New Hampshire Security Incident Demonstrates Importance of Documenting Any Decision to Forego Security Breach Notification

The New Hampshire Attorney General and the federal Center for Medicare and Medicaid Services are investigating Wentworth-Douglass Hospital’s decision not to notify patients or the Attorney General of a security incident that occurred more than two years ago. The security incident, which lasted from May 2006 until July 2007, involved a former hospital employee who became disgruntled after being transferred from the pathology lab. The former employee gained unauthorized access to pathology reports on nearly 2,000 occasions and changed reports involving more than 1,100 patients. The hospital investigated the incident and determined that neither New Hampshire’s notice law nor HIPAA required notification.

The matter might have ended there but for the hospital’s termination of its contract with the pathology group that worked in the lab. The pathologists allege that the contract termination constituted retaliation for their pushing the hospital to disclose the incident. It appears that after the contract termination, the pathologists reported the incident to government officials.

While we do not question the motives of the New Hampshire pathologists, this incident demonstrates the importance for employers of documenting any decision not to provide security breach notification when a security incident occurs. Under many state security breach notification laws as well as HIPAA’s new security breach notification requirements, notice is required only if a security incident poses a material risk of harm to the individuals whose information has been compromised. Whether a material risk of harm exists often is a judgment call.

An employee who is aware of a security incident and a related decision not to provide notice could easily second guess that decision after being disciplined or terminated. As in the New Hampshire incident, a complaint about a decision not to notify could trigger an investigation by federal or state authorities months or years after the incident occurred. Without contemporaneous and thorough documentation of the decision-making process, an employer could have difficulty responding to an investigator’s demands for an explanation of the decision not to notify affected individuals or, where required, state or federal agencies.

This entry was written by Philip L. Gordon

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.