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The controversial privacy regulations bestowed upon the health care industry as a parting gift by the Clinton administration may not affect providers as much as or as quickly as it first seemed. The Bush administration has made it clear the rules may be a bad idea, and federal officials are taking moves to slow down the implementation while they consider a wholesale change or revocation of the rules.
Tommy G. Thompson, the new secretary of Health and Human Services (HHS), announced recently he was delaying the implementation of the privacy rules and considering whether to stop the implementation altogether. The rules were scheduled to take effect Feb. 26, but Thompson postponed the effective date to April 14. Providers still will have two years to come into compliance, as originally outlined.
Thompson’s action came after much lobbying from the health care industry. Providers had appealed to Thompson and others in the Bush administration, and groups representing patients and the health care industry both called for changes before the Senate’s Health, Education, Labor, and Pensions Committee. Thirty-nine industry groups wrote Thompson, urging him to delay the Feb. 26 effective date of the rules. Representatives from several of those groups told the committee that, as written, the rules are unworkable.
Thompson announced the delay in implementing the rule in a speech to the American Association of Health Plans, a trade group for health maintenance organizations. Thompson said the implementation was being delayed partly because of the Bush administration’s concerns about how the rule would affect providers, but also because they feel the Clinton administration mishandled the rule-making process. Thompson said the rules were published in the Federal Register on Dec. 28, 2000, but the Clinton administration never sent them to Congress for a 60-day review, as required by a 1996 law. That law, the Congressional Review Act, requires a 60-day period before any major new rule can take effect.
G. Richard Smith, MD, testified before the Senate committee on behalf of the Association of American Medical Colleges. He said "the rule is overreaching; that it will be much more costly and burdensome than the rule’s authors wish us to believe, and will create an expensive new privacy bureaucracy’ that, absent sources of new funding nowhere yet identified, represents a substantial unfunded mandate; that it cannot be implemented effectively nationwide within the two-year compliance window specified; and that the inability of the rule to pre-empt state laws will prove to be increasingly problematic and burdensome, in an era in which individual mobility, interstate health care delivery, payment and operations, and interstate research are all commonplace."
Critics argued the rules are likely to be more expensive than many entities will be able to bear and likely to cost far more than the $17.6 billion estimated by HHS. They also said the final version of the rule includes a new requirement for individual consent for treatment, payment, and other routine uses of information that could prove problematic. One example was the concerns of pharmacists about getting patient consent for prescriptions that are called or faxed to pharmacies and picked up by the patient’s relative.
Health care industry officials testified about their concern that stronger state privacy laws would remain in place. One critic asked about a situation in which a patient lives in one state, works in another, and receives care in a third. Would that situation be governed by state law where the policy is written, where the patient lives, or where the care is provided?
The Senate also heard from some supporters of the rules who want them strengthened. Among other suggested changes, they asked the committee to create a "private right of action" to allow those whose information is wrongly disclosed to sue for damages, and to close what some call a loophole in the regulations allowing the use of personal information for marketing and fundraising.
The American Psychiatric Association (APA) submitted this testimony: "The APA is particularly concerned about the need for sensitivity with psychiatric patients’ names. Commercial fundraisers should not be allowed to take advantage of patients, especially those with mental illness."