AMCA Files For Bankruptcy, After Health Care Data Hack

The American Medical Collection Agency, filed for Chapter 11 protection after an eight-month long system hack breached the personal, financial, and health data of up to 20 million Quest Diagnostics, LabCorp, and BioReference patients, according to Bloomberg.

In May, American Medical Collection Agency began notifying clients of a systems hack that began in August 2018 and lasted through March 2019. A hacker gained access to a server with a wide range of data from several AMCA clients including patient data and some Social Security numbers, among other sensitive information. LabCorp disclosed that about 200,000 people also had their credit card or bank account information stolen.

The debt recoveries firm learned about the data breach when it started receiving notices about a large number of credit cards tied to its web portal being used for fraudulent activities and that the company reduced its employee headcount drastically from 113 to just 25 by the end of 2018.

Russell Fuchs, Chief Executive of Retrieval-Masters Creditors Bureau, stated in the court filing of Chapter 11 that AMCA had incurred “enormous expenses that were beyond the ability of the debtor to bear” and that the company had spent up to $400,000 on hiring outside experts to investigate the breach and an additional $3.8 million on sending over 7 million individual notices to people affected by the breach.

LabCorp, Quest, and two of AMCA other largest clients, Conduent and CareCentrix ceased business operation with AMCA due to the breach, which fueled the bankruptcy petition.

As a result, AMCA intended to liquidate up to $10 million worth of assets and liabilities to pay for its breach-mitigation activities. This, even after CEO Fuchs lent $2.5 million to AMCA to help the firm with bearing the costs of individual mailings, states Bloomberg.

Reference:

https://www.bnnbloomberg.ca/debt-collector-goes-bankrupt-after-quest-customer-data-hack-1.1274429

https://www.hipaajournal.com/amca-data-breach-impacts-12-million-quest-diagnostics-patients/