Mass. AG announces $140,000 settlement with medical groups

BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $140,000 settlement Monday with the former owners of a Marblehead-based medical billing practice and four pathology groups to settle allegations of improper patient record disposal.

Joseph and Louise Gagnon, doing business as Goldthwait Associates, allegedly violated state data security laws by mishandling and improperly disposing of medical records. The records contained protected health information and personal information from four Massachusetts pathology groups at the Georgetown Transfer Station.

The records contained more than 67,000 residents' information, including medical diagnoses, Social Security numbers and names. The records were allegedly disposed of at a public dump.

"Personal health information must be safeguarded as it passes from patients to doctors to medical billers and other third-party contractors," Coakley said. "We believe this data breach put thousands of patients at risk, and it is the obligation of all parties involved to ensure that sensitive information is disposed of properly to prevent this from happening again."

Other defendants involved in the settlement are Pioneer Valley Pathology Associates P.C., Milton Pathology Associates P.C., Milford Pathology Associates P.C. and Kevin Dole, the former president of Chestnut Pathology Service P.C.

Coakley's office alleges that the pathology groups violated HIPAA regulations by failing to have appropriate safeguards in place to protect the personal information they provided to Goldthwait Associates. The groups also allegedly violated state data security regulations by not taking reasonable steps toward selecting and retaining a security service provider.

Under the terms of the settlements, the defendants agreed to pay a total of $140,000 for civil penalties, attorney fees and a data protection fund to support efforts to improve the privacy and security of sensitive financial and health information in the state.

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