Rising Statistics Show Internal Security is Not Enough to Protect Data
On Monday June 3, Quest Diagnostics, the largest blood-testing company in the world, reported that nearly 12 million patients’ personal information, including financial data, social security numbers, and medical records, was exposed through a data breach at a third-party billing collection agency. While lab results were not affected, the sheer number of patients affected makes this event the second largest healthcare data breach ever reported, following only health insurer Anthem’s 78.8 million record data breach in 2015.
The Overlooked Third-Party Risk
How could a global company like Quest’s patient data be so vulnerable? The risk did not come from within the enterprise healthcare company, but through a data breach by American Medical Collection Agency (AMCA), a third-party billing collection service vendor providing services to Quest’s healthcare revenue manager, Optum360 LLC.
External entities like AMCA are widely used across industries. A recent Deloitte poll found 70% of enterprise businesses report a moderate to high reliance on third-party services, but all the rewards come with equal risks. The same poll found that 47% of the organizations surveyed had experienced a risk incident involving the use of third-party services in the last three years.
Quest is Not Alone and That’s Not a Good Thing
Healthcare is an appealing target for hackers, and third-party services have provided the perfect backdoor access to data for several major breaches in 2019.
Just one day after Quest made their announcement, diagnostics company LabCorp reported nearly 7.7 million patients’ personal data was exposed as a result of a massive breach at the same third-party billing collection agency as Quest: AMCA. Additionally, Rush System for Health reported in March 2019 that the personal information for approximately 45,000 patients was compromised due to their third-party claims processing services vendor, and Emerson Hospital reported around the same time that 6,314 patients had portions of their protected health information exposed due to a security breach at a third-party services vendor.
Beyond healthcare, big-name companies across industries have made headlines due to compromised data, including Target, Home Depot, Applebee’s, and Saks Fifth Avenue. A 2018 study by Opus & Ponemon Institute found that 59% of companies experienced a third-party data breach that year, but a mere 16% claimed they effectively mitigated third-party risks. While it may seem obvious that outside entities can create security gaps, it appears dedicated evaluation and management of these additions can often be substandard, with only 37% of the study’s respondents indicated having enough resources to manage third-party relationships.
Cautionary tales featuring global healthcare companies, retail giants, and national restaurant chains might be enough to change those eye-opening statistics, but lawmakers are now asking impacted companies about “vendor selection and due diligence process, sub-supplier monitoring, [and] continuous vendor evaluation policies,” and pointedly asking about the recent breach headlines “how many times has Quest Diagnostics conducted a security test which evaluates both Quest Diagnostics’ systems as well as the systems of any companies it outsourced to?”
Don’t be in the News for a Breach and Don’t be a Statistic – Here’s How
First, following best practices and compliance mandates can set enterprise organizations up to better protect their data from any vulnerabilities third-party entities present, including:
- Regularly scheduled vulnerability assessments
- HIPAA-required risk assessments for healthcare organizations
- Dedicated security management and monitoring
- Disaster Recovery planning
BAAs are Necessary but Not Sufficient
Enterprise companies must always ensure that they have a solid and trustworthy partner that can deliver secure infrastructure with a comprehensive Business Associate Agreements (BAA). A BAA acts as a binding contract to create liability between the company and vendor that upholds both parties to stringent HIPAA regulations, but more can be done to truly ensure security for critical data. Hostway|HOSTING provides peace of mind with industry-leading BAAs and more so with our HITRUST CSF Certified status, demonstrating that all the certified applications appropriately managing risk by meeting key regulations and industry-defined requirements. “HITRUST CSF is the gold standard,” says CEO Emil Sayegh. “In the face of mounting data breaches, companies handling sensitive data must remove all doubt by working with trusted cloud providers with deep experience in security protocols and regulatory compliance.”
Trust is Possible with the Right Third-Party Vendors
Whether starting for square one or proactively planning for a worst-case scenario, organizations can avoid a data breach disaster at the hands of a third-party vendor with diligent vetting, managing, and planning – all of which can be time-consuming and drain resources, falling back to the 37% statistic above.
Meeting HIPAA compliance and setting strong BAAs are a good start, but with the help of experienced HITRUST-certified experts, businesses can better trust their third-party associates. Like an extension of their own teams, Hostway|HOSTING guides and supports with our detailed and compliance-focused assessments, steadfast monitoring, and rigorously tested recovery plans. Hostway|HOSTING is ready to meet any organization’s needs, such as our client BlueSky Creative, Inc. who had “a lot of questions and need[ed] to be 100% confident in the provider”, but Vice President Stephanie Butler explains that with Hostway|HOSTING “from day one, all my questions were answered, and I was given all the guidance I needed and more.”
As a tenured IT services company with over 20 years of experience, Hostway|HOSTING solutions meet compliance for PCI, HITRUST, HIPAA, FERPA, and GDPR guidelines, and our BAAs strengthen the mutual commitments to safeguard customer data. Our design for data security thoroughly evaluates all third-party vendors and how they interact with all systems and platforms and continue with safeguard evaluations, so no customer ever has to worry about becoming a statistic.