Identity Theft News

CVS to pay $2.25 million for HIPAA violation

Thursday, February 19, 2009

CVS Caremark has been ordered to pay $2.25 million to settle federal charges that its employees threw out sensitive patient information in the trash.

According to the FTC, the nation's largest pharmacy chain lacked proper security procedures for discarding patient data when pharmacy workers threw out pill bottles, medication instruction sheets and computerized order information in 2006.

The personal information of patients was protected under the Health Insurance Portability and Accountability Act (HIPAA).

"This is a case that will restore appropriate privacy protections to tens of millions of people across the country. It also sends a strong message to other organizations that possess consumers' protected personal information. They are required to secure consumers' private information," said William E. Kovacic, chairman of the FTC.

CVS has denied any wrongdoing, but decided to settle to avoid costly litigation fees, SCMagazineus.com reports.

In addition to the payment, CVS's more than 6,300 retail pharmacies must establish procedures for disposing of protected health information, implement a training program, conduct internal monitoring and hire an outside assessor to evaluate compliance for three years, according to the FTC.