MADISON, Wis. — The Wisconsin Department of Justice (DOJ) is joining a multistate coalition in announcing a $2.3 million multistate settlement with the Laboratory Corporation of America (Labcorp), resolving a multistate investigation into the 2019 data breach at Labcorp’s debt collector, Retrieval-Masters Creditors Bureau doing business as American Medical Collection Agency (AMCA). The AMCA breach potentially exposed the personal information of over 27.5 million individuals throughout the United States, including 10.2 million Labcorp patients. In Wisconsin, 16,615 residents were affected. The multistate coalition settled with AMCA in 2021 after the company’s bankruptcy petition was dismissed.
While the data breach occurred at AMCA, the data involved was the sensitive data of Labcorp’s patients. While companies can contract with vendors freely and delegate authority, data security is a non-delegable duty.
“People should be able to trust that their sensitive health information will be appropriately protected,” said AG Kaul. “This settlement ensures that, going forward, Labcorp will have stronger protections against this kind of incident in place.”
Vendor management remains one of the most challenging areas in cybersecurity, but it is critical that businesses properly vet their vendors and ensure that information shared with those vendors will be kept secure. The settlement provides strong requirements around vendor management, especially medical debt collection, including:
- Developing certain aspects of the company’s information security program, such as an incident response plan that includes internal reporting of vendor security events.
- Minimizing the sharing of data with vendors while balancing certain needs of debt collectors to meet their legal obligations.
- Expanding the vendor risk management program to include requiring a dedicated team, employing tools to evaluate vendors, and verifying vendor compliance.
- Adding specific requirements for debt collectors as a specialized subset of vendors, including maintaining contract inventories, enforcing cybersecurity standards through contract, segmenting data which is often aggregated by debt collectors for multiple clients, and requiring debt collectors to perform assessments and audits, and including the right of termination for non-compliance.
- Hiring a third-party assessor to perform an information security assessment with a focus on vendor risk management.
As part of the settlement, Labcorp will make a payment of $ 2,287,455.00 to the states, of which $17,534 is payable to Wisconsin.
Joining Wisconsin DOJ in this settlement are the attorneys general of Alaska, Alabama, Arizona, Arkansas, Colorado, Connecticut, the District of Columbia, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and West Virginia.
