If a covered entity discovers that the PHI was breached in transit to the designated third party, and the PHI was “unsecured PHI” as defined at 45 CFR 164.402, the covered entity generally is obligated to notify the individual and HHS of the breach and otherwise comply with the HIPAA Breach Notification Rule at 45 CFR 164, Subpart D. However, if the individual requested that the covered entity transmit the PHI in an unsecure manner (e.g., unencrypted), and, after being warned of the security risks to the PHI associated with the unsecure transmission, maintained her preference to have the PHI sent in that manner, the covered entity is not responsible for a disclosure of PHI while in transmission to the designated third party, including any breach notification obligations that would otherwise be required. Further, a covered entity is not liable for what happens to the PHI once the designated third party receives the information as directed by the individual in the access request.
