Medical privacy rule attracts critics, confusion and misinformation

The Hill,

Newspaper for and About the US Congress

April 9, 2003

Business and Lobbying: Medical privacy rule attracts critics,
confusion, and 'misinformation'

By Bob Cusack

The nation's new medical privacy rule will change how the media covers elections because it opens a gaping loophole that will allow news outlets to report legally on the confidential medical records of public figures.

The new medical privacy rule will give patients - and public figures - sweeping protections over the privacy of their medical records by giving them more control over how their protected information is used and disclosed.

These are just two of the widely differing claims on the effect of the regulation that most covered industry groups - including insurance companies, physicians, and other healthcare providers - must comply with starting April 14.

Many experts who have studied medical privacy issues for years are at odds over the impact that the privacy rules, to be implemented by the Department of Health and Human Services (HHS) will have on consumers. Moreover, some of them provide vastly different answers on the parameters of current privacy laws.

Jim Pyles, co-founder of the law firm Powers Pyles Sutter and Verville P.C., said he believes the privacy rule will eliminate citizens' rights to withhold their personal health information.

The privacy rule, coupled with a 2001 Supreme Court ruling (Bartnicki et al v. Vopper, aka Williams, et al) that found that media outlets are allowed to report information that is illegally obtained, will have a significant impact on future elections, Pyles said. "The 2002 election is the last election that medical records will not play a pivotal role," he said. "I don't think members of Congress and the administration are aware of this."

Pyles, who has testified before Congress and serves as counsel to several national home health, ambulatory care, and psychiatric associations, said the privacy rule will put more patient data in the hands of health plans, hospitals, and insurance firms, and other companies that meets the definition of "covered entity" or "business associate."

Therefore, an estimated 600,000 entities will have regulatory permission to use and disclose patient data, regardless of the wishes of the consumer, Pyles said. Physicians will not be able to withhold information that they believe should not be released because the insurance companies that pay these doctors will demand the data, Pyles added.

The Bush administration has strongly refuted Pyles' claims. An HHS representative said that the rule is the first federal regulation on privacy, adding that the reason that Congress mandated the standard was because there was no federal standard. Pyles, however, said that privacy rights are included in the Constitution and that these rights have been upheld in the 1977 Supreme Court decision in Whalen v. Roe. All it will take for a public official's medical information to be released is for one employee to anonymously leak it to a media outlet, Pyles said. He added that computer hackers will be able to access personal information.

While medical records have been leaked before - it happened to Rep. Nydia Valazquez (D-N.Y.) over 10 years ago - Pyles said public figures will not have any recourse because of the 2001 Supreme Court ruling and the lack of protections in the new privacy rule.

Furthermore, the chances that it will happen will increase exponentially because more entities will have access to much more personally identifiable medical information, he said.

Pyles has strongly hinted that he will sue the Bush administration on behalf of mental health associations and consumer groups.

Under the rule, patients cannot withhold their records if covered entities request the information for treatment, payment or health care operations. Critics have said that the administration's definition of health care operations is way too broad.

When he introduced legislation last year to revise the privacy rule, Rep. Ed Markey (D-Mass.) said, "While treatment and payment are terms that consumers understand and associate with health care, 'health care operations' is a category tied to commerce, not patient care."

Top Democrats on Capitol Hill have criticized the administration for amending its rule to eliminate the patient's written consent. In its place, the administration mandated that patients be notified of their privacy rights.

The Bush administration changed the consent provision after leading Republicans and influential health care groups lobbied hard last year for the revision. These groups, which included many physician associations, argued that obtaining written consent would cause major delays in patients' access to care.

But some consumer advocates do not agree with Pyles' theory about the privacy standard. Janlori Goldman of the Health Privacy Project called the written consent issue a "red herring." Even if consumers had the option of providing written consent, they would have to sign it in order to get care from their providers, she said. Many health care industry and provider groups, which have praised the White House for making changes to the privacy rule that was proposed by the Clinton administration, said that the written consent provision would have confused patients and increased patient waiting times.

Peter Swire, who helped draft the proposed privacy regulation in the Clinton White House, echoed claims that the emphasis on the written consent is overblown. He also strongly disputed Pyles' claims that the privacy rule will lead to more leaked records of candidates running for public office.

If entities illegally release medical records, they will be fined, Swire said. Just as with any law, some people will violate the privacy standard, he said. But the new federal rule allows the government to fine violators, Swire added.

Deborah Peel, a psychiatrist who testified before Congress on genetic privacy last year, believes the privacy rule will result in the unlawful release of more confidential information - especially the records of public figures.

The National Coalition of Mental Health Professionals and Consumers has blasted the privacy rule: "For the first time in our nation's history the government is going to decide how and to whom our personal information can be disclosed." Industry groups that support the regulation contend that "there is a lot of misinformation" being spread on the rule. Some health care industry groups contend much of the criticism of the privacy rule is attributable to partisan politics.

While acknowledging that the highly volatile issue divides Republicans - who tend to support the administration's position on the rule - and Democrats on Capitol Hill, critics of the rule contend that the issue is about privacy - not politics.

They add that their likely lawsuit against HHS on the privacy rule will include many groups that have wide ranging political views.

In the midst of the confusion that the privacy rule has triggered, it is clear that critics and proponents of the rule believe the other side is spreading lies about the regulation.

"If that's what they are telling you, they are dead wrong," said an industry representative who supports the privacy rule.

A critic of the rule recently told The Hill, "[Supporters of the regulation] are full of nonsense."

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