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Clinical Laboratories and Pathology Groups

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American Associated Pharmacies Struck by Ransomware Attack

Clinical laboratories and anatomic pathology groups should consider these cyberattacks on major healthcare entities as reminders that they should tighten their cybersecurity protections

Hackers continue to gain access to public health records—including clinical laboratory testing data—putting thousands of patients’ protected health information (PHI) at risk of being exposed. The latest important healthcare entity to become the victim of a ransomware attack is American Associated Pharmacies (AAP). According to The Register, AAP announced a ransomware operation called Embargo had stolen over 1.4 terabytes (TB) of data, encrypted those files, and demanded $1.3 million to decrypt the data.

Embargo claims that Scottsboro, Ala.-based AAP paid $1.3 million to have its systems restored. They are now demanding an additional $1.3 million to keep the stolen data private, the HIPAA Journal reported, adding, “The attack follows ransomware attacks on Memorial Hospital and Manor, an 80-bed community hospital and 107 long-term care facility in Georgia, and Weiser Memorial Hospital, a critical access hospital in Idaho.”

AAP has not publicly confirmed the ransomware attack, nor has it made an official statement regarding the breach. But it did post an “Important Notice” on its website reporting, “limited ordering capabilities for API Warehouse have been restored at APIRx.com.”

API Warehouse is a subsidiary of AAP that helps subscribers save on brand name and generic prescriptions via wholesale purchasing plans. It oversees more than 2,000 independent pharmacies across the US and has over 2,500 stock keeping units (SKUs) in its inventory.

The message further states “All user passwords associated with both APIRx.com and RxAAP.com have been reset, so existing credentials will no longer be valid to access the sites. Please click ‘forgot password’ on the log in screen and follow the prompts accordingly to reset your password.”

“Embargo seems to have international and multi-sector victims and is not focusing on a specific victim profile. They seem opportunistic,” Mike Hamilton (above), founder and chief information security officer (CISO) of cybersecurity firm Critical Insight, told HealthcareInfoSecurity. “However, as they do have multiple victims in healthcare, and their tooling to disable detection is sophisticated, they should not be discounted. If indeed they operate through affiliates, we can expect others to use their infrastructure and tools, and Embargo may emerge as a top threat to healthcare.” Since 80% of all medical records are made up of clinical laboratory testing data, laboratory patients are particularly vulnerable. (Photo copyright: Critical Insight.)

Embargo on the Hunt for PHI

Due to the large amount of data Embargo stole from the AAP servers, it’s likely the hackers were able to procure medical records and account details from all customers of the pharmacies involved in the attack. 

Researchers at ESET, an internet security company, first noticed the ransomware organization known as Embargo in June of this year. In a news release, ESET stated that Embargo used an endpoint detection and response (EDR) killer toolkit to steal AAP’s data. 

“Based on its modus operandi, Embargo seems to be a well-resourced group. It sets up its own infrastructure to communicate with victims. Moreover, the group pressures victims into paying by using double extortion: the operators exfiltrate victims’ sensitive data and threaten to publish it on a leak site, in addition to encrypting it,” ESET wrote in a news release.

Embargo recently attacked other organizations within the healthcare industry as well. In November, it claimed responsibility for breaching the security of Memorial Hospital and Manor in Bainbridge, Ga. The cyberattack affected Memorial’s email and electronic medical record (EHR) systems, which caused the facility to pivot to a paper-based system, The Cyber Express reported. 

Embargo’s attack on Weiser Memorial Hospital in Weiser, Idaho, involved the theft of approximately 200 gigabytes (GB) of sensitive data and caused a four-week-long outage of its computer systems.  

Other Cyberattacks on Healthcare Organizations

Dark Daily has covered many cyberattacks on hospital health systems in multiple ebriefs over the past few years.

In “Cyberattack Renders Healthcare Providers across Ascension’s Hospital Network Unable to Access Medical Records Endangering Patients,” we summarized how Ascension’s inability to access medical records during the attack caused major disruptions to patient healthcare. It took more than a month for Ascension’s electronic health record system to be fully restored.

In “Change Healthcare Cyberattack Disrupts Pharmacy Order Processing for Healthcare Providers Nationwide,” Dark Daily outlined how a February cyberattack on Change Healthcare caused its parent organization UnitedHealth Group to file a Material Cybersecurity Incidents Report (form 8-K) with the US Securities and Exchange Commission (SEC) in which it stated it had “identified a suspected nation-state associated cybersecurity threat actor [that] had gained access to some of the Change Healthcare information technology systems.”

A few days later the real identity of the threat actor was revealed to be a ransomware group known as BlackCat (aka, ALPHV), according to Reuters.

And in, “Continued Cyberattacks on Hospitals, Clinical Laboratories, and Other Providers Cause Closures as Hackers Grow in Sophistication,” we reported how hospitals of all sizes continue to be prime targets for sophisticated cyberattacks, where hackers remotely disable a healthcare network’s computer systems—including its clinical laboratory information system (LIS)—and extort ransomware payments.

Safeguarding patient data is critical, and more healthcare organizations are discovering the hard way that they are vulnerable to hackers. This situation serves as another reminder to clinical laboratory and pathology group managers that they need to be proactive and serious about protecting their information systems, and in upgrading their digital security at regular intervals.

Hackers are working hard to obtain access to protected health information, which puts patients at continuous risk of having their private records stolen.

—JP Schlingman

Related Information:

Ransomware Fiends Boast They’ve Stolen 1.4TB from US Pharmacy Network

Another Major US Healthcare Organization Has Been Hacked, with Potentially Major Consequences

Gang Shaking Down Pharmacy Group for Second Ransom Payment

US Pharmacy Network Loses 1.4 Terabytes of Data to Boasting Hackers

New Ransomware Group Embargo Uses Toolkit That Disables Security Solutions, ESET Research Discovers

Embargo Ransomware Group Claims Attack on American Associated Pharmacies

American Associated Pharmacies Resets All User Passwords after Ransomware Gang Claims Responsibility for Cyberattack

Ransomware Attack Disrupts Memorial Hospital’s EHR System, Temporarily Slows Operations

Weiser Memorial Hospital Investigating Cyberattack

Hospital Deals with IT Outage for 4 Weeks

Healthcare Cyberattacks at Two Hospitals Prompt Tough Decisions as Their Clinical Laboratories Are Forced to Switch to Paper Documentation

Three Federal Agencies Warn Healthcare Providers of Pending Ransomware Attacks; Clinical Laboratories Advised to Assess Their Cyberdefenses

IT Experts Demonstrate How AI and Computer Microphones Can Be Used to Figure Out Passwords and Break into Customer Accounts

Clinical laboratories and pathology groups should be on the alert to this new digital threat; telehealth sessions and video conferencing calls particularly vulnerable to acoustic AI attacks

Banks may be the first to get hit by a new form of hacking because of all the money they hold in deposit accounts, but experts say healthcare providers—including medical laboratories—are comparably lucrative targets because of the value of patient data. The point of this hacking spear is artificial intelligence (AI) with increased capabilities to penetrate digital defenses.

AI is developing rapidly. Are healthcare organizations keeping up? The hackers sure are. An article from GoBankingRates titled, “How Hackers Are Using AI to Steal Your Bank Account Password,” reveals startling new AI capabilities that could enable bad actors to compromise information technology (IT) security and steal from customers’ accounts.

Though the article covers how the AI could conduct cyberattacks on bank information, similar techniques can be employed to gain access to patients’ protected health information (PHI) and clinical laboratory databases as well, putting all healthcare consumers at risk.

The new AI cyberattack employs an acoustic Side Channel Attack (SCA). An SCA is an attack enabled by leakage of information from a physical computer system. The “acoustic” SCA listens to keystrokes through a computer’s microphone to guess a password with 95% accuracy.

That’s according to a UK study published in IEEE Xplore, a journal of the IEEE European Symposium on Security and Privacy Workshops, titled, “A Practical Deep Learning-Based Acoustic Side Channel Attack on Keyboards.”

“With recent developments in deep learning, the ubiquity of microphones and the rise in online services via personal devices, acoustic side channel attacks present a greater threat to keyboards than ever,” wrote UK study authors Joshua Harrison, MEng, Durham University; Ehsan Toreini, University of Surrey; and Maryam Mehrnezhad, PhD, University of London.

Hackers could be recording keystrokes during video conferencing calls as well, where an accuracy of 93% is achievable, the authors added.

This nefarious technological advance could spell trouble for healthcare security. Using acoustic SCA attacks, busy healthcare facilities, clinical laboratories, and telehealth appointments could all be potentially compromised.

“The ubiquity of keyboard acoustic emanations makes them not only a readily available attack vector, but also prompts victims to underestimate (and therefore not try to hide) their output,” wrote Joshua Harrison, MEng (above), and his team in their IEEE Xplore paper. “For example, when typing a password, people will regularly hide their screen but will do little to obfuscate their keyboard’s sound.” Since computer keyboards and microphones in healthcare settings like hospitals and clinical laboratories are completely ubiquitous, the risk that this AI technology will be used to invade and steal patients’ protected health information is high. (Photo copyright: CNBC.)

Why Do Hackers Target Healthcare?

Ransomware attacks in healthcare are costly and dangerous. According to InstaMed, a healthcare payments and billing company owned by J.P. Morgan, healthcare data breaches increased to 29.5% in 2021 costing over $9 million. And beyond the financial implications, these attacks put sensitive patient data at risk.

Healthcare can be seen as one of the most desirable markets for hackers seeking sensitive information. As InstaMed points out, credit card hacks are usually quickly figured out and stopped. However, “medical records can contain multiple pieces of personally identifiable information. Additionally, breaches that expose this type of data typically take longer to uncover and are harder for an organization to determine in magnitude.”

With AI advancing at such a high rate, healthcare organizations may be unable to adapt older network systems quickly—leaving them vulnerable.

“Legacy devices have been an issue for a while now,” Alexandra Murdoch, medical data analyst at GlobalData PLC, told Medical Device Network, “Usually big medical devices, such as imaging equipment or MRI machines are really expensive and so hospitals do not replace them often. So as a result, we have in the network these old devices that can’t really be updated, and because they can’t be updated, they can’t be protected.”

Vulnerabilities of Telehealth

In “Penn Medicine Study Shows Telemedicine Can Cut Employer Healthcare Costs by 25%,” Dark Daily reported a study conducted by the Perelman School of Medicine at the University of Pennsylvania (Penn Medicine) which suggested there could be significant financial advantages for hospitals that conduct telehealth visits. This, we projected, would be a boon to clinical laboratories that perform medical testing for telemedicine providers.

But telehealth, according to the UK researchers, may also be one way hackers get past safeguards and into critical hospital systems.

“When trained on keystrokes recorded using the video-conferencing software Zoom, an accuracy of 93% was achieved, a new best for the medium. Our results prove the practicality of these side channel attacks via off-the-shelf equipment and algorithms,” the UK researchers wrote in IEEE Xplore.

“[AI] has worrying implications for the medical industry, as more and more appointments go virtual, the implications of deepfakes is a bit concerning if you only interact with a doctor over a Teams or a Zoom call,” David Higgins, Senior Director at information security company CyberArk, told Medical Device Network.

Higgins elaborated on why healthcare is a highly targeted industry for hackers.

“For a credit card record, you are looking at a cost of one to two dollars, but for a medical record, you are talking much more information because the gain for the purposes of social engineering becomes very lucrative. It’s so much easier to launch a ransomware attack, you don’t even need to be a coder, you can just buy ransomware off of the dark web and use it.”

Steps Healthcare Organizations Should Take to Prevent Cyberattacks

Hackers will do whatever they can to get their hands on medical records because stealing them is so lucrative. And this may only be the beginning, Higgins noted.

“I don’t think we are going to see a slowdown in attacks. What we are starting to see is that techniques to make that initial intrusion are becoming more sophisticated and more targeted,” he told Medical Device Network. “Now with things like AI coming into the mix, it’s going to become much harder for the day-to-day individual to spot a malicious email. Generative AI is going to fuel more of that ransomware and sadly it’s going to make it easier for more people to get past that first intrusion stage.”

To combat these attacks patient data needs to be encrypted, devices updated, and medical staff well-trained to spot cyberattacks before they get out of hand. These SCA attacks on bank accounts could be easily transferable to attacks on healthcare organizations’ patient records.

Clinical laboratories, anatomic pathology groups, and other healthcare facilities would be wise to invest in cybersecurity, training for workers, and updated technology. The hackers are going to stay on top of the technology, healthcare leaders need to be one step ahead of them.

—Ashley Croce

Related Information:

How Hackers Are Using AI to Steal Your Bank Account Password

A Practical Deep Learning-Based Acoustic Side Channel Attack on Keyboards

AI Can Steal Passwords with 95% Accuracy by ‘Listening’ to Keystrokes, Alarming Study Finds

New ‘Deep Learning Attack’ Deciphers Laptop Keystrokes with 95% Accuracy

Can A.I. Steal Your Password? Study Finds 95% Accuracy by Listening to Keyboard Typing

Ransomware in Healthcare: What You Need to Know

Hospital 2040: How Healthcare Cybercrime is Predicted to Escalate

30 Crucial Cybersecurity Statistics (2023): Data, Trends and More

Penn Medicine Study Shows Telemedicine Can Cut Employer Healthcare Costs by 25%

Data Theft at 23andMe Leaks Genetic and Personal Information for Thousands, Targets Ashkenazi Jews and Chinese

Federal class action lawsuit looms as genetics company searches for what went wrong; a reminder to clinical laboratories of the importance of protecting patient information

Several years ago, security experts warned that biotechnology and genomics company 23andMe, along with other similar genetics companies, would be attacked by hackers. Now those predictions appear to have come true, and it should be a cautionary tale for clinical laboratories. In an October 6 blog post, the genetic testing company confirmed that private information from thousands of its customers was exposed and may be being sold on the dark web.

According to Wired, “At least a million data points from 23andMe accounts appear to have been exposed on BreachForums.” BreachForums is an online forum where users can discuss internet hacking, cyberattacks, and database leaks, among other topics.

“Hackers posted an initial data sample on the platform BreachForums earlier this week, claiming that it contained one million data points exclusively about Ashkenazi Jews,” Wired reported, adding that “hundreds of thousands of users of Chinese descent” also appear to be impacted.

The leaked information included full names, dates of birth, sex, locations, photos, and both genetic and ancestry results, Bleeping Computer reported.

For its part, 23andMe acknowledges the data theft but claims “it does not see evidence that its systems have been breached,” according to Wired.

Anne Wojcicki

Anne Wojcicki (above) is the co-founder and CEO of genetics company 23andMe, which on October 24 told its customers in an email, “There was unauthorized access to one or more 23andMe accounts that were connected to you through DNA Relatives. As a result, the DNA Relatives profile information you provided in this feature was exposed to the threat actor.” Clinical laboratories must work to ensure their patient data is fully secured from similar cyber theft. (Photo copyright: TechCrunch.)

23andMe Claims Data Leak Not a Security Incident

The data leaked has been confirmed by 23andMe to be legitimate. “Threat actors used exposed credentials from other breaches [of other company’s security] to access 23andMe accounts and steal the sensitive data. Certain 23andMe customer profile information was compiled through access to individual 23andMe.com accounts,” a 23andMe spokesperson told Bleeping Computer.

However, according to the company, the leak does not appear to be a data security incident within the 23andMe systems. “The preliminary results of this investigation suggest that the login credentials used in these access attempts may have been gathered by a threat actor from data leaked during incidents involving other online platforms where users have recycled login credentials,” the spokesperson added.

What the genetics company has determined is that compromised accounts were from users choosing the DNA Relative feature on their website as a means to find and connect to individuals related to them. Additionally, “the number of accounts sold by the cybercriminal does not reflect the number of 23andMe accounts breached using exposed credentials,” Bleeping Computer noted.

Price of Private Information

Following the 23andMe data leak, the private genetic information was quickly available online … for a price.

“On October 4, the threat actor offered to sell data profiles in bulk for $1-$10 per 23andMe account, depending on how many were purchased,” Bleeping Computer reported.

Stolen medical records are becoming hotter than credit card information, the experts say. “Stolen records sell for as much as $1,000 each,” according to credit rating agency Experian, Bleeping Computer noted.

In its 2018 Global Security Report, “cybersecurity firm Trustwave pegged the black-market value of medical records at $250 each. Credit card numbers, on the other hand, sell for around $5 each on the dark web … while Social Security numbers can be purchased for as little as $1 each,” Fierce Healthcare reported.

Clinical laboratory managers and pathologists should take note of the value that the dark web places on the medical records of a patient, compared to the credit card numbers of the same individual. From this perspective, hacking a medical laboratory to steal patient health data can be much more lucrative than hacking the credit card data from a retailer.

Inevitable Federal Lawsuit

Regardless of what security measures the 23andMe site boasts, the breach quickly brought a proposed federal class action suit filed on October 9 in the US District Court for the Northern District of California. The suit, “filed by plaintiffs repressing all persons who had personal data exposed,” claims that information from Mark Zuckerberg, Elon Musk, and Sergey Brin were among the leak, Bloomberg Law reported.

“Victims of the breach are now at increased risk of fraud and identity theft, and have suffered damages in the form of invasion of privacy, lost time and out-of-pocket expenses incurred responding to the breach, diminished value of their personal information, and lost benefit of the bargain with 23andMe,” according to court documents.

“The lawsuit brings claims of negligence, breach of implied contract, invasion of privacy/intrusion upon seclusion, unjust enrichment, and declaratory judgment,” Bloomberg Law noted. Additionally, the claim states that 23andMe “failed to provide prompt and adequate notice of the incident.”

Plaintiffs are “seeking actual damages, compensatory damages, statutory damages, punitive damages, lifetime credit-monitoring services, restitution, disgorgement, injunctive relief, attorneys’ fees and costs, and pre-and post-judgment interest,” Bloomberg Law reported.

Preventing Future Data Leaks

Years of experts warning genetics companies like 23andMe that they need more strict data security have proven to be true. “This incident really highlights the risks associated with DNA databases,” Brett Callow, a threat analyst at data security firm Emsisoft, told Wired. “The fact that accounts had reportedly opted into the ‘DNA Relatives’ feature is particularly concerning as it could potentially result in extremely sensitive information becoming public.”

“Callow notes that the situation raises broader questions about keeping sensitive genetic information safe and the risks of making it available in services that are designed like social networks to facilitate sharing. With such platforms come all of the data privacy and security issues that have plagued traditional social networks, including issues related to data centralization and scraping,” Wired noted.

Clinical laboratory databases are full of protected health information (PHI). Wise lab managers will work to ensure that their medical lab’s patient data is secure from today’s cyberthreats.

—Kristin Althea O’Connor

Related Information:

23andMe Blog Post: Addressing Data Security Concerns

23andMe Sued Over Hack of Genetic Data Affecting Thousands

23andMe Notifies Customers of Data Breach into Its ‘DNA Relatives’ Feature

Genetics Firm 23andMe Says User Data Stolen in Credential Stuffing Attack

23andMe User Data Stolen in Targeted Attack on Ashkenazi Jews

Industry Voices—Forget Credit Card Numbers. Medical Records Are the Hottest Items on the Dark Web

Hacker Claims to Have Stolen Genetic Data from Millions Of 23andMe Users and Is Trying to Sell the Information Online

US District Court California Northern District (San Francisco) Civil Docket for Case #: 3:23-Cv-05147-EMC

2018 Trustwave Global Security Report

Ransomware Activity Targeting the Healthcare and Public Health Sector

23andMe Sued After Hacker Claims Massive Data Breach Impacting Ashkenazi Jews

Five Biggest Risks of Sharing Your DNA with Consumer Genetic-Testing Companies

The FTC Is Investigating DNA Firms Like 23andme and Ancestry over Privacy

Healthcare Cyberattacks at Two Hospitals Prompt Tough Decisions as Their Clinical Laboratories Are Forced to Switch to Paper Documentation

Recent intrusions into the hospitals’ IT systems resulted in blocked medical records including medical laboratory data

Healthcare cyberattacks continue to be a threat that bring potentially costly business consequences for clinical laboratories. Just in the past month, two hospital systems had their health information technology (HIT) systems disrupted due to security incidents. In response, the hospitals’ medical laboratories were forced to switch from digital to paper documentation and, in at least one case, the organization reportedly had difficulty accessing electronic laboratory test results.

The incidents took place at 772-bed Tallahassee Memorial HealthCare (TMH) in Florida and 62-bed Atlantic General Hospital (AGH) in Berlin, Maryland.

At Tallahassee Memorial, an “IT security issue” on Feb. 2 resulted in the organization shutting down its IT systems for 13 days, including at its clinical laboratory. The hospital’s computer network went back online on Feb. 15, according to a news release.

At Atlantic General Hospital, according to an AGH news release, IT personnel discovered a ransomware attack on Jan. 29 that affected the hospital’s central computer system. As a result, the walk-in outpatient laboratory was closed until Feb. 14.

These recent cyberattacks underscore the importance for clinical laboratory leaders to have plans and procedures already in place prior to a disruption in access to critical patient data.

Ben Denkers

Healthcare cyberattacks can be a “complete blindside for a lot of organizations that think they have protections in place because they bought a product or they developed a policy,” said Ben Denkers (above), Chief Innovation Officer at CynergisTek, an Austin, Texas-based cybersecurity company, in an exclusive interview with The Dark Report. Since clinical laboratory test results make up about 80% of a patient’s medical records, disruption of a hospital’s IT network can be life threatening. (Photo copyright: The Dark Report.)

Laboratory Staff Unable to View Digital Diagnostic Results at Tallahassee Memorial

Though the exact nature of the incident at Tallahassee Memorial HealthCare has not been divulged, hospital officials did report the incident to law enforcement, which suggests a cyberattack had occurred.

Electronic laboratory test results were among the casualties of the IT difficulties at TMH. “Staff have been unable to access digital patient records and lab results because of the shutdown,” a source told CNN.

Attempts by Dark Daily to reach a medical laboratory manager for comment at TMH were unsuccessful. However, in a news release posted online shortly after the cyberattack, the health system advised staff members on dealing with the IT outages.

“Patients and families may notice the switch to paper documentation during registration, admission, or during their care, as our providers will be using paper forms, prescription pads, handwritten notes, or other similar paper methods where they may usually use an electronic process,” the news release stated. “We apologize for any delays this may create. We practice for situations like this, and we are prepared to provide safe, high-quality care to our patients during computer system downtimes.”

Atlantic General Hospital Reports Ransomware Incident to the FBI

At Atlantic General Hospital, the outpatient walk-in laboratory and outpatient imaging department both temporarily closed because of the ransomware attack.

Staff members throughout the hospital were “forced to manually check patients in and out of appointments and record all other information by hand instead of online,” Ocean City Today reported.

The hospital immediately informed the FBI of the ransomware incident and continues to work with an incident response team to determine whether criminals accessed any sensitive data. It was not clear whether the organization ultimately paid a ransom to unlock its systems.

The hospital’s medical laboratory director did not respond to an email from Dark Daily seeking further comment.

Healthcare Cyberattacks Attempt to Gain Access to Data

As we covered in “Ransomware Strikes Hospitals, Clinical Laboratories, and Medical Clinics without Warning and Is Now a Major Threat to all Healthcare Organizations,” healthcare organizations have increasingly been a target of cybercriminals and hackers who are after valuable patient data. For example, the healthcare and public health sector accounted for 25% of ransomware complaints as of October 2022, according to data from the FBI, as reported by the federal Cybersecurity and Infrastructure Security Agency.

Therefore, it is critical that clinical laboratory and hospital staff work with their IT counterparts to verify that technology and processes are in place to protect access to patient data.

In “Labs Must Audit Their Cybersecurity Measures,” Ben Denkers, who at that time was Chief Innovation Officer at CynergisTek, a cybersecurity firm based in Austin, Texas, told The Dark Report, “Testing, validating, and auditing whether measures are working as designed is a change of mentality for a lot of organizations.” (If you don’t subscribe to The Dark Report, try our free trial.)

An IT network attack is an attempt by a cybercriminal to gain unauthorized access to devices that contain and exchange data within an organization. Although this information may be on individual devices or on servers, network attacks are often only possible after a hacker enters a system through an endpoint, such as an individual’s email inbox.

“It’s important to understand that while the network server itself might have ultimately been the target, that doesn’t necessarily mean that it was compromised first,” Denkers told The Dark Report. “Phishing is a perfect example of a way an attacker could first gain access to a workstation, and then from there move laterally to a server.”

The final cost of a healthcare cyberattack often exceeds the ransom. Media coverage can lead to an organization’s diminished reputation within the community, and if protected health information (PHI) is accessed by the criminals, a hospital or health system may need to pay for identity theft monitoring for affected patients.

There also are regulatory repercussions that can be costly depending on the circumstances surrounding a cyberattack. For example, on Feb. 2, the US Department of Health and Human Services’ Office for Civil Rights announced a settlement with Banner Health Affiliated Covered Entities (Banner Health), a nonprofit health system headquartered in Phoenix, to resolve a data breach resulting from a hacking incident in 2016. That incident disclosed PHI for 2.81 million patients.

As part of the settlement, Banner Health paid a $1.25 million penalty and will carry out a corrective action plan to protect PHI in the future and resolve any alleged HIPAA violations, according to the HHS Office for Civil Rights.

This hefty penalty is a reminder to pathologists and clinical laboratory managers that—when it comes to cyberattacks—the classic adage “an ounce of prevention is worth a pound of cure” is appropriate advice.

—Scott Wallask

Related Information:

FBI Working with TMH to “Assess the Situation;” Computers Still Offline after Cyber Incident

TMH: Progress on IT Security Event Wednesday, Feb. 15, 2023

Tallahassee Memorial Managing IT Security Issue

CISA: Alert (AA22-294A)

Apparent Cyberattack Forces Florida Hospital System to Divert Some Emergency Patients to Other Facilities

Atlantic General Mum on Ransomware Event Details after System Are Restored

Atlantic General Hospital System Still Down Following Ransomware Attack

Atlantic General Hospital Fully Operational Following Cybersecurity Event

Nearly One Million Patient Records of Hospitals, Health Clinics, Medical Laboratories, and other Providers Stolen in Ransomware Attack on Medical Records Company

Nearly One Million Patient Records of Hospitals, Health Clinics, Medical Laboratories, and other Providers Stolen in Ransomware Attack on Medical Records Company

Clinical labs should proactively investigate how a vendor will respond to a data security incident and how quickly, says expert

Clinical laboratory managers in New York and surrounding areas should be aware that  almost one million protected health information (PHI) records from as many as 28 healthcare providers appear to have been stolen from a medical records company that services these providers.

Practice Resources LLC (PRL), a company that provides billing services for dozens of hospitals and medical providers in Central New York, announced in August they were the target of a ransomware attack that occurred on April 12 of this year. The Syracuse-based organization stated that hackers may have captured personally identifiable information (PII) such as names, home addresses, treatment dates, health plan numbers, and internal account numbers of 934,138 patients.

The data breach affected the patient records of dozens of medical providers and the clinical laboratories that service them, as well as physical therapists, pediatricians, gynecologists, orthopedic surgeons, and more.

Dark Daily’s sister publication The Dark Report covered a similar 2019 data breach in “Labs Should Heed Lessons from Huge Data Breach.”

Jim Giszczak, JD

“When a lab’s vendor has some type of breach, the lab entity that provided the compromised information could have some liability related to the breach,” explained Jim Giszczak, JD (above), McDonald Hopkins, in an interview with The Dark Report over a similar data breach in 2019. “That’s why every lab should be proactive and do a review to understand each vendor’s policies, procedures, training, and response in the event of a breach. Because your lab needs to know how a vendor will respond to a data security incident, and importantly, how quickly it will respond, it’s critical for lab officials to review the contracts they have with vendors that acquire, or have access to, PHI.” (Photo copyright: McDonald Hopkins.)

Not a Scam

“Unfortunately, it’s not a scam,” stated David Barletta, President and CEO of PRL, in an interview with local Syracuse news WSYR. “This really did happen in April—there was a ransomware attack on our system. We brought in forensic accountants and forensic information teams to come and look at what happened.”

PRL sent out more than 940,000 letters to potential victims of the cyberattack in August, noting that some patients may receive more than one letter.

The complete list of “healthcare entities on whose behalf Practice Resources LLC is providing notice of data incident,” according to PRL, includes:

Although their investigation did not uncover any evidence that personal data was misused, PRL has arranged credit monitoring services free of charge for one year from the date of enrollment. The company is also offering proactive fraud assistance to help people with any questions or in case they become a victim of fraud.

“There were no patient social security numbers that were taken. No medical record information was taken,” Barletta told WSYR. “We really, just out of an abundance of caution, felt that it was necessary that we provide them with credit monitoring for a year—just in case.”

Hundreds of Thousands of Patients Affected by Breach

When PRL discovered the data breach, the company took immediate steps to secure its systems and scrutinize the nature and extent of the incident. They then hired a forensic team to investigate what patient data may have been accessed by the hackers, a process that took several months.  

“It does take a long time because each client has hundreds of thousands of patients maybe,” Barletta explained. “We have several large clients that really bore the brunt of this.”

According to Barletta, PRL bills about $450 million annually for its clients, which include some major institutions in Central New York. The New York state Attorney General’s office is investigating the hacking incident and delving into whether PRL’s data security was adequate. 

As a result of the breach, FamilyCare Medical Group, which serves more than 80 physicians and thousands of patients, lost all of its laboratory data, according to the group’s CEO, Mitchell Brodey, MD. They had to close their lab for several months while their computer system was rebuilt. During this time, all their lab work was sent to another laboratory for analysis, MSN reported

The PRL ransomware attack was what is commonly known as a third-party data breach. This type of breach occurs when sensitive data is stolen from a third-party vendor, or when their systems are used to access and steal sensitive information stored on other systems.

In the United States, the Federal Trade Commission (FTC) is responsible for enforcing federal privacy and data protection regulations. If a breach affects 500 or more individuals, the company must issue a press release and notify the FTC and all affected consumers within 60 days of the discovery of the breach.

Clinical Labs Should Proactively Review Member Agreements

In 2019, our sister publication The Dark Report covered a major data breach affecting more than 20 million patients. That breach occurred when hackers gained access to the data systems of a third-party bill collector and impacted four of the nation’s largest clinical laboratories:

At that time, The Dark Report asked James Giszczak, JD, Chair of the Litigation Department and Co-Chair of the Data Privacy and Cybersecurity Practice Group at McDonald Hopkins, to provide insight on what steps clinical laboratory leaders should take to avoid and handle data breaches.

“One important lesson from this data breach is how critical it is for clinical labs and pathology groups to be proactive in making sure they review their vendor agreements,” Giszczak stated. “In that review, labs need to know the specific measures each vendor is taking to protect the information the lab is providing to their vendors.”

Giszczak suggested that clinical laboratory leaders make sure they understand each vendor’s policies, procedures, training, and response in the event of a data breach. He reiterated that labs could have some liability related to the breach.

-JP Schlingman

Related Information:

Labs Should Heed Lessons from Huge Data Breach

Hackers May Have Breached Medical Billing Records of Nearly One Million CNY Patients

List of Healthcare Entities on Whose Behalf Practice Resources LLC Is Providing Notice of Data Incident

Practice Resources, LLC Announces Data Breach Impacting the Information of 924,138 Patients

PRL Data Incident Notification

Your Stories: The Letter from Practice Resources, LLC is Legit

Third Party Data Breach: How to Prevent and What to Do

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