NCPA - National Center for Policy Analysis

Patient Privacy Rules Could Be Costly & Confusing

January 12, 2001

Health care industry groups say the Clinton Administration's sweeping new patient privacy regulations will be expensive to implement, may create hazards for patients, and are a potential legal quagmire for doctors, hospitals, Health Maintenance Organizations and pharmaceutical companies.

The rules issued by the Department of Health and Human Services in December establish national standards for how personal health information is used and distributed, and set criminal and civil penalties for breaching patient privacy.

  • Insurers and physicians will be required to inform patients about how their information is being used and to whom it is being disclosed.
  • Each patient a right to a "disclosure history'' listing the entities that received their personal medical information.
  • Patients will also have the right to access their own medical files, as well as the right to request amendments or corrections.
  • And doctors and hospitals will be required to obtain written consent before using a patient's health information, even for routine purposes.

HHS was required to write privacy rules by the Health Insurance Portability and Accountability Act. However, the regulations go far beyond those proposed a year ago, and now cover paper, oral and electronic health care information.

  • HHS estimated the cost to comply with the regulations as proposed a year ago was $3.8 billion.
  • The administration estimates the cost of implementing the regulations in their final form will be around $18 billion over 10 years.
  • But since the new regulations do not preempt contrary and more stringent state rules, health care providers will incur additional costs to conform to differing state standards.

Differing standards "could directly affect consumers by impeding the flow of important and potentially life-saving medical information, thereby making it difficult for some consumers to receive necessary health care," warns the Health Insurance Association of America.

Source: Reuters Health, "Privacy Rules Pose Difficult Implementation Issues for Health Industry," Medscape, December 21, 2000; "Federal Government Underestimated Cost Of HIPAA Privacy Rules, AHA Says," BNA'S Health Care Policy Report, December 18, 2000; Press Release, "New Medical Information Rules Lack Uniformity; Add Complexity, Confusion, And Cost," December 20, 2000, Health Insurance Association of America.


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