The U.S. Department of Health and Human Services Office for Civil Rights (OCR) recently announced a $100,000 settlement with a company that is no longer in business. Filefax, Inc. (Filefax) was an Illinois company that provided storage and delivery services for medical records held by covered entities. OCR had been investigating Filefax since 2015 for allegedly leaving medical records containing PHI of approximately 2,150 patients in an unlocked vehicle in a Filefax parking lot and/or allowing an unauthorized person to remove the files from the facility.
A court-ordered receiver liquidated Filefax’s assets in 2016. As part of the settlement with OCR, the receiver agreed to pay $100,000 and properly dispose of all medical records and PHI remaining in Filefax’s possession. The settlement amount may be small, but the circumstances are striking. OCR’s pursuit of a settlement against a defunct company serves as a lesson to other health care companies that no one is off limits to HIPAA enforcement actions.
OCR’s press release about the settlement is available here.