Alphabet's Verily covered up HIPAA violations, whistleblower says in lawsuit

A former executive at Verily, Alphabet's health technology arm, has filed a lawsuit claiming the company mishandled the health data of over 25,000 patients without their consent and subsequently attempted to cover up these violations. Ryan Sloan, who previously held the position of chief commercial officer for Verily Onduo, asserts that he was dismissed after raising concerns about breaches of the Health Insurance Portability and Accountability Act (HIPAA) to senior management. Sloan's allegations, now part of an ongoing federal lawsuit in San Francisco, shed light on significant HIPAA violations that reportedly occurred between 2017 and 2021. According to court documents, both Sloan and Julia Feldman, Onduo’s general counsel, uncovered that Verily had improperly utilized protected health information in various capacities, including research and marketing efforts. Despite raising these issues internally, they claim that their concerns were not adequately addressed. The lawsuit, which was filed late last year, recently saw a judge deny Verily's request to dismiss it or move the case to arbitration. In response to the allegations, a Verily spokesperson stated, "We believe the claims made in this employment matter are completely without merit and will defend ourselves vigorously. As this is an ongoing legal issue, we will refrain from further comments at this time." Verily, which began as an ambitious project within Alphabet's innovation lab in 2015, has faced scrutiny amid these allegations. The company has reportedly shifted its focus several times over the years, moving from hardware development to pandemic response during COVID-19, and now to precision health initiatives. The lawsuit reveals that internal investigations at Verily confirmed multiple HIPAA breaches. It highlights that the company allegedly delayed notifying affected parties about these breaches, opting instead to negotiate contract renewals without disclosing the violations. Notably, during contract discussions with Highmark Health in August 2022, Verily allegedly misrepresented its compliance with HIPAA. Sloan was ultimately terminated from Verily in January 2023, during a period when he was on protected leave to care for his ailing mother. This lawsuit adds to a series of challenges faced by Verily, which despite securing significant funding, continues to grapple with finding a sustainable product strategy. Recent reports indicate that Verily is transitioning to a C-corp structure to attract new investment and may be restructuring its business focus as it moves forward.