FTC Puts Trial Over LabMD’s Data Security Practices on Hold

June 18, 2014 in News

The Federal Trade Commission has halted an administrative trial examining the data security practices of LabMD, a cancer-detection services company, after the House Committee on Oversight and Government Reform notified the agency that Tiversa, a peer-to-peer intelligence and security services firm involved in the investigation, might have given inaccurate or untruthful information, Healthcare Info Security reports (Kolbasuk McGee, Healthcare Info Security, 6/12).

Background on Case

In 2013, FTC filed a complaint against LabMD for two privacy breaches in 2008 and 2012 that affected about 10,000 patients.

In the complaint, FTC wrote that LabMD’s “failure to employ reasonable and appropriate measures to prevent unauthorized access to personal information” violated the agency’s regulations (iHealthBeat, 3/26).

Tiversa told FTC that in 2008 it found a LabMD spreadsheet containing the insurance billing data of 9,000 consumers on an unsecured peer-to-peer network. A second data breach in 2012 brought the number of affected patients to 10,000 (Hall, FierceHealthIT, 6/17).

Details of House Committee’s Letter

In a June 11 letter to FTC Chair Edith Ramirez, House Committee on Oversight and Government Reform Chair Darrell Issa (R-Calif.) wrote that FTC has relied on Tiversa “as a source of information” in its enforcement action against LabMD, adding, “However, information the committee recently obtained indicates that testimony company officials provided to federal government entities may not be truthful.”

Issa wrote, “The committee’s ongoing investigation has shown that competing claims exist about the culpability of those responsible for the dissemination of false information. It is clear at this point, however, that the information provided to the FTC is incomplete and inaccurate.”

According to Healthcare Info Security, the House panel is considering next steps in its own investigation and could hold hearings on the issue (Healthcare Info Security, 6/12).

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