A Court of Appeals in Indiana upheld a Superior Court ruling from 2013 levying a $1.44M HIPAA fine against Walgreens and it’s pharmacist Audra Withers. The case looked at several important issues, including how strongly an employer could be held accountable for the actions of it’s professional employee.
The case surrounds the pharmacist disclosing prescription information about the ex-girlfriend of her husband, who had a child with the woman. The pharmacist reviewed the patients medical history in 2010, shared it with her husband who in turn shared the protected information with at least 3 others. Walgreens was found liable and appealed with the reasoning that they should not be held responsible for a professional pharmacist knowingly violating company policy and the law. Both courts disagreed.
The case presents concerning ramifications for employers of professional employees. Respondeat superior case law has generally protected employers from the unsanctioned actions of their employees, however the court did not protect Walgreens in this case. Regulatory investigations ad HIPAA fines are on the rise, pharmacies should carefully craft employee guidelines, handbooks and controls. In addition, reviewing insurance programs for regulatory coverage is paramount. Many malpractice policies over limited regulatory proceedings coverage, directors & officers as well as cyber liability coverage offer more comprehensive protection.