WC Insurers Keep Eye On Privacy Rules

Workers comp insurers need to circle April 14, 2003 on theirplanning calendars. Thats the date that most healthcare providersmust comply with medical privacy regulations released by the U.S.Department of Health and Human Services.

After furious lobbying by insurers, HHS amended the preamble ofthe regulation to state that the rule is not intended to interferewith state workers comp systems. Insurers would have preferred thatHHS exempt workers comp entirely, but it wasnt feasible because ofthe logistical difficulty in changing the regulation.

HHS reportedly assured the industry that changes could be madedown the road should the regulation unreasonably hamper workerscomp insurers in processing claims and preventing fraud.

Hopefully, it wont come to that. But just to be safe, workerscomp insurers must be particularly vigilant to make sure thatprivacy regulations do not keep them from doing their job ininvestigating claims.

The problem centers on the fact that the rule allows “coveredentities”–such as physicians, hospitals, health plans and otherproviders–to only disclose medical information deemed by theprovider to be “minimally necessary” to workers comp insurers.Insurers fear this puts healthcare providers on the spot legally,forcing them to determine exactly what is “minimally necessary”information.

In this litigation-happy society, who would blame a healthcareprovider for playing it safe and giving out as little data aspossible to workers comp insurers? This is bound to hinder claimshandling, and could open the door to widespread fraud.

Insurers need to put systems in place to monitor the responsefrom providers under the new rules. Are they getting all theinformation they used to receive (and need)? If not, they must holdHHS to its promise to revise the rule so that workers comp insurersarent left holding the bag.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, August 19, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.