HHS Reports on Breaches of Unsecured Protected Health Information

In its recent Annual Report to Congress on Breaches of Unsecured Protected Health Information, the Office of Civil Rights of the Department of Health and Human Services, we see confirmation of certain trends-- bigger breaches and breaches involving theft of electronic media:

Between January 1, 2010 and December 31, 2010, breaches involving 500 or more individuals also made up less than one percent of reports, yet accounted for more than 99 percent of the more than 5.4 million individuals who were affected by a breach of their protected health information. The largest breaches in 2010, like 2009, occurred as a result of theft. However, in comparison to 2009, in 2010, the number of individuals affected by the loss of electronic media or paper records containing protected health information was greater than the number of individuals affected by unauthorized access or human error.

Did You Know There Is a Congressional Cyber Security Caucus?

Until yesterday, I did not know there was a Congressional Cyber Security Caucus.  It is not clear what it has been up to, as it hasn't had a media release in eleven months.

Online Privacy Bills Planned for 2011

By Patrick Connolly

If Tuesday night’s failure to give fast-track approval to an extension of certain surveillance powers under the Patriot Act is any indication, Congress is in the mood to protect individual privacy. As such, a series of anticipated online privacy protection bills are likely to garner bipartisan support in the weeks and months ahead. 

Proposals will come from both sides of the aisle. According to Hillicon Valley, Rep. Jackie Speier (D-Calif.) will shortly introduce an online privacy bill directing FTC to implement a “do not track” regime applicable to online advertisers (this although public comments to the FTC report supporting such a measure, Protecting Consumer Privacy in an Era of Rapid Change, are still coming in). Rep. Speier’s bill is said not to include any safe harbor provision. In contrast, the privacy bill forthcoming from Rep. Bobby Rush (D-Ill.) will not include a “do not track” mandate, but is anticipated to be very similar to the bill he proposed in 2010 that provided a safe harbor to marketers participating in a FTC-approved, self-regulatory “Choice Program.” Any approved “Choice Program” would, true to its name, be required to provide users with a robust set of options concerning the collection and use of their information.

On the Republican side, Rep. Cliff Stearns (R-Fla.) plans to introduce a new version of the 2010 draft Boucher-Stearns bill which would have required websites to inform users of how they collect and use personally identifiable information and then allow users to opt out of having such information collected. Collection of certain sensitive information and the sharing of personally identifiable information with third parties would require users to opt in.

Other politicians reported to have an interest in addressing internet privacy this year include Rep. Joe Barton (R-Texas), and Senators Jay Rockefeller (D-W. Va.) and John Kerry (D-Mass.).

So with the ink barely dry on public comments to the Commerce Department’s Dynamic Policy Framework, and with public comments to the FTC Report still incoming, it appears legislators may be ready to run with the presumption inherent in both reports that the existing notice and choice mechanism for protecting Internet user privacy is outdated and ineffective. 

All this activity is focused on achieving increased transparency, simplification of consumer choice, and ensuring users are able to give true informed consent to the collection and use of their information. However, a rush to regulate without providing sufficient flexibility for different business models could stunt innovation and hurt the user experience. In this dynamic marketplace, where large businesses and emerging companies alike are beginning to innovate consumer privacy solutions and may soon compete on that basis, passage of rigid laws and reactionary regulations may be counter-productive.

Congressional Aide Shares Secret Ethics List With The World

Last week, it was learned that a secret report of the U.S. House of Representatives Ethics Committee was disclosed -- apparently inadvertently -- by a junior committee staff member.  This staff apparently stored the file on a home computer that also ran a "peer-to-peer" file-sharing service.  Just as peer-to-peer services let you share music and games, they also can give outside users access to other files on your computer, including in this case secret Congressional reports.  The 22-page "Committee on Standards Weekly Summary Report" contained summaries of ethics investigations of dozens of House members and some of their staff.

Although "peer-to-peer" services have caused breaches of sensitive financial, defense-related and personal data from government sites in the past, it seems like the federal government has not learned its lesson (even as it tries to impose Fed Flags rules and the HITECH Act on the private sector).

Bill to Narrow Red Flags Rules Moves Forward

It appears that certain groups, such as the American Bar Association (ABA), may be partially successful in their efforts to convince Congress to narrow the scope of the FTC Red Flags Rules, which are currently scheduled to go into effect on November 1.  According to the BNA Privacy & Security Law Report, the House Financial Services Committee has sent H.R. 3763, titled a bill "To amend the Fair Credit Reporting Act to provide for an exclusion from Red Flag Guidelines for certain businesses," directly to the House floor without a markup.  The bill proceeded to the House floor after the Republican side of the Financial Services Committee consented to such a move.

The bill, which was introduced on October 8 by Rep. John Adler (D-N.J.), would exclude from the Red Flags Rules health care, accounting and legal practices with 20 or fewer employees.  It would also require the FTC, within 180 days, to issue regulations that set forth the process by which a business may apply for an exemption from the Red Flags Rules.

Of course, the passage of H.R. 3763 likely will not sufficiently narrow the Red Flags Rules in the eyes of the ABA, which has filed suit in federal district court in Washington D.C. to stop the application of the Red Flags Rules to all attorneys (see our prior post on this lawsuit).  In that case, the ABA has already moved for partial summary judgment, and the FTC has filed an opposition.  On October 13, ABA President Carolyn Lamm sent a letter to Rep. Barney Frank (D-MA), the chairman of the Financial Services Committee, urging lawmakers to exempt all attorneys from the rules.

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