As we pore through the 562-page HITECH Omnibus Rule released by the Department of Health and Services late Thursday afternoon, here are some top line bullet points:

• Effective Date:  Rule becomes effective on March 26, 2013.  Covered entities and business associates must comply by September 23, 2013.
• Business Associates are now front and center – During its announcement yesterday, Leon Rodriguez, director of the HHS Office for Civil Rights (OCR) clearly pointed out that “some of the largest breaches” reported to the agency have involved business associates.    The Omnibus Rule applies all of the HIPAA Security Rule standards and implementation specifications and certain HIPAA Privacy Rule provisions directly to business associates and it adds “subcontractors” to the definition of “business associate” and requires business associates to enter into written contracts with subcontractors that are substantially similar to business associate agreements.   Although there is a bit of a runway before effectiveness of the provisions, there is no time to waste for companies to determine (a) whether they are indeed “business associates” under this new, expanded view (may be some surprises), and (b) if you are a BA, how far down your technology “stack” you may have to go under the Omnibus Rule to determine who are your “subcontractors.”   Also, this is a good time for covered entities to get busy to determine and catalog exactly who is a “business associate” for their purposes.   Risk assessments and gap analyses always take more time than estimated.   OCR’s comments yesterday are consistent with its view that business associate compliance with HITECH is poor, resulting in breaches and other security incidents jeopardizing patient privacy.  During the public comment period, entities filed comments requesting additional time and assistance for business associates and subcontractors.  In response, OCR provided a link to pre-existing compliance guidance.
• Breach Notification:  Omnibus Rule replaces the current version of the HIPAA Breach Notification Rule with a new version stating that an acquisition, access, use, or disclosure of PHI not permitted under the Privacy Rule is presumed to be a breach unless a covered entity or business associate can demonstrate a low probability that the PHI has been compromised based on a four-factor risk assessment.
• Enforcement:  The Omnibus Rule incorporates the increased and tiered civil money penalty structure provided by the HITECH Act with penalties based on the level of negligence with a maximum penalty of $1.5 million per violation.

Director Rodriguez was clear in his statement yesterday:  ”This final omnibus rule marks the most sweeping changes to the HIPAA Privacy and Security Rules since they were first implemented.  These changes not only greatly enhance a patient’s privacy rights and protections, but also strengthen the ability of my office to vigorously enforce the HIPAA privacy and security protections, regardless of whether the information is being held by a health plan, a health care provider, or one of their business associates.”

More to come in the days and weeks ahead.