Tag Archives: health systems

2012 Privacy and Security Year in Review

In 2012, there has been a continuation of the trend toward heightened regulation and enforcement of the privacy and security requirements under the Health Information Portability and Accountability Act (“HIPAA”) and under other state and federal health privacy laws. Although there have not been any significant changes to federal health privacy laws this year, federal enforcement activity continues to be strong.

Recent actions taken by the Department of Health and Human Services (“HHS”) suggest that HHS’s approach to regulating health information privacy and security is continuing to shift in the direction of enforcement as another way to send a message about the importance of voluntary compliance. In 2012, HHS’s Office of Civil Rights (“OCR”) entered into a number of highly publicized settlements with HIPAA covered entities (“Covered Entities”) stemming from alleged violations of HIPAA. Also this past year, OCR launched a new HIPAA audit and compliance program (“Audit Program”), which it initially intends to use for information-gathering and compliance improvement purposes. In addition, HHS continues to promote better privacy and security practices, most recently by incorporating certain privacy standards relating to medical records access into its electronic health records (“EHRs”) incentive program’s eligibility requirements.

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The Road to a Successful Transaction: Paved With Your Priorities

While I may be stating the obvious, hospitals and health systems are complex creatures that frequently drive local economies, culture and population health status (among other things).  Accordingly, when considering a potential change of control transaction, it is critical that you examine what drives your organization and what [in the community] your organization drives.  In particular, the latter is frequently overlooked in these circumstances.

What Drives Your Organization (Your Mission)

So, how do you begin to identify your organization’s priorities?  I recommend starting with the low hanging fruit—the hospital’s mission.  It is critical in the early stages of a potential transaction to consider your organization’s mission, how that mission relates to your current operations and if that mission is capable of evolving.  For instance, if your hospital’s focus for the last 50 years has related to teaching and research, then partnering with an organization that will continue to enhance and invest in these pursuits may be a key priority.  Likewise, if charity care and serving the indigent population has been the hospital’s mission historically, you will want to ensure charity care is high on your list and considered when your board evaluates a potential transaction partner.  These are the points on which you will be less likely to compromise as the deal progresses.

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