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FTC supports breach notification bill

The Federal Trade Commission has approved a data breach bill requiring entities that hold consumers’ sensitive information to create a robust data compliance protection plan. The intention of the plan is to enforce strict breach notification requirements.

The FTC submitted testimony for a Senate hearing on the bill and said it “strongly supports” the bill.

“Notification in appropriate circumstances can be beneficial,” the Commission says. “Notification laws that have increased public awareness of the harm breaches can cause. ┬áBreach notification at the federal level would extend notification nationwide and accomplish similar goals.”

The bill would serve as a complement to several breach notification laws on a state level already in effect, the FTC says.

U.S. Senators Mark Pryor (D-AR) and Jay Rockefeller (D-WV) filed in August the “Data Security and Breach Notification Act of 2010 [1],” which would be regulated by the FTC.

According to the language in the bill, healthcare entities and their business associates (BAs) would be in the clear so long as they complied with the Health Information Technology for Economic and Clinical Health (HITECH) Act or any other federal laws that satisfy similar or stronger requirements.

It is unclear, however, if compliance with the FTC’s Red Flags Rule for identity theft protections would exempt entities from the requirements in the new bill.

No matter to whom the bill applies, healthcare entities should watch the bill’s progress in light of new privacy and security laws in HITECH that call for greater patient rights to protected health information (PHI) and greater penalties for breaches of unsecured PHI.

The FTC’s testimony this week called for additions to the bill:

The bill extends civil action power to state attorneys general, much like HITECH does. It includes a maximum of $11,000 per day for each day an entity is found not to be in compliance and caps a single violation at:

Read more [2] about the bill’s security and compliance requirements.