Blue Cross: 840,000 healthcare records at risk after laptop theft

Two employee laptops stolen in November from Horizon Blue Cross Blue Shield of New Jersey

Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ) said on Friday that nearly 840,000 member that their information my be at risk, after two employee laptops were stolen in November.

According to a statement from BCBSNJ, the police were notified on November 4 about the missing hardware, which were left on the desk, presumably safe from theft because they were protected by a cable-lock. However, the data on those systems was not encrypted, potentially exposing 839,711 members to fraud and identity theft.

According to an incident review, a computer forensic expert confirmed that the stolen laptops may have contained files with various amounts of personal data, including name and demographic information (e.g., address, member identification number, date of birth), and in some instances, a Social Security number and/or limited clinical information.

"Given laptops are stolen every day, and given that encryption has been around for a long time, it's still amazing that these types of scenarios continue to happen," said Mark Huckman, the COO of WinMagic, a data protection firm in Canada.

[Can the new HIPAA rule cut PHI breaches?]

"With today's regulatory rules that apply to these healthcare entities, it's more imperative than ever that these organizations deploy managed encryption solutions for their devices. A desk-side cable-lock is not enough."

Indeed, locksport enthusiasts have been making short work of desktop cable-locks for years, defeating them with common items such as office supplies, soda cans, or toilet paper rolls. BCBDNJ didn't explain why they opted for this layer of protection and not encryption. Their notification letters simply say that the locks didn't prevent the theft ultimately, and that the laptops were not encrypted.

"Horizon BCBSNJ continues to work with law enforcement to locate the laptops. To prevent a similar incident from happening in the future, Horizon BCBSNJ is strengthening encryption processes and enhancing its policies, procedures and staff education regarding the security of company property and member information," the insurers' statement said.

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