CoPilot Provider Services has settled with New York for $130,000 in penalties for waiting more than a year to notify its customers of a breach to the company's website, NY Attorney General Eric Schneiderman announced Thursday.
The attorney general determined the healthcare administrative services and IT provider violated general business law, in its delayed breach notification to its 221,178 customers. CoPilot agreed to the monetary settlement and to reform its notification and legal compliance program.
The breach occurred in October 2015, when an unauthorized individual accessed confidential patient reimbursement data through the administration site. The hacker downloaded data that included names, birthdates, addresses, phone numbers and medical insurance card details.
However, CoPilot waited until January 2017 to begin formally notifying its customers of the breach.
The FBI began investigating the incident in February at CoPilot's request, focusing on a former employee they believed was responsible.
CoPilot blamed the breach notification delay on the FBI investigation, but law enforcement didn't say that customer notification would hinder the ongoing investigation and didn't instruct CoPilot to delay. General business law instructs that companies must provide timely breach notification.
The Department of Health and Human Services is still looking into whether CoPilot is considered a covered business associate under HIPAA.
Thursday's agreement also states that CoPilot will comply with New York's consumer protection and data security laws.
"Healthcare services providers have a duty to protect patient records as securely as possible and to provide notice when a breach occurs," said Schneiderman in a statement. "Waiting over a year to provide notice is unacceptable. My office will continue to hold businesses accountable to their responsibility to protect customers' private information."