Solara Medical Supplies to pay $3M to settle cyber violations

WASHINGTON – The U.S. Department of Health and Human Services, Office for Civil Rights, has announced a $3 million settlement with Solara Medical Supplies concerning potential violations of HIPAA Security and Breach Notification rules caused by a phishing incident.   

In November 2019, OCR received a breach report concerning a phishing attack in which an unauthorized third party gained access to the email accounts of eight Solara employees between April and June 2019, resulting in the breach of the ePHI of 114,007 individuals. In January 2020, OCR received notification of a second breach by the company related to 1,531 notification letters sent to the wrong mailing addresses.  

OCR’s investigation determined that Solara failed to conduct a compliant risk analysis to identify the potential risks and vulnerabilities to ePHI in Solara's systems; failed to implement security measures sufficient to reduce the risks and vulnerabilities to ePHI to a reasonable and appropriate level; and failed to provide timely breach notification to individuals, HHS and the media.  

“Cyberattacks have skyrocketed exponentially in recent years,” said OCR Director Melanie Fontes Rainer. “Effective cybersecurity requires identifying potential risks and vulnerabilities to health information and implementing effective security measures to protect against them. Health care entities that fail to address identified cybersecurity issues leave themselves vulnerable to cyberattacks. OCR urges health care entities to prioritize securing their information systems and take all necessary steps to reduce and prevent cyberattacks and safeguard protected health information.”  

Under the terms of the settlement, Solara agreed to implement a corrective action plan that will be monitored by OCR for two years and pay $3 million to OCR. Under the corrective action plan, Solara will be required to take definitive steps to resolve potential violations of the HIPAA Security and Breach Notification Rules, including:  

• Conducting an accurate and thorough risk analysis to determine the potential risks and vulnerabilities to the ePHI in its systems;  

• Implementing a written risk management plan to address and mitigate security risks and vulnerabilities identified in the risk analysis;  

• Developing, maintaining, and revising, as necessary, its written policies and procedures to comply with the HIPAA Rules; and  

• Training its workforce on its HIPAA policies and procedures.  

The resolution agreement and corrective action plan may be found at https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/solara-ra-cap/index.html