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Stanford Hospital blames contractor for data breach

After patient files $20M lawsuit, health care provider firm says contractor is responsible

By Jaikumar Vijayan, Computerworld
October 06, 2011 07:20 PM ET

Computerworld - Stanford Hospital & Clinics this week blamed a third party billing contractor for a data breach that exposed the personal data of some 20,000 patients.

Stanford release a statement blaming the contractor just a week after it was hit with a $20 million lawsuit related to the breach, which the Palo Alto, Calif. health care provider disclosed in September.

The lawsuit was filed in Los Angeles Superior Court Sept. 28 by one of the affected patients, Shana Springer, who is seeking $1,000 per compromise record, or $20 million.

Stanford last month disclosed that a spreadsheet being handled by a third party billing contractor, Multi Specialties Collection Services (MSCS), was somehow posted on Student of Fortune, a website that lets students solicit homework help for a fee.

The spreadsheet contained names, diagnosis codes, account numbers as well as admission and discharge dates of about 20,000 patients who visited the hospital's Emergency Room in 2009.

In an update to its statement this week, Stanford Hospital claimed that it encrypted the data sent to MSCS, which was to use it for "permissible hospital billing support purposes."

However, the statement contended that MCCS decrypted the data, used it to create a spreadsheet and then illegally gave it to a person not authorized to handle it. That individual then posted the data on a student homework website in an effort to find help in his or her effort to create a bar graph and charts.

The hospital statement does not identify the individual it alleges posted the information on the Web site. It did say that the person claimed to be an executive vice president at MSCS, and the company's primary contact for Stanford.

"SHC has learned that his relationship with MSCS was that of an independent contractor" who was not authorized to access the data, the hospital said.

In a statement, the hospital maintained that it had acted in accordance with all requirements to protect the confidentiality and blamed MSCS for improperly sharing it.

"This mishandling of private patient information was in complete contravention of the law and of the requirements of MSCS's contract with SHC and is shockingly irresponsible," the statement said.

In a statement to the New York Times , the MSCS contractor, identified as Frank Corcino, said he had received the information directly from Stanford, then decrypted it and put it into a spreadsheet. Corcino told the Times he then handed off the spreadsheet to a job applicant as parts of a skills test.

According to the newspaper, Corcino said the applicant was unaware the spreadsheet data was private and posted it on the homework help site in Sept. 2010. The data remained on the site until August 22, 2011, when it was discovered by a patient.

Corcino blames Stanford for sending him unnecessary data and MSCS for not having an appropriate training and audit system for such data, according to the Times story. He also claimed that MSCS allowed him to use the title of executive vice president, the story said.

Originally published on www.computerworld.com. Click here to read the original story.

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