What HIPAA-Covered Entities & Other Companies Need to Know About Cookies & Tracking Tech

In March, the U.S. Department of Health and Human Services (HHS) Office for Civil Rights issued a bulletin about the use of online tracking technologies by HIPAA-regulated entities resulting in the disclosure of protected health information (PHI).

Tracking technology is a script, code or pixel embedded in a website or mobile app that gathers information on online visitors. It includes cookies, beacons, pixels, software development kits (SDKs) and session replay scripts.

These tools can have several benefits, but since they collect device and advertising IDs, they permit a third party to track users across unrelated websites. Often the owner of the site does not even realize that these tools are installed or, after attempting to turn them off, does not realize they are still operating in the background.

Information collected on a HIPAA-regulated site can constitute PHI if it relates to the user’s past, present or future health, healthcare services or payment for healthcare. Under HHS guidelines, the determination of whether electronic health information constitutes PHI can turn on whether the user had to authenticate (i.e., log in to) those webpages to access the information and whether the user’s purpose in accessing the webpage related to the user’s past, present or future healthcare.

If PHI is deemed to have been accessed through the site, the covered entity must comply with HIPAA privacy and security rules. If the third-party recipient of the tracking data is a business associate, then the covered entity must have entered into a business associate agreement with such entity.

If that were not complicated enough, consumer health data is a new category of health data under several new state laws. It expressly excludes PHI since the business collecting this information is not a HIPAA-covered entity. The purpose of these new laws is to regulate health data collected by the thousands of commercial entities that are not regulated by HIPAA.

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While not PHI, this information constitutes sensitive personal information under state data privacy laws, triggering a different set of compliance obligations, such as the duty to:

• Secure the user’s affirmative opt-in consent to the collection of such data or the duty to grant the user a right to opt out of such collection and use
• Provide reasonable security of such data
• Execute a restrictive data protection agreement with the third-party recipient of the tracking data (rather than a business associate agreement)
• Comply with the Federal Trade Commission’s (FTC) health breach notification rule, which can treat the unauthorized disclosure of this data as a data breach

As proof of the legal risks of tracking, on July 30 the New York state attorney general published a guide for businesses on website privacy controls that confirms that privacy controls and online tracking are subject to New York’s consumer protection laws (even though New York does not yet have a comprehensive data privacy statute). It followed a recent investigation of e-commerce retailers that found that privacy controls used by retailers did not work as described, cookie notices were mislabeled, tools were misconfigured and the effect of cookie opt-outs was misrepresented when tracking was not actually disabled. The attorney general’s office made clear that the use of tracking technologies is a continuing enforcement priority.

Moreover, the use of tracking technology has triggered 50 class-action lawsuits against hospitals and health care providers under the Video Privacy Protection Act, federal and state wiretapping laws and common law privacy rights. The FTC has issued fines ranging from $1.5 million to nearly $8 million against companies in the healthcare industry, and patient class-actions against health systems have settled for as much $12 million.

Key takeaways

All businesses should determine whether they are using tracking technologies on their websites and mobile apps. HIPAA-regulated entities should specifically determine if tracking is being used in association with health-related services, treatments or payments. Best practices include the following:

• Companies should have their own engineers review the code and operation of tracking technologies to see if cookies, pixels and beacons “fire” for online visits and where the outputs are sent. Do not blindly trust your vendor.
• Analyze the license terms for all SDKs and tracking tools incorporated into your sites.
• If the business partner requires a business associate agreement, ensure that your agreement includes all of the updated terms for such agreements from HHS.
• If your business is not regulated by HIPAA, determine what state and FTC rules apply to your collection and use of all personal information, including electronic health data, and ensure that you comply with such rules.
• Finally, note Washington’s My Health My Data Act requirement for a separate consumer health data privacy notice and remember the act’s private cause of action for violations.