Bach Seat

– Updated 10/25/2018 – Anthem, Inc. has agreed to pay a $16 million HIPAA fine to the U.S. Department of Health and Human Service, Office for Civil Rights. The OCR found that the data breach between December 2, 2014, and January 27, 2015, cyber-attackers stole the electronic protected health information of almost 79 million people. The stolen information in the data breach included names, social security numbers, medical identification numbers, addresses, dates of birth, email addresses, and employment information.

The $16 million settlement is the largest HIPAA settlement.

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Many online believe that the Anthem (ANTM) hack was a strategic cyber-war strike by China. Stu Sjouwerman at CyberheistNews writes that PII thefts would normally be a Russian operation. However, the Anthem data breach appears to be a Chinese attack. CNN reports that Chinese hackers tend to target trade, economic, and national security secrets that could help the Chinese economy. Mr. Sjouwerman says he received an insider tip that most of the three-letter U.S. Government agencies have their employees insured through Anthem’s Blue Cross Blue Shield. Anthem also provided health insurance defense contractors Northrop Grumman and Boeing.

Knowbe4’s Sjouwerman speculates that the Chinese now own the identities of all the people fighting them. The stolen data can now be used in a multitude of social engineering scenarios. Dmitri Alperovitch, co-founder of security firm CrowdStrike told CNN that the attack fit the profile of a hacking group believed to be Chinese government spies called “Deep Panda.”

The objective of the “Deep Panda” data breach according to the CrowdStrike CTO is to amass a large collection of Americans’ personal information to find citizens willing to spy for the Chinese and find potential U.S. spies operating in China. Mr. Alperovitch told CNN that’s why Chinese hackers broke into U.S. federal employee network last year. They also broke at least three hospital chains and two insurance providers the public hasn’t yet heard about.

Knowbe4 speculates that many people in the Government have steam coming out of their ears about the Anthem hack. Cyberwar has suddenly become very personal to them. This may be why President Obama recently signed an executive order that will nudge private companies to share data about cybersecurity threats between each other and with the federal government.

Apart from the cost of the Anthem data breach are likely to smash $100 million barrier, it’s surprising that Anthem did not encrypt SSN’s which allowed wholesale identity theft of thousands of American cyber-warriors.

CEO Sjouwerman explains that hackers are going after healthcare records because they are much more valuable. He points out that healthcare records stay active for several months after a hack, as opposed to credit card numbers which quickly get nixed after a few days. Since Anthem is a healthcare company, you would expect them to take HIPAA compliance to the max and even top the required controls with higher standards. As we all know, compliance does not equal security, but it establishes a baseline at the very least.

rb-

There is enough blame to go around.

Time to go back to a cash society and barter.

Say, Doc Johnson, I’ll trade you two chickens for measles vaccination.

Related articles

• China’s Secret Strategy Exposed (freebeacon.com)

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.