The Office for Civil Rights (OCR) has announced that the University of Massachusetts Amherst (UMass) has agreed to settle an investigation against it as a result of a malware infection for $650,000, along with implementing a Corrective Action Plan. Although $650,000 is a hefty sum for the allegations, the OCR in its announcement said it is “reflective of the fact that the University operated at a financial loss in 2015.”

The settlement is the result of a self-reported breach on June 18, 2013 when UMass reported that a workstation in the Center for Language, Speech and Hearing became infected with malware that compromised the names, addresses, Social Security numbers, dates of birth, health insurance information, diagnoses, and procedure codes. The compromise occurred because there was no firewall in place.

The allegations against UMass include the fact that it did not properly designate its different health care components as hybrid entities and implement policies and procedures for those hybrid entities.

This is the first enforcement action to address the designation of a hybrid entity and it is important guidance to hybrid entities that if they designate certain parts of the organization as a covered entity or a business associate, that those parts of the organization are required to have HIPAA compliance policies and procedures in place and to follow HIPAA, but the rest of the organization is not required to do so.

Organization that include health care entities (like a clinic) or perform business associate functions (like billing) may wish to review whether designation as a hybrid entity is appropriate. Colleges and Universities are an obvious choice, as seen by this enforcement action.