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HOUSE CONCURRENT RESOLUTION
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WHEREAS, On June 11, 2015, the Department of Aging and |
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Disability Services ("DADS"), a "covered entity" under Privacy, |
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Security, and Breach Notification Rules ("HIPAA Rules"), filed a |
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breach notification report with the United States Department of |
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Health and Human Services, Office for Civil Rights ("OCR") stating |
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that an impermissible disclosure of unsecured electronic protected |
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health information (ePHI) in violation of HIPAA Rules had occurred |
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when a DADS web application was accessible to unauthorized parties; |
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and |
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WHEREAS, On July 23, 2015, OCR notified DADS of its |
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investigation of DADS compliance with the HIPAA Rules and |
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determined that: |
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a. DADS failed to conduct an accurate and thorough |
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assessment of the potential risks and vulnerabilities to the |
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confidentiality, integrity, and availability of ePHI held by the |
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covered entity. (See 45 C.F.R. Section 164.308(a)(1)(ii)(A)) |
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b. DADS failed to implement appropriate technical |
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policies and procedures for electronic information systems that |
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maintain electronic protected health information to allow access |
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only to those persons or software programs that have been granted |
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access rights as specified in 45 C.F.R. Section 164.308(a)(4). |
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(See 45 C.F.R. Section 164.312(a)(1)) |
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c. DADS failed to implement appropriate hardware, |
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software, and/or procedural mechanisms that record and examine |
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activity in information systems that contained or used ePHI. (See |
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45 C.F.R. Section 164.312(b)) |
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d. As a result of its failure to appropriately |
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safeguard the ePHI in a web-based application, DADS impermissibly |
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disclosed the ePHI of up to 6,617 individuals. (See 45 |
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C.F.R. Section 164.502(a)); and |
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WHEREAS, OCR presented the State of Texas a Resolution |
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Agreement with Corrective Action Plan (the "Settlement Agreement") |
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in lieu of civil monetary penalties and to provide DADS an |
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opportunity to correct DADS's failures to safeguard ePHI; and |
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WHEREAS, The State of Texas has presented a counter-proposal |
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to the Settlement Agreement to OCR that applies to those covered |
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functions and information resources involved in the breach that |
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were formerly operated by DADS but that have been transferred to the |
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Health and Human Services Commission ("TX HHS"); and |
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WHEREAS, The proposed Settlement Agreement comprises the |
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following terms and conditions: |
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Payment. TX HHS agrees to pay OCR the amount of |
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$1,600,000.00 ("Resolution Amount" or "RA"). |
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Corrective Action Plan. TX HHS has entered into and |
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agrees to comply with a Corrective Action Plan ("CAP"). If TX HHS |
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breaches the CAP, and fails to cure the breach as set forth in the |
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CAP, then TX HHS will be in breach of the Settlement Agreement and |
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OCR will not be subject to the release set forth in the Settlement |
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Agreement. Compliance with the RA/CAP of the Settlement Agreement |
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by TX HHS is conditioned upon TX HHS obtaining the approval of, and |
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appropriation of funds needed to comply with, the RA/CAP by the |
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Legislature of the State of Texas. (See Texas Civil Practice and |
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Remedies Code Section 111.003(b)). The term of the Corrective |
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Action Plan will be three (3) years from the effective date of the |
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proposed agreement. |
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Release by OCR. In consideration of and conditioned |
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upon performance by TX HHS of its obligations under the proposed |
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Settlement Agreement, OCR releases TX HHS from any actions it may |
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have against TX HHS under the HIPAA Rules arising out of or related |
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to the conduct identified in paragraph 2 of this concurrent |
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resolution. OCR does not release TX HHS from, nor waive any rights, |
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obligations, or causes of action other than those arising out of or |
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related to said conduct and referred to in this paragraph. |
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Agreement by Released Parties. TX HHS shall not |
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contest the validity of its obligation to pay, nor the amount of, |
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the Resolution Amount or any other obligations agreed to under the |
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proposed Settlement Agreement. TX HHS waives all procedural rights |
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granted under Section 1128A of the Social Security Act (42 |
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U.S.C. Section 1320a-7a); and 45 C.F.R. Part 160, Subpart E; and |
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claims collection regulations at 45 C.F.R. Part 30, including, but |
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not limited to, notice, hearing, and appeal with respect to the |
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Resolution Amount; and |
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WHEREAS, Section 111.003(a)(2), Civil Practice and Remedies |
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Code, requires the legislature to approve a settlement of a claim or |
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action against the state if the settlement commits the state to a |
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course of action that in reasonable probability will entail a |
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continuing increased expenditure of state funds over subsequent |
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state fiscal biennia; and |
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WHEREAS, The CAP of the proposed agreement commits the State |
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of Texas to a course of action that in reasonable probability |
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entails a continuing increased expenditure of state funds over |
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subsequent state fiscal biennia; now, therefore, be it |
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RESOLVED, That the 86th Legislature of the State of Texas |
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hereby approve the proposed Settlement Agreement. |