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FTC Issues Policy Statement Affirming that Health Apps Must Comply with FTCFTC Issues Policy Statement Affirming that Health Apps and Connected Device Companies Must Comply with FTC’s Health Breach Notification Rule

FTC Issues Policy Statement Affirming that Health Apps and Connected Device Companies Must Comply with FTC’s Health Breach Notification Rule

At an open commission meeting on Wednesday, September 15th, the Federal Trade Commission (FTC) voted 3-2 to approve a policy statement affirming that health apps and connected devices that draw information from multiple sources need to comply with the FTC’s August 2009 Health Breach Notification Rule. The policy statement serves as a notice to health apps and connected devices – companies that are traditionally not covered entities under HIPAA –  “of their ongoing obligation to come clean about breaches”.  The statement also affirms that the entities may be subject to civil penalties of up to $43,792 per violation per day.

The American Recovery and Reinvestment Act of 2009 (Recovery Act of 2009) required the FTC to enforce breach notification requirements with respect to vendors and third parties and to adopt a rule implementing such requirements. Under the Health Breach Notification Rule, vendors of personal health records and related entities must notify U.S. consumers and the FTC, and, in some cases the media, if there has been a breach of unsecured identifiable health information.

Acknowledging that it has now been more than a decade since the promulgation of the Health Breach Notification Rule and that there has been a proliferation of apps and technologies that consumers can now use “to track diseases, diagnoses, treatment, medications, fitness, fertility, sleep, mental health, diet, and other vital areas,” the FTC affirmed on Wednesday that apps capable of drawing information from multiple sources (such as through a combination of consumer inputs and APIs) are covered, even if the health information comes from only one source.

You can read the full policy statement of the FTC here.

FTC Chair Lina M. Khan and Commissioners Rohit Chopra and Rebecca Kelly Slaughter voted in favor of the policy statement, while Commissioners Joshua Phillips and Christine S. Wilson each issued dissenting statements. The dissenting opinions asserted that this statutory and regulatory opinion should be determined in the context of the rulemaking process that is currently under way, rather than a policy statement.

It is important that companies developing health apps and connected devices be aware of this announcement.  Beckage closely monitors developments in laws and regulations governing health data and breach response. Beckage’s team of highly skilled attorneys and technologists are uniquely situated to assist clients as they navigate these changes.

Email Beckage Health Law Team Lead Sarah L. Rugnetta, Esq., (CIPP/E) at srugnetta@beckage.com or call 716.898.2102 for assistance in analyzing this and other regulatory and legislative matters in the Health Law space.

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Data Privacy DayBeckage Attorneys Make 2021 Data Security & Privacy Predictions in Observance of Data Privacy Day

Beckage Attorneys Make 2021 Data Security & Privacy Predictions in Observance of Data Privacy Day

Today is Data Privacy Day – an international event held annually on January 28th with the purpose of promoting privacy and data protection best practices for consumers and businesses. At Beckage, every day is Data Privacy Day – our team of lawyers and technologists works daily with clients on data security and privacy measures, from developing policies and procedures to comply with international and domestic privacy regimes to responding to headline-making data incidents and defending clients in data security and privacy class actions.

The legal landscape surrounding data security and privacy is constantly evolving to adapt to technological advancements and global privacy trends. In observance of this holiday, we asked some of our experienced team members what they expect to see in this space in 2021.


Litigation – Myriah V. Jaworski, Esq. CIPP/US, CIPP/E

My data privacy prediction for 2021 is also related to biometrics. This year we will see the continued rise of regulation over and litigation concerning the use of biometric information.

A few years after the Illinois State Legislature passed BIPA, the Biometric Information Privacy Act, we started to see a slew of class action lawsuits filed against businesses alleged to have violated BIPA’s written release requirement. BIPA class actions have ranged from headline-making cases against major tech companies, such has Facebook, to small and medium-sized businesses across numerous industries.

While biometric lawsuits were once viewed as a risk associated only with doing business in Illinois, other states, like Washington and Texas, have followed suit by passing their own laws mimicking BIPA and others are eyeing their own biometric privacy bills. Of note, a bill nearly identical to BIPA is pending in the New York State legislature, which, if passed, could have a much larger impact on businesses given that New York is one of the largest economies in the United States.

At the federal level, we have recently seen the Federal Trade Commission (FTC) enter the biometric conversation with its consent agreement with EverAlbum, Inc. This consent order may have set a nation-wide standard for businesses’ use and collection of biometric information, regardless of whether those businesses operate in states that have enacted or pending biometric privacy laws.

In short, in 2021 the risks and penalties associated with collecting and using biometric information are steep. Any business, regardless of location, that is engaging in biometric information collection should conduct a privacy audit, look at its written policies, and ensure that it has the requisite consents in mind. As a litigator, I always say “demonstrable compliance is the strongest legal defense,” and that is certainly true in the biometric privacy space.

Watch Myriah’s video prediction here.


Incident Response – Daniel P. Greene, Esq., CIPP/US, CIPP/E

At the heart of what we do as incident response privacy practitioners is data breach prevention.  My 2021 prediction for the privacy landscape is an expansion in the use of multi-factor authentication. This is great news for incident response because, often, multi-factor authentication is an important step in helping to avoid a data incident and protect the privacy of data.

Multi-factor authentication is when a user identifies themself through biometrics, like a facial or fingerprint scan, or though entering a code on a device to confirm access to sensitive spaces, like a bank account or work network. It helps in avoiding unauthorized access and we expect to see this technology used in new spaces in 2021, such as when using an ATM or checking out at a grocery store.

We also anticipate an expansion in the use of biometrics over device authentication. There have been numerous documented incidents where device authentication has backfired. A famous example occurred in 2019 when attackers were able to gain access to Twitter CEO Jeff Dorsey’s account using a SIM card swap scheme. Because biometric identifiers are much more difficult to change or duplicate, using a facial scan or fingerprint is a much more secure method of confirming a user’s identity. And while this brings up a host of other issues about safeguarding biometric information, I think we can expect to see it used a lot more soon.

Watch Dan’s video prediction here.


Government Investigations – Michael L. McCabe, Esq., CCEP

In 2021, I expect to see increased enforcement of privacy and data security laws and regulations at both the federal and state level. Considering new leadership in Washington D.C. and the looming impact of the COVID-19 pandemic, I predict not just an uptick in enforcement, but also a more muscular approach by regulators.  More enforcement actions are expected, a further reminder for companies to work with experienced tech privacy and security legal counsel to minimize legal and technical risk.

At the federal level, look for enhanced enforcement by the Federal Trade Commission (FTC), Federal Communications Commission (FCC), and Securities and Exchange Commission (SEC). On the state level, I anticipate a similar response by state attorneys general outside of Washington.   

In 2020, we saw a major uptick in cyber-attacks, due in part to companies having to quickly adopt policies for a distributed workforce.  There were also numerous COVID-related phishing attempts. These developments have resulted in a record number of data security incidents. Therefore, I expect the focus of these enforcement actions to be not just on privacy compliance, but also on effective data security and incident response.  

Watch Mike’s video prediction here.


Privacy Compliance – Kara L. Hilburger, Esq., CIPP-US

My prediction for the privacy compliance area in 2021 is the increased focus on consumer privacy rights. With California’s comprehensive privacy law, the California Consumer Privacy Act (CCPA), now one year old, there is increase awareness and attention to data subject rights.  With a myriad of other states entertaining statutes similar to the CCPA, I anticipate a host of plaintiff related lawsuits filed under these statutes’ privacy right of action provisions. The result is that business operating in this highly global, multi-jurisdictional environment will need to continue to work towards building out robust and scalable data security and privacy infrastructures that take into account not only the GDPR and CCPA but other emerging laws. For example, updating forward-facing website disclosure policies and user agreements will be paramount here to be sure they comply with the required disclosures.

Relatedly, my second prediction as that we will continue to see an uptick in litigation filed under the Americans with Disabilities Act and frankly no end is in sight.  Businesses are continuing to educate themselves on the legal standards necessary for building and maintaining an accessible website.  We also anticipate much in the way of legislation or increase DOJ involvement in this area under the new administration.

Watch Kara’s video prediction here.


Health Law – Allison K. Prout, Esq., Cert. AWS Cloud Practitioner

With so much of our everyday lives moving online in the wake of the COVID-19 pandemic, we have seen a large uptick in data breaches caused by third-party vendors and service providers. And when it comes to the healthcare industry, I anticipate a continued increase in incidents that originate with business associates and other vendors providing services to covered entities. 

 In fact, about 40% of HIPAA breaches involve or are caused by business associates. With a new administration that’s likely to favor regulatory action, we expect to see regulatory authorities continue to enforce actions against covered entities whose business associates or service providers experience breaches. 

So what does this mean for the industry?  We expect to see covered entities taking a much closer look at who they are working with—and whether those parties have robust security and privacy protocols. For this reason, business associates may need to prepare accordingly. Whether you are a covered entity or a business associate, now is the time to dust off vendor due diligence and monitoring policies and procedures. It’s also a good idea to take a closer look at those service agreements and business associate agreements to make sure your service providers are making the right security commitments—and assuming responsibility—when there’s a breach.

Watch Allie’s video prediction here.


Global Data Privacy – Jordan L. Fischer, Esq. CIPP/US, CIPP/E, CIPM

My first prediction for the global data privacy space in 2021 is the creation and evolution of additional data privacy regulations across the globe. The so-called “GDPR Effect” has been pushing data privacy trends across the globe, and we expect to this to continue as more regions and countries adopt legislation mimicking parts of the GDPR, putting their own unique twist on data privacy, or modernizing their existing data privacy regulations to make them more compatible with the GDPR and other global privacy regimes.

My second prediction is a major emphasis on cross-border data transfers. The 2020 Schrems II decision invalidated the EU-US Privacy Shield for sending data from Europe to the United States. This decision was focused on data transfers between the United States and the European Union, but it also highlights a challenge we are continuing to see in international law – while these privacy regulations see borders, the digital realm does not.  Thus, it is increasingly hard to segment data and maintain it within a specific region. This year, I anticipate a lot of tension between regions that approach privacy and security from various perspectives that don’t always align. This presents a challenge for businesses to continue to operate efficiently while minimizing risk and dealing with multiple global privacy and security regulations.

Regardless of the specific trends we expect to see this year, one thing is certain – the global data privacy landscape will continue to change rapidly, creating a fascinating environment for data privacy and security lawyers to practice in.  I am very excited to be a part of such a dynamic team that will continue to provide services to our clients in this space.

Watch Jordan’s video prediction here.


Key Takeaways

Today, as well as every other day of the year, we hope you take some time to reflect on data privacy and security and the ways you can better protect your personal or business’ private information. The Beckage team is passionate about to educating the masses on the importance of data security, the consumer privacy rights and the impact on businesses, and the steps you can take safeguard your information. We are committed to providing updates on relevant legislation, current threats, and proactive data security steps. Be sure to follow us on LinkedIn, read our blog, and subscribe to our newsletter to stay up to date on the latest in this ever-changing space. Happy Data Privacy Day!

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Health DataOCR Continues its Focus on Patient Access Rights

OCR Continues its Focus on Patient Access Rights

The Beckage Health Law team continues to monitor OCR developments that relate to patient access rights.  In 2020, it became clear that patient right of access to records is a significant priority of the Office of Civil Rights (OCR), under the Department of Health and Human Services (HHS).  Just last month OCR reported on a settlement, audit results, and proposed rules, all focused on patient access to records. 

For example, on December 22nd, OCR announced the settlement of its 13th investigation focused on health records access.  The investigation followed a patient complaint to the OCR after the patient was unable to obtain records from his primary care provider on two separate occasions in 2019.  Emphasizing the importance of workforce training and documentation, the OCR issued a $36,000 fine and required the provider to update its Designated Record Set Policy as part of the Corrective Action Plan. 

In December, we also saw the release of an audit report on health industry compliance for audits conducted during 2016-2017.  The December 17, 2020 report reveals findings for audits of randomly selected entities and business associates.  Of note, most organizations failed to include appropriate content in plain language in their Notice of Privacy Practices, and often missing content related to individual rights.  Moreover, the report notes that many entities did not have appropriate policies, procedures, and documentation to demonstrate compliance with rules about how to respond to requests for records.

Finally, as described more fully in Beckage’s recent blog posted about HHS proposed rules OCR proposed amending the HIPAA Rule, including amendments to expand patients’ rights to access records, increase transparency about these rights, and shorten providers’ time to respond to records. 

These three developments reaffirm OCR’s strong commitment to enforce the patient access rules, which we expect will continue in 2021. 

Beckage health law attorneys work with hospitals, health care providers and business associates to develop a compliance program tailored to mitigate risk.  Our team has significant experience in OCR enforcement matters and investigations.  We recommend that clients prioritize a review of their Notice of Privacy Practices and as well as patient access policies to help mitigate risk.  Reach out to our Beckage Health Law team for assistance analyzing these and other regulatory and legislative matters. 

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2020Looking Back on 2020’s Top Privacy and Cybersecurity Trends

Looking Back on 2020’s Top Privacy and Cybersecurity Trends

As 2020 comes to a close, Beckage looks back on the ways this difficult and unprecedented year impacted the data privacy and cybersecurity landscape both domestically and across the globe.

Enhanced Privacy Challenges and Concerns Due to Covid-19

In response to the COVID-19 pandemic, businesses around the globe made a major pivot to online or virtual operations early this year. An intentional focus on data protection and a solid understanding of the regulatory landscape is a legal requirement that demands the integration of data protection up front in any network design or business practice. The increase in exposure of company assets made it necessary to implement a variety of technical safeguards. Companies still had to meet the compliance milestones of the NY SHIELD Act and California’s Consumer Protection Act (CCPA) while dealing with new privacy challenges caused by a distributed workforce and a global health pandemic. Beckage reminds organizations of the importance of revisiting their readiness through business continuity, incident response, and more expansive administrative, technical, and physical safeguards when shifting to a work-from-home model and recommends continued assessment of your company’s privacy pitfalls in this ever-shifting legal landscape.

Increased Ransomware and Cyberattacks

With rapid changes in organizational operations caused by the COVID-19 pandemic, attackers became more sophisticated in their strategies and unleashed several unrelenting, simultaneous attacks on service providers and the organizations they serve in 2020. Victims of recent cyber attacks, such as the SolarWinds campaign carried out in December, include government agencies, healthcare providers, consulting agencies, and , technology, telecom, and oil and gas companies. In many of these campaigns, attackers were able to gain access and move freely throughout an organization’s server, installing additional software, creating new accounts, and accessing sensitive data and valuable resources while remaining largely undetected. In response to the uptick in data incidents this year, the Beckage Incident Response Team recommends organizations implement several preventative steps to safeguard their organization to help minimize legal risk.

Patient Access Rights and Interoperability

Recent developments in 2020 concerning patients’ right to access health information to implement interoperability and record access requirements intend to help patients obtain access to health records and payment data to make informed decisions about their healthcare. The CMS Proposed Rule and the OCR Proposed Rule represent a complete overhaul of well-established standards and an introduction of new and highly technical requirements with healthcare compliance. The experienced Health Law Team at Beckage can help to distill these lengthy and complicated rules so organizations can understand practical implications on daily operations.

Increased International Focus on Consumer Privacy

On the heels of EU’s General Data Protection Regulation (GDPR), many countries followed suit by establishing legal frameworks for governing how organizations collect, use, and store their citizens’ personal data. One example is Brazil’s Lei Geral de Proteção de Dados (LGPD), which went into effect in August of 2020. This general data protection law, which closely mimics the GDPR, places strict requirements on organizations that process Brazilian citizen’s personal data.

At the same time, Europe continued to elevate its enforcement of the GDPR, with major decisions from various member state Data Protection Authorities, the European Court of Justice (ECJ), and the European Data Protection Board (EDBP). The most impactful for businesses across the globe was the ECJ’s decision in Schrems II, which invalidated the EU-US Privacy Shield and called into question the long-term viability of the Standard Contractual Clauses (SCCs) to transfer data from the EU to the US. In 2021, companies should closely monitor the evolving guidance on international data transfers and be prepared to mitigate risk of global data transfers.

Beckage’s Global Data Privacy Team expects continued adoption of data protection regulations across many regions, and an emphasis on creating global security and privacy compliance programs in the year ahead.

Uptick in ADA Litigation

This past year, the Beckage Accessibility Team has witnessed a drastic increase in litigation under Title III of the Americans with Disabilities Act. On average, about eight new lawsuits are filed a day by disabled individuals alleging unequal access to goods and services provided on a company’s digital platforms. While the Department of Justice (DOJ) has consistently held that the ADA applies to websites and mobile apps, they have failed to clarify the precise requirements for a business to be deemed compliant. This has prompted a wave of litigation by plaintiffs’ who claim a website or mobile app’s incompatibility with assistive technology, like screen-reading software, has denied them full access to and equal enjoyment of the goods, services, and accommodations of the website, therefore violating the ADA. Most of these lawsuits are settled quickly out of court to avoid litigating in such uncertain legal terrain.

Beckage handles the defense of website accessibility lawsuits as well as assists companies in navigate pre and post-suit settlement agreements for this unique area of the law.  Beckage also works with clients under privilege to conduct internal and remedial audits of client websites and mobile applications, evaluate platform compatibility and oversee implementation of recommended remedial or accessibility-enhancement measures.

California Consumer Protection Act (CCPA)  

Enforcement of California’s comprehensive California Consumer Privacy Act (CCPA) began on July 1, 2020 and has brought a range of plaintiff related lawsuits under its private right of action provision expanding California breach laws. For a data breach to be actionable, the information accessed must be identified as personal information, as narrowly defined by California’s data breach notification law. Recently, in November 2020, the Consumer Right To Privacy Act (CRPA) ballot initiative was passed, creating additional privacy rights and obligations pertaining to sensitive personal information that will go into effect. CPRA also expands data breach liability created by the CCPA, adds a private right of action for unauthorized access that permits access to an account if the business failed to maintain reasonable security, and imposes data protection obligations directly on service providers, contractors, and third parties. Beckage urges businesses who operate in or serve California citizens to continue to follow CCPA developments and carefully monitor related litigation in the coming months.

Emerging Technologies

The recent expansion of the Illinois Biometric Information Privacy Act (BIPA) has resulted in numerous class actions suits against organizations alleged to have collected plaintiffs’ biometric data. With the expanding use of biometric equipment, these claims often allege defendants obtained plaintiffs’ biometric data without complying with the BIPA’s notification and consent requirements. Upcoming class suits may address the issue of BIPA having an extraterritorial effect when bringing claims against out of state vendors.

Similarly, computers that manipulate the media, known as deep fakes, advance the dangers of influenced perceptions. The advancements of deep fakes are giving rise to laws regarding defamation, trade libel, false light, violation of right of publicity, or intentional infliction of emotional distress. Sophisticated tech lawyers can assist in determining rights and technological solutions to mitigate harm. As former tech business owners, Beckage lawyers want to drive innovation with use of these new and emerging technologies while understanding standards and laws that may impact such development. Beckage recommends that companies proactively mitigate the risks associated with collecting biometric information and deep fakes to prevent legal repercussions and defamation. 

Key Takeaways

2020 proved to be an unpredictable year in more ways than one. The COVID-19 pandemic forced companies to rapidly adapt to new privacy and data security challenges caused by a distributed workforce, emerging technologies, and an increased focus on ecommerce with in-person shopping and events. As we move towards 2021 with no definitive end to the pandemic in sight, it is crucial for companies to prioritize data privacy and cybersecurity initiatives by consulting qualified legal tech experts who can help navigate the uncertainty next year will bring. Beckage attorneys can assist in creating, implementing, and evaluating robust data security and privacy infrastructures that will help put your business in a position to tackle all the challenges 2021 has in store.

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Health LawHHS Proposed Rules Could Have Significant Impact on Health Plans and Health Care Providers

HHS Proposed Rules Could Have Significant Impact on Health Plans and Health Care Providers

Beckage’s Health Law Team is monitoring recent developments concerning patient’s right to access health information. Last week, two agencies within the Department of Health and Human Services (“HHS”) announced proposed rules that could have a significant impact on health plans and health care providers. Though applicability of the proposed rules varies, both rules focus on individuals’ right to access health information, a compliance area that has seen increased scrutiny and enforcement actions in recent years.

OCR Proposed Rule

On December 10th, the HHS Office of Civil Rights (“OCR”) announced proposed changes to the Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule as part of a new proposed rule (“OCR Proposed Rule”). The OCR Proposed Rule is intended to reduce barriers for patients accessing medical records themselves and for covered entities using records related to care coordination and case management. While the OCR Proposed Rule eases some requirements for covered entities, it also creates a number of new requirements.

Key takeaways include:

  • Patient Access Requests: While covered entities currently have 30 days to respond to patient requests for access to their own health information, the OCR Proposed Rule would shorten this timeframe to 15 days (though it would allow an additional 15-day extension). Additionally, the OCR Proposed Rule would allow patients who are inspecting their records in person to capture images and take notes.
  • Fee Schedules and Notice of Privacy Practices: The OCR Proposed Rule would require covered entities to post their fee schedules for producing health records on their websites. In addition, covered entities would need to modify their Notice of Privacy Practices (“NPP”) to clarify patient rights, including prominent presentation of information about how patients can file HIPAA complaints and clarification that patients may direct release of their detailed records even when only a summary of records is made available to the patient. However, covered entities would no longer need to obtain patient acknowledgement of receipt of the NPP.
  • Use and Disclosure of Protected Health Information: The OCR Proposed Rule also broadens the scope of when and how covered entities can use and disclose protected health information, for the purpose of health care operations, with use and disclosure now permitted for case management and care coordination. Furthermore, there are additional provisions for sharing patient health information among covered entities, including among Armed Services care providers. CMS also updated references to reflect widespread use of electronic health records (EHR).

CMS Proposed Rule

Also on December 10th, the Centers for Medicare & Medicaid Services (“CMS”) announced proposed changes to the CMS Interoperability and Patient Access Final Rule (“Interoperability Rule”) issued earlier this year as part of a new proposed rule (“CMS Proposed Rule”). Visit Beckage’s previous blog on the Interoperability Rule here.

Key takeaways include:

  • Payer Requirements: The CMS Proposed Rule requires payers to provide patients with access to information about pending and active prior authorization decisions through their Patient Access API, which payers are required to implement under the Interoperability Rule. The CMS Proposed Rule also clarifies that payers can and must implement an attestation process for third-party apps to attest to security and privacy safeguards prior to accessing the payer’s Patient Access API on behalf of the member. Additionally, it specifies technical requirements for the Payer-to-Payer API, which must now be implemented using Fast Healthcare Interoperability Resources (“FHIR”) standards.
  • Provider Requirements: The CMS Proposed Rule requires providers to develop a Provider Access API for providers and payers to share claims and encounter data, certain types of clinical data, and pending and active prior authorization decisions.

Though the proposed rules will likely change during the 60-day public comment period, they underscore HHS’s commitment to individuals’ right to access health information. We encourage covered entities to review the proposed rules carefully to understand how the changes will potentially impact daily operations and procedures.

The experienced Health Law team at Beckage can help to distill these lengthy and complicated rules so organizations can understand practical implications on daily operations. Our seasoned health law attorneys are uniquely positioned to advise on regulatory compliance matters, as they have also worked in health care settings, are certified privacy professionals, and are technologists.

Call Beckage at 716.898.2102 for assistance analyzing these and other regulatory and legislative matters.

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