(i) Education records covered by the Family Educational Rights and
Privacy Act, as amended, 20 U.S.C. 1232g;
(ii) Records described at 20 U.S.C. 1232g(a)(4)(B)(iv); and
(iii) Employment records held by a covered entity in its role as
employer.
* * * * *
Use means, with respect to individually identifiable health
information, the sharing, employment, application, utilization,
examination, or analysis of such information within an entity that
maintains such information.
* * * * *
PART 162--ADMINISTRATIVE REQUIREMENTS
1. The authority citation for part 162 is revised to read as
follows:
Authority: Secs. 1171 through 1179 of the Social Security Act
(42 U.S.C. 1320d-1320d-8), as added by sec. 262 of Pub. L. 104-191,
110 Stat. 2021-2031, and sec. 264 of Pub. L. 104-191, 110 Stat.
2033-2034 (42 U.S.C. 1320d-2 (note)).
Sec. 162.103 [Amended]
2. In Sec. 162.103, the definition of ``electronic media'' is
removed.
PART 164--SECURITY AND PRIVACY
1. The authority citation for part 164 is revised to read as
follows:
Authority: Secs. 1171 through 1179 of the Social Security Act
(42 U.S.C. 1320d-1320d-8), as added by sec. 262 of Pub. L. 104-191,
110 Stat. 2021-2031, and 42 U.S.C. 1320d-2 and 1320d-4, sec. 264 of
Pub. L. 104-191, 110 Stat. 2033-2034 (42 U.S.C. 1320d-2 (note)).
2. A new Sec. 164.103 is added to read as follows:
Sec. 164.103 Definitions.
As used in this part, the following terms have the following
meanings:
Common control exists if an entity has the power, directly or
indirectly,
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significantly to influence or direct the actions or policies of another
entity.
Common ownership exists if an entity or entities possess an
ownership or equity interest of 5 percent or more in another entity.
Covered functions means those functions of a covered entity the
performance of which makes the entity a health plan, health care
provider, or health care clearinghouse.
Health care component means a component or combination of
components of a hybrid entity designated by the hybrid entity in
accordance with Sec. 164.105(a)(2)(iii)(C).
Hybrid entity means a single legal entity:
(1) That is a covered entity;
(2) Whose business activities include both covered and non-covered
functions; and
(3) That designates health care components in accordance with
paragraph Sec. 164.105(a)(2)(iii)(C).
Plan sponsor is defined as defined at section 3(16)(B) of ERISA, 29
U.S.C. 1002(16)(B).
Required by law means a mandate contained in law that compels an
entity to make a use or disclosure of protected health information and
that is enforceable in a court of law. Required by law includes, but is
not limited to, court orders and court-ordered warrants; subpoenas or
summons issued by a court, grand jury, a governmental or tribal
inspector general, or an administrative body authorized to require the
production of information; a civil or an authorized investigative
demand; Medicare conditions of participation with respect to health
care providers participating in the program; and statutes or
regulations that require the production of information, including
statutes or regulations that require such information if payment is
sought under a government program providing public benefits.
3. Section 164.104 is revised to read as follows:
Sec. 164.104 Applicability.
(a) Except as otherwise provided, the standards, requirements, and
implementation specifications adopted under this part apply to the
following entities:
(1) A health plan.
(2) A health care clearinghouse.
(3) A health care provider who transmits any health information in
electronic form in connection with a transaction covered by this
subchapter.
(b) When a health care clearinghouse creates or receives protected
health information as a business associate of another covered entity,
or other than as a business associate of a covered entity, the
clearinghouse must comply with Sec. 164.105 relating to organizational
requirements for covered entities, including the designation of health
care components of a covered entity.
4. A new Sec. 164.105 is added to read as follows:
Sec. 164.105 Organizational requirements.
(a)(1) Standard: Health care component. If a covered entity is a
hybrid entity, the requirements of subparts C and E of this part, other
than the requirements of this section, Sec. 164.314, and Sec.
164.504, apply only to the health care component(s) of the entity, as
specified in this section.
(2) Implementation specifications:
(i) Application of other provisions. In applying a provision of
subparts C and E of this part, other than the requirements of this
section, Sec. 164.314, and Sec. 164.504, to a hybrid entity:
(A) A reference in such provision to a ``covered entity'' refers to
a health care component of the covered entity;
(B) A reference in such provision to a ``health plan,'' ``covered
health care provider,'' or ``health care clearinghouse,'' refers to a
health care component of the covered entity if such health care
component performs the functions of a health plan, health care
provider, or health care clearinghouse, as applicable;
(C) A reference in such provision to ``protected health
information'' refers to protected health information that is created or
received by or on behalf of the health care component of the covered
entity; and
(D) A reference in such provision to ``electronic protected health
information'' refers to electronic protected health information that is
created, received, maintained, or transmitted by or on behalf of the
health care component of the covered entity.
(ii) Safeguard requirements. The covered entity that is a hybrid
entity must ensure that a health care component of the entity complies
with the applicable requirements of this section and subparts C and E
of this part. In particular, and without limiting this requirement,
such covered entity must ensure that:
(A) Its health care component does not disclose protected health
information to another component of the covered entity in circumstances
in which subpart E of this part would prohibit such disclosure if the
health care component and the other component were separate and
distinct legal entities;
(B) Its health care component protects electronic protected health
information with respect to another component of the covered entity to
the same extent that it would be required under subpart C of this part
to protect such information if the health care component and the other
component were separate and distinct legal entities;
(C) A component that is described by paragraph (a)(2)(iii)(C)(2) of
this section does not use or disclose protected health information that
it creates or receives from or on behalf of the health care component
in a way prohibited by subpart E of this part;
(D) A component that is described by paragraph (a)(2)(iii)(C)(2) of
this section that creates, receives, maintains, or transmits electronic
protected health information on behalf of the health care component is
in compliance with subpart C of this part; and
(E) If a person performs duties for both the health care component
in the capacity of a member of the workforce of such component and for
another component of the entity in the same capacity with respect to
that component, such workforce member must not use or disclose
protected health information created or received in the course of or
incident to the member's work for the health care component in a way
prohibited by subpart E of this part.
(iii) Responsibilities of the covered entity. A covered entity that
is a hybrid entity has the following responsibilities:
(A) For purposes of subpart C of part 160 of this subchapter,
pertaining to compliance and enforcement, the covered entity has the
responsibility of complying with subpart E of this part.
(B) The covered entity is responsible for complying with Sec.
164.316(a) and Sec. 164.530(i), pertaining to the implementation of
policies and procedures to ensure compliance with applicable
requirements of this section and subparts C and E of this part,
including the safeguard requirements in paragraph (a)(2)(ii) of this
section.
(C) The covered entity is responsible for designating the
components that are part of one or more health care components of the
covered entity and documenting the designation in accordance with
paragraph (c) of this section, provided that, if the covered entity
designates a health care component or components, it must include any
component that would meet the definition of covered entity if it were a
separate legal entity. Health care component(s) also may include a
component only to the extent that it performs:
(1) Covered functions; or
(2) Activities that would make such component a business associate
of a
[[Page 8376]]
component that performs covered functions if the two components were
separate legal entities.
(b)(1) Standard: Affiliated covered entities. Legally separate
covered entities that are affiliated may designate themselves as a
single covered entity for purposes of subparts C and E of this part.
(1) Implementation specifications:
(i) Requirements for designation of an affiliated covered entity.
(A) Legally separate covered entities may designate themselves
(including any health care component of such covered entity) as a
single affiliated covered entity, for purposes of subparts C and E of
this part, if all of the covered entities designated are under common
ownership or control.
(B) The designation of an affiliated covered entity must be
documented and the documentation maintained as required by paragraph
(c) of this section.
(ii) Safeguard requirements. An affiliated covered entity must
ensure that:
(A) The affiliated covered entity's creation, receipt, maintenance,
or transmission of electronic protected health information complies
with the applicable requirements of subpart C of this part;
(B) The affiliated covered entity's use and disclosure of protected
health information comply with the applicable requirements of subpart E
of this part; and
(C) If the affiliated covered entity combines the functions of a
health plan, health care provider, or health care clearinghouse, the
affiliated covered entity complies with Sec. 164.308(a)(4)(ii)(A) and
Sec. 164.504(g), as applicable.
(c)(1) Standard: Documentation. A covered entity must maintain a
written or electronic record of a designation as required by paragraphs
(a) or (b) of this section.
(2) Implementation specification: Retention period. A covered
entity must retain the documentation as required by paragraph (c)(1) of
this section for 6 years from the date of its creation or the date when
it last was in effect, whichever is later.
5. A new subpart C is added to part 164 to read as follows:
Subpart C--Security Standards for the Protection of Electronic
Protected Health Information
Sec.
164.302 Applicability.
164.304 Definitions.
164.306 Security standards: General rules.
164.308 Administrative safeguards.
164.310 Physical safeguards.
164.312 Technical safeguards.
164.314 Organizational requirements.
164.316 Policies and procedures and documentation requirements.
164.318 Compliance dates for the initial implementation of the
security standards.
Appendix A to Subpart C of Part 164--Security Standards: Matrix
Authority: 42 U.S.C. 1320d-2 and 1320d-4.
Sec. 164.302 Applicability.
A covered entity must comply with the applicable standards,
implementation specifications, and requirements of this subpart with
respect to electronic protected health information.
Sec. 164.304 Definitions.
As used in this subpart, the following terms have the following
meanings:
Access means the ability or the means necessary to read, write,
modify, or communicate data/information or otherwise use any system
resource. (This definition applies to ``access'' as used in this
subpart, not as used in subpart E of this part.)
Administrative safeguards are administrative actions, and policies
and procedures, to manage the selection, development, implementation,
and maintenance of security measures to protect electronic protected
health information and to manage the conduct of the covered entity's
workforce in relation to the protection of that information.
Authentication means the corroboration that a person is the one
claimed.
Availability means the property that data or information is
accessible and useable upon demand by an authorized person.
Confidentiality means the property that data or information is not
made available or disclosed to unauthorized persons or processes.
Encryption means the use of an algorithmic process to transform
data into a form in which there is a low probability of assigning
meaning without use of a confidential process or key.
Facility means the physical premises and the interior and exterior
of a building(s).
Information system means an interconnected set of information
resources under the same direct management control that shares common
functionality. A system normally includes hardware, software,
information, data, applications, communications, and people.
Integrity means the property that data or information have not been
altered or destroyed in an unauthorized manner.
Malicious software means software, for example, a virus, designed
to damage or disrupt a system.
Password means confidential authentication information composed of
a string of characters.
Physical safeguards are physical measures, policies, and procedures
to protect a covered entity's electronic information systems and
related buildings and equipment, from natural and environmental
hazards, and unauthorized intrusion.
Security or Security measures encompass all of the administrative,
physical, and technical safeguards in an information system.
Security incident means the attempted or successful unauthorized
access, use, disclosure, modification, or destruction of information or
interference with system operations in an information system.
Technical safeguards means the technology and the policy and
procedures for its use that protect electronic protected health
information and control access to it.
User means a person or entity with authorized access.
Workstation means an electronic computing device, for example, a
laptop or desktop computer, or any other device that performs similar
functions, and electronic media stored in its immediate environment.
Sec. 164.306 Security standards: General rules.
(a) General requirements. Covered entities must do the following:
(1) Ensure the confidentiality, integrity, and availability of all
electronic protected health information the covered entity creates,
receives, maintains, or transmits.
(2) Protect against any reasonably anticipated threats or hazards
to the security or integrity of such information.
(3) Protect against any reasonably anticipated uses or disclosures
of such information that are not permitted or required under subpart E
of this part.
(4) Ensure compliance with this subpart by its workforce.
(b) Flexibility of approach.
(1) Covered entities may use any security measures that allow the
covered entity to reasonably and appropriately implement the standards
and implementation specifications as specified in this subpart.
(2) In deciding which security measures to use, a covered entity
must take into account the following factors:
(i) The size, complexity, and capabilities of the covered entity.
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(ii) The covered entity's technical infrastructure, hardware, and
software security capabilities.
(iii) The costs of security measures.
(iv) The probability and criticality of potential risks to
electronic protected health information.
(c) Standards. A covered entity must comply with the standards as
provided in this section and in Sec. 164.308, Sec. 164.310, Sec.
164.312, Sec. 164.314, and Sec. 164.316 with respect to all
electronic protected health information.
(d) Implementation specifications.
In this subpart:
(1) Implementation specifications are required or addressable. If
an implementation specification is required, the word ``Required''
appears in parentheses after the title of the implementation
specification. If an implementation specification is addressable, the
word ``Addressable'' appears in parentheses after the title of the
implementation specification.
(2) When a standard adopted in Sec. 164.308, Sec. 164.310, Sec.
164.312, Sec. 164.314, or Sec. 164.316 includes required
implementation specifications, a covered entity must implement the
implementation specifications.
(1) When a standard adopted in Sec. 164.308, Sec. 164.310, Sec.
164.312, Sec. 164.314, or Sec. 164.316 includes addressable
implementation specifications, a covered entity must--
(i) Assess whether each implementation specification is a
reasonable and appropriate safeguard in its environment, when analyzed
with reference to the likely contribution to protecting the entity's
electronic protected health information; and
(ii) As applicable to the entity--
(A) Implement the implementation specification if reasonable and
appropriate; or
(B) If implementing the implementation specification is not
reasonable and appropriate--
(1) Document why it would not be reasonable and appropriate to
implement the implementation specification; and
(2) Implement an equivalent alternative measure if reasonable and
appropriate.
(e) Maintenance. Security measures implemented to comply with
standards and implementation specifications adopted under Sec. 164.105
and this subpart must be reviewed and modified as needed to continue
provision of reasonable and appropriate protection of electronic
protected health information as described at Sec. 164.316.
Sec. 164.308 Administrative safeguards.
(a) A covered entity must, in accordance with Sec. 164.306:
(1)(i) Standard: Security management process. Implement policies
and procedures to prevent, detect, contain, and correct security
violations.
(ii) Implementation specifications:
(A) Risk analysis (Required). Conduct an accurate and thorough
assessment of the potential risks and vulnerabilities to the
confidentiality, integrity, and availability of electronic protected
health information held by the covered entity.
(B) Risk management (Required). Implement security measures
sufficient to reduce risks and vulnerabilities to a reasonable and
appropriate level to comply with Sec. 164.306(a).
(C) Sanction policy (Required). Apply appropriate sanctions against
workforce members who fail to comply with the security policies and
procedures of the covered entity.
(D) Information system activity review (Required). Implement
procedures to regularly review records of information system activity,
such as audit logs, access reports, and security incident tracking
reports.
(2) Standard: Assigned security responsibility. Identify the
security official who is responsible for the development and
implementation of the policies and procedures required by this subpart
for the entity.
(3)(i) Standard: Workforce security. Implement policies and
procedures to ensure that all members of its workforce have appropriate
access to electronic protected health information, as provided under
paragraph (a)(4) of this section, and to prevent those workforce
members who do not have access under paragraph (a)(4) of this section
from obtaining access to electronic protected health information.
(ii) Implementation specifications:
(A) Authorization and/or supervision (Addressable). Implement
procedures for the authorization and/or supervision of workforce
members who work with electronic protected health information or in
locations where it might be accessed.
(B) Workforce clearance procedure (Addressable). Implement
procedures to determine that the access of a workforce member to
electronic protected health information is appropriate.
(C) Termination procedures (Addressable). Implement procedures for
terminating access to electronic protected health information when the
employment of a workforce member ends or as required by determinations
made as specified in paragraph (a)(3)(ii)(B) of this section.
(4)(i) Standard: Information access management. Implement policies
and procedures for authorizing access to electronic protected health
information that are consistent with the applicable requirements of
subpart E of this part.
(ii) Implementation specifications:
(A) Isolating health care clearinghouse functions (Required). If a
health care clearinghouse is part of a larger organization, the
clearinghouse must implement policies and procedures that protect the
electronic protected health information of the clearinghouse from
unauthorized access by the larger organization.
(B) Access authorization (Addressable). Implement policies and
procedures for granting access to electronic protected health
information, for example, through access to a workstation, transaction,
program, process, or other mechanism.
(C) Access establishment and modification (Addressable). Implement
policies and procedures that, based upon the entity's access
authorization policies, establish, document, review, and modify a
user's right of access to a workstation, transaction, program, or
process.
(5)(i) Standard: Security awareness and training. Implement a
security awareness and training program for all members of its
workforce (including management).
(ii) Implementation specifications. Implement:
(A) Security reminders (Addressable). Periodic security updates.
(B) Protection from malicious software (Addressable). Procedures
for guarding against, detecting, and reporting malicious software.
(C) Log-in monitoring (Addressable). Procedures for monitoring log-
in attempts and reporting discrepancies.
(D) Password management (Addressable). Procedures for creating,
changing, and safeguarding passwords.
(6)(i) Standard: Security incident procedures. Implement policies
and procedures to address security incidents.
(ii) Implementation specification: Response and Reporting
(Required). Identify and respond to suspected or known security
incidents; mitigate, to the extent practicable, harmful effects of
security incidents that are known to the covered entity; and document
security incidents and their outcomes.
(7)(i) Standard: Contingency plan. Establish (and implement as
needed) policies and procedures for responding to an emergency or other
occurrence (for example, fire, vandalism, system failure, and natural
disaster) that damages systems that contain electronic protected health
information.
(ii) Implementation specifications:
[[Page 8378]]
(A) Data backup plan (Required). Establish and implement procedures
to create and maintain retrievable exact copies of electronic protected
health information.
(B) Disaster recovery plan (Required). Establish (and implement as
needed) procedures to restore any loss of data.
(C) Emergency mode operation plan (Required). Establish (and
implement as needed) procedures to enable continuation of critical
business processes for protection of the security of electronic
protected health information while operating in emergency mode.
(D) Testing and revision procedures (Addressable). Implement
procedures for periodic testing and revision of contingency plans.
(E) Applications and data criticality analysis (Addressable).
Assess the relative criticality of specific applications and data in
support of other contingency plan components.
(8) Standard: Evaluation. Perform a periodic technical and
nontechnical evaluation, based initially upon the standards implemented
under this rule and subsequently, in response to environmental or
operational changes affecting the security of electronic protected
health information, that establishes the extent to which an entity's
security policies and procedures meet the requirements of this subpart.
(b)(1) Standard: Business associate contracts and other
arrangements. A covered entity, in accordance with Sec. 164.306, may
permit a business associate to create, receive, maintain, or transmit
electronic protected health information on the covered entity's behalf
only if the covered entity obtains satisfactory assurances, in
accordance with Sec. 164.314(a) that the business associate will
appropriately safeguard the information.
(2) This standard does not apply with respect to--
(i) The transmission by a covered entity of electronic protected
health information to a health care provider concerning the treatment
of an individual.
(ii) The transmission of electronic protected health information by
a group health plan or an HMO or health insurance issuer on behalf of a
group health plan to a plan sponsor, to the extent that the
requirements of Sec. 164.314(b) and Sec. 164.504(f) apply and are
met; or
(iii) The transmission of electronic protected health information
from or to other agencies providing the services at Sec.
164.502(e)(1)(ii)(C), when the covered entity is a health plan that is
a government program providing public benefits, if the requirements of
Sec. 164.502(e)(1)(ii)(C) are met.
(3) A covered entity that violates the satisfactory assurances it
provided as a business associate of another covered entity will be in
noncompliance with the standards, implementation specifications, and
requirements of this paragraph and Sec. 164.314(a).
(4) Implementation specifications: Written contract or other
arrangement (Required). Document the satisfactory assurances required
by paragraph (b)(1) of this section through a written contract or other
arrangement with the business associate that meets the applicable
requirements of Sec. 164.314(a).
Sec. 164.310 Physical safeguards.
A covered entity must, in accordance with Sec. 164.306:
(a)(1) Standard: Facility access controls. Implement policies and
procedures to limit physical access to its electronic information
systems and the facility or facilities in which they are housed, while
ensuring that properly authorized access is allowed.
(2) Implementation specifications:
(i) Contingency operations (Addressable). Establish (and implement
as needed) procedures that allow facility access in support of
restoration of lost data under the disaster recovery plan and emergency
mode operations plan in the event of an emergency.
(ii) Facility security plan (Addressable). Implement policies and
procedures to safeguard the facility and the equipment therein from
unauthorized physical access, tampering, and theft.
(iii) Access control and validation procedures (Addressable).
Implement procedures to control and validate a person's access to
facilities based on their role or function, including visitor control,
and control of access to software programs for testing and revision.
(iv) Maintenance records (Addressable). Implement policies and
procedures to document repairs and modifications to the physical
components of a facility which are related to security (for example,
hardware, walls, doors, and locks).
(b) Standard: Workstation use. Implement policies and procedures
that specify the proper functions to be performed, the manner in which
those functions are to be performed, and the physical attributes of the
surroundings of a specific workstation or class of workstation that can
access electronic protected health information.
(c) Standard: Workstation security. Implement physical safeguards
for all workstations that access electronic protected health
information, to restrict access to authorized users.
(d)(1) Standard: Device and media controls. Implement policies and
procedures that govern the receipt and removal of hardware and
electronic media that contain electronic protected health information
into and out of a facility, and the movement of these items within the
facility.
(2) Implementation specifications:
(i) Disposal (Required). Implement policies and procedures to
address the final disposition of electronic protected health
information, and/or the hardware or electronic media on which it is
stored.
(ii) Media re-use (Required). Implement procedures for removal of
electronic protected health information from electronic media before
the media are made available for re-use.
(iii) Accountability (Addressable). Maintain a record of the
movements of hardware and electronic media and any person responsible
therefore.
(iv) Data backup and storage (Addressable). Create a retrievable,
exact copy of electronic protected health information, when needed,
before movement of equipment.
Sec. 164.312 Technical safeguards.
A covered entity must, in accordance with Sec. 164.306:
(a)(1) Standard: Access control. Implement technical policies and
procedures for electronic information systems that maintain electronic
protected health information to allow access only to those persons or
software programs that have been granted access rights as specified in
Sec. 164.308(a)(4).
(2) Implementation specifications:
(i) Unique user identification (Required). Assign a unique name
and/or number for identifying and tracking user identity.
(ii) Emergency access procedure (Required). Establish (and
implement as needed) procedures for obtaining necessary electronic
protected health information during an emergency.
(iii) Automatic logoff (Addressable). Implement electronic
procedures that terminate an electronic session after a predetermined
time of inactivity.
(iv) Encryption and decryption (Addressable). Implement a mechanism
to encrypt and decrypt electronic protected health information.
(b) Standard: Audit controls. Implement hardware, software, and/or
procedural mechanisms that record and examine activity in information
systems that contain or use electronic protected health information.
(c)(1) Standard: Integrity. Implement policies and procedures to
protect
[[Page 8379]]
electronic protected health information from improper alteration or
destruction.
(2) Implementation specification: Mechanism to authenticate
electronic protected health information (Addressable). Implement
electronic mechanisms to corroborate that electronic protected health
information has not been altered or destroyed in an unauthorized
manner.
(d) Standard: Person or entity authentication. Implement procedures
to verify that a person or entity seeking access to electronic
protected health information is the one claimed.
(e)(1) Standard: Transmission security. Implement technical
security measures to guard against unauthorized access to electronic
protected health information that is being transmitted over an
electronic communications network.
(2) Implementation specifications:
(i) Integrity controls (Addressable). Implement security measures
to ensure that electronically transmitted electronic protected health
information is not improperly modified without detection until disposed
of.
(ii) Encryption (Addressable). Implement a mechanism to encrypt
electronic protected health information whenever deemed appropriate.
Sec. 164.314 Organizational requirements.
(a)(1) Standard: Business associate contracts or other
arrangements.
(i) The contract or other arrangement between the covered entity
and its business associate required by Sec. 164.308(b) must meet the
requirements of paragraph (a)(2)(i) or (a)(2)(ii) of this section, as
applicable.
(ii) A covered entity is not in compliance with the standards in
Sec. 164.502(e) and paragraph (a) of this section if the covered
entity knew of a pattern of an activity or practice of the business
associate that constituted a material breach or violation of the
business associate's obligation under the contract or other
arrangement, unless the covered entity took reasonable steps to cure
the breach or end the violation, as applicable, and, if such steps were
unsuccessful--
(A) Terminated the contract or arrangement, if feasible; or
(B) If termination is not feasible, reported the problem to the
Secretary.
(2) Implementation specifications (Required).
(i) Business associate contracts. The contract between a covered
entity and a business associate must provide that the business
associate will--
(A) Implement administrative, physical, and technical safeguards
that reasonably and appropriately protect the confidentiality,
integrity, and availability of the electronic protected health
information that it creates, receives, maintains, or transmits on
behalf of the covered entity as required by this subpart;
(B) Ensure that any agent, including a subcontractor, to whom it
provides such information agrees to implement reasonable and
appropriate safeguards to protect it;
(C) Report to the covered entity any security incident of which it
becomes aware;
(D) Authorize termination of the contract by the covered entity, if
the covered entity determines that the business associate has violated
a material term of the contract.
(ii) Other arrangements.
(A) When a covered entity and its business associate are both
governmental entities, the covered entity is in compliance with
paragraph (a)(1) of this section, if--
(1) It enters into a memorandum of understanding with the business
associate that contains terms that accomplish the objectives of
paragraph (a)(2)(i) of this section; or
(2) Other law (including regulations adopted by the covered entity
or its business associate) contains requirements applicable to the
business associate that accomplish the objectives of paragraph
(a)(2)(i) of this section.
(B) If a business associate is required by law to perform a
function or activity on behalf of a covered entity or to provide a
service described in the definition of business associate as specified
in Sec. 160.103 of this subchapter to a covered entity, the covered
entity may permit the business associate to create, receive, maintain,
or transmit electronic protected health information on its behalf to
the extent necessary to comply with the legal mandate without meeting
the requirements of paragraph (a)(2)(i) of this section, provided that
the covered entity attempts in good faith to obtain satisfactory
assurances as required by paragraph (a)(2)(ii)(A) of this section, and
documents the attempt and the reasons that these assurances cannot be
obtained.
(C) The covered entity may omit from its other arrangements
authorization of the termination of the contract by the covered entity,
as required by paragraph (a)(2)(i)(D) of this section if such
authorization is inconsistent with the statutory obligations of the
covered entity or its business associate.
(b)(1) Standard: Requirements for group health plans. Except when
the only electronic protected health information disclosed to a plan
sponsor is disclosed pursuant to Sec. 164.504(f)(1)(ii) or (iii), or
as authorized under Sec. 164.508, a group health plan must ensure that
its plan documents provide that the plan sponsor will reasonably and
appropriately safeguard electronic protected health information
created, received, maintained, or transmitted to or by the plan sponsor
on behalf of the group health plan.
(2) Implementation specifications (Required). The plan documents of
the group health plan must be amended to incorporate provisions to
require the plan sponsor to--
(i) Implement administrative, physical, and technical safeguards
that reasonably and appropriately protect the confidentiality,
integrity, and availability of the electronic protected health
information that it creates, receives, maintains, or transmits on
behalf of the group health plan;
(ii) Ensure that the adequate separation required by Sec.
164.504(f)(2)(iii) is supported by reasonable and appropriate security
measures;
(iii) Ensure that any agent, including a subcontractor, to whom it
provides this information agrees to implement reasonable and
appropriate security measures to protect the information; and
(iv) Report to the group health plan any security incident of which
it becomes aware.
Sec. 164.316 Policies and procedures and documentation requirements.
A covered entity must, in accordance with Sec. 164.306:
(a) Standard: Policies and procedures. Implement reasonable and
appropriate policies and procedures to comply with the standards,
implementation specifications, or other requirements of this subpart,
taking into account those factors specified in Sec. 164.306(b)(2)(i),
(ii), (iii), and (iv). This standard is not to be construed to permit
or excuse an action that violates any other standard, implementation
specification, or other requirements of this subpart. A covered entity
may change its policies and procedures at any time, provided that the
changes are documented and are implemented in accordance with this
subpart.
(b)(1) Standard: Documentation.
(i) Maintain the policies and procedures implemented to comply with
this subpart in written (which may be electronic) form; and
(ii) If an action, activity or assessment is required by this
subpart to be documented, maintain a written (which may be electronic)
record of the action, activity, or assessment.
(2) Implementation specifications:
[[Page 8380]]
(i) Time limit (Required). Retain the documentation required by
paragraph (b)(1) of this section for 6 years from the date of its
creation or the date when it last was in effect, whichever is later.
(ii) Availability (Required). Make documentation available to those
persons responsible for implementing the procedures to which the
documentation pertains.
(iii) Updates (Required). Review documentation periodically, and
update as needed, in response to environmental or operational changes
affecting the security of the electronic protected health information.
Sec. 164.318 Compliance dates for the initial implementation of the
security standards.
(a) Health plan.
(1) A health plan that is not a small health plan must comply with
the applicable requirements of this subpart no later than April 20,
2005.
(2) A small health plan must comply with the applicable
requirements of this subpart no later than April 20, 2006.
(b) Health care clearinghouse. A health care clearinghouse must
comply with the applicable requirements of this subpart no later than
April 20, 2005.
(c) Health care provider. A covered health care provider must
comply with the applicable requirements of this subpart no later than
April 20, 2005.
Appendix A to Subpart C of Part 164--Security Standards: Matrix
----------------------------------------------------------------------------------------------------------------
Implementation
Specifications
Standards Sections (R)=Required,
(A)=Addressable
----------------------------------------------------------------------------------------------------------------
Administrative Safeguards
----------------------------------------------------------------------------------------------------------------
Security Management Process............................ 164.308(a)(1) Risk Analysis (R)
............................. Risk Management (R)
............................. Sanction Policy (R)
............................. Information System
Activity Review (R)
Assigned Security Responsibility....................... 164.308(a)(2) (R)
Workforce Security..................................... 164.308(a)(3) Authorization and/or
Supervision (A)
............................. Workforce Clearance
Procedure
............................. Termination Procedures
(A)
Information Access Management.......................... 164.308(a)(4) Isolating Health care
Clearinghouse Function
(R)
............................. Access Authorization (A)
............................. Access Establishment and
Modification (A)
Security Awareness and Training........................ 164.308(a)(5) Security Reminders (A)
............................. Protection from
Malicious Software (A)
............................. Log-in Monitoring (A)
............................. Password Management (A)
Security Incident Procedures........................... 164.308(a)(6) Response and Reporting
(R)
Contingency Plan....................................... 164.308(a)(7) Data Backup Plan (R)
............................. Disaster Recovery Plan
(R)
............................. Emergency Mode Operation
Plan (R)
............................. Testing and Revision
Procedure (A)
............................. Applications and Data
Criticality Analysis
(A)
Evaluation............................................. 164.308(a)(8) (R)
Business Associate Contracts and Other Arrangement..... 164.308(b)(1) Written Contract or
Other Arrangement (R)
--------------------------------------------------------
Physical Safeguards
----------------------------------------------------------------------------------------------------------------
Facility Access Controls............................... 164.310(a)(1) Contingency Operations
(A)
............................. Facility Security Plan
(A)
............................. Access Control and
Validation Procedures
(A)
............................. Maintenance Records (A)
Workstation Use........................................ 164.310(b) (R)
Workstation Security................................... 164.310(c) (R)
Device and Media Controls.............................. 164.310(d)(1) Disposal (R)
............................. Media Re-use (R)
............................. Accountability (A)
............................. Data Backup and Storage
(A)
--------------------------------------------------------
Technical Safeguards (see Sec. 164.312)
----------------------------------------------------------------------------------------------------------------
Access Control......................................... 164.312(a)(1) Unique User
Identification (R)
............................. Emergency Access
Procedure (R)
............................. Automatic Logoff (A)
............................. Encryption and
Decryption (A)
Audit Controls......................................... 164.312(b) (R)
Integrity.............................................. 164.312(c)(1) Mechanism to
Authenticate Electronic
Protected Health
Information (A)
Person or Entity Authentication........................ 164.312(d) (R)
Transmission Security.................................. 164.312(e)(1) Integrity Controls (A)
............................. Encryption (A)
----------------------------------------------------------------------------------------------------------------
[[Page 8381]]
Sec. 164.500 [Amended]
6. Sec. In 164.500(b)(1)(iv), remove the words ``including the
designation of health care components of a covered entity''.
Sec. 165.501 [Amended]
7. In Sec. 164.501, the definitions of the following terms are
removed: Covered functions, Disclosure, Individual, Organized health
care arrangement, Plan sponsor Protected health information, Required
by law, and Use.
Sec. 164.504 [Amended]
8. In Sec. 164.504, the following changes are made:
a. The definitions of the following terms are removed: Common
control, Common ownership, Health care component, and Hybrid entity.
b. Paragraphs (b) through (d) are removed and reserved.
Authority: Sections 1173 and 1175 of the Social Security Act (42
U.S.C. 1329d-2 and 1320-4).
Dated: January 13, 2003.
Tommy G. Thompson,
Secretary.
[FR Doc. 03-3877 Filed 2-13-03; 8:45 am]
BILLING CODE 4120-01-P