Insurers Fret As New HIPAA Privacy Rule Begins

Insurers Fret As New HIPAA Privacy Rule Begins

NU Online News Service, April 11, 3:38 p.m. EST?An insurers trade group said the industry is worried the federal rule, effective Monday, that sets privacy protections for medical records, may block insurers' access to data needed for claims processing.

The Alliance of American Insurers made the statement prior to the start of rules developed by the Department of Health and Human Services to implement HIPAA, the Health Insurance Portability and Accountability Act.

Keith Bateman, vice president of workers compensation and health for the Alliance in Downers Grove, Ill. said individual health care providers, "are unlikely to have a full understanding of what is required of them. In the face of this uncertainty, property-casualty insurers are concerned that covered entities will 'just say no' to many legitimate requests for disclosure."

He noted that, under the rule, only health providers would face penalties for improperly disclosing medical records.

"Covered entities are the group at risk if a violation occurs, but there is quite a bit of uncertainty concerning when a disclosure may be made," Mr. Bateman said.

The problem exists, he said, even though, "the medical portions of property-casualty coverages such as workers compensation and automobile coverage are excluded from the definition of health plan under the rule."

Property-casualty insurer access to medical information needed for claims administration is obtained from medical providers covered by the rule, "and thus will be indirectly impacted, quite possibly in an adverse manner," Mr. Bateman said.

The Health and Human Services Final Rule on Standards for the Privacy of Identifiable Health Information applies to healthcare providers that transmit information electronically, healthcare clearinghouses and large health plans.

Under the Rule, covered entities generally are required to have a specific signed authorization by the individual whose health information is to be disclosed, the Alliance noted.

But the Alliance said there are "myriad exceptions relating to treatment, payment and health care operations, under which many interactions with property-casualty insurers fall, as well as specific exceptions relating to workers compensation and reporting regarding state laws."

With only limited exceptions, health care providers under the rule are required to disclose only the "minimum necessary information."

The rule also does not preempt more stringent state requirements. As a result, the Alliance said, property-casualty insurers may be burdened by not being able to develop a standardized authorization form that can be used in all states.

"For the above reasons, and many more, the initial 'break-in' period for this rule could pose problems for insurers handling claims in workers compensation, automobile and other property-casualty coverages providing medical coverage," Mr. Bateman concluded.

The Alliance of American Insurers represents more than 340 p-c insurance companies.