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45–252 CC 1998

H.R. 52, THE FAIR HEALTH INFORMATION

PRACTICES ACT OF 1997

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, 

INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON GOVERNMENT 

REFORM AND OVERSIGHT 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

ON

H.R. 52

TO ESTABLISH A CODE OF FAIR INFORMATION PRACTICES FOR 

HEALTH INFORMATION, TO AMEND SECTION 552A OF TITLE 5, 

UNITED STATES CODE, AND FOR OTHER PURPOSES

JUNE 5, 1997

Serial No. 105–58

Printed for the use of the Committee on Government Reform and Oversight

(

(II)

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT 

DAN BURTON, Indiana, Chairman 

BENJAMIN A. GILMAN, New York 

J. DENNIS HASTERT, Illinois 

CONSTANCE A. MORELLA, Maryland 

CHRISTOPHER SHAYS, Connecticut 

STEVEN SCHIFF, New Mexico 

CHRISTOPHER COX, California 

ILEANA ROS-LEHTINEN, Florida 

JOHN M. MCHUGH, New York 

STEPHEN HORN, California 

JOHN L. MICA, Florida 

THOMAS M. DAVIS, Virginia 

DAVID M. MCINTOSH, Indiana 

MARK E. SOUDER, Indiana 

JOE SCARBOROUGH, Florida 

JOHN B. SHADEGG, Arizona 

STEVEN C. LATOURETTE, Ohio 

MARSHALL ‘‘MARK’’ SANFORD, South 

Carolina 

JOHN E. SUNUNU, New Hampshire 

PETE SESSIONS, Texas 

MICHAEL PAPPAS, New Jersey 

VINCE SNOWBARGER, Kansas 

BOB BARR, Georgia 

ROB PORTMAN, Ohio 

HENRY A. WAXMAN, California 

TOM LANTOS, California 

ROBERT E. WISE, JR., West Virginia 

MAJOR R. OWENS, New York 

EDOLPHUS TOWNS, New York 

PAUL E. KANJORSKI, Pennsylvania 

GARY A. CONDIT, California 

CAROLYN B. MALONEY, New York 

THOMAS M. BARRETT, Wisconsin 

ELEANOR HOLMES NORTON, Washington, 

DC 

CHAKA FATTAH, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland 

DENNIS J. KUCINICH, Ohio 

ROD R. BLAGOJEVICH, Illinois 

DANNY K. DAVIS, Illinois 

JOHN F. TIERNEY, Massachusetts 

JIM TURNER, Texas 

THOMAS H. ALLEN, Maine 

HAROLD E. FORD, JR., Tennessee 

———

BERNARD SANDERS, Vermont 

(Independent) 

KEVIN BINGER, Staff Director 

DANIEL R. MOLL, Deputy Staff Director 

JUDITH MCCOY, Chief Clerk 

PHIL SCHILIRO, Minority Staff Director 

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY

STEPHEN HORN, California, Chairman 

PETE SESSIONS, Texas 

THOMAS DAVIS, Virginia 

JOE SCARBOROUGH, Florida 

MARSHALL ‘‘MARK’’ SANFORD, South 

Carolina 

JOHN E. SUNUNU, New Hampshire 

——— ———

CAROLYN B. MALONEY, New York 

PAUL E. KANJORSKI, Pennsylvania 

MAJOR R. OWENS, New York 

ROD R. BLAGOJEVICH, Illinois 

DANNY K. DAVIS, Illinois 

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California 

J. RUSSELL GEORGE, Staff Director and Chief Counsel 

MARK UNCAPHER, Counsel 

JOHN HYNES, Professional Staff Member 

ANDREA MILLER, Clerk 

DAVID MCMILLEN, Minority Professional Staff Member 

(III)

C O N T E N T S 

Page 

Hearing held on June 5, 1997 ................................................................................. 1

Text of H.R. 52 .................................................................................................. 1

Statement of: 

Condit, Hon. Gary A., a Representative in Congress from the State of 

California ....................................................................................................... 27

Gabriel, Dr. Sherine, Department of Health Services Research, Mayo 

Clinic, representing the Healthcare Leadership Council; Dr. Elizabeth 

Andrews, Glaxo Wellcome Inc., representing the Pharmaceutical Research and Manufacturers Association; and Dr. Steven Kenny Hoge, 

chair, Council on Psychiatry and Law of the American Psychiatric 

Association ..................................................................................................... 97

Goldman, Janlori, visiting scholar, Georgetown University Law Center, 

and affiliated with the Center for Democracy and Technology; Dr. Donald J. Palmisano, member, Board of Trustees, American Medical Association; and Merida L. Johns, Ph.D., president, American Health Information Management Association ................................................................. 53

Stearns, Hon. Cliff, a Representative in Congress from the State of Florida ................................................................................................................... 32

Letters, statements, etc., submitted for the record by: 

Andrews, Dr. Elizabeth, Glaxo Wellcome Inc., representing the Pharmaceutical Research and Manufacturers Association: 

Information concerning informed consent ............................................... 158

Prepared statement of ............................................................................... 116

Condit, Hon. Gary A., a Representative in Congress from the State of 

California, prepared statement of ................................................................ 29

Gabriel, Dr. Sherine, Department of Health Services Research, Mayo 

Clinic, representing the Healthcare Leadership Council, prepared statement of ........................................................................................................... 100

Hoge, Dr. Steven Kenny, chair, Council on Psychiatry and Law of the 

American Psychiatric Association, prepared statement of ........................ 128

Johns, Merida L., Ph.D., president, American Health Information Management Association, prepared statement of .............................................. 67

Maloney, Hon. Carolyn B., a Representative in Congress from the State 

of New York, prepared statement of ........................................................... 49

Palmisano, Dr. Donald J., member, Board of Trustees, American Medical 

Association, prepared statement of ............................................................. 59

Shays, Hon. Christopher, a Representative in Congress from the State 

of Connecticut, prepared statement of ........................................................ 41

Slaughter, Hon. Louise M., a Representative in Congress from the State 

of New York, prepared statement of ........................................................... 43

Stearns, Hon. Cliff, a Representative in Congress from the State of Florida, prepared statement of ........................................................................... 34

(1)

H.R. 52: THE FAIR HEALTH INFORMATION 

PRACTICES ACT OF 1997

THURSDAY, JUNE 5, 1997 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, 

INFORMATION, AND TECHNOLOGY, 

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 9:32 a.m., in room 

2154, Rayburn House Office Building, Hon. Stephen Horn 

(chairman of the subcommittee) presiding. 

Present: Representatives Horn, Sessions, and Maloney. 

Staff present: J. Russell George, staff director and chief counsel; 

Mark Uncapher, counsel; John Hynes, professional staff member; 

Andrea Miller, clerk; and David McMillen and Ron Stroman, minority professional staff members. 

Mr. HORN. The Subcommittee on Government Management, Information, and Technology will come to order. 

We are here today to consider the issue of medical records privacy and H.R. 52, the Fair Health Information Practices Act of 

1997, introduced by Representative Condit of California. 

[The text of H.R. 52 follows:]

105TH CONGRESS 

1ST SESSION

H.R. 52

To establish a code of fair information practices for health information, to amend 

section 552a of title 5, United States Code, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 7, 1997

MR. CONDIT introduced the following bill; which was referred to the Committee on 

Commerce, and in addition to the Committees on Government Reform and Oversight, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction 

of the committee concerned 

A BILL 

To establish a code of fair information practices for health information, to amend 

section 552a of title 5, United States Code, and for other purposes. 

Be it enacted by the Senate and House of Representatives of the United States 

of America in Congress assembled, 

2

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Fair Health Information Practices Act of 1997’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Findings and purposes. 

Sec. 3. Definitions. 

TITLE I—FAIR HEALTH INFORMATION PRACTICES 

Subtitle A—Duties of Health Information Trustees 

Sec. 101. Inspection of protected health information. 

Sec. 102. Amendment of protected health information. 

Sec. 103. Notice of information practices. 

Sec. 104. Disclosure history. 

Sec. 105. Security. 

Subtitle B—Use and Disclosure of Protected Health Information 

Sec. 111. General limitations on use and disclosure. 

Sec. 112. Authorizations for disclosure of protected health information. 

Sec. 113. Treatment, payment, and oversight. 

Sec. 114. Next of kin and directory information. 

Sec. 115. Public health. 

Sec. 116. Health research. 

Sec. 117. Emergency circumstances. 

Sec. 118. Judicial and administrative purposes. 

Sec. 119. Law enforcement. 

Sec. 120. Subpoenas, warrants, and search warrants. 

Subtitle C—Access Procedures and Challenge Rights 

Sec. 131. Access procedures for law enforcement subpoenas, warrants, and search 

warrants. 

Sec. 132. Challenge procedures for law enforcement subpoenas. 

Sec. 133. Access and challenge procedures for other subpoenas. 

Sec. 134. Construction of subtitle; suspension of statute of limitations. 

Sec. 135. Responsibilities of Secretary. 

Subtitle D—Miscellaneous Provisions 

Sec. 141. Payment card and electronic payment transactions. 

Sec. 142. Access to protected health information outside of the United States. 

Sec. 143. Standards for electronic documents and communications. 

Sec. 144. Duties and authorities of affiliated persons. 

Sec. 145. Agents and attorneys. 

Sec. 146. Minors. 

Sec. 147. Maintenance of certain protected health information. 

Subtitle E—Enforcement 

Sec. 151. Civil actions. 

Sec. 152. Civil money penalties. 

Sec. 153. Alternative dispute resolution. 

Sec. 154. Amendments to criminal law. 

TITLE II—AMENDMENTS TO TITLE 5, UNITED STATES CODE 

Sec. 201. Amendments to title 5, United States Code. 

TITLE III—REGULATIONS, RESEARCH, AND EDUCATION; EFFECTIVE 

DATES; APPLICABILITY; AND RELATIONSHIP TO OTHER LAWS 

Sec. 301. Regulations; research and education. 

Sec. 302. Effective dates. 

Sec. 303. Applicability. 

Sec. 304. Relationship to other laws. 

3

SEC. 2. FINDINGS AND PURPOSES. 

(a) FINDINGS.—The Congress finds as follows: 

(1) The right to privacy is a personal and fundamental right protected by 

the Constitution of the United States. 

(2) The improper use or disclosure of personally identifiable health information about an individual may cause significant harm to the interests of the individual in privacy and health care, and may unfairly affect the ability of the individual to obtain employment, education, insurance, credit, and other necessities. 

(3) Current legal protections for health information vary from State to State 

and are inadequate to meet the need for fair information practices standards. 

(4) The movement of individuals and health information across State lines, 

access to and exchange of health information from automated data banks and 

networks, and the emergence of multistate health care providers and payors 

create a compelling need for uniform Federal law, rules, and procedures governing the use, maintenance, and disclosure of health information. 

(5) Uniform rules governing the use, maintenance, and disclosure of health 

information are an essential part of health care reform, are necessary to support the computerization of health information, and can reduce the cost of providing health services by making the necessary transfer of health information 

more efficient. 

(6) An individual needs access to health information about the individual 

as a matter of fairness, to enable the individual to make informed decisions 

about health care, and to correct inaccurate or incomplete information. 

(b) PURPOSES.—The purposes of this Act are as follows: 

(1) To define the rights of an individual with respect to health information 

about the individual that is created or maintained as part of the health treatment and payment process. 

(2) To define the rights and responsibilities of a person who creates or 

maintains individually identifiable health information that originates or is used 

in the health treatment or payment process. 

(3) To establish effective mechanisms to enforce the rights and responsibilities defined in this Act. 

SEC. 3. DEFINITIONS. 

(a) DEFINITIONS RELATING TO PROTECTED HEALTH INFORMATION.—For purposes 

of this Act: 

(1) DISCLOSE.—The term ‘‘disclose’’, when used with respect to protected 

health information that is held by a health information trustee, means to provide access to the information, but only if such access is provided by the trustee 

to a person other than—

(A) the trustee or an officer or employee of the trustee; 

(B) an affiliated person of the trustee; or 

(C) a protected individual who is a subject of the information. 

(2) DISCLOSURE.—The term ‘‘disclosure’’ means the act or an instance of disclosing. 

(3) PROTECTED HEALTH INFORMATION.—The term ‘‘protected health information’’ means any information, whether oral or recorded in any form or medium—

(A) that is created or received in a State by—

(i) a health care provider; 

(ii) a health benefit plan sponsor; 

(iii) a health oversight agency; or 

(iv) a public health authority; 

(B) that relates in any way to the past, present, or future physical or 

mental health or condition or functional status of a protected individual, 

the provision of health care to a protected individual, or payment for the 

provision of health care to a protected individual; and 

(C) that—

(i) identifies the individual; or 

(ii) with respect to which there is a reasonable basis to believe that 

the information can be used to identify the individual. 

(4) PROTECTED INDIVIDUAL.—The term ‘‘protected individual’’ means an individual who, with respect to a date—

(A) is living on the date; or 

(B) has died within the 2-year period ending on the date. 

(5) USE.—The term ‘‘use’’, when used with respect to protected health information that is held by a health information trustee, means—

4

(A) to use, or provide access to, the information in any manner that 

does not constitute a disclosure; or 

(B) any act or instance of using, or providing access, described in subparagraph (A). 

(b) DEFINITIONS RELATING TO HEALTH INFORMATION TRUSTEES.—For purposes 

of this Act: 

(1) CARRIER.—The term ‘‘carrier’’ means a licensed insurance company, a 

hospital or medical service corporation (including an existing Blue Cross or Blue 

Shield organization, within the meaning of section 833(c)(2) of the Internal Revenue Code of 1986), a health maintenance organization, or other entity licensed 

or certified by a State to provide health insurance or health benefits. 

(2) HEALTH BENEFIT PLAN.—The term ‘‘health benefit plan’’ means—

(A) any contract of health insurance, including any hospital or medical 

service policy or certificate, hospital or medical service plan contract, or 

health maintenance organization group contract, that is provided by a carrier; and 

(B) an employee welfare benefit plan or other arrangement insofar as 

the plan or arrangement provides health benefits and is funded in a manner other than through the purchase of one or more policies or contracts 

described in subparagraph (A). 

(3) HEALTH BENEFIT PLAN SPONSOR.—The term ‘‘health benefit plan sponsor’’ means a person who, with respect to a specific item of protected health information, receives, creates, uses, maintains, or discloses the information while 

acting in whole or in part in the capacity of—

(A) a carrier or other person providing a health benefit plan, including 

any public entity that provides payments for health care items and services 

under a health benefit plan that are equivalent to payments provided by 

a private person under such a plan; or 

(B) an officer or employee of a person described in subparagraph (A). 

(4) HEALTH CARE PROVIDER.—The term ‘‘health care provider’’ means a person who, with respect to a specific item of protected health information, receives, creates, uses, maintains, or discloses the information while acting in 

whole or in part in the capacity of—

(A) a person who is licensed, certified, registered, or otherwise authorized by law to provide an item or service that constitutes health care in the 

ordinary course of business or practice of a profession; 

(B) a Federal or State program that directly provides items or services 

that constitute health care to beneficiaries; or 

(C) an officer or employee of a person described in subparagraph (A) 

or (B). 

(5) HEALTH INFORMATION TRUSTEE.—The term ‘‘health information trustee’’

means—

(A) a health care provider; 

(B) a health oversight agency; 

(C) a health benefit plan sponsor; 

(D) a public health authority; 

(E) a health researcher; or 

(F) a person who, with respect to a specific item of protected health information, is not described in subparagraphs (A) through (E) but receives 

the information—

(i) pursuant to—

(I) section 117 (relating to emergency circumstances); 

(II) section 118 (relating to judicial and administrative purposes); 

(III) section 119 (relating to law enforcement); or 

(IV) section 120 (relating to subpoenas, warrants, and search 

warrants); or 

(ii) while acting in whole or in part in the capacity of an officer or 

employee of a person described in clause (i). 

(6) HEALTH OVERSIGHT AGENCY.—The term ‘‘health oversight agency’’ means 

a person who, with respect to a specific item of protected health information, 

receives, creates, uses, maintains, or discloses the information while acting in 

whole or in part in the capacity of—

(A) a person who performs or oversees the performance of an assessment, evaluation, determination, or investigation relating to the licensing, 

accreditation, or certification of health care providers; 

(B) a person who—

5

(i) performs or oversees the performance of an audit, assessment, 

evaluation, determination, or investigation relating to the effectiveness 

of, compliance with, or applicability of, legal, fiscal, medical, or scientific standards or aspects of performance related to the delivery of, 

or payment for, health care; and 

(ii) is a public agency, acting on behalf of a public agency, acting 

pursuant to a requirement of a public agency, or carrying out activities 

under a State or Federal statute regulating the assessment, evaluation, 

determination, or investigation; or 

(C) an officer or employee of a person described in subparagraph (A) 

or (B). 

(7) HEALTH RESEARCHER.—The term ‘‘health researcher’’ means a person 

who, with respect to a specific item of protected health information, receives the 

information— (A) pursuant to section 116 (relating to health research); or 

(B) while acting in whole or in part in the capacity of an officer or employee of a person described in subparagraph (A). 

(8) PUBLIC HEALTH AUTHORITY.—The term ‘‘public health authority’’ means a person who, with respect to a specific item of protected health information, 

receives, creates, uses, maintains, or discloses the information while acting in 

whole or in part in the capacity of— (A) an authority of the United States, a State, or a political subdivision 

of a State that is responsible for public health matters; 

(B) a person acting under the direction of such an authority; or 

(C) an officer or employee of a person described in subparagraph (A) 

or (B). 

(c) OTHER DEFINITIONS.—For purposes of this Act: 

(1) AFFILIATED PERSON.—The term ‘‘affiliated person’’ means a person 

who— (A) is not a health information trustee; 

(B) is a contractor, subcontractor, associate, or subsidiary of a person 

who is a health information trustee; and 

(C) pursuant to an agreement or other relationship with such trustee, 

receives, creates, uses, maintains, or discloses protected health information. 

(2) APPROVED HEALTH RESEARCH PROJECT.—The term ‘‘approved health research project’’ means a biomedical, epidemiological, or health services research 

or statistics project, or a research project on behavioral and social factors affecting health, that has been approved by a certified institutional review board. 

(3) CERTIFIED INSTITUTIONAL REVIEW BOARD.—The term ‘‘certified institutional review board’’ means a board— (A) established by an entity to review research involving protected 

health information and the rights of protected individuals conducted at or 

supported by the entity; 

(B) established in accordance with regulations of the Secretary under 

section 116(d)(1); and 

(C) certified by the Secretary under section 116(d)(2). 

(4) HEALTH CARE.—The term ‘‘health care’’—

(A) means—

(i) any preventive, diagnostic, therapeutic, rehabilitative, maintenance, or palliative care, counseling, service, or procedure—

(I) with respect to the physical or mental condition, or functional status, of an individual; or 

(II) affecting the structure or function of the human body or 

any part of the human body, including banking of blood, sperm, organs, or any other tissue; or 

(ii) any sale or dispensing of a drug, device, equipment, or other 

item to an individual, or for the use of an individual, pursuant to a prescription; but 

(B) does not include any item or service that is not furnished for the 

purpose of maintaining or improving the health of an individual. 

(5) LAW ENFORCEMENT INQUIRY.—The term ‘‘law enforcement inquiry’’

means a lawful investigation or official proceeding inquiring into a violation of, 

or failure to comply with, any criminal or civil statute or any regulation, rule, 

or order issued pursuant to such a statute. 

(6) PERSON.—The term ‘‘person’’ includes an authority of the United States, 

a State, or a political subdivision of a State. 

(7) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Health and 

Human Services. 

6

(8) STATE.—The term ‘‘State’’ includes the District of Columbia, Puerto Rico, 

the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. 

TITLE I—FAIR HEALTH INFORMATION PRACTICES 

Subtitle A—Duties of Health Information Trustees 

SEC. 101. INSPECTION OF PROTECTED HEALTH INFORMATION. 

(a) IN GENERAL.—Except as provided in subsection (b), a health information 

trustee described in subsection (g)—

(1) shall permit a protected individual to inspect any protected health information about the individual that the trustee maintains, any record with respect 

to such information required under section 104, and any copy of an authorization required under section 112 that pertains to such information; 

(2) shall provide the protected individual with a copy of the information, 

upon request by the individual and subject to any conditions imposed by the 

trustee under subsection (d), in any form or format requested by the individual, 

if the information is readily reproducible by the trustee in such form or format; 

(3) shall permit a person who has been designated in writing by the protected individual to inspect the information on behalf of the individual or to accompany the individual during the inspection; and 

(4) may offer to explain or interpret information that is inspected or copied 

under this subsection. 

(b) EXCEPTIONS.—A health information trustee is not required by this section 

to permit inspection or copying of protected health information by a protected individual if any of the following conditions apply: 

(1) INFORMATION ABOUT OTHERS.—The information relates to an individual, 

other than the protected individual or a health care provider, and the trustee 

determines in the exercise of reasonable professional judgment that inspection 

or copying of the information would cause sufficient harm to one or both of the 

individuals so as to outweigh the desirability of permitting access. 

(2) ENDANGERMENT TO LIFE OR SAFETY.—Inspection or copying of the information could reasonably be expected to endanger the life or physical safety of 

an individual. 

(3) CONFIDENTIAL SOURCE.—The information identifies or could reasonably 

lead to the identification of an individual (other than a health care provider) 

who provided information under a promise of confidentiality to a health care 

provider concerning a protected individual who is a subject of the information. 

(4) ADMINISTRATIVE PURPOSES.—The information—

(A) is used by the trustee solely for administrative purposes and not 

in the provision of health care to a protected individual who is a subject 

of the information; and 

(B) is not disclosed by the trustee to any person. 

(5) DUPLICATIVE INFORMATION.—The information duplicates information 

available for inspection under subsection (a). 

(6) INFORMATION COMPILED IN ANTICIPATION OF LITIGATION.—The information is compiled principally—

(A) in anticipation of a civil, criminal, or administrative action or proceeding; or 

(B) for use in such an action or proceeding. 

(c) INSPECTION AND COPYING OF SEGREGABLE PORTION.—A health information 

trustee shall permit inspection and copying under subsection (a) of any reasonably 

segregable portion of a record after deletion of any portion that is exempt under 

subsection (b). 

(d) CONDITIONS.—A health information trustee may—

(1) require a written request for the inspection and copying of protected 

health information under this section; and 

(2) charge a reasonable cost-based fee for—

(A) permitting inspection of information under this section; and 

(B) providing a copy of protected health information under this section. 

(e) STATEMENT OF REASONS FOR DENIAL.—If a health information trustee denies 

in whole or in part a request for inspection or copying under this section, the trustee 

shall provide the protected individual who made the request with a written statement of the reasons for the denial. 

(f) DEADLINE.—A health information trustee shall comply with or deny a request for inspection or copying of protected health information under this section 

within the 30-day period beginning on the date the trustee receives the request. 

7

(g) APPLICABILITY.—This section applies to a health information trustee who 

is— (1) a health benefit plan sponsor; 

(2) a health care provider; 

(3) a health oversight agency; or 

(4) a public health authority. 

SEC. 102. AMENDMENT OF PROTECTED HEALTH INFORMATION. 

(a) IN GENERAL.—A health information trustee described in subsection (f) shall, 

within the 45-day period beginning on the date the trustee receives from a protected 

individual about whom the trustee maintains protected health information a written 

request that the trustee correct or amend the information, complete the duties described in one of the following paragraphs: 

(1) CORRECTION OR AMENDMENT AND NOTIFICATION.—The trustee shall— (A) make the correction or amendment requested; 

(B) inform the protected individual of the amendment or correction that 

has been made; 

(C) make reasonable efforts to inform any person who is identified by 

the protected individual, who is not an employee of the trustee, and to 

whom the uncorrected or unamended portion of the information was previously disclosed of the correction or amendment that has been made; and 

(D) at the request of the individual, make reasonable efforts to inform 

any known source of the uncorrected or unamended portion of the information about the correction or amendment that has been made. 

(2) REASONS FOR REFUSAL AND REVIEW PROCEDURES.—The trustee shall inform the protected individual of— (A) the reasons for the refusal of the trustee to make the correction or 

amendment; 

(B) any procedures for further review of the refusal; and 

(C) the individual’s right to file with the trustee a concise statement 

setting forth the requested correction or amendment and the individual’s reasons for disagreeing with the refusal of the trustee. 

(b) STANDARDS FOR CORRECTION OR AMENDMENT.—A trustee shall correct or 

amend protected health information in accordance with a request made under subsection (a) if the trustee determines that the information is not accurate, relevant, 

timely, or complete for the purposes for which the information may be used or disclosed by the trustee. 

(c) STATEMENT OF DISAGREEMENT.—After a protected individual has filed a 

statement of disagreement under subsection (a)(2)(C), the trustee, in any subsequent disclosure of the disputed portion of the information, shall include a copy of 

the individual’s statement and may include a concise statement of the trustee’s rea- sons for not making the requested correction or amendment. 

(d) CONSTRUCTION.—This section may not be construed to require a health information trustee to conduct a hearing or proceeding concerning a request for a correction or amendment to protected health information the trustee maintains. 

(e) CORRECTION.—For purposes of subsection (a), a correction is deemed to have 

been made to protected health information when— (1) information that is not timely, accurate, relevant, or complete is clearly 

marked as incorrect; or 

(2) supplementary correct information is made part of the information and 

adequately cross-referenced. 

(f) APPLICABILITY.—This section applies to a health information trustee who is— (1) a health benefit plan sponsor; 

(2) a health care provider; 

(3) a health oversight agency; or 

(4) a public health authority. 

SEC. 103. NOTICE OF INFORMATION PRACTICES. 

(a) PREPARATION OF NOTICE.—A health information trustee described in subsection (d) shall prepare a written notice of information practices describing the following: 

(1) The rights under this Act of a protected individual who is the subject 

of protected health information, including the right to inspect and copy such information and the right to seek amendments to such information, and the procedures for authorizing disclosures of protected health information and for revoking such authorizations. 

(2) The procedures established by the trustee for the exercise of such rights. 

(3) The uses and disclosures of protected health information that are authorized under this Act. 

8

(b) DISSEMINATION OF NOTICE.—A health information trustee—

(1) shall, upon request, provide any person with a copy of the trustee’s notice of information practices (described in subsection (a)); and 

(2) shall make reasonable efforts to inform persons in a clear and conspicuous manner of the existence and availability of such notice. 

(c) MODEL NOTICES.—Not later than July 1, 1999, the Secretary, after notice 

and opportunity for public comment, shall develop and disseminate model notices 

of information practices for use by health information trustees under this section. 

(d) APPLICABILITY.—This section applies to a health information trustee who 

is—

(1) a health benefit plan sponsor; 

(2) a health care provider; or 

(3) a health oversight agency. 

SEC. 104. DISCLOSURE HISTORY. 

(a) IN GENERAL.—Except as provided in subsection (b) and section 114, each 

health information trustee shall create and maintain, with respect to any protected 

health information the trustee discloses, a record of—

(1) the date and purpose of the disclosure; 

(2) the name of the person to whom the disclosure was made; 

(3) the address of the person to whom the disclosure was made or the location to which the disclosure was made; and 

(4) where practicable, a description of the information disclosed. 

(b) REGULATIONS.—Not later than July 1, 1999, the Secretary shall promulgate 

regulations that exempt a health information trustee from maintaining a record 

under subsection (a) with respect protected health information disclosed by the 

trustee for purposes of peer review, licensing, certification, accreditation, and similar activities. 

SEC. 105. SECURITY. 

(a) IN GENERAL.—Each health information trustee who receives or creates protected health information that is subject to this Act shall maintain reasonable and 

appropriate administrative, technical, and physical safeguards—

(1) to ensure the integrity and confidentiality of the information; 

(2) to protect against any reasonably anticipated—

(A) threats or hazards to the security or integrity of the information; 

and 

(B) unauthorized uses or disclosures of the information; and 

(3) otherwise ensure compliance with this Act by the trustee and the officers and employees of the trustee. 

(b) GUIDELINES.—Not later than July 1, 1999, the Secretary, after notice and 

opportunity for public comment, shall develop and disseminate guidelines for the 

implementation of this section. The guidelines shall take into account—

(1) the technical capabilities of record systems used to maintain protected 

health information; 

(2) the costs of security measures; 

(3) the need for training persons who have access to protected health information; and 

(4) the value of audit trails in computerized record systems. 

Subtitle B—Use and Disclosure of Protected Health Information 

SEC. 111. GENERAL LIMITATIONS ON USE AND DISCLOSURE. 

(a) USE.—Except as otherwise provided under this Act, a health information 

trustee may use protected health information only for a purpose—

(1) that is compatible with and directly related to the purpose for which the 

information—

(A) was collected; or 

(B) was received by the trustee; or 

(2) for which the trustee is authorized to disclose the information under this 

Act. 

(b) DISCLOSURE.—A health information trustee may disclose protected health information only as authorized under this Act. 

(c) SCOPE OF USES AND DISCLOSURES.—

(1) IN GENERAL.—A use or disclosure of protected health information by a 

health information trustee shall be limited, when practicable, to the minimum 

amount of information necessary to accomplish the purpose for which the information is used or disclosed. 

9

(2) GUIDELINES.—Not later than July 1, 1999, the Secretary, after notice 

and opportunity for public comment, shall issue guidelines to implement paragraph (1), which shall take into account the technical capabilities of the record 

systems used to maintain protected health information and the costs of limiting 

use and disclosure. 

(d) IDENTIFICATION OF DISCLOSED INFORMATION AS PROTECTED INFORMATION.— Except with respect to protected health information that is disclosed under section 

114 (relating to next of kin and directory information), a health information trustee 

may disclose protected health information only if the recipient has been notified that 

the information is protected health information that is subject to this Act. 

(e) AGREEMENT TO LIMIT USE OR DISCLOSURE.—A health information trustee 

who receives protected health information from any person pursuant to a written 

agreement to restrict use or disclosure of the information to a greater extent than 

otherwise would be required under this Act shall comply with the terms of the 

agreement, except where use or disclosure of the information in violation of the 

agreement is required by law. A trustee who fails to comply with the preceding sentence shall be subject to section 151 (relating to civil actions) with respect to such 

failure. 

(f) NO GENERAL REQUIREMENT TO DISCLOSE.—Nothing in this Act shall be construed to require a health information trustee to disclose protected health information not otherwise required to be disclosed by law. 

SEC. 112. AUTHORIZATIONS FOR DISCLOSURE OF PROTECTED HEALTH INFORMATION. 

(a) WRITTEN AUTHORIZATIONS.—A health information trustee may disclose protected health information pursuant to an authorization executed by the protected individual who is the subject of the information, if each of the following requirements 

is satisfied: 

(1) WRITING.—The authorization is in writing, signed by the individual, and 

dated on the date of such signature. 

(2) SEPARATE FORM.—The authorization is not on a form used to authorize 

or facilitate the provision of, or payment for, health care. 

(3) TRUSTEE DESCRIBED.—The trustee is specifically named or generically 

described in the authorization as authorized to disclose such information. 

(4) RECIPIENT DESCRIBED.—The person to whom the information is to be 

disclosed is specifically named or generically described in the authorization as 

a person to whom such information may be disclosed. 

(5) STATEMENT OF INTENDED USES AND DISCLOSURES RECEIVED.—The authorization contains an acknowledgment that the individual has received a 

statement described in subsection (b) from such person. 

(6) INFORMATION DESCRIBED.—The information to be disclosed is described 

in the authorization. 

(7) AUTHORIZATION TIMELY RECEIVED.—The authorization is received by the 

trustee during a period described in subsection (c)(1). 

(8) DISCLOSURE TIMELY MADE.—The disclosure occurs during a period described in subsection (c)(2). 

(b) STATEMENT OF INTENDED USES AND DISCLOSURES.—

(1) IN GENERAL.—A person who wishes to receive from a health information 

trustee protected health information about a protected individual pursuant to 

an authorization executed by the individual shall supply the individual, in writing and on a form that is distinct from the authorization, with a statement of 

the uses for which the person intends the information and the disclosures the 

person intends to make of the information. Such statement shall be supplied before the authorization is executed. 

(2) ENFORCEMENT.—If the person uses or discloses the information in a 

manner that is inconsistent with such statement, the person shall be subject to 

section 151 (relating to civil actions) with respect to such failure, except where 

such use or disclosure is required by law. 

(3) MODEL STATEMENTS.—Not later than July 1, 1999, the Secretary, after 

notice and opportunity for public comment, shall develop and disseminate model 

statements of intended uses and disclosures of the type described in paragraph 

(1). 

(c) TIME LIMITATIONS ON AUTHORIZATIONS.—

(1) RECEIPT BY TRUSTEE.—For purposes of subsection (a)(7), an authorization is timely received if it is received by the trustee during—

(A) the 1-year period beginning on the date that the authorization is 

signed under subsection (a)(1), if the authorization permits the disclosure 

of protected health information to—

(i) a health benefit plan sponsor; 

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(ii) a health care provider; 

(iii) a health oversight agency; 

(iv) a public health authority; 

(v) a health researcher; or 

(vi) a person who provides counseling or social services to individuals; or 

(B) the 30-day period beginning on the date that the authorization is 

signed under subsection (a)(1), if the authorization permits the disclosure 

of protected health information to a person other than a person described 

in subparagraph (A). 

(2) DISCLOSURE BY TRUSTEE.—For purposes of subsection (a)(8), a disclosure 

is timely made if it occurs before—

(A) the date or event (if any) specified in the authorization upon which 

the authorization expires; and 

(B) the expiration of the 6-month period beginning on the date the 

trustee receives the authorization. 

(d) REVOCATION OR AMENDMENT OF AUTHORIZATION.—

(1) IN GENERAL.—A protected individual in writing may revoke or amend 

an authorization described in subsection (a), in whole or in part, at any time, 

except insofar as—

(A) disclosure of protected health information has been authorized to 

permit validation of expenditures based on health condition by a government authority; or 

(B) action has been taken in reliance on the authorization. 

(2) NOTICE OF REVOCATION.—A health information trustee who discloses 

protected health information in reliance on an authorization that has been revoked shall not be subject to any liability or penalty under this Act if—

(A) the reliance was in good faith; 

(B) the trustee had no notice of the revocation; and 

(C) the disclosure was otherwise in accordance with the requirements 

of this section. 

(e) ADDITIONAL REQUIREMENTS OF TRUSTEE.—A health information trustee may 

impose requirements for an authorization that are in addition to the requirements 

in this section. 

(f) COPY.—A health information trustee who discloses protected health information pursuant to an authorization under this section shall maintain a copy of the 

authorization. 

(g) CONSTRUCTION.—This section may not be construed—

(1) to require a health information trustee to disclose protected health information; or 

(2) to limit the right of a health information trustee to charge a fee for the 

disclosure or reproduction of protected health information. 

(h) SUBPOENAS, WARRANTS, AND SEARCH WARRANTS.—If a health information 

trustee discloses protected health information pursuant to an authorization in order 

to comply with an administrative subpoena or warrant or a judicial subpoena or 

search warrant, the authorization—

(1) shall specifically authorize the disclosure for the purpose of permitting 

the trustee to comply with the subpoena, warrant, or search warrant; and 

(2) shall otherwise meet the requirements in this section. 

SEC. 113. TREATMENT, PAYMENT, AND OVERSIGHT. 

(a) DISCLOSURES BY PLANS, PROVIDERS, AND OVERSIGHT AGENCIES.—A health 

information trustee described in subsection (d) may disclose protected health information to a health benefit plan sponsor, health care provider, or health oversight 

agency if the disclosure is—

(1) for the purpose of providing health care and a protected individual who 

is a subject of the information has not previously objected to the disclosure in 

writing; 

(2) for the purpose of providing for the payment for health care furnished 

to an individual; or 

(3) for use by a health oversight agency for a purpose that is described in 

subparagraph (A) or (B)(i) of section 3(b)(6). 

(b) DISCLOSURES BY CERTAIN OTHER TRUSTEES.—A health information trustee 

may disclose protected health information to a health care provider if—

(1) the disclosure is for the purpose described in subsection (a)(1); and 

(2) the trustee—

(A) is a public health authority; 

11

(B) received protected health information pursuant to section 117 

(relating to emergency circumstances); or 

(C) is an officer or employee of a trustee described in subparagraph (B). 

(c) USE IN ACTION AGAINST INDIVIDUAL.—A person who receives protected 

health information about a protected individual through a disclosure under this section may not use or disclose the information in any administrative, civil, or criminal 

action or investigation directed against the individual, except an action or investigation arising out of and related to receipt of health care or payment for health care. 

(d) APPLICABILITY.—A health information trustee referred to in subsection (a) is 

any of the following: 

(1) A health benefit plan sponsor. 

(2) A health care provider. 

(3) A health oversight agency. 

SEC. 114. NEXT OF KIN AND DIRECTORY INFORMATION. 

(a) NEXT OF KIN.—A health information trustee who is a health care provider, 

who received protected health information pursuant to section 117 (relating to emergency circumstances), or who is an officer or employee of such a recipient may orally 

disclose protected health information about a protected individual to the next of kin 

of the individual (as defined under State law), or to a person with whom the individual has a close personal relationship, if— (1) the trustee has no reason to believe that the individual would consider 

the information especially sensitive; 

(2) the individual has not previously objected to the disclosure; 

(3) the disclosure is consistent with good medical or other professional practice; and 

(4) the information disclosed is limited to information about health care 

that is being provided to the individual at or about the time of the disclosure. 

(b) DIRECTORY INFORMATION.— (1) IN GENERAL.—A health information trustee who is a health care provider, who received protected health information pursuant to section 117 

(relating to emergency circumstances), or who is an officer or employee of such 

a recipient may disclose to any person the information described in paragraph 

(2) if— (A) a protected individual who is a subject of the information has not 

objected in writing to the disclosure; 

(B) the disclosure is otherwise consistent with good medical and other 

professional practice; and 

(C) the information does not reveal specific information about the physical or mental condition or functional status of a protected individual or 

about the health care provided to a protected individual. 

(2) INFORMATION DESCRIBED.—The information referred to in paragraph (1) 

is the following: 

(A) The name of an individual receiving health care from a health care 

provider on a premises controlled by the provider. 

(B) The location of the individual on such premises. 

(C) The general health status of the individual, described in terms of 

critical, poor, fair, stable, satisfactory, or terms denoting similar conditions. 

(c) NO DISCLOSURE RECORD REQUIRED.—A health information trustee who discloses protected health information under this section is not required to create and 

maintain a record of the disclosure under section 104. 

(d) RECIPIENTS.—A person to whom protected health information is disclosed 

under this section shall not, by reason of such disclosure, be subject to any requirement under this Act. 

SEC. 115. PUBLIC HEALTH. 

(a) IN GENERAL.—A health information trustee who is a health care provider 

or a public health authority may disclose protected health information to— (1) a public health authority for use in legally authorized— (A) disease or injury reporting; 

(B) public health surveillance; or 

(C) public health investigation or intervention; or 

(2) an individual who is authorized by law to receive the information in a 

public health intervention. 

(b) USE IN ACTION AGAINST INDIVIDUAL.—A public health authority who receives protected health information about a protected individual through a disclosure under this section may not use or disclose the information in any administrative, civil, or criminal action or investigation directed against the individual, except 

where the use or disclosure is authorized by law for protection of the public health. 

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(c) INDIVIDUAL RECIPIENTS.—An individual to whom protected health information is disclosed under subsection (a)(2) shall not, by reason of such disclosure, be 

subject to any requirement under this Act. 

SEC. 116. HEALTH RESEARCH. 

(a) IN GENERAL.—A health information trustee described in subsection (c) may 

disclose protected health information to a person if— (1) the person is conducting an approved health research project; 

(2) the information is to be used in the project; and 

(3) the project has been determined by a certified institutional review board 

to be— (A) of sufficient importance so as to outweigh the intrusion into the privacy of the protected individual who is the subject of the information that 

would result from the disclosure; and 

(B) impracticable to conduct without the information. 

(b) LIMITATIONS ON USE AND DISCLOSURE; OBLIGATIONS OF RECIPIENT.—A 

health researcher who receives protected health information about a protected individual pursuant to subsection (a)— (1) may use the information solely for purposes of an approved health research project; 

(2) may not use or disclose the information in any administrative, civil, or 

criminal action or investigation directed against the individual; and 

(3) shall remove or destroy, at the earliest opportunity consistent with the 

purposes of the approved health research project in connection with which the 

disclosure was made, information that would enable an individual to be identified, unless a certified institutional review board has determined that there is 

a health or research justification for retention of such identifiers and there is 

an adequate plan to protect the identifiers from use and disclosure that is inconsistent with this Act. 

(c) APPLICABILITY.—A health information trustee referred to in subsection (a) is 

any health information trustee other than a person who, with respect to the specific 

protected health information to be disclosed under such subsection, received the information—

(1) pursuant to—

(A) section 118 (relating to judicial and administrative purposes); 

(B) paragraph (1), (2), (3), or (4) of section 119(a) (relating to law enforcement); or 

(C) section 120 (relating to subpoenas, warrants, and search warrants); 

or 

(2) while acting in whole or in part in the capacity of an officer or employee 

of a person described in paragraph (1). 

(d) REQUIREMENTS FOR INSTITUTIONAL REVIEW BOARDS.—

(1) REGULATIONS.—Not later than July 1, 1999, the Secretary, after opportunity for notice and comment, shall promulgate regulations establishing requirements for certified institutional review boards under this Act. The regulations shall be based on regulations promulgated under section 491(a) of the 

Public Health Service Act and shall ensure that certified institutional review 

boards are qualified to assess and protect the confidentiality of research subjects. 

(2) CERTIFICATION.—The Secretary shall certify that an institutional review 

board satisfies the requirements of the regulations promulgated under paragraph (1). 

SEC. 117. EMERGENCY CIRCUMSTANCES. 

(a) IN GENERAL.—A health information trustee may disclose protected health information if the trustee believes, on reasonable grounds, that the disclosure is necessary to prevent or lessen a serious and imminent threat to the health or safety 

of an individual. 

(b) USE IN ACTION AGAINST INDIVIDUAL.—A person who receives protected 

health information about a protected individual through a disclosure under this section may not use or disclose the information in any administrative, civil, or criminal 

action or investigation directed against the individual, except an action or investigation arising out of and related to receipt of health care or payment for health care. 

SEC. 118. JUDICIAL AND ADMINISTRATIVE PURPOSES. 

(a) IN GENERAL.—A health information trustee described in subsection (d) may 

disclose protected health information—

(1) pursuant to the Federal Rules of Civil Procedure, the Federal Rules of 

Criminal Procedure, or comparable rules of other courts or administrative agenVerDate 0ct 31 2002 09:50 Nov 14, 2002 Jkt 081024 PO 00000 Frm 00016 Fmt 6633 Sfmt 6621 W:\DISC\45252 45252
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cies in connection with litigation or proceedings to which a protected individual 

who is a subject of the information is a party and in which the individual has 

placed the individual’s physical or mental condition or functional status in 

issue; 

(2) if directed by a court in connection with a court-ordered examination of 

an individual; or 

(3) to assist in the identification of a dead individual. 

(b) WRITTEN STATEMENT.—A person seeking protected health information about 

a protected individual held by health information trustee under— (1) subsection (a)(1)— (A) shall notify the protected individual or the attorney of the protected 

individual of the request for the information; 

(B) shall provide the trustee with a signed document attesting—

(i) that the protected individual is a party to the litigation or proceedings for which the information is sought; 

(ii) that the individual has placed the individual’s physical or mental condition or functional status in issue; and 

(iii) the date on which the protected individual or the attorney of 

the protected individual was notified under subparagraph (A); and 

(C) shall not accept any requested protected health information from 

the trustee until the termination of the 10-day period beginning on the date 

notice was given under subparagraph (A); or 

(2) subsection (a)(3) shall provide the trustee with a written statement that 

the information is sought to assist in the identification of a dead individual. 

(c) USE AND DISCLOSURE.—A person to whom protected health information is 

disclosed under this section may use and disclose the information only to accomplish 

the purpose for which the disclosure was made. 

(d) APPLICABILITY.—A health information trustee referred to in subsection (a) is 

any of the following: 

(1) A health benefit plan sponsor. 

(2) A health care provider. 

(3) A health oversight agency. 

(4) A person who, with respect to the specific protected health information 

to be disclosed under such subsection, received the information—

(A) pursuant to—

(i) section 117 (relating to emergency circumstances); or 

(ii) section 120 (relating to subpoenas, warrants, and search warrants); or 

(B) while acting in whole or in part in the capacity of an officer or employee of a person described in subparagraph (A). 

SEC. 119. LAW ENFORCEMENT. 

(a) IN GENERAL.—A health information trustee may disclose protected health information to a law enforcement agency, other than a health oversight agency—

(1) if the information is disclosed for use in an investigation or prosecution 

of a health information trustee; 

(2) in connection with criminal activity committed against the trustee or an 

affiliated person of the trustee or on premises controlled by the trustee; or 

(3) if the information is needed to determine whether a crime has been committed and the nature of any crime that may have been committed (other than 

a crime that may have been committed by the protected individual who is the 

subject of the information). 

(b) ADDITIONAL AUTHORITY OF CERTAIN TRUSTEES.—A health information trustee who is not a public health authority or a health researcher may disclose protected 

health information to a law enforcement agency (other than a health oversight agency)—

(1) to assist in the identification or location of a victim, fugitive, or witness 

in a law enforcement inquiry; 

(2) pursuant to a law requiring the reporting of specific health care information to law enforcement authorities; or 

(3) if the information is specific health information described in paragraph 

(2) and the trustee is operated by a Federal agency; 

(c) CERTIFICATION.—Where a law enforcement agency requests a health information trustee to disclose protected health information under subsection (a) or 

(b)(1), the agency shall provide the trustee with a written certification that—

(1) is signed by a supervisory official of a rank designated by the head of 

the agency; 

(2) specifies the information requested; and 

14

(3) states that the information is needed for a lawful purpose under this 

section. 

(d) RESTRICTIONS ON DISCLOSURE AND USE.—A person who receives protected 

health information about a protected individual through a disclosure under this section may not use or disclose the information—

(1) in any administrative, civil, or criminal action or investigation directed 

against the individual, except an action or investigation arising out of and directly related to the action or investigation for which the information was obtained; and 

(2) otherwise unless the use or disclosure is necessary to fulfill the purpose 

for which the information was obtained and is not prohibited by any other provision of law. 

SEC. 120. SUBPOENAS, WARRANTS, AND SEARCH WARRANTS. 

(a) IN GENERAL.—A health information trustee described in subsection (g) may 

disclose protected health information if the disclosure is pursuant to any of the following: 

(1) A subpoena issued under the authority of a grand jury and the trustee 

is provided a written certification by the grand jury that the grand jury has 

complied with the applicable access provisions of section 131. 

(2) An administrative subpoena or warrant or a judicial subpoena or search 

warrant and the trustee is provided a written certification by the person seeking the information that the person has complied with the applicable access provisions of section 131 or 133(a). 

(3) An administrative subpoena or warrant or a judicial subpoena or search 

warrant and the disclosure otherwise meets the conditions of one of sections 113 

through 119. 

(b) AUTHORITY OF ALL TRUSTEES.—Any health information trustee may disclose 

protected health information if the disclosure is pursuant to subsection (a)(3). 

(c) RESTRICTIONS ON USE AND DISCLOSURE.—Protected health information about 

a protected individual that is disclosed by a health information trustee pursuant 

to—

(1) subsection (a)(2) may not be otherwise used or disclosed by the recipient 

unless the use or disclosure is necessary to fulfill the purpose for which the information was obtained; and 

(2) subsection (a)(3) may not be used or disclosed by the recipient unless 

the recipient complies with the conditions and restrictions on use and disclosure 

with which the recipient would have been required to comply if the disclosure 

by the trustee had been made under the section referred to in subsection (a)(3) 

the conditions of which were met by the disclosure. 

(d) RESTRICTIONS ON GRAND JURIES.—Protected health information that is disclosed by a health information trustee under subsection (a)(1)—

(1) shall be returnable on a date when the grand jury is in session and actually presented to the grand jury; 

(2) shall be used only for the purpose of considering whether to issue an 

indictment or report by that grand jury, or for the purpose of prosecuting a 

crime for which that indictment or report is issued, or for a purpose authorized 

by rule 6(e) of the Federal Rules of Criminal Procedure or a comparable State 

rule; 

(3) shall be destroyed or returned to the trustee if not used for one of the 

purposes specified in paragraph (2); and 

(4) shall not be maintained, or a description of the contents of such information shall not be maintained, by any government authority other than in the 

sealed records of the grand jury, unless such information has been used in the 

prosecution of a crime for which the grand jury issued an indictment or presentment or for a purpose authorized by rule 6(e) of the Federal Rules of Criminal 

Procedure or a comparable State rule. 

(e) USE IN ACTION AGAINST INDIVIDUAL.—A person who receives protected 

health information about a protected individual through a disclosure under this section may not use or disclose the information in any administrative, civil, or criminal 

action or investigation directed against the individual, except an action or investigation arising out of and directly related to the inquiry for which the information was 

obtained; 

(f) CONSTRUCTION.—Nothing in this section shall be construed as authority for 

a health information trustee to refuse to comply with a valid administrative subpoena or warrant or a valid judicial subpoena or search warrant that meets the requirements of this Act. 

15

(g) APPLICABILITY.—A health information trustee referred to in subsection (a) is 

any trustee other than the following: 

(1) A public health authority. 

(2) A health researcher. 

Subtitle C—Access Procedures and Challenge Rights 

SEC. 131. ACCESS PROCEDURES FOR LAW ENFORCEMENT SUBPOENAS, WARRANTS, AND 

SEARCH WARRANTS. 

(a) PROBABLE CAUSE REQUIREMENT.—A government authority may not obtain 

protected health information about a protected individual from a health information 

trustee under paragraph (1) or (2) of section 120(a) for use in a law enforcement 

inquiry unless there is probable cause to believe that the information is relevant to 

a legitimate law enforcement inquiry being conducted by the government authority. 

(b) WARRANTS AND SEARCH WARRANTS.—A government authority that obtains 

protected health information about a protected individual from a health information 

trustee under circumstances described in subsection (a) and pursuant to a warrant 

or search warrant shall, not later than 30 days after the date the warrant was 

served on the trustee, serve the individual with, or mail to the last known address 

of the individual, a copy of the warrant. 

(c) SUBPOENAS.—Except as provided in subsection (d), a government authority 

may not obtain protected health information about a protected individual from a 

health information trustee under circumstances described in subsection (a) and pursuant to a subpoena unless a copy of the subpoena has been served by hand delivery 

upon the individual, or mailed to the last known address of the individual, on or 

before the date on which the subpoena was served on the trustee, together with a 

notice (published by the Secretary under section 135(1)) of the individual’s right to 

challenge the subpoena in accordance with section 132, and—

(1) 30 days have passed from the date of service, or 30 days have passed 

from the date of mailing, and within such time period the individual has not 

initiated a challenge in accordance with section 132; or 

(2) disclosure is ordered by a court under section 132. 

(d) APPLICATION FOR DELAY.—

(1) IN GENERAL.—A government authority may apply to an appropriate 

court to delay (for an initial period of not longer than 90 days) serving a copy 

of a subpoena and a notice otherwise required under subsection (c) with respect 

to a law enforcement inquiry. The government authority may apply to the court 

for extensions of the delay. 

(2) REASONS FOR DELAY.—An application for a delay, or extension of a 

delay, under this subsection shall state, with reasonable specificity, the reasons 

why the delay or extension is being sought. 

(3) EX PARTE ORDER.—The court shall enter an ex parte order delaying, or 

extending the delay of, the notice and an order prohibiting the trustee from revealing the request for, or the disclosure of, the protected health information 

being sought if the court finds that—

(A) the inquiry being conducted is within the lawful jurisdiction of the 

government authority seeking the protected health information; 

(B) there is probable cause to believe that the protected health information being sought is relevant to a legitimate law enforcement inquiry being 

conducted by the government authority; 

(C) the government authority’s need for the information outweighs the 

privacy interest of the protected individual who is the subject of the information; and 

(D) there are reasonable grounds to believe that receipt of a notice by 

the individual will result in—

(i) endangering the life or physical safety of any individual; 

(ii) flight from prosecution; 

(iii) destruction of or tampering with evidence or the information 

being sought; or 

(iv) intimidation of potential witnesses. 

(4) SERVICE OF APPLICATION ON INDIVIDUAL.—Upon the expiration of a period of delay of notice under this subsection, the government authority shall 

serve upon the individual, with the service of the subpoena and the notice, a 

copy of any applications filed and approved under this subsection. 

SEC. 132. CHALLENGE PROCEDURES FOR LAW ENFORCEMENT SUBPOENAS. 

(a) MOTION TO QUASH SUBPOENA.—Within 30 days of the date of service, or 30 

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tected health information about a protected individual from a health information 

trustee under paragraph (1) or (2) of section 120(a) (except a subpoena to which section 133 applies), the individual may file (without filing fee) a motion to quash the 

subpoena—

(1) in the case of a State judicial subpoena, in the court which issued the 

subpoena; 

(2) in the case of a subpoena issued under the authority of a State that is 

not a State judicial subpoena, in a court of competent jurisdiction; 

(3) in the case of a subpoena issued under the authority of a Federal court, 

in any court of the United States of competent jurisdiction; or 

(4) in the case of any other subpoena issued under the authority of the 

United States, in—

(A) the United States district court for the district in which the individual resides or in which the subpoena was issued; or 

(B) another United States district court of competent jurisdiction. 

(b) COPY.—A copy of the motion shall be served by the individual upon the government authority by delivery of registered or certified mail. 

(c) AFFIDAVITS AND SWORN DOCUMENTS.—The government authority may file 

with the court such affidavits and other sworn documents as sustain the validity 

of the subpoena. The individual may file with the court, within 5 days of the date 

of the authority’s filing, affidavits and sworn documents in response to the 

authority’s filing. The court, upon the request of the individual, the government authority, or both, may proceed in camera. 

(d) PROCEEDINGS AND DECISION ON MOTION.—The court may conduct such proceedings as it deems appropriate to rule on the motion. All such proceedings shall 

be completed, and the motion ruled on, within 10 calendar days of the date of the 

government authority’s filing. 

(e) EXTENSION OF TIME LIMITS FOR GOOD CAUSE.—The court, for good cause 

shown, may at any time in its discretion enlarge the time limits established by subsections (c) and (d). 

(f) STANDARD FOR DECISION.—A court may deny a motion under subsection (a) 

if it finds that there is probable cause to believe that the protected health information being sought is relevant to a legitimate law enforcement inquiry being conducted by the government authority, unless the court finds that the individual’s privacy interest outweighs the government authority’s need for the information. The 

individual shall have the burden of demonstrating that the individual’s privacy interest outweighs the need established by the government authority for the information. 

(g) SPECIFIC CONSIDERATIONS WITH RESPECT TO PRIVACY INTEREST.—In determining under subsection (f) whether an individual’s privacy interest outweighs the 

government authority’s need for the information, the court shall consider—

(1) the particular purpose for which the information was collected by the 

trustee; 

(2) the degree to which disclosure of the information will embarrass, injure, 

or invade the privacy of the individual; 

(3) the effect of the disclosure on the individual’s future health care; 

(4) the importance of the inquiry being conducted by the government authority, and the importance of the information to that inquiry; and 

(5) any other factor deemed relevant by the court. 

(h) ATTORNEY’S FEES.—In the case of any motion brought under subsection (a) 

in which the individual has substantially prevailed, the court, in its discretion, may 

assess against a government authority a reasonable attorney’s fee and other litigation costs (including expert fees) reasonably incurred. 

(i) NO INTERLOCUTORY APPEAL.—A court ruling denying a motion to quash 

under this section shall not be deemed a final order and no interlocutory appeal 

may be taken therefrom by the individual. An appeal of such a ruling may be taken 

by the individual within such period of time as is provided by law as part of any 

appeal from a final order in any legal proceeding initiated against the individual 

arising out of or based upon the protected health information disclosed. 

SEC. 133. ACCESS AND CHALLENGE PROCEDURES FOR OTHER SUBPOENAS. 

(a) IN GENERAL.—A person (other than a government authority seeking protected health information under circumstances described in section 131(a)) may not 

obtain protected health information about a protected individual from a health information trustee pursuant to a subpoena under section 120(a)(2) unless—

(1) a copy of the subpoena has been served upon the individual or mailed 

to the last known address of the individual on or before the date on which the 

subpoena was served on the trustee, together with a notice (published by the 

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Secretary under section 135(2)) of the individual’s right to challenge the subpoena, in accordance with subsection (b); and 

(2) either— (A) 30 days have passed from the date of service or 30 days have 

passed from the date of the mailing and within such time period the individual has not initiated a challenge in accordance with subsection (b); or 

(B) disclosure is ordered by a court under such subsection. 

(b) MOTION TO QUASH.—Within 30 days of the date of service or 30 days of the 

date of mailing of a subpoena seeking protected health information about a protected individual from a health information trustee under subsection (a), the individual may file (without filing fee) in any court of competent jurisdiction, a motion 

to quash the subpoena, with a copy served on the person seeking the information. 

The individual may oppose, or seek to limit, the subpoena on any grounds that 

would otherwise be available if the individual were in possession of the information. 

(c) STANDARD FOR DECISION.—The court shall grant an individual’s motion 

under subsection (b) if the person seeking the information has not sustained the 

burden of demonstrating that— (1) there are reasonable grounds to believe that the information will be relevant to a lawsuit or other judicial or administrative proceeding; and 

(2) the need of the person for the information outweighs the privacy interest 

of the individual. 

(d) SPECIFIC CONSIDERATIONS WITH RESPECT TO PRIVACY INTEREST.—In determining under subsection (c) whether the need of the person for the information outweighs the privacy interest of the individual, the court shall consider— (1) the particular purpose for which the information was collected by the 

trustee; 

(2) the degree to which disclosure of the information will embarrass, injure, 

or invade the privacy of the individual; 

(3) the effect of the disclosure on the individual’s future health care; 

(4) the importance of the information to the lawsuit or proceeding; and 

(5) any other factor deemed relevant by the court. 

(e) ATTORNEY’S FEES.—In the case of any motion brought under subsection (b) 

by an individual against a person in which the individual has substantially prevailed, the court, in its discretion, may assess against the person a reasonable attorney’s fee and other litigation costs (including expert fees) reasonably incurred. 

SEC. 134. CONSTRUCTION OF SUBTITLE; SUSPENSION OF STATUTE OF LIMITATIONS. 

(a) IN GENERAL.—Nothing in this subtitle shall affect the right of a health information trustee to challenge a request for protected health information. Nothing in 

this subtitle shall entitle a protected individual to assert the rights of a health information trustee. 

(b) EFFECT OF MOTION ON STATUTE OF LIMITATIONS.—If an individual who is 

the subject of protected health information files a motion under this subtitle which 

has the effect of delaying the access of a government authority to such information, 

the period beginning on the date such motion was filed and ending on the date on 

which the motion is decided shall be excluded in computing any period of limitations 

within which the government authority may commence any civil or criminal action 

in connection with which the access is sought. 

SEC. 135. RESPONSIBILITIES OF SECRETARY. 

Not later than July 1, 1999, the Secretary, after notice and opportunity for public comment, shall develop and disseminate brief, clear, and easily understood model 

notices—

(1) for use under subsection (c) of section 131, detailing the rights of a protected individual who wishes to challenge, under section 132, the disclosure of 

protected health information about the individual under such subsection; and 

(2) for use under subsection (a) of section 133, detailing the rights of a protected individual who wishes to challenge, under subsection (b) of such section, 

the disclosure of protected health information about the individual under such 

section. 

Subtitle D—Miscellaneous Provisions 

SEC. 141. PAYMENT CARD AND ELECTRONIC PAYMENT TRANSACTIONS. 

(a) PAYMENT FOR HEALTH CARE THROUGH CARD OR ELECTRONIC MEANS.—If a 

protected individual pays a health information trustee for health care by presenting 

a debit, credit, or other payment card or account number, or by any other electronic 

payment means, the trustee may disclose to a person described in subsection (b) 

only such protected health information about the individual as is necessary for the 

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processing of the payment transaction or the billing or collection of amounts charged 

to, debited from, or otherwise paid by, the individual using the card, number, or 

other electronic payment means. 

(b) TRANSACTION PROCESSING.—A person who is a debit, credit, or other payment card issuer, is otherwise directly involved in the processing of payment transactions involving such cards or other electronic payment transactions, or is otherwise directly involved in the billing or collection of amounts paid through such 

means, may only use or disclose protected health information about a protected individual that has been disclosed in accordance with subsection (a) when necessary 

for— (1) the authorization, settlement, billing or collection of amounts charged to, 

debited from, or otherwise paid by, the individual using a debit, credit, or other 

payment card or account number, or by other electronic payment means; 

(2) the transfer of receivables, accounts, or interest therein; 

(3) the audit of the credit, debit, or other payment card account information; 

(4) compliance with Federal, State, or local law; or 

(5) a properly authorized civil, criminal, or regulatory investigation by Federal, State, or local authorities. 

SEC. 142. ACCESS TO PROTECTED HEALTH INFORMATION OUTSIDE OF THE UNITED STATES. 

(a) IN GENERAL.—Notwithstanding the provisions of subtitle B, and except as 

provided in subsection (b), a health information trustee may not permit any person 

who is not in a State to have access to protected health information about a protected individual unless one or more of the following conditions exist: 

(1) SPECIFIC AUTHORIZATION.—The individual has specifically consented to 

the provision of such access outside of the United States in an authorization 

that meets the requirements of section 112. 

(2) EQUIVALENT PROTECTION.—The provision of such access is authorized 

under this Act and the Secretary has determined that there are fair information 

practices for protected health information in the jurisdiction where the access 

will be provided that provide protections for individuals and protected health 

information that are equivalent to the protections provided for by this Act. 

(3) ACCESS REQUIRED BY LAW.—The provision of such access is required 

under—

(A) a Federal statute; or 

(B) a treaty or other international agreement applicable to the United 

States. 

(b) EXCEPTIONS.—Subsection (a) does not apply where the provision of access to 

protected health information—

(1) is to a foreign public health authority; 

(2) is authorized under section 114 (relating to next of kin and directory information), 116 (relating to health research), or 117 (relating to emergency circumstances); or 

(3) is necessary for the purpose of providing for payment for health care 

that has been provided to an individual. 

SEC. 143. STANDARDS FOR ELECTRONIC DOCUMENTS AND COMMUNICATIONS. 

(a) STANDARDS.—Not later than July 1, 1999, the Secretary, after notice and opportunity for public comment and in consultation with appropriate private standardsetting organizations and other interested parties, shall establish standards with respect to the creation, transmission, receipt, and maintenance, in electronic and magnetic form, of each type of written document specifically required or authorized 

under this Act. Where a signature is required under any other provision of this Act, 

such standards shall provide for an electronic or magnetic substitute that serves the 

functional equivalent of a signature. 

(b) TREATMENT OF COMPLYING DOCUMENTS AND COMMUNICATIONS.—An electronic or magnetic document or communication that satisfies the standards established under subsection (a) with respect to such document or communication shall 

be treated as satisfying the requirements of this Act that apply to an equivalent 

written document. 

SEC. 144. DUTIES AND AUTHORITIES OF AFFILIATED PERSONS. 

(a) REQUIREMENTS ON TRUSTEES.—

(1) PROVISION OF INFORMATION.—A health information trustee may provide 

protected health information to a person who, with respect to the trustee, is an 

affiliated person and may permit the affiliated person to use such information, 

only for the purpose of conducting, supporting, or facilitating an activity that 

the trustee is authorized to undertake. 

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(2) NOTICE TO AFFILIATED PERSON.—A health information trustee shall notify a person who, with respect to the trustee, is an affiliated person of any duties under this Act that the affiliated person is required to fulfill and of any 

authorities under this Act that the affiliated person is authorized to exercise. 

(b) DUTIES OF AFFILIATED PERSONS.—

(1) IN GENERAL.—An affiliated person shall fulfill any duty under this Act 

that—

(A) the health information trustee with whom the person has an agreement or relationship described in section 3(c)(1)(C) is required to fulfill; and 

(B) the person has undertaken to fulfill pursuant to such agreement or 

relationship. 

(2) CONSTRUCTION OF OTHER SUBTITLES.—With respect to a duty described 

in paragraph (1) that an affiliated person is required to fulfill, the person shall 

be considered a health information trustee for purposes of this Act. The person 

shall be subject to subtitle E (relating to enforcement) with respect to any such 

duty that the person fails to fulfill. 

(3) EFFECT ON TRUSTEE.—An agreement or relationship with an affiliated 

person does not relieve a health information trustee of any duty or liability 

under this Act. 

(b) AUTHORITIES OF AFFILIATED PERSONS.—

(1) IN GENERAL.—An affiliated person may only exercise an authority under 

this Act that the health information trustee with whom the person is affiliated 

may exercise and that the person has been given by the trustee pursuant to an 

agreement or relationship described in section 3(c)(1)(C). With respect to any 

such authority, the person shall be considered a health information trustee for 

purposes of this Act. The person shall be subject to subtitle E (relating to enforcement) with respect to any act that exceeds such authority. 

(2) EFFECT ON TRUSTEE.—An agreement or relationship with an affiliated 

person does not affect the authority of a health information trustee under this 

Act. 

SEC. 145. AGENTS AND ATTORNEYS. 

(a) IN GENERAL.—Except as provided in subsections (b) and (c), a person who 

is authorized by law (on grounds other than an individual’s minority), or by an instrument recognized under law, to act as an agent, attorney, proxy, or other legal 

representative for a protected individual or the estate of a protected individual, or 

otherwise to exercise the rights of the individual or estate, may, to the extent authorized, exercise and discharge the rights of the individual or estate under this Act. 

(b) HEALTH CARE POWER OF ATTORNEY.—A person who is authorized by law (on 

grounds other than an individual’s minority), or by an instrument recognized under 

law, to make decisions about the provision of health care to an individual who is 

incapacitated may exercise and discharge the rights of the individual under this Act 

to the extent necessary to effectuate the terms or purposes of the grant of authority. 

(c) NO COURT DECLARATION.—If a health care provider determines that an individual, who has not been declared to be legally incompetent, suffers from a medical 

condition that prevents the individual from acting knowingly or effectively on the 

individual’s own behalf, the right of the individual to authorize disclosure under section 112 may be exercised and discharged in the best interest of the individual by—

(1) a person described in subsection (b) with respect to the individual; 

(2) a person described in subsection (a) with respect to the individual, but 

only if a person described in paragraph (1) cannot be contacted after a reasonable effort; 

(3) the next of kin of the individual, but only if a person described in paragraph (1) or (2) cannot be contacted after a reasonable effort; or 

(4) the health care provider, but only if a person described in paragraph (1), 

(2), or (3) cannot be contacted after a reasonable effort. 

SEC. 146. MINORS. 

(a) INDIVIDUALS WHO ARE 18 OR LEGALLY CAPABLE.—In the case of an individual—

(1) who is 18 years of age or older, all rights of the individual shall be exercised by the individual, except as provided in section 145; or 

(2) who, acting alone, has the legal capacity to apply for and obtain health 

care and has sought such care, the individual shall exercise all rights of an individual under this Act with respect to protected health information relating to 

such care. 

(b) INDIVIDUALS UNDER 18.—Except as provided in subsection (a)(2), in the case 

of an individual who is—

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(1) under 14 years of age, all the individual’s rights under this Act shall 

be exercised through the parent or legal guardian of the individual; or 

(2) 14, 15, 16, or 17 years of age, the right of inspection (under section 101), 

the right of amendment (under section 102), and the right to authorize disclosure of protected health information (under section 112) of the individual may 

be exercised either by the individual or by the parent or legal guardian of the 

individual. 

SEC. 147. MAINTENANCE OF CERTAIN PROTECTED HEALTH INFORMATION. 

(a) IN GENERAL.—A State shall establish a process under which the protected 

health information described in subsection (b) that is maintained by a person described in subsection (c) is delivered to, and maintained by, the State or an individual or entity designated by the State. 

(b) INFORMATION DESCRIBED.—The protected health information referred to in 

subsection (a) is protected health information that—

(1) is recorded in any form or medium; 

(2) is created by—

(A) a health care provider; or 

(B) a health benefit plan sponsor that provides benefits in the form of 

items and services to enrollees and not in the form of reimbursement for 

items and services; and 

(3) relates in any way to the past, present, or future physical or mental 

health or condition or functional status of a protected individual or the provision of health care to a protected individual. 

(c) PERSONS DESCRIBED.—A person referred to in subsection (a) is any of the 

following: 

(1) A health care facility previously located in the State that has closed. 

(2) A professional practice previously operated by a health care provider in 

the State that has closed. 

(3) A health benefit plan sponsor that—

(A) previously provided benefits in the form of items and services to enrollees in the State; and 

(B) has ceased to do business. 

Subtitle E—Enforcement 

SEC. 151. CIVIL ACTIONS. 

(a) IN GENERAL.—Any individual whose right under this Act has been knowingly or negligently violated—

(1) by a health information trustee, or any other person, who is not described in paragraph (2), (3), (4), or (5) may maintain a civil action for actual 

damages and for equitable relief against the health information trustee or other 

person; 

(2) by an officer or employee of the United States while the officer or employee was acting within the scope of the office or employment may maintain 

a civil action for actual damages and for equitable relief against the United 

States; 

(3) by an officer or employee of any government authority of a State that 

has waived its sovereign immunity to a claim for damages resulting from a violation of this Act while the officer or employee was acting within the scope of 

the office or employment may maintain a civil action for actual damages and 

for equitable relief against the State government; 

(4) by an officer or employee of a government of a State that is not described in paragraph (3) may maintain a civil action for actual damages and for 

equitable relief against the officer or employee; or 

(5) by an officer or employee of a government authority while the officer or 

employee was not acting within the scope of the office or employment may 

maintain a civil action for actual damages and for equitable relief against the 

officer or employee. 

(b) KNOWING VIOLATIONS.—Any individual entitled to recover actual damages 

under this section because of a knowing violation of a provision of this Act (other 

than subsection (c) or (d) of section 111) shall be entitled to recover the amount of 

the actual damages demonstrated or $5000, whichever is greater. 

(c) ACTUAL DAMAGES.—For purposes of this section, the term ‘‘actual damages’’

includes damages paid to compensate an individual for nonpecuniary losses such as 

physical and mental injury as well as damages paid to compensate for pecuniary 

losses. 

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(d) PUNITIVE DAMAGES; ATTORNEY’S FEES.—In any action brought under this 

section in which the complainant has prevailed because of a knowing violation of 

a provision of this Act (other than subsection (c) or (d) of section 111), the court 

may, in addition to any relief awarded under subsections (a) and (b), award such 

punitive damages as may be warranted. In such an action, the court, in its discretion, may allow the prevailing party a reasonable attorney’s fee (including expert 

fees) as part of the costs, and the United States shall be liable for costs the same 

as a private person. 

(e) LIMITATION.—A civil action under this section may not be commenced more 

than 2 years after the date on which the aggrieved individual discovered the violation or the date on which the aggrieved individual had a reasonable opportunity to 

discover the violation, whichever occurs first. 

(f) INSPECTION AND AMENDMENT.—If a health information trustee has established a formal internal procedure that allows an individual who has been denied 

inspection or amendment of protected health information to appeal the denial, the 

individual may not maintain a civil action in connection with the denial until the 

earlier of—

(1) the date the appeal procedure has been exhausted; or 

(2) the date that is 4 months after the date on which the appeal procedure 

was initiated. 

(g) NO LIABILITY FOR PERMISSIBLE DISCLOSURES.—A health information trustee 

who makes a disclosure of protected health information about a protected individual 

that is permitted by this Act and not otherwise prohibited by State or Federal statute shall not be liable to the individual for the disclosure under common law. 

(h) NO LIABILITY FOR INSTITUTIONAL REVIEW BOARD DETERMINATIONS.—If the 

members of a certified institutional review board have in good faith determined that 

an approved health research project is of sufficient importance so as to outweigh the 

intrusion into the privacy of an individual pursuant to section 116(a)(1), the members, the board, and the parent institution of the board shall not be liable to the 

individual as a result of such determination. 

(i) GOOD FAITH RELIANCE ON CERTIFICATION.—A health information trustee who 

relies in good faith on a certification by a government authority or other person and 

discloses protected health information about an individual in accordance with this 

Act shall not be liable to the individual for such disclosure. 

SEC. 152. CIVIL MONEY PENALTIES. 

(a) VIOLATION.—Any health information trustee who the Secretary determines 

has demonstrated a pattern or practice of failure to comply with the provisions of 

this Act shall be subject, in addition to any other penalties that may be prescribed 

by law, to a civil money penalty of not more than $10,000 for each such failure. In 

determining the amount of any penalty to be assessed under the procedures established under subsection (b), the Secretary shall take into account the previous 

record of compliance of the person being assessed with the applicable requirements 

of this Act and the gravity of the violation. 

(b) PROCEDURES FOR IMPOSITION OF PENALTIES.—The provisions of section 

1128A of the Social Security Act (other than subsections (a) and (b)) shall apply to 

the imposition of a civil monetary penalty under this section in the same manner 

as such provisions apply with respect to the imposition of a penalty under section 

1128A of such Act. 

SEC. 153. ALTERNATIVE DISPUTE RESOLUTION. 

(a) IN GENERAL.—Not later than July 1, 1999, the Secretary shall, by regulation, develop alternative dispute resolution methods for use by individuals, health 

information trustees, and other persons in resolving claims under section 151. 

(b) EFFECT ON INITIATION OF CIVIL ACTIONS.—

(1) IN GENERAL.—Subject to paragraph (2), the regulations established 

under subsection (a) may provide that an individual alleging that a right of the 

individual under this Act has been violated shall pursue at least one alternative 

dispute resolution method developed under such subsection as a condition precedent to commencing a civil action under section 151. 

(2) LIMITATION.—Such regulations may not require an individual to refrain 

from commencing a civil action to pursue one or more alternative dispute resolution method for a period that is greater than 6 months. 

(3) SUSPENSION OF STATUTE OF LIMITATIONS.—The regulations established 

by the Secretary under subsection (a) may provide that a period in which an 

individual described in paragraph (1) pursues (as defined by the Secretary) an 

alternative dispute resolution method under this section shall be excluded in 

computing the period of limitations under section 151(e). 

22

(c) METHODS.—The methods under subsection (a) shall include at least the following: 

(1) ARBITRATION.—The use of arbitration. 

(2) MEDIATION.—The use of mediation. 

(3) EARLY OFFERS OF SETTLEMENT.—The use of a process under which parties make early offers of settlement. 

(d) STANDARDS FOR ESTABLISHING METHODS.—In developing alternative dispute 

resolution methods under subsection (a), the Secretary shall ensure that the methods promote the resolution of claims in a manner that—

(1) is affordable for the parties involved; 

(2) provides for timely and fair resolution of claims; and 

(3) provides for reasonably convenient access to dispute resolution for individuals. 

SEC. 154. AMENDMENTS TO CRIMINAL LAW. 

(a) IN GENERAL.—Title 18, United States Code, is amended by inserting after 

chapter 73 the following: 

‘‘CHAPTER 74—OBTAINING PROTECTED HEALTH INFORMATION 

‘‘Sec. 

‘‘1531. Definitions. 

‘‘1532. Obtaining protected health information under false pretenses. 

‘‘1533. Monetary gain from obtaining protected health information under false pretenses. 

‘‘1534. Knowing and unlawful obtaining of protected health information. 

‘‘1535. Monetary gain from knowing and unlawful obtaining of protected health information. 

‘‘1536. Knowing and unlawful use or disclosure of protected health information. 

‘‘1537. Monetary gain from knowing and unlawful sale, transfer, or use of protected 

health information. 

‘‘§ 1531. Definitions 

‘‘As used in this chapter—

‘‘(1) the term ‘health information trustee’ has the meaning given such term 

in section 3(b)(5) of the Fair Health Information Practices Act of 1997; 

‘‘(2) the term ‘protected health information’ has the meaning given such 

term in section 3(a)(3) of such Act; and 

‘‘(3) the term ‘protected individual’ has the meaning given such term in section 3(a)(4) of such Act. 

‘‘§ 1532. Obtaining protected health information under false pretenses 

‘‘Whoever under false pretenses—

‘‘(1) requests or obtains protected health information from a health information trustee; or 

‘‘(2) obtains from a protected individual an authorization for the disclosure 

of protected health information about the individual maintained by a health information trustee; 

shall be fined under this title or imprisoned not more than 5 years, or both. 

‘‘§ 1533. Monetary gain from obtaining protected health information under 

false pretenses 

‘‘Whoever under false pretenses—

‘‘(1) requests or obtains protected health information from a health information trustee with the intent to sell, transfer, or use such information for profit 

or monetary gain; or 

‘‘(2) obtains from a protected individual an authorization for the disclosure 

of protected health information about the individual maintained by a health information trustee with the intent to sell, transfer, or use such authorization for 

profit or monetary gain; 

and knowingly sells, transfers, or uses such information or authorization for profit 

or monetary gain shall be fined under this title or imprisoned not more than 10 

years, or both. 

‘‘§ 1534. Knowing and unlawful obtaining of protected health information 

‘‘Whoever knowingly obtains protected health information from a health information trustee in violation of the Fair Health Information Practices Act of 1997, 

knowing that such obtaining is unlawful, shall be fined under this title or imprisoned not more than 5 years, or both. 

23

‘‘§ 1535. Monetary gain from knowing and unlawful obtaining of protected 

health information 

‘‘Whoever knowingly—

‘‘(1) obtains protected health information from a health information trustee 

in violation of the Fair Health Information Practices Act of 1997, knowing that 

such obtaining is unlawful and with the intent to sell, transfer, or use such information for profit or monetary gain; and 

‘‘(2) knowingly sells, transfers, or uses such information for profit or monetary gain; 

shall be fined under this title or imprisoned not more than 10 years, or both. 

‘‘§ 1536. Knowing and unlawful use or disclosure of protected health information 

‘‘Whoever knowingly uses or discloses protected health information in violation 

of the Fair Health Information Practices Act of 1997, knowing that such use or disclosure is unlawful, shall be fined under this title or imprisoned not more than 5 

years, or both. 

‘‘§ 1537. Monetary gain from knowing and unlawful sale, transfer, or use of 

protected health information 

‘‘Whoever knowingly sells, transfers, or uses protected health information in violation of the Fair Health Information Practices Act of 1997, knowing that such sale, 

transfer, or use is unlawful, shall be fined under this title or imprisoned not more 

than 10 years, or both.’’. 

(b) CLERICAL AMENDMENT.—The table of chapters for part I of title 18, United 

States Code, is amended by inserting after the item relating to chapter 73 the 

following:

‘‘74. Obtaining protected health information .............................................. 1531’’.

TITLE II—AMENDMENTS TO TITLE 5, UNITED STATES CODE 

SEC. 201. AMENDMENTS TO TITLE 5, UNITED STATES CODE. 

(a) NEW SUBSECTION.—Section 552a of title 5, United States Code, is amended 

by adding at the end the following:

‘‘(w) MEDICAL EXEMPTIONS.—The head of an agency that is a health information 

trustee (as defined in section 3(b)(5) of the Fair Health Information Practices Act 

of 1997) shall promulgate rules, in accordance with the requirements (including general notice) of subsections (b)(1), (b)(2), (b)(3), (c), and (e) of section 553 of this title, 

to exempt a system of records within the agency, to the extent that the system of 

records contains protected health information (as defined in section 3(a)(3) of such 

Act), from all provisions of this section except subsections (e)(1), (e)(2), subparagraphs (A) through (C) and (E) through (I) of subsection (e)(4), and subsections 

(e)(5), (e)(6), (e)(9), (e)(12), (l), (n), (o), (p), (q), (r), and (u).’’. 

(b) REPEAL.—Section 552a(f)(3) of title 5, United States Code, is amended by 

striking ‘‘pertaining to him,’’ and all that follows through the semicolon and inserting ‘‘pertaining to the individual;’’. 

TITLE III—REGULATIONS, RESEARCH, AND EDUCATION; EFFECTIVE 

DATES; APPLICABILITY; AND RELATIONSHIP TO OTHER LAWS 

SEC. 301. REGULATIONS; RESEARCH AND EDUCATION. 

(a) REGULATIONS.—Not later than July 1, 1999, the Secretary shall prescribe 

regulations to carry out this Act. 

(b) RESEARCH AND TECHNICAL SUPPORT.—The Secretary may sponsor—

(1) research relating to the privacy and security of protected health information; 

(2) the development of consent forms governing disclosure of such information; and 

(3) the development of technology to implement standards regarding such 

information. 

(c) EDUCATION.—The Secretary shall establish education and awareness programs—

(1) to foster adequate security practices by health information trustees; 

(2) to train personnel of health information trustees respecting the duties 

of such personnel with respect to protected health information; and 

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(3) to inform individuals and employers who purchase health care respecting their rights with respect to such information. 

(d) OFFICE OF INFORMATION PRIVACY.— (1) ESTABLISHMENT.—There is established in the Department of Health and 

Human Services, within the Office of the Secretary, an Office of Information 

Privacy. The Office of Information Privacy shall be headed by a Director, who 

shall also be the Privacy Adviser of the Department of Health and Human Services. The Director shall be the principal adviser to the Secretary on the effect 

of the use and disclosure of personally-identifiable information on the privacy 

of individuals. 

(2) DUTIES.—The Director of the Office of Information Privacy shall— (A) monitor and participate in the development of regulations under 

this Act; 

(B) monitor the implementation of this Act within the Department of 

Health and Human Services; 

(C) advise the Secretary of the effects of current activities and proposed 

statutory, regulatory, administrative, and budgetary actions on the information privacy of individuals; 

(D) monitor the implementation within the Department of Health and 

Human Services of laws and policies affecting the confidentiality of personally-identifiable health information or other personally-identifiable information; 

(E) advise the Secretary on the implications for privacy of automated 

systems for the collection, storage, analysis, or transfer of personally-identifiable health information or other personally-identifiable information; 

(F) engage in, or commission, research and technical studies on the implications of policies and practices for information privacy promulgated by 

the Secretary; 

(G) serve as a point of contact within the Department of Health and 

Human Services for persons, such as other agencies of the Federal Government, States, foreign governments, international organizations, privacy and 

consumer advocacy organizations, businesses, nonprofit organizations, and 

individuals, interested in the effects on privacy of the collection, maintenance, use, and disclosure of personally-identifiable health information or 

other personally-identifiable information; and 

(H) report from time to time to the Secretary, the Congress, and the 

public on privacy matters. 

SEC. 302. EFFECTIVE DATES. 

(a) IN GENERAL.—Except as provided in subsection (b), this Act, and the amendments made by this Act, shall take effect on January 1, 2000. 

(b) PROVISIONS EFFECTIVE IMMEDIATELY.— (1) IN GENERAL.—A provision of this Act shall take effect on the date of the 

enactment of this Act if the provision— (A) imposes a duty on the Secretary to develop, establish, or promulgate regulations, guidelines, notices, statements, or education and awareness programs; or 

(B) authorizes the Secretary to sponsor research or the development of 

forms or technology. 

(2) OFFICE OF INFORMATION PRIVACY.—Section 301(d) (relating to the Office 

of Information Privacy) shall take effect on the date of the enactment of this 

Act. 

SEC. 303. APPLICABILITY. 

(a) PROTECTED HEALTH INFORMATION.—Except as provided in subsections (b) 

and (c), the provisions of this Act shall apply to any protected health information 

that is received, created, used, maintained, or disclosed by a health information 

trustee in a State on or after January 1, 2000, regardless of whether the information existed or was disclosed prior to such date. 

(b) EXCEPTION.— (1) IN GENERAL.—The provisions of this Act shall not apply to a trustee described in paragraph (2), except with respect to protected health information 

that is received by the trustee on or after January 1, 2000. 

(2) APPLICABILITY.—A trustee referred to in paragraph (1) is—

(A) a health researcher; or 

(B) a person who, with respect to specific protected health information, 

received the information—

(i) pursuant to—

(I) section 117 (relating to emergency circumstances); 

25

(II) section 118 (relating to judicial and administrative purposes); 

(III) section 119 (relating to law enforcement); or 

(IV) section 120 (relating to subpoenas, warrants, and search 

warrants); or 

(ii) while acting in whole or in part in the capacity of an officer or 

employee of a person described in clause (i). 

(c) AUTHORIZATIONS FOR DISCLOSURES.—An authorization for the disclosure of 

protected health information about a protected individual that is executed by the 

individual before January 1, 2000, and is recognized and valid under State law on 

December 31, 1999, shall remain valid and shall not be subject to the requirements 

of section 112 until January 1, 2001, or the occurrence of the date or event (if any) 

specified in the authorization upon which the authorization expires, whichever occurs earlier. 

SEC. 304. RELATIONSHIP TO OTHER LAWS. 

(a) STATE LAW.—Except as otherwise provided in subsections (b), (c), (d), (e), 

and (g), a State may not establish, continue in effect, or enforce any State law to 

the extent that the law is inconsistent with, or imposes additional requirements 

with respect to, any of the following: 

(1) A duty of a health information trustee under this Act. 

(2) An authority of a health information trustee under this Act to disclose 

protected health information. 

(3) A provision of subtitle C (relating to access procedures and challenge 

rights), subtitle D (miscellaneous provisions), or subtitle E (relating to enforcement). 

(b) LAWS RELATING TO PUBLIC HEALTH AND MENTAL HEALTH.—This Act does 

not preempt, supersede, or modify the operation of any State law regarding public 

health or mental health to the extent that the law prohibits or regulates a disclosure of protected health information that is permitted under this Act. 

(c) CRIMINAL PENALTIES.—A State may establish and enforce criminal penalties 

with respect to a failure to comply with a provision of this Act. 

(d) REQUIREMENTS ON STATE AGENCIES.—A State may establish, continue in effect, and enforce any State law to the extent that the law imposes on a judicial, legislative, or executive agency of the State a requirement, limitation, or procedure 

with respect to the use or disclosure of protected health information that is in addition to the requirements, limitations, and procedures imposed under this Act. 

(e) PRIVILEGES.—A privilege that a person has under law in a court of a State 

or the United States or under the rules of any agency of a State or the United 

States may not be diminished, waived, or otherwise affected by—

(1) the execution by a protected individual of an authorization for disclosure 

of protected health information under this Act, if the authorization is executed 

for the purpose of receiving health care or providing for the payment for health 

care; or 

(2) any provision of this Act that authorizes the disclosure of protected 

health information for the purpose of receiving health care or providing for the 

payment for health care. 

(f) DEPARTMENT OF VETERANS AFFAIRS.—The limitations on use and disclosure 

of protected health information under this Act shall not be construed to prevent any 

exchange of such information within and among components of the Department of 

Veterans Affairs that determine eligibility for or entitlement to, or that provide, 

benefits under laws administered by the Secretary of Veterans Affairs. 

(g) CERTAIN DUTIES UNDER STATE OR FEDERAL LAW.—This Act shall not be construed to preempt, supersede, or modify the operation of any of the following: 

(1) Any law that provides for the reporting of vital statistics such as birth 

or death information. 

(2) Any law requiring the reporting of abuse or neglect information about 

any individual. 

(3) Subpart II of part E of title XXVI of the Public Health Service Act 

(relating to notifications of emergency response employees of possible exposure 

to infectious diseases). 

(4) The Americans with Disabilities Act of 1990. 

(5) Any Federal or State statute that establishes a privilege for records 

used in health professional peer review activities. 

(h) SECRETARIAL AUTHORITY.—

(1) SECRETARY OF HEALTH AND HUMAN SERVICES.—A provision of this Act 

does not preempt, supersede, or modify the operation of section 543 of the Public Health Service Act, except to the extent that the Secretary of Health and 

26

Human Services determines through regulations promulgated by such Secretary 

that the provision provides greater protection for protected health information, 

and the rights of protected individuals, than is provided under such section 543. 

(2) SECRETARY OF VETERANS AFFAIRS.—A provision of this Act does not preempt, supersede, or modify the operation of section 7332 of title 38, United 

States Code, except to the extent that the Secretary of Veterans Affairs determines through regulations promulgated by such Secretary that the provision 

provides greater protection for protected health information, and the rights of 

protected individuals, than is provided under such section 7332.

Mr. HORN. No one will make the mistake of thinking that medical privacy is a new issue. It is worth recalling the words of Hippocrates. His oath included the following pledge: ‘‘All that may 

come to my knowledge in the exercise of my profession, which 

ought not to be spread abroad, I will keep secret and will never reveal.’’

Patient information acquired by medical experts is deeply personal and should be kept private. The challenge we now face is to 

protect the timeless value of confidentiality, the privacy between 

doctor and patient, in a rapidly changing health care environment. 

We face an enormous conflict between an old value, the right to 

personal privacy, and the increasing need of our health care system 

to exchange intimate information about each of us. Managed health 

care systems must be able to exchange information between doctors, insurers, and others. We need to set the rules of the road. 

At stake are the quality and the value of our health care. The 

increasing use of information technology and the increasing complexity of provider arrangements are inevitable. The exchange of 

patient health care information is an integral part of the existing 

health care system. Claims payments require diagnostic information. Communications between primary care providers and other 

providers, such as specialists or hospitals, require patient information to be shared. Pharmacies maintain data bases of past prescriptions. 

Despite this highly fluid environment for exchanging health care 

information, no uniform national standard currently exists to protect the confidentiality of this information. Moreover, there is little 

uniformity among State statutes regarding the confidentiality of 

health care information. Most of the States’ laws lack penalties for 

misuse or misappropriation. Protections vary according to both the 

holder and the type of information. 

Under last year’s Kassebaum-Kennedy act, the Secretary of 

Health and Human Services is required to recommend privacy 

standards for health care information to Congress by September 

1997. If Congress does not enact health care privacy legislation by 

August 1999, the Secretary of Health and Human Services is required to promulgate such privacy regulations. In effect, the Kassebaum-Kennedy act gave Congress a 3-year window of opportunity 

to enact major health care privacy legislation. 

An illustration of the difficulties we face is the revolution in the 

science of genetics, with the mapping of the human genome. Incredibly sensitive, precise genetic tests have been developed, genetic screening has become commonplace, and an extraordinary 

array of genetic interventions are being explored. 

Genetics privacy issues inevitably accompany the scientific advances. Do genetic data differ fundamentally from other health 

27

data? Genetic data could be used prejudicially, such as ineligibility 

for employment, financial credit, or life or health insurance. 

Issues associated with genetic privacy and possible discrimination based on genetic information have received heightened attention. The House Committee on Commerce has established a task 

force on health records and genetic privacy chaired by Representative Stearns and Green. Any substantial legislation on the issue of 

medical records privacy will involve establishing uniform national 

rules on the collection and protection of personally identifiable 

health data, affirming the rights of patients, setting criteria and 

procedures for disclosure, their use and security of health care information, focusing responsibilities for ensuring proper protection 

and use of health care information and establishing penalties for 

wrongful use of the data. 

The legislation before us today is H.R. 52, the Fair Health Information Practices Act of 1997. Under this bill, medical records created or used during the process of treatment become protected 

health information. Furthermore, health care providers are required to maintain appropriate administrative, technical, and physical safeguards to protect the integrity and privacy of health care 

information. H.R. 52 would allow patients to review their medical 

records and correct inaccurate information. It would also place restriction on the release of information relating to the treatment of 

patients and on the payment for health care services. 

Three Members of Congress who have taken the lead on medical 

records privacy issues will testify today as part of our first panel. 

They are Representative Condit, who is author of H.R. 52, as well 

as Representatives Slaughter and Stearns. 

Representatives of privacy advocates, health care providers and 

records management organizations will testify on panel II. The witnesses are Ms. Janlori Goldman, visiting scholar at Georgetown 

University Law Center, who is also affiliated with the Center for 

Democracy and Technology; Dr. Donald J. Palmisano, who is a 

member of the Board of Trustees, American Medical Association; 

and Dr. Merida Johns, who is president of the American Health Information Management Association. 

Representatives of medical researchers will testify on panel III. 

Witnesses are Dr. Sherine Gabriel of the Department of Health 

Services Research, Mayo Clinic, representing the Health Care 

Leadership Council; Dr. Elizabeth Andrews of Glaxo Wellcome, representing the Pharmaceutical Research and Manufacturers Association; and Dr. Steven Kenny Hoge, who serves as chair of the 

Council on Psychiatry and Law at the American Psychiatric Association. 

We welcome all of today’s witnesses. 

I have just learned that Mrs. Slaughter will not be here. She 

asks for her comments to be submitted for the record and without 

objection, they will be. We are delighted to have the author of this 

legislation with us, Mr. Condit, and it is all yours. 

STATEMENT OF HON. GARY A. CONDIT, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. CONDIT. Thank you, Mr. Chairman. First of all, let me commend you, Mr. Chairman, for gathering us here today to discuss 

28

the privacy of medical records. This is an extremely important step 

in addressing the anxiety of many patients and citizens across this 

country. The time has come for us in reforming the way we handle 

medical records; and this is a very sensitive issue, and it is time 

for us to take a look at how we have been doing this. 

As more and more medical records are computerized, a patient’s 

confidentiality is put at risk, and we have examples of that 

throughout our review of this issue. For this reason, I have introduced the Fair Health Information Practices Act; and you have 

been kind enough to work with us on that, Mr. Chairman and I appreciate that very much. 

Our guiding principle in drafting this bill is to protect the confidential information contained in medical records and protecting 

this information once it leaves the physician’s office. Under the bill, 

medical information is protected by establishing uniform Federal 

rules for handling medical records; holding those who handle this 

information accountable for the security and privacy of the medical 

records. 

Today, you will hear testimony from a number of people who 

have expertise in this area, and I look forward to their testimony. 

We have heard them speak before, over the last couple of years, on 

this issue. You know, last year, with the Kennedy-Kassebaum bill, 

we were given a target date, 1999, to enact something. We think 

this is a good step in the right direction, and I hope we can put 

something together. 

Mr. Chairman, I have an extensive statement and some background information that I would like to submit for the record, and 

I would be available here for a few minutes to respond to any comments or questions; and with that, I will yield back. 

Mr. HORN. Well, we appreciate you coming and your statement 

will be, without objection, part of the record at this point. 

Mr. CONDIT. Thank you. 

[The prepared statement of Hon. Gary A. Condit follows:]

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Mr. HORN. We now have the distinguished Member from Florida, 

Mr. Stearns. 

STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF FLORIDA 

Mr. STEARNS. Good morning, Mr. Chairman. I am delighted to be 

here and want to compliment you on your leadership in having this 

hearing. While the scope of your hearing today covers medical 

records in general, I would like to restrict my comments to why I 

believe we must provide safeguards to prevent discrimination 

based on a person’s genetic profile. 

The question of confidentiality of one’s medical record is something that should concern us all. The reason I am here today is to 

discuss how we can find a way to ensure that technological advances in genetic testing proceed while protecting the interests of 

the individual. 

Let me state, technology is good, research must be allowed. It is 

the means and applications of this technology and research that 

concerns us all. I believe genetic testing may become, in fact, a civil 

rights issue. It could be the civil rights issue of the 21st century. 

Should an insurance company be able to deny children medical coverage because their mother died of an inherited heart defect? Even 

if children may or may not carry the defect this is a dilemma faced 

by a father in California who could not get family medical coverage 

under his group plan as a result of his wife’s death. 

In another case, a man lost his auto insurance coverage because 

he had a genetic condition which affected his muscles. Although he 

had a clean driving record stretching back 20 years, genetic information was used to cancel his policy. 

One young woman was hired as a social worker, and for 8 

months, she received promotions and positive performance reviews. 

However, while conducting a training program on caring for patients with Huntington’s disease, she mentioned that she had family members with that condition. She was soon fired and informed 

by another colleague that it was due to a concern that she might 

develop Huntington’s disease. 

As these cases show, access to genetic information can result in 

being denied health insurance, cancellation of auto insurance, and 

even the loss of a job. These people were discriminated against 

based upon their genes. You might be amazed to know how many 

of us here in this committee room carry mutated genes. The fact 

is, we all do. Fortunately, most genetic mutations are silent, exhibiting no significant consequences. 

The National Institutes for Health is home to the Human Genome Project. This project is a 15-year study scheduled for completion in the year 2005. The discoveries made from mapping out the 

entire human genome will mean better early detection, treatment 

of disease, and even their prevention. These are the up sides of genetic research. 

The examples I provided earlier show genetic information can 

also be used to discriminate against people. That is where Congress 

should take action to ensure continued progress in genetic research 

while also protecting people from the misuse of genetic information. 

33

This issue is moving very quickly, and we need to make some 

sound public policy decisions now. 

In the last Congress, I introduced the Genetic Privacy and Nondiscrimination Act, H.R. 2690, to establish guidelines concerning 

the disclosure and use of genetic information. My goal was to protect the health privacy of the American people while not disrupting 

genetic research efforts. I am currently drafting a similar piece of 

legislation for the 105th Congress. 

Last year, I was able to, with the help of others, insert language 

into the Health Care Coverage and Affordability Act while the 

measure was in the Commerce Committee, on which I sit. As you 

know, we passed this measure and the President signed it. One 

provision of this bill prohibits insurance companies from denying 

coverage to an employee or beneficiary on the basis of health status. Health status was defined as an individual’s medical condition, 

claims, experience, receipt of health care, medical history, evidence 

of insurability, or disability. The two words that I inserted in the 

commerce bill were, quote, genetic information. These two words 

made a good bill better, but additional protection and guidelines 

are still needed. That is one of my priorities in the 105th Congress. 

Chairman Tom Bliley of the Commerce Committee asked me to 

take a leading role in establishing policy on these issues by 

chairing the task force on health records and genetic privacy. This 

bipartisan task force will consider these questions in a series of 

briefings, meetings, and public hearings. 

The job of the task force is to answer a number of questions 

which certainly pertain to medical records and privacy; and some 

of these are, Mr. Chairman, one, how will we protect the health 

records of persons with genetic deficiencies and still allow scientific 

research to go forward unimpeded? Additionally, the whole area of, 

quote, informed consent, end quote, must be clarified as it pertains 

to genetic privacy. How will the thousands of available genetic 

tests created as a result of the Human Genome Project affect our 

citizens? And three, what issues are raised by the potential misuse 

of genetic and other information about an individual? 

Genetic information is personal, powerful, permanent, and sensitive. It not only affects the individual, but it also has an impact 

on offspring and other blood relatives. Genetic privacy must be protected. On the other hand, it is a key to the treatment, cure and 

prevention of disease, so genetic research must continue. I see our 

job is to meet these goals as best we can; it is also an issue of fairness. 

In conclusion, Mr. Chairman, think about those two little boys in 

California who were denied insurance coverage because of an error 

in a genetic script. This is something that they could not control 

and did not choose. As I noted, we all have errors in our genetic 

blueprints. For most of us, it does not harm us, but for many, the 

onset of disease is devastating. We owe them a level of privacy and 

the hope for treatment and cure. That is the central mission of my 

task force and legislation. 

Thank you, Mr. Chairman. 

Mr. HORN. I thank you for that very fine statement. 

[The prepared statement of Hon. Cliff Stearns follows:]

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Mr. HORN. Let me just put in the record, without objection, the 

comments of Representative Shays, who is chairman of the Human 

Resources Subcommittee of our full committee and the comments 

of Representative Slaughter, who is the author of H.R. 306, the Genetic Information Nondiscrimination and Health Insurance Act. 

Any other remarks as Members arrive, those opening statements 

will be put in the record. 

[The prepared statements of Hon. Christopher Shays and Hon. 

Louise M. Slaughter follow:]

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Mr. HORN. Let us now, in your limited time, ask a few questions. 

Given the situation on genetic information in those cases, Representative Stearns, that you cited, are truly important because I 

happen to have a college classmate whose child had exactly that 

heart situation. No one thought the child would live past 8, and 

that child is now in his late 30’s or early 40’s. So genetic information doesn’t always have an inevitable consequence. 

And I think the one question here is, should we separate the genetic information aspect from the other privacy aspects in the 

Condit bill, or should we just work on both in one piece? What is 

your feeling on that? 

Mr. STEARNS. Well, I think what Gary is doing is important, and 

I think separating them temporarily until we know enough about 

it—because as you just pointed out, if a doctor sits down with me 

and says, Cliff, you have a predisposition because of your gene for 

X, Y, Z, what does that mean in terms of probability theory? Does 

the environment, the fact I don’t drink or smoke or perhaps that 

I exercise, perhaps where I live, how does that tie in? And what 

does that predisposition mean? We just don’t know. 

We can say, in some genes, it means you are going to die at a 

definite date. But for a lot of this, there is going to be a high level 

of probability that we have to work out and we should not have the 

health records impeded while we try to understand the whole impact of this, in the legal aspect, in terms of punitive—allowing research to go ahead, in terms of counseling people. I mean, the 

issues just open up like Pandora’s box. 

So I think the whole area of genetics is an issue unto itself in 

how we deal with it, much like we are trying to deal with cloning. 

And as you know, the President’s Commission, I think is going to 

reveal its recommendations this week or next. And so this whole 

area is something that is staggering in terms of implication. 

Mr. CONDIT. May I respond? 

As you know, you and I have had discussions, we are looking for 

a comprehensive approach to medical records and the confidentiality, and so we would like to eventually see everything sort of 

on an even keel here. But I do acknowledge that what Mr. Stearns 

has brought up here is sort of in a special category. At this time, 

we don’t have a lot of information about it, so I do think that there 

is a time period where we may want to do as he said, take a special 

look at it and see whether or not it fits under this category. But 

we probably could work to accommodate it either way, but I think 

he makes a very good point and one we would probably agree with. 

I also, Mr. Chairman—if I may, I apologize to you; you have been 

very kind to hold this hearing today, and I know you are going to 

get a lot of good information. I have another obligation I need to 

get to, but I do have a stack of information I would like to leave 

for the record, if I may. 

Mr. HORN. Without objection, it will be inserted at this point. 

I just have one question, if you have got a second. 

On H.R. 52, as put in this year, is there an impact on law enforcement investigations? I recall that some law enforcement officials, representatives of the Department of Justice, in particular, 

expressed concern about your previous legislation, H.R. 435, and its 

47

effect on law enforcement investigations. Do you know of any similar concerns? 

Mr. CONDIT. That is a good point, and I am glad you brought it 

up. 

It is certainly not my intent to exclude law enforcement from 

having access to information that is crucial to them, maybe in a 

criminal case. So last session when we worked on this issue, we 

spent a lot of time working with the law enforcement industry, and 

I think we clarified, to their satisfaction, language that they can 

accept. And I think they are protected under this bill, and we have 

not received, to my knowledge, any objection from them on this 

particular language. They do have access to records when they 

need them. 

Mr. HORN. Thank you very much. 

Mr. Stearns, when I listened to your examples on genetics and 

how insurance companies were doing this and that, it came to my 

mind that the whole reason we have insurance is not just to insure 

well people, but to insure a group of people, and that is what the 

actuarial tables, it seems to me, are based upon; and to deny an 

individual, just because science has progressed, it bothers me a lot, 

and we have to do something to figure out how to solve that one. 

Do you have any other comments you want to make? I don’t want 

to hold you here. I know you have a lot of things to do. 

Mr. STEARNS. Well, Mr. Chairman, in the area of law enforcement, also in the area of military, that is another area that health 

records—in determining availability, access for military people, 

military doctors, putting people in combat; and with genetic predisposition, how does that work out if a person has strong allergies 

or a person has some other problems that would become apparent 

under stress or would become apparent under certain conditions? 

How does that work out, and how is the individual protected, and 

what does it mean? That is an area that we need to have the wisdom of Solomon to figure out how to protect health records and at 

the same time allow the military, the law enforcement and research—most importantly, research—to have access to the records. 

So, I mean, it is something I commend you and others for doing, 

and I am delighted to be here. 

Mr. HORN. Let me just ask if Mr. Sessions has any questions he 

would like to ask you before you leave. 

Mr. SESSIONS. I really have no questions. I would just say that 

I was unprepared before I walked in today. I knew the general subject. I have a little boy with Down’s Syndrome, so I have had to 

ask a lot of these same questions, not only of myself in dealing 

with him, but also of my son, and how we are going to deal with 

him as he progresses. 

So these are very thought-provoking issues, and I am very interested in your comments today and those of Congressman Condit. 

Mr. STEARNS. Dr. Collins, who heads up the Genome Project out 

at the National Institutes of Health—I went out there and toured 

the facility, and I urge all Members to go out there and to actually 

meet with Dr. Collins and hear his presentation on the future with 

genetic engineering. It is exciting. 

For example, with your son and other children that many Americans will have, the hope some day is we can actually go back into 

48

your DNA and correct things and make things new again, and that 

is a spectacular kind of thought. But at the same time, for many 

Americans who have mutated genes, we need to make sure that 

they have a full life and are not discriminated against because of 

anything that medicine finds. 

Mr. SESSIONS. What is interesting to me, since we are on the 

subject—and I know you need to go—I struggle and I have struggled in dealing with my child. Many people, in dealing with all 

sorts of gene and genetic problems, as Down’s Syndrome is one of 

those, I am of a firm belief that God gave us baby Alex the way 

he is, and we are simply trying to take him as far as we can; and 

a lot of changes, I would not want to make to him. We are trying 

to take him as far as he can go as he was given to us. 

And a lot of people do things with exercise or their facial muscles 

so that the disability that this child has is not recognizable. And 

so my wife and I have taken the perspective in dealing with this 

that we want to massage him, we want to do those things that help 

his facial muscles, that help him to be able to speak and help him 

to do those things, but he should not become unrecognizable for 

what he is to this world. He could, at some point, be 25 years old 

on a street corner, be lost, and a person would look at him and 

maybe not know what they are looking at. 

So I have found that I like baby Alex the way he is, and he was 

a gift to us; and I would not go back and alter one single thing, 

even if I knew he were Down’s from the very beginning. So there 

are a lot of things that come to us that may not be exactly the way 

you and I think are perfect, but is in reality a wonderful creation. 

Mr. STEARNS. Well, that is an inspiring attitude toward it, and 

I think all of us should have that attitude on many things. So I 

commend you for that attitude, and I think that is an inspiration 

for many of us. 

Mr. SESSIONS. Thank you. 

Mr. HORN. I agree with the gentleman. When you mentioned allergies, the thought crossed my mind that no one on Capitol Hill 

would be able to get insurance. As I walk down the hall, everybody 

seems to have allergies. And when our class arrived in the fall of 

1992, somebody said, you know, ‘‘Why we all have allergies?’’ We 

apparently have one of every tree in America on Capitol Hill. I 

don’t know if it is true, but it is an interesting source for what the 

problem is around here. 

Would the gentlewoman from New York care to ask any questions? 

Mrs. MALONEY. I would like to have my opening comments put 

into the record as read. 

Mr. HORN. That has automatically been done already. 

[The prepared statement of Hon. Carolyn B. Maloney follows:]

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Mrs. MALONEY. I am sorry Mr. Condit has already left. We 

wouldn’t be as far along as we are on this issue if it had not been 

for the work he did in the 103d Congress. 

I wanted to ask him, but maybe Mr. Stearns can answer, in one 

of his bills, he had exempted mental health, and yet now he 

dropped from his bill the exception for mental health treatment, 

and I wanted to ask him why. Are you working with him on his 

bill? 

Mr. STEARNS. No, I am not and it would not be fair for me to 

comment on his bill. Gary is very knowledgeable. 

Mrs. MALONEY. Do you think the provisions in Congresswoman 

Slaughter’s bill are adequate or would you add to them? 

Mr. STEARNS. Well, this is a bill that we dropped pretty much 

like we dropped last year. Senator Mack and Senator Hatfield 

dropped it on the Senate side. 

The bill we are going to drop this year is going to be a little different, and we think that our bill is going to be more specific and 

tailored. And we are seeking the administration’s help, because we 

think the administration has some concern about certain things; 

and since we are trying to get something passed, we are trying to 

work with them. 

She has also been very active, and I admire her for her leadership and her activities on this, and welcome the work that she has 

done and working with her. 

Mrs. MALONEY. OK. Thank you very much. 

Mr. HORN. Thank you for coming. We appreciate you having 

shared your knowledge on the subject. When will that task force 

of yours report, basically? 

Mr. STEARNS. Mr. Chairman, Gene Green of Texas represents 

Houston. We are hoping to have some hearings at some of the universities. University of Florida has a lot of research on this and we 

are hoping to have a hearing in July, in which we try to define 

where in this enormous panoramic subject that we could go and get 

the most bang for the buck. We would seek your advice and the 

members of this committee too. 

Mr. HORN. Well, we thank you for the hard work you have dedicated to this issue. It is very important. 

We will now call forth the second panel, and that will be Ms. 

Goldman, Mr. Palmisano, and Ms. Johns. 

If you stand and raise your right hands, we have a tradition that 

witnesses other than Members of Congress take the oath. 

[Witnesses sworn.] 

Mr. HORN. All three witnesses affirmed, and we will start with 

Ms. Goldman. 

STATEMENTS OF JANLORI GOLDMAN, VISITING SCHOLAR, 

GEORGETOWN UNIVERSITY LAW CENTER, AND AFFILIATED 

WITH THE CENTER FOR DEMOCRACY AND TECHNOLOGY; 

DR. DONALD J. PALMISANO, MEMBER, BOARD OF TRUSTEES, 

AMERICAN MEDICAL ASSOCIATION; AND MERIDA L. JOHNS, 

Ph.D., PRESIDENT, AMERICAN HEALTH INFORMATION MANAGEMENT ASSOCIATION 

Ms. GOLDMAN. Good morning, and thank you very much for inviting me to testify today. I not only appreciate your invitation, I 

54

appreciate this subcommittee’s continued commitment to this issue. 

I think this might be the third or fourth hearing on this subject 

you have held in the last few years, and I think it has advanced 

the policy discussions quite a bit. 

What I would like to do, since this has been an issue that has 

been very well discussed and documented—there is quite a record 

that this subcommittee alone has created—is just talk a little bit 

about what has changed since the last hearing, which was almost 

a year ago today. Congress passed the Health Information Portability Act, the Kassebaum-Kennedy bill that now—really what 

Congress did, in place of passing mandatory privacy rules, was give 

itself a time limit and say, we must act to pass legislation in the 

next few years on privacy of health records, or else the Secretary 

of HHS will promulgate regulations. So one way or another we are 

going to have a law on enforceable regulations in the next few 

years. 

It was, I think, a serious failing in the Kassebaum-Kennedy law 

that the administrative simplification provisions did pass, which 

require standard uniform format of health information, essentially 

a computerized patient record in the next few years, without saying 

at the outset what the privacy rules should be. 

What it means is that as the Secretary and as the computer industry and the health information industry is moving to computerize and standardize personal medical records, they are doing so 

without knowing what privacy and security rules to put in place. 

So when Congress does act or the Secretary acts, they are going to 

have to go back and retrofit those systems. 

It is expensive. I think it is a problem. I would urge the Congress 

not to wait until the time limit it has been given, but to act more 

swiftly so that people who are in those offices, in those industries, 

that are working with health information, know what to do at the 

outset. 

In that law though that did pass, instead of passing the rules, 

what Congress did do was say, we need to address the privacy 

issues. A committee was created, the National Committee on Vital 

and Health Statistics. It has held hearings on the issue and created 

an even more extensive public record about the need for health privacy legislation. The Secretary is going to issue a report this summer. 

In addition, since last year, the National Research Council issued 

a report for the record, very detailed report about the need for security in computerized health information systems. They went 

around the country, they did case studies and they found that even 

with the best of intentions, there was a lack of strong privacy and 

security safeguards in place. And again we have horror stories 

about people who acted with malice and used information without 

permission, sold it to the press. We have information about carelessness, we have horror stories, but I think for the vast majority 

of people in this country who want to do the right thing, they don’t 

know where to start and they are seeking Congress’ guidance. 

As well, the National Action Plan on Breast Cancer and the 

Human Genome Project, which we have talked a little bit about, 

is holding a series of workshops on privacy and genetic information, because they are wrestling with the need to push forward in 

55

genetic research. But the fear that so many individuals who are 

participants in these studies are going to have, is fear that they 

will be discriminated against in insurance, even in employment. 

Even though the ADA should protect them against that, they do 

not trust the research and public health community to protect their 

confidentiality. 

I don’t think it is an overstatement to say we are rapidly, and 

have been for years, approaching a crisis in health care because of 

the lack of privacy rules. Fundamental critical health care services 

are at risk of being undermined. 

This is not a case of privacy practices being a barrier to research 

and to public health and to managed care; that is often how the 

issue is formulated in the press and by some in the industry who 

say, ‘‘privacy will be a barrier to us, if we have to protect privacy, 

we are not going to get the information we need because people 

won’t consent to these uses.’’

I would actually say we have quite the opposite scenario. We will 

have substantial barriers to treatment, research, and public health 

if people do not believe that their privacy is protected and that they 

don’t have the following principles guaranteed. 

One is, they must have access to their own records. Half the 

States in this country give people the right to see their own medical records. It is a sham. 

The other thing people must have is control over their own 

records. When they go to a doctor, they should be able to determine 

who else gets to see the record and under what circumstances. 

Right now people sign blanket waivers, and even where doctors 

want to maintain confidentiality and want to have kind of the oldfashioned doctor-patient relationship, they are unable to do so because of requirements on the part of payers, insurance companies, 

sometimes researchers with whom they have relationships, to disclose that information. 

The other thing people must have are strong enforceable remedies, individual remedies where they can pursue a lawsuit against 

someone who has harmed them. There should be civil penalties and 

criminal penalties. Most of the legislation that has been introduced 

in both the House and the Senate has very strong penalties. 

Very quickly, on some of the issues raised, my view—and, I 

think, the view of a number of people in the research community 

at NIH in the Human Genome Project—is that we should treat genetic information as health information and not treat it separately 

and not isolate it as a separate, special circumstance. In fact, H.R. 

52, Congressman Condit’s bill, does incorporate genetic information 

now under the definition of personal health information. It talks 

about past, present, or future information, as do a number of the 

Senate proposals. That is genetic information. It refers to information about others who are not necessarily the record subject. That 

is also genetic information. 

As well, I think that the law enforcement provisions, which I 

know and, Mr. Chairman, you raised in your questions, I really believe that the law enforcement sections in a health privacy law 

must be consistent with other law enforcement provisions and privacy laws that we currently have at the Federal level. 

56

The Video Privacy Protection Act, better known as the Bork bill 

by some, the Right to Financial Privacy Act, the Education Privacy 

Act, all have law enforcement provisions that require a warrant before access; and I think that we should have at least the same level 

of protection for medical records that we have for video rental 

records. 

In addition, the pre-emption section which is in H.R. 52 is different than some of the provisions on the Senate side, but I think 

also needs some looking. Right now, we can’t do any worse than we 

currently have since there is no Federal standard. 

Again let’s look at the very serious consequences. Without privacy protections, people are going to withhold information from 

their doctors because they are going to be afraid the doctor will 

have to convey it to somebody else, and they know the protections 

aren’t in place. They will withhold information or they may lie to 

their doctors; they may give inaccurate information, which will undermine the ability of the doctor to give an accurate diagnosis. The 

other problem is that doctors may actually lie in submitting the 

claim forms, and I don’t mean to suggest doctors are doing ill here, 

but they are trying to protect their patients, so they often put inaccurate diagnoses on the claim forms. 

Or I think the more horrible consequence is that people will not 

seek health care. They will stay away from health care altogether 

because of fear, and we see it in the HIV area and reproductive 

health; people are afraid of going to the doctor at all in terms of 

discrimination and employment and insurance, that their families 

may find out, reporters, marketers. The personal consequences are 

very real, but I think the societal consequences are even more startling and one that we tend to overlook, which is that public health 

will be undermined if we don’t have accurate information; and research will be undermined if we don’t have accurate and reliable 

information. 

So while the public health people and researchers often say we 

are worried about how privacy rules will affect our work in improving health care, we really need to look at the cost of not protecting 

privacy. Privacy, I believe, is a necessary, vital partner in other 

health care goals. It is not a barrier, it is not an impediment, but 

it is a partner in achieving other health care goals. 

I appreciate your holding this hearing. Thank you. 

Mr. HORN. We thank you for the most helpful statement. 

[Note.—A copy of the report entitled, ‘‘Privacy and Health Information Systems: A Guide to Protecting Patient Confidentiality,’’

can be found in subcommittee files, and may be obtained by calling 

(206) 682–2811.] 

Mr. HORN. Dr. Palmisano, member of the Board of Trustees of 

the American Medical Association. 

Dr. PALMISANO. Thank you Mr. Chairman and members of the 

committee. My name is Donald Palmisano, and I am here representing the American Medical Association and some 300,000 physicians and medical student members. I also bring to the discussion 

today my 26 years’ experience as a surgeon practicing in New Orleans. We appreciate the time and energy the subcommittee is devoting to this important issue. 

57

Let me begin by stating medicine’s underlying premise in all of 

the discussions of patient confidentiality. The patient-physician relationship is first built on trust. Confidentiality of communications 

within this relationship is the cornerstone of good medical practice 

and good medical care. Patients must feel safe in disclosing to their 

physicians personal and sometimes embarrassing facts and information that they do not want others to know. We, as physicians, 

need this information to provide the best and most appropriate 

medical care. Without such assurances, patients may not provide 

the information necessary for proper diagnosis and treatment. The 

cost of medical care can increase when physicians do not have such 

information. 

Our professional and ethical responsibility is outlined in our 

AMA Code of Medical Ethics and it is to keep our patients’ confidences, and it is no different because the medical records are 

stored electronically rather than on paper. But the evolution of 

electronic medical data has intensified our existing concerns about 

access to and, now, even commerce in patients’ confidential medical 

information. 

The growing number of third parties demanding information has 

eroded our patients’ confidence that information that they share 

with their doctor is going to help in their individual care. Any number of parties will give you arguments for a vast array of supposedly compelling health and public safety reasons as to why they 

need to know such private information. 

But a need is not a right, and I would like to emphasize that, 

a need is not a right. And because it may be happening now, 

doesn’t make it right. 

AMA policy clearly states that conflicts between a patient’s right 

to privacy and a third party’s need to know should be resolved in 

favor of the patient except where that would result in serious 

health hazard or harm to the patient, or others; and we would suggest that all bills studied in the Congress use that guideline so that 

the patient is the primary protector of his or her own medical information, and not someone else’s right, desire, or belief in their right 

to get that information. 

We believe that patients have a basic right of privacy of their 

medical information and records. We believe that the patient’s privacy should be honored, unless the patient waives it in a meaningful way or in rare instances of strongly countervailing public interests. And by ‘‘meaningful,’’ we mean informed and not coerced. 

We believe that you should limit the information disclosed to 

that part of the medical record or abstract necessary to fulfill the 

immediate and specific purpose—that is, no fishing expeditions. 

While you have our written statement, which goes into more detail, I would like to highlight a few points. First, we cannot forget 

that the primary purpose of the medical record is to provide a reliable tool and to provide clinical diagnosis and treatment for patients. Patients should generally have access to information from 

their medical record. There are few exceptions to protect the mental or physical safety of the patient, but the physical record is the 

property of the physician or provider, and this is where control of 

most disclosures should emanate. 

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Second, on the issue of consent, a patient’s first consent, generally for treatment or payment, should not automatically apply to 

subsequent disclosures unless the patient specifically and freely 

waives defined rights. Insurers, of course, need basic information 

to pay claims and have legitimate need for information to conduct 

utilization review and quality assurance and to monitor for fraud 

and abuse. The AMA cautions against categorizing these activities 

as payment for treatment purposes when they do not go directly to 

paying for a specific individual’s treatment. 

Patients generally believe that their signature releases personal 

information for their direct and specific benefit, overly broad and 

legislative definitions should not exploit patients’ lack of knowledge 

regarding complex information systems. For consent to be truly voluntary, it must be knowing and that includes a patient knowing for 

what purpose their records are being sought. Patients should not 

be coerced into divulging any and all medical records, either their 

own or their families by way of a nonspecific consent signed upon 

enrolling in a plan as a condition of insurance payment, nor should 

physicians have to sign agreements with insurers to produce 

records without that patient’s consent. 

Third, exceptions to the requirement for patient consent to disclosure should be minimally and narrowly drawn. 

Last, whenever possible, medical information used for research 

purposes should have all identifying information removed, unless 

the patient specifically consents to the use of his or her personally 

identifiable information. 

In conclusion, the fact that we have vastly improved technology 

to collect, sort and analyze patients’ medical data does not diminish 

our ethical obligation to protect our patients’ privacy. We all hear 

seemingly compelling arguments for efficiency and technological potential, but we cannot allow the vigorous standards of confidentiality required by the medical profession’s ethical code to be subverted once the record gets into others’ hands. We have to work to 

fit the goal of efficiency within the larger framework of patient privacy, not the other way around. 

Thank you again for inviting the American Medical Association 

to testify. I am happy to discuss our testimony in more detail, and 

the AMA is happy to work with the subcommittee to address concerns. Thank you very much, sir. 

Mr. HORN. We thank you. That is a very well developed statement, as I read it earlier. 

[The prepared statement of Dr. Palmisano follows:]

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Mr. HORN. Dr. Johns is President of the American Health Information Management Association, a rather large organization. Give 

us a little bit about its history. I know you mentioned the numbers 

in your second paragraph, but I think you could educate most of 

us about the extent of your membership. 

Ms. JOHNS. I will be happy to, Mr. Chairman. 

Thank you, Mr. Chairman and members of the subcommittee. 

AHIMA appreciates the opportunity to appear before the subcommittee today in support of the Fair Health Information Practices Act. AHIMA is an organization that was established 69 years 

ago and a professional organization that represents 37,000 

credentialed health information managers. We have over 200 educational programs throughout the country, in colleges and universities which prepare accredited record technicians and record administrators. 

Our organization, a professional organization, was originally established for the purpose of managing, storing, and protecting 

health information, and we have a long tradition with the issues 

regarding confidentiality and privacy, and a principal goal in the 

mission of our organization, since 1929, for protection of health information. So certainly, we are not new to the issues that are being 

posed today. 

We are the credentialed specialists who manage and protect patient health information. We work in a variety of health care institutions and health-related organizations, and we are the professionals that are responsible for handling requests for information 

from third-party payers, from employers, from researchers, attorneys, other health care providers, local, State, and Federal agencies. Our members ensure that information is disclosed pursuant to 

valid authorizations and pursuant to statutes, regulations, and 

court orders. Our efforts, however, to protect health information 

have been complicated by a lack of Federal pre-emptive confidentiality legislation. 

Assuring confidentiality is important because it makes patients 

feel comfortable enough to communicate openly with their health 

care providers. Assuring confidentiality is also important because 

it makes patients feel comfortable that the information they are 

providing health care providers is going to be protected. Unfortunately, current regulations and the physician-patient privilege do 

not offer patients real protection. Therefore, AHIMA believes H.R. 

52 is a solution to this dilemma, first, because the bill establishes 

a code of fair information practices, and, second, because it provides a uniform national health standard for the use and the disclosure of individually identifiable health information. 

It is true that some States have enacted confidentiality legislation, but there is little uniformity with their approaches. Most statutes do not even address the issue of redisclosure of health information, and penalties for its misuse are lacking. Protections also 

vary according to the holder of the information, and for different 

types of information. 

For instance, several States have recently enacted genetic privacy legislation. Segregating and creating special protections for 

specific types of information, such as mental health or genetic information could result in inadvertent breaches of confidentiality. 

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For that reason, AHIMA recommends that comprehensive confidentiality legislation cover all types of health information. 

One of the greatest threats to patient privacy is the increasing 

and growing demand for data, and while there are Federal regulations that offer strong protections, they are limited in their applicability. For example, the Federal Privacy Act of 1974 was designed 

to provide citizens some control over the information collected on 

them by the Federal Government. However, this law does not apply 

to the private sector. There are also Federal regulations in regard 

to alcohol and substance abuse, but these only apply to Federal or 

federally funded facilities that offer treatment for alcohol or substance abuse. 

As a result of the ongoing public policy debate, during the past 

several years, Congress and the general public have come to a consensus there is a need for Federal confidentiality legislation. Reports of the Institutes of Medicine and from the Office of Technology Assessment and, most recently, the National Research 

Council have all underscored the need for Federal action. 

In order to address the need for Federal legislation, AHIMA in 

1993 drafted model legislative language that outlined a code of fair 

health information practices. This language was published in the 

Office of Technology Assessment report, protecting privacy in computerized medical information as a model code, and was used in 

drafting the Fair Health Information Practices Act. 

There are a number of key provisions in the model language that 

are essential to any legislation governing the collection, use and 

disclosure of health information. These include, first, a patient’s 

right to know and access his or her own health information; the 

provision—providing provisions for restrictions on information used 

and provisions for criminal and civil penalties to protect the misuse 

of information. We are pleased to note that H.R. 52 covers all of 

these key provisions. 

We are also pleased to note that H.R. 52, in sections 101 and 

102, provides individuals with the right to access and copy the personal health information and also to amend errors as well. Currently, only 28 States allow patients access to their health information, and even within these particular statutes, they are not uniform. 

We note, however, one principal concern with sections 101 and 

102. These require health information trustees such as health benefit plan sponsors, health care providers, health oversight agencies 

and public health authorities to permit patients to inspect and copy 

their records. They also require that these trustees correct or 

amend protected health information upon request, or take certain 

actions if they refuse to make such changes. 

Because medical records are the physician’s or health care facility’s legal record, they are an important element of patient care, 

and we urge that the language be amended that only providers be 

permitted to correct health information. In other words, information should be corrected at its source. 

AHIMA believes that the passage of pre-emptive confidentiality 

legislation is imperative, and we thank the subcommittee for holding this very important hearing. We sincerely hope that our testimony will prove helpful. In addition to the points we have made 

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here today, we would be more than willing to offer our technical 

comments to you, as you continue to discuss the provisions of the 

Fair Health Information Practices Act. 

[The prepared statement of Ms. Johns follows:]

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Mr. HORN. Well, we appreciate that very thorough statement, 

and we will take you and others up on that because this is a continuing dialog. We don’t claim to know it all up here. That is why 

we have hearings, and in hearings we try to bring out what are the 

similarities and differences. 

Let’s start with you, Ms. Goldman. From what you heard from 

two of your colleagues, where do you differ from them? 

Ms. GOLDMAN. Well, I wouldn’t want to pass up the opportunity 

to find differences with my colleagues, but in truth, I am extremely 

heartened by how much agreement we all have. It has been the 

true history of this issue that all of us at this table, representing 

the various organizations, have worked closely together and believe 

that we must have health privacy legislation. On the broad principles, it seems to me that we have very strong agreement and we 

have worked together over the years to try to fashion some kind 

of a consensus. I am not sure there is vast disagreement or even 

significant disagreement at this time. 

Mr. HORN. So you are OK on the principles, but it is the nittygritty that sometimes brings the Congress to a halt. Does any of 

the nitty-gritty bother you? 

Ms. GOLDMAN. There are probably some vast differences among 

folks who are not at this table, but I think if it were left to the 

three of us we could probably come up with something—— Mr. HORN. The next panel is going to join us, and we asked you 

all to stay here to get a dialog between the six of you; but I thought 

we would do some of it first so we could have a few things that 

are strictly in your testimony. 

Ms. GOLDMAN. I think what is remarkable about this issue is, 

you have organizations such as the American Medical Association 

and the American Civil Liberties Union and the Center for Democracy and Technology. You have such a broad range of groups who 

are involved in various aspects of the health care system who realize, from a very first-hand knowledge, how important it is to have 

enforceable rules. 

Mr. HORN. Dr. Palmisano, how about the AMA? Where do you 

agree and where do you disagree about what you have heard by the 

fine witnesses on either side of you? 

Dr. PALMISANO. Well, I would second what we just heard. I think 

we are in basic agreement. 

What I would like to emphasize is, I think the patient rights 

need to be superior to the Government’s need to know or some 

other third parties need to know and we should follow established 

procedure. Certainly nothing less than probable cause to get into 

the medical record, and we must always protect that right; and we 

think very strongly the code of medical ethics is something that we 

rely on very heavily and it states very clearly that the patients’ rights are primary. I believe our society is a society that has decided we go to the patient first. It is a philosophical base where the 

patient has the right to make a decision, even if it is the wrong 

decision, as opposed to teleological society, where we do what we 

think is right for the patient and the patients’ desires become secondary. So I think we are all in sync on these issues. 

We are concerned about some aspects in the bill. We are concerned about the definition of ‘‘health oversight agency’’ seems 

88

overly broad. We understand there may be some agencies that look 

at this with proper credentials, but maybe there are agencies like 

XYZ that is a for-profit corporation that gets a hold of this information. 

We are very concerned about anything that would allow people 

who don’t have the knowledge and the ethical base to protect the 

patients’ rights having control of these records. We are concerned 

about anything that would link to Social Security numbers, where 

someone could get in. We are concerned about crackers or perhaps 

hackers getting in this information, if it is a clearinghouse. We see 

the Central Intelligence Agency, recently in the news, reports 

where some hacker—cracker, I am not sure what the right term is. 

Mr. HORN. You can use both, if you want. 

Dr. PALMISANO. The evil people that get in without our permission—and they said the Central Stupidity Agency; and we think 

that is one of our most secure and secret agencies, if people can get 

through their fire walls, that is what bothers us. And once people 

know this information is available in electronic form on a central 

data base, we think there will be great incentives. Right now they 

are just people doing it to show they can, quote, ‘‘beat the system,’’

perhaps, but there will be people selling this information. 

So we are very concerned. We appreciate the opportunity, and I 

will be happy to deal with any specific questions. Thank you. 

Mr. HORN. Dr. Johns, what is your feeling based on the testimony your two colleagues have given? Any agreement, any disagreement? 

Ms. JOHNS. Very much agreement, Mr. Chairman, and I think as 

a result of the ongoing policy debate, which occurred over the past 

several years, we have come as a group to a consensus about the 

need for this type of Federal confidentiality legislation. 

Mr. HORN. Let me ask a few questions before we go to the next 

panel. 

Ms. Goldman, some patients may be willing to volunteer information about themselves or even waive their right of record confidentiality if the waiver is incorporated into an offer from a health care 

marketer to provide free samples or coupons that might fit the patients’ needs. Is a purpose of H.R. 52 to discourage that activity, 

and should it or shouldn’t it? 

Ms. GOLDMAN. I think you raise one of the critical issues in privacy legislation, which is consent. It’s usually the cornerstone of 

any piece of privacy legislation, as you may not use the information 

in an unrelated way, without the individual’s consent. 

And as we heard from other testimony, consent is a big term, but 

it doesn’t mean anything if it is not voluntary, if it is not informed. 

It is not meaningful if it doesn’t have those qualities to it. And I 

think the way to ensure consent is meaningful and informed and 

voluntary is to make sure that obtaining that consent is not a condition of receiving certain benefits and services. 

I should be able to go to a doctor and say, I do not want you to 

release this information to a researcher, or I don’t want this information to be released to another doctor without my knowledge; and 

I should still be able to receive treatment even if, as Dr. Palmisano 

said, it may not be in the patient’s best medical interest. That is 

89

a decision he or she should be able to make without suffering the 

consequence of not getting care. 

Most people who sign the broad waivers, when they go to get 

health care, the broad waivers that say this information may be released for any purpose to anybody under any circumstances—and 

I have signed many of them recently since I had surgery on my foot 

a few months ago, and you sign them because you know that it is 

not a choice. These are not real choices people are making; and 

what we should do is build in a way of removing the authorization 

process or consent process from the receiving of certain benefits 

and services, and then I think we will see. 

In fact, the Video Privacy Act, which I keep raising as an example of what we can do when there is consensus in the Congress, 

says you may not disclose without permission and you may not request that authorization as a condition of giving someone a video, 

so can’t we do the same thing here? 

Mr. HORN. Any comments either of you have on that question? 

Dr. PALMISANO. Mr. Chairman, I would just agree with that. In 

my personal practice over the years, it is not uncommon to get a 

request about treatment I have given to a patient that may be unrelated to the treatment I just gave, and they make a photocopy 

of this blanket consent. It is our policy and has been ever since I 

started medical practice 26 or 27 years ago to always call the patient, and if the patient is not immediately available, I have my 

staff continue to try and say this information they want is really 

not related. 

I want you to know what is in your medical record. If you have 

questions, you are welcome to come by and look at it, but you did 

confide to me some information that has a bearing on why you 

might have this ulcer, because of the stress, the family problems 

at home, and I don’t believe that is anybody’s business, unless you 

want it to be somebody’s business. 

So patients feel rather intimidated. They are afraid they are 

going to lose their insurance, and now in this era of managed care, 

they could really have additional pressure put on them. They feel 

rather intimidated, so I think what we have advocated today and 

what you all are very wisely looking into is in the patients’ best 

interest. 

Thank you. 

Mr. HORN. Dr. Johns, any comments? 

Ms. JOHNS. We fully agree with the statements that have been 

previously stated. 

Mr. HORN. OK. Let’s move to the disclosure to spouses. I understand physicians are often faced with difficult choices in sharing 

that information about the condition and care of a patient with 

spouses and family members. Assuming a patient had not previously authorized disclosure nor prohibited it, how would H.R. 52 

affect the ability of a health care provider, such as physician, to 

share information with a spouse, and what is your feeling on that, 

any one of the three of you? 

Ms. GOLDMAN. Spouses are not necessarily treated differently 

from others who are requesting information. The one area where 

there may be slightly different treatment is called the next-of-kin 

provision, which allows a doctor to disclose to the next-of-kin, 

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which could be a spouse, it could be a cousin, it could be someone 

with whom the individual has a significant relationship. It allows 

the physician to disclose to that person, for instance, after surgery, 

unless the individual has objected and said, I don’t want you to 

talk to my spouse about my condition or about the results of my 

surgery, and so the spouse still has that option. 

I assume you would be able to talk with more knowledge about 

how it works in the real world, but there is usually a more comfortable relationship there unless the individuals suggest they don’t 

want that shared. I think H.R. 52 deals with that pretty well. 

Dr. PALMISANO. Well, I think this is a balancing act and something we face all the time. If I am examining a patient—let’s say, 

a woman and she requires an operation—and she says, ‘‘please 

allow my husband to come into the room during this discussion,’’ then I know that she wants her husband to know everything and 

would want him to know everything in the immediate postoperative period, perhaps, and so on, so there is no problem. 

But if someone comes to me, man or woman, and I treat the individual, and someone calls up from another State and says, ‘‘Hi, I 

am the spouse,’’ or whatever, I don’t give that information out. 

There has to be identification, and I have to find out from the patient, ‘‘Do you want me to release this information?’’ Sometimes we 

find people are judicially separated, for instance; we don’t really 

know they are judicially separated, and they are in the midst of a 

battle that would affect the division of their assets and so on, so 

I always go back to the patient. 

Basically, our reading of the next-of-kin provision on page 35 is 

that they would be basically granted the right to give that information, unless the patient objected to that; and that is a balancing act 

that needs to be decided. So I don’t know what is the correct answer to that. 

We always go back to the patient, and if the patient is unconscious, comes in from an automobile accident, for instance, in our 

State in Louisiana, there are provisions that state you can release 

the information to a next-of-kin. If someone is in a terminal, irreversible coma and hasn’t made out a living will, we have a provision in many of the State laws that says the next-of-kin, if not judicially separated, is the individual that can make the decision 

whether or not to continue life-sustaining treatments if imminent 

death is there. 

Mr. HORN. Suppose it is a transmittable disease that could lead 

to death; does the spouse have a right to know? 

Dr. PALMISANO. Well, of course that is under State law. In almost 

every State there is a reporting requirement. Some States require 

you name the individual; other States, they say you give the information immediately to the health officer, and if it looks like it 

could be something that could affect, for instance, someone with tuberculosis, with a productive cough that has the actual bacteria 

that causes tuberculosis, if that is being spread around, they need 

to know the name of the individual and so on. Our medical ethics 

say that you release the information if someone could do grievous 

harm to someone else. 

So you have to then make a decision. You advise the individual 

that it is best for you to disclose this, if you are talking about a 

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sexually transmitted disease, such as AIDS, which usually is considered fatal, but now we have some drugs that may change our 

perspective on that. Then if the individual says, ‘‘no, I am going to 

continue to do this,’’ I think the physician has an ethical obligation 

to take the next step and decide whether or not you will transmit 

the information. 

First of all, you have to do it to the health officer, usually, in 

your State and call the individual. It is one of those ethical dilemmas that the physician needs to make sure that he or she really 

has all the facts. If someone had a plague that was transmittable 

by just exhaling and so on, we would need to isolate that individual; and if the individual says, I am out of here, it would be the 

physician’s obligation to notify not only the next-of-kin, but the 

health authorities, so we wouldn’t have a plague throughout the 

Nation. 

Mr. HORN. Dr. Johns, any comments? 

Ms. JOHNS. No, basically the comments and the sections within 

H.R. 52 that have been already been elaborated on, we feel comfortable with. 

Mr. HORN. Let me move to another area then on correcting patient records. Dr. Palmisano, H.R. 52, subtitle (a) permits patients 

to inspect their health care records to make corrections. With what 

frequency do patients currently ask you, or other doctors, to see 

their records and attempt to make corrections? And to what degree 

does that even occur? 

Dr. PALMISANO. Mr. Chairman, that is a rarity. It is not unusual 

for people to request a copy of the records because they may be 

moving to another State, but it is a rarity for someone to come in 

and say—in fact, in 26 years of private practice, I have never had 

anybody come in and say they wanted to change the record. They 

see me do the record for the office visit right in the office, because 

after I do the history and physical examination, I usually start 

writing in front of the patient and ask if they have additional questions, and I tell them of their lab reports and so on, and offer a 

copy to them. 

So I have had people ask for copies of the records, and we give 

them that information. And in the field I am in, in surgery, it 

would be rare for me to have something in there that might affect 

the health of the individual, their mental health, such as psychiatrists might have. There might be information that if the patient 

got that information immediately—and Dr. Hoge can address that 

better—but the patient may get even more depressed and commit 

suicide. So it is a rarity in actual practice, but there is no hesitation on our part for the patient to get a copy of the record. 

We believe that the record is the record of the physician, and certainly we wouldn’t want to give the original record and have them 

start changing, and mark out things and so on. But if they want 

to give me additional information—it is not uncommon, they would 

say, Doctor, I would like this medicine listed that I have here put 

in my record; I would say, certainly, and we will photocopy it and 

give them a copy back, and we will keep the copy, the original or 

the copy, whatever they prefer, in the record. 

It is a rarity that someone would want to take my records and 

change what is in my record. 

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Mr. HORN. What State do you practice in? 

Dr. PALMISANO. I am in the State of Louisiana. 

Mr. HORN. Does Louisiana have a law that relates to this type 

of situation, or do you follow an AMA protocol, or how do doctors 

sort of make up their minds how to handle the questions, rare 

though the question might be? 

Dr. PALMISANO. Specifically, we follow the AMA ethical guidelines throughout the Nation, the people who are members of the 

AMA and many physicians who are not members also follow, 

whether or not they have sent their dues in. This seems to be the 

bible of what is the right thing to do. 

In Louisiana, on that specific issue—I don’t recall if there is 

any—well, I take that back. We have a statute, in fact, patients 

have the right to get their record at any time. They can come in 

and ask for the record, and the record would be given to the patient. If an attorney sends a subpoena in Louisiana—and this law 

changes every year, but now it will change every other year, because Louisiana now will have a fiscal session 1 year and everything else the other year. But between the medical association, the 

trial lawyers and everybody else, there is a battle on how to get 

the record. What we have is a very rigid way of getting the medical 

record. A patient can come, request the record, sign for the record 

and get a copy of the record. 

If an attorney wants the record through subpoena, that attorney 

is obligated to send a notification to the patient, if it is an adverse 

attorney, to the patient or the patient’s attorney; and after 10 days 

to 15 days—it changes from year to year—if there is no protest at 

the court level, then the physician is allowed to give the record out. 

But you cannot give the record out until that number of days have 

passed and you also have this notification; it is an affidavit that 

the attorney must submit. 

So we are very cautious about who can get the record. 

Mr. HORN. Do you, in your own practice, or do doctors you know, 

have they ever refused to grant a patient’s request to access to the 

record; and if so, what is the policy of the AMA on that? 

Dr. PALMISANO. No, I don’t personally know anyone who has refused to grant access of the patients to the record. I have seen situations where a patient said, don’t give that record; and a subpoena 

came for the record, and the doctor says, what am I supposed to 

do; and they will usually call the legal counsel or the medical society or their professional liability carrier, and they all get together 

and try to work something out. They usually end up going to the 

judge and trying to explain the situation. 

But there is no problem in giving that information, and it is the 

policy of the AMA that the patient has a right to inspect his or her 

records, unless there is some overriding reason that might, as I 

said, in a psychiatric situation—my counsel here just pointed out 

that the patient has access unless in the professional judgment of 

the medical doctor it would harm the patient—then it goes to some 

designee, for instance. And this usually occurs in a psychiatric situation, and it is not only in our policy, but it is also in our code of 

medical ethics book and the patient has a right to that information. 

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We deal with informed consent, Mr. Chairman, all the time, and 

it is a very strict law of informed consent that has evolved throughout the Nation and especially in Louisiana. 

Mr. HORN. If we use an analogy to an audit report of an organization, often when an auditor makes a statement—let’s say it is a 

Government auditor—the agency would be given the right to respond to that statement; but both items would remain in the 

record, in other words, the audit initiation and the agency response. 

Now, in terms of using medical information—and we talk about 

the patient’s right to correct the record—would that mean we simply add, as you suggested earlier, another sheet of paper to the 

record, that this is the patient’s view of this record, or would there 

have to be integration in what is presumably your record on the 

patient? 

Dr. PALMISANO. Well, the original record is never changed unless 

there is an error in the record. For instance, if the physician wrote 

down the patient was on XYZ medication and, in reality, the physician did not hear that correctly and the patient says, gee, I looked 

at my record and I am not on that medication, then we don’t want 

to go back and alter the record incorrectly. We want to do it in the 

approved methodology and make a new note, put an asterisk or 

some note saying, this is an error up above, put a line through it, 

date it, initial it; and then go down to the next area for writing and 

say, this area was corrected, the patient brought it to my attention, 

the patient is on this medication and not what we wrote. You 

would then, just move on and that would be the way to correct it. 

Now, on the other hand, if what the physician found was absolutely correct, such as the physician did an abdominal palpation 

and found a pulsating mass or suspected it to be an abdominal aneurysm, that was the physician’s impression, based on the history 

and the physical examination at that time, the symptoms in the 

physical examination. So if the patient came in and said, ‘‘I want 

that changed, I don’t want that on my record because I am going 

to such and such—I am applying for new insurance,’’ the physician 

could not ethically or medically or legally do that. That would be 

wrong. 

And if the patient wanted to insert that in there, I personally 

would have no objection; I don’t think it would be in the patient’s 

best interest, but I would put it in the record and say, I will make 

an attachment page. If the patient came in and wanted the record 

changed, I don’t believe that is the appropriate thing to do. 

Here is the patient’s statement and put it in there. 

Mr. HORN. Any comments on this aspect of record changing, correction or revision? 

Ms. JOHNS. The general practice, just as Dr. Palmisano has stated, where there is an error in the record, it is corrected by putting 

a line through the error, indicating that there is an error, and writing a correct entry for that; and the issue of the amendment to the 

record is common practice. Good information practice is to include 

the amendment to the record, if the patient and the health care 

provider are in disagreement. 

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Mr. HORN. Is that practice sort of the basic code of your organization, and is that actually carried out in most State laws with 

which you are familiar? 

Ms. JOHNS. It is a practice. Our best practice—our association 

puts out practice briefs, and that procedure that I have just stated 

is included as best practice. Whether or not it is carried out in each 

State would be another issue, but as far as our credentialed, certified people, this is what we would expect. 

Mr. HORN. Did you have a comment on that? 

Ms. GOLDMAN. Just a small comment. 

While I appreciate what the code of ethics is and how, in particular, Dr. Palmisano operates in his practice, my recent experience has been a little disconcerting. 

I was in a surgeon’s office recently where the patient in front of 

me requested a copy of her medical record and she said, ‘‘May I get 

a copy of my medical records, please?’’ And the person behind the 

desk said, ‘‘To whom should we send the record?’’ And she said, ‘‘I 

would like a copy for myself.’’ And she said, ‘‘I can’t release the 

record to you, but if you would like to tell us who you would like 

us to send them to, we will make sure the doctor gets the record.’’ She went through a huge struggle, and I then couldn’t help myself and suggested there was a law in the District of Columbia that 

required that she get a copy of her record. And the nurse was furious and said, ‘‘That is not our policy in this office, we don’t release 

records to the patients;’’ and my understanding, in talking to the 

nurse later on and the doctor—who, by the way, I chose for his surgical ability and not his adherence to privacy principles—I was 

really surprised to find that at least in the District, there is something that is considered to be common practice which is not to give 

the record directly to the individual, even though there is a law 

that requires it. 

So I think that, at least in my little experience, there may be a 

real disjuncture between what the code of ethics is and how people 

practice. 

Mr. HORN. On, quote, the record, unquote, what about a xerox 

of the record? Are they worried about the complete loss of the 

record? That is a legitimate worry for a doctor. 

Ms. GOLDMAN. I assume so. 

Mr. HORN. I assume they would make a xerox to send it even to 

another doctor, rather than lose that record. I would never release 

a record like that. 

Ms. GOLDMAN. The issue, at least in the circumstances I am giving, is not so much whether it was xeroxed or not xeroxed, but that 

the practice, the policy of that office was not to release directly to 

the patient. 

Mr. HORN. I understand that; and I think the law is right and 

the doctor’s office was wrong, that the patient ought to have a right 

to know, even if they can’t translate the doctor’s handwriting and 

even if they don’t know what some of the words mean. 

Let me ask you, Dr. Johns, about audit tracing. Many information technology systems can incorporate these records, handling 

audit trails that maintain a log of each instance—when each individual is looking at an electronic file. We have that argument in 

Government as to who had access to these files. This makes it posVerDate 0ct 31 2002 09:50 Nov 14, 2002 Jkt 081024 PO 00000 Frm 00098 Fmt 6633 Sfmt 6602 W:\DISC\45252 45252
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sible to generate a list of each time and each individual who has 

looked at a patient’s electronic record. 

How prevalent are such tracing procedures in existing health 

care information systems? Do they have that type of situation? 

Ms. JOHNS. With electronic information systems, there are usually provisions or functions for audit trails, and audit trails are 

used in various ways. It is not that they are included with the patient’s medical record, but they are used as one mechanism in a 

total security policy; and I think that is important, to recognize 

that audit trails or tracings are one avenue by which you can protect or identify breaches of confidentiality or at least identify 

breaches of access into the record. 

A total security policy should include good policies, good procedures, very good employee education and training, in addition to 

being able to select various types of technical types of mechanisms 

that can protect information in an electronic environment. 

Mr. HORN. I think one thing that worries a lot of us—and I remember the testimony very clearly when Mr. Condit chaired the 

subcommittee under the Democratic Congress, one of our colleagues from New York had had her records stolen, and entered 

into her political campaign. In other words, her records were used 

against her. 

That was a very serious situation, and I think all of us worry 

about the person who has access to those records in a doctor’s office, in a hospital, in an insurance company, whatever the case may 

be. You could have a disgruntled employee who decides to take copies of the records of the mayor of the city and the biggest developer 

in town. They would be subjected to blackmail are subjected to revelation of an embarrassing situation by sending the information to 

the local newspaper. 

Now, what kind of audit system do we have in one’s office to say, 

who has access to these files? As I go into offices, what I see are 

rows and rows of paper folders. And often when I go in, there is 

nobody behind the desk; if it is the noon hour or whatever, somebody could walk through and say, that is an interesting folder, I 

think I heard her on TV the other night. So what do we do about 

that? 

Ms. JOHNS. In relationship to access to paper records, normal 

practice is that when records are released, there is a log that is 

kept as to who has requested that information and for what purpose. This would be occurring in hospital medical records departments. 

In regards to the instance that you were giving, as far as like an 

employee who might want to access records, if they felt they were 

going to be terminated, another good practice is that individuals 

who are going to be terminated, their access rights, in addition to 

audit trails, need to be terminated prior to them being informed of 

their termination, or at the same time, so that you have dual types 

of counterbalances, as far as protecting that information. 

Audit trails, too, can have intelligence built into them so that 

flags are set as to identifying potentially suspicious types of activity. For instance, if an employee of the health care facility was 

being treated in the hospital, any accesses to that record would be 

monitored and flagged, if it would be a health care provider that 

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would be looking at the record who didn’t have the direct patient 

contact relationship, or if it would be an employee within the institution someplace, where they should not have access. 

So I think an important consideration with audit trails, as well, 

or tracings, is that there is some mechanism by which potentially 

suspicious activities can be identified. 

Mr. HORN. Should hospitals, insurers, doctors, and other health 

care providers be required to incorporate such tracking procedures 

in all the information systems? 

Ms. JOHNS. I think that is an issue you have to look at in context, and again, as I mentioned, audit trails are only one technical 

aspect of a security program. You have other aspects, such as passwords, access levels, audit trails, certainly, and policies and procedures, as well as employee education and training. 

So, I think you really need to look at the specific application— how large the institution is, for instance—in a smaller physician’s 

office practice, the need for audit trails when you have three people 

working in an office may really not make much sense, as opposed 

to an institution where you have 5,000 individuals working and 

more people who have access, and clearly all of them would not be 

involved with the direct patient care. 

So I think it needs to be done, all of the guidelines need to be 

presented, and then a mechanism of procedure for a whole security 

program needs to be developed. I think that is going to be varied 

from institution to institution. 

Mr. HORN. One last question before we move to the next panel 

concerns administrative simplification. 

One of the objectives of the Kassebaum-Kennedy bill, which was 

enacted into law, as I mentioned in my opening statement, was to 

foster administrative simplification. This includes creating common 

definitions for data elements and coding practices. 

Three weeks ago, this subcommittee heard testimony on the medical transaction system of the Medicare operation, and the Department of Health and Human Services and their efforts to develop a 

common provider identification number. Are we making progress 

toward streamlining health care administration practices and what 

barriers continue to exist? What do you see happening in that area, 

Dr. Johns? 

Ms. JOHNS. As far as barriers in electronic patient records? 

Mr. HORN. Yes, and just how far are we from it. 

Are we getting into standardization based on software of a particular vendor, or is that software related to the best practices of 

your organization, the AMA and others? 

Ms. JOHNS. I think one very large barrier—and it has been cited 

by other reports—the Institutes of Medicine and their computerbased patient record report even back in 1991 cited one of the biggest barriers is lack of standard, and a barrier we certainly are experiencing is the barrier in regards to confidentiality and having 

Federal legislation in regards to a standard, uniform practice. And 

so, without some standard, uniform practice, it makes it very difficult to either transfer information—we have problems with standards in vocabularies which, of course, agencies or groups like the 

National Library of Medicine are certainly working on, other 

groups like HL–7 and ASTM standard organizations are working 

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on. I think that, because HIPA requires the Secretary of Health 

and Human Services to adopt standards for national providers, 

identification, payers, and patients by February 1998. 

We feel that this is a very good first step in helping us get the 

standards that we need to build a national information infrastructure, and I believe the NCVHS is currently holding hearings on 

these issues, and additional information will be available later this 

year, which certainly we will comment on at that time. 

Mr. HORN. Well, we thank you for your comments on this series 

of questions. 

We are now going to ask panel III to come forward and sit with 

you. You can relax for a while and then we have some comments, 

questions for both panels II and III. So if Dr. Gabriel, Drs. Andrews and Hoge will come forward, we will appreciate it. If the new 

witnesses will stand and raise their right hands. 

[Witnesses sworn.]. 

Mr. HORN. All three witnesses have affirmed. 

Let’s just go down the line, the way the agenda is. 

Dr. Sherine Gabriel, Department of Health Services Research, 

Mayo Clinic, representing the Healthcare Leadership Council, is 

first. 

STATEMENTS OF DR. SHERINE GABRIEL, DEPARTMENT OF 

HEALTH SERVICES RESEARCH, MAYO CLINIC, REPRESENTING THE HEALTHCARE LEADERSHIP COUNCIL; DR. 

ELIZABETH ANDREWS, GLAXO WELLCOME INC., REPRESENTING THE PHARMACEUTICAL RESEARCH AND MANUFACTURERS ASSOCIATION; AND DR. STEVEN KENNY HOGE, 

CHAIR, COUNCIL ON PSYCHIATRY AND LAW OF THE AMERICAN PSYCHIATRIC ASSOCIATION 

Dr. GABRIEL. Mr. Chairman, members of the committee, I am Dr. 

Sherine Gabriel, a physician and researcher at the Mayo Clinic. 

Thank you for the opportunity to testify before you today regarding 

the issue of medical records confidentiality. 

I am here this morning, as you just heard, on behalf of the 

Healthcare Leadership Council. My testimony, however, will reflect 

my own perspectives as a health care researcher. I will address two 

fundamental questions: What is the importance of medical recordsbased research to the public, and what is the impact of legislation 

restricting access to medical records on such research? 

I am privileged to work at a world-renowned medical institution. 

Mayo Clinic’s international reputation is a center of excellence in 

medicine, which grew out of the commitment of our founders, Drs. 

Will and Charlie Mayo, to integrate medical research and education with clinical practice. 

The Mayo brothers perceived a duty to use the information from 

medical records to answer important public health questions, and 

in 1907, pioneered the concept of the unit medical record, where 

medical data on each patient is stored in one self-contained packet 

and kept in perpetuity. This led to the formation of the Rochester 

Epidemiology Project, the unique national research resource which 

has been funded by the National Institutes of Health for over three 

decades. It has resulted in approximately 1,000 scientific publications, analyzing thousands of diseases and medical conditions, and 

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was ranked in the top 1 percent of all NIH proposals when it was 

last reviewed in 1995. The central element of the REP is access to 

the complete medical records of all residents within a geographically defined population. 

Medical records research is vital to maintaining and improving 

the health of the American public. Virtually every health hazard 

we know of today and countless medical advances have been identified using information from medical records. For example, if researchers had not been allowed to study the medical records of patients with unusual immune deficiency problems in the late 1970’s, 

the characterization of the AIDS epidemic would have been delayed 

at a huge cost to the public’s health. Similarly, characterization of 

Lyme disease required collation of information from the medical 

records of the children who presented with this condition in Lyme, 

CT. 

Other examples include examining the benefits and risks of estrogen treatment, the health risks of smoking, of dietary fats, obesity, certain occupations, studies leading to the development of vaccines for polio and measles, and studies showing the benefits of 

breast cancer screening. Without medical records research, problems such as the Thalidomide tragedy and the role of prostate specific antigens, the controversial tests for prostate cancer, could not 

have been resolved to the extent they are. 

You may have read in the newspapers last year that an outbreak 

of flesh-eating strep was identified at Mayo in 1995. Without access 

to the medical records of patients with these unusual infections, 

characterization of this syndrome and isolation of this deadly bacterial strain would have been delayed and over 100 school children, 

which our research showed were the unwitting carriers of this 

deadly germ in their throats, would have gone untreated. 

Let’s now turn to the second question: What is the impact of legislation which restricts access to medical records? Such legislation, 

in my opinion, threatens the very existence of this entire category 

of medical research. This is because people who do not consent are 

systematically different in important ways from people who do. 

For example, people who don’t consent may have had worse outcomes, or they may be less satisfied with their care. Studies which 

exclude these people would be biased; they would simply give the 

wrong answer. 

Moreover, while research is clear on the point that people who 

do not consent are systematically different from those who do, the 

direction and magnitude of those differences are completely unpredictable from study to study. So not only will such research result 

in the wrong answers, but it will be impossible to determine how 

wrong they are or in what direction. Thus, the reliability and validity of the findings from such research will be weakened. 

Inclusion of all qualifying individuals is the only way to ensure 

that accurate conclusions are drawn in public health medical 

records-based research. Of course, such research—and we recognize 

this—must be done while taking appropriate measures for maintaining patient confidentiality, including careful review and oversight by institutional review boards and strict adherence to procedures restricting access to patients’ specific medical information. 

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In closing, I want to comment briefly on what I believe is an important driving force behind all of this, which is the desire to keep 

personal medical information between the patient and his or her 

physician, the old Hippocratic idea. As a physician, a patient and 

a mother, I understand why this idea is so appealing; however, in 

a complex health care environment, it is an unattainable ideal. 

For example, in an average medical visit, the following individuals and groups must have access to the patient’s medical record 

in order to best serve the patient: the appointment office; the registration desk; all physicians, physician assistants and nurses who 

provide care for the patients, as well as receptionists and secretaries; medical, nursing and other students and their mentors; all 

laboratory, EKG, x-ray technicians who perform the necessary 

tests; infection control officers who regularly survey medical 

records for reportable diseases; continuous improvements staff who 

strive to improve our health care processes; members of the marketing department who seek to ensure patient satisfaction; the 

business office for billing, the legal department, insurers, and 

third-party payers. 

After all of this is taken care of, a qualified nurse researcher, 

bound by the rules of the IRB and strict patient confidentiality regulations could be abstracting clinical data from the medical record 

which, after being stripped of patient identifiers, will be combined 

with similar data from hundreds of other patients to answer a specific public health question. The type of legislation we currently 

have in Minnesota influences only that nurse’s access to the medical record and has no impact on any of the other points of access. 

Mr. Chairman, legislation must be carefully crafted, such that it 

ensures privacy of medical information, a very important goal, and 

does not hinder medical scientific research, as such interference 

will put the public’s health and well-being at risk for serious harm. 

Thank you for your attention. 

Mr. HORN. Well, thank you. You have raised some very interesting questions that we are all going to have to grapple with. 

[The prepared statement of Dr. Gabriel follows:]

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Mr. HORN. Our next witness is Dr. Elizabeth Andrews—I hope 

I am pronouncing this right—Glaxo Wellcome Inc., representing 

the Pharmaceutical Research and Manufacturers Association. 

Dr. ANDREWS. Thank you, Mr. Chairman, and thank you for the 

opportunity to present our information. My name is Elizabeth Andrews and I am director of Worldwide Epidemiology at Glaxo 

Wellcome. I appear before the committee on behalf of the Pharmaceutical Research and Manufacturers of America, or PhRMA, to 

discuss our industry’s views on data privacy in general and H.R. 

52 in particular. I will summarize our full statement, which will be 

provided for the record. 

It is clear that patients deserve to have medical information kept 

in strictest confidence by those to whom they entrust it. PhRMA 

companies honor that trust. Patients also deserve answers to their 

unmet medical needs. 

This past year, the research conducted by our companies yielded 

53 new FDA-approved medicines, new weapons in the war against 

40 diseases, including AIDS, cancer, heart ailments, and mental illness. Our continued progress depends on aggressive, multifaceted 

research, including basic science that allows us to understand disease processes, practical research and development that enables us 

to discover and develop drugs to treat disease. Clinical trials that 

demonstrate project safety and efficacy, epidemiologic research that 

helps us to know how drugs perform in the real world, identifying 

and characterizing rare side effects or unsuspected benefits and 

health services research that leads toward improvements and the 

quality and cost-effectiveness of patient care. Federal policy must 

accomplish twin objectives, protecting the privacy of individual patients, while also protecting the continued viability of research that 

promotes improved health care for all persons. 

We believe these objectives can best be met by establishing uniform national requirements for the handling of medical information, defined to include genetic information. PhRMA has three primary suggestions that should be included in Federal requirements, 

but need specifically to be addressed in H.R. 52. 

First, the bill should recognize the process already in place under 

regulations adopted by FDA and 16 other Federal agencies to protect patient identifiable information used in biomedical research. 

Second, any new legislation or regulations should preserve researchers’ access to the full range of potentially useful information 

about the incidence, prevalence, and outcomes of illness, as long as 

individual privacy is properly safeguarded. Only those data sources 

that directly identify individuals need to be kept confidential. 

Third, uniform national requirements should provide effective 

Federal pre-emption of State statutes. One of the compelling reasons for establishing Federal requirements is to provide a uniform 

set of rules that can be applied consistently from State to State for 

research. With respect to clinical trials, the current controls regulating FDA-monitored trials are quite strict. 

Through standard operating procedures, companies ensure, 

under Federal Rules, that personally identifiable information remains secure in the offices of individual health care practitioners 

who serve as the study investigators. The sponsoring company has 

access only to the information that needs to report to FDA, to 

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verify results and to protect patient safety. We are concerned that 

H.R. 52 does not recognize the existing safeguards, the regulatory 

processes and oversight mechanisms that exist. The National Institutes of Health and the President’s National Bioethics Advisory 

Commission are already charged with examining the IRB process 

and will develop recommendations for any improvements that are 

deemed necessary. 

PhRMA is also concerned that H.R. 52 would restrict access to 

certain data bases if they could be linked by codes to data sources 

that identify individuals. These data bases contain crypted identifiers and only through the use of a secure and confidential key can 

specific patients be identified. In some studies, it is necessary to 

use this key to link to other sources of information about the patients to create a richer more scientifically informed set of data. 

These type of studies need special precautions to ensure confidentiality of patient information, but these studies are not concerned 

with the identity of the patient, only with the scientific content, 

that a patient’s information can contribute to a study. 

A wide range of health-related data could be affected by the provisions of H.R. 52, from Medicare, Medicaid and private insurance 

claims data, to State-collected vital and health statistics. Access to 

these data is important to generate answers to many of today’s 

pressing health issues that cannot be answered through other 

mechanisms. Analyses of such data have contributed to demonstrating the higher risk of hip fracture in the elderly among 

those taking psychotropic drugs, quantifying the risks and benefits 

of hormone replacement therapy, documenting the underuse of beta 

blockers following heart attacks and the resulting increase in mortality and morbidity. 

Under H.R. 52, access to these data bases could be construed to 

require for each reanalysis of the data, either specific consent of 

each of the subjects whose medical information is contained in the 

data base or the approval of a certified IRB. Current regulations 

exempt such data from IRB review and informed consent requirements. Such requirements are unnecessary and do nothing to protect human research subjects, whose identity is not revealed in 

such data bases. Instead, we can protect patients’ privacy without 

impeding research, through careful encryption of data, effective security for the key to encrypted data, tight security safeguards 

whenever confidential information is accessed directly, and guarantees of confidentiality by each individual who obtains confidential 

information. 

In conclusion, the research-based pharmaceutical industry respects the privacy of patients and the confidentiality of information 

about them. We could not conduct our research if we did not do so. 

We urge that any changes in Federal confidentiality requirements 

be drafted with great care to ensure that medical research can continue to yield new remedies and better ways of caring for patients. 

Thank you. 

[The prepared statement of Dr. Andrews follows:]

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Mr. HORN. Well, thank you very much. We appreciate that testimony. We now have Dr. Steven Kenny Hoge, the chair of the Council on Psychiatry and Law of the American Psychiatric Association. 

Dr. HOGE. Thank you. Mr. Chairman, I am Dr. Ken Hoge. I am 

testifying on behalf of the American Psychiatric Association, a medical specialty society representing more than 40,000 psychiatric 

physicians nationwide. We are pleased to have the opportunity to 

discuss with you privacy protections for medical records. 

Patients come to physicians and entrust them with sensitive, private, personal, and sometimes embarrassing information because 

they believe that it will be used to help them. Physicians acting in 

the interests of their patients have controlled access to this information. As the guardian of confidential medical record information, 

physicians have protected patients’ privacy. When third parties inappropriately demand access to medical records, physicians refuse. 

When the third party’s right to access is uncertain, physicians have 

acted as sentinels, alerting patients that others are trying to seek 

the records. 

Physicians may take steps to protect records even in the face of 

legal pressures. Physicians have guided patients so that even voluntary disclosures of medical information minimize privacy intrusions. The physician’s role as guardian of the medical record has 

been recognized in professional standards, impressed upon physicians in their training and acknowledged as legitimate by the 

courts. 

Recently, the traditional role of the physician as guardian of patient privacy has come under serious attack. Medical information 

has increasingly been put to uses that are not intended to serve patient interests. Third party demands for access have increased with 

attended risks to patient privacy. Electronic storage of medical information raises serious privacy concerns, since these systems, by 

design, facilitate access, transmission, and duplication of medical 

records. 

In our written statement, we have submitted several principles 

that are important to maintaining the privacy of medical records. 

Let me emphasize the following now. Medical data is generated for 

the care and treatment of patients and should be used to serve 

their interests. This can only be done if physicians continue to play 

an active role as guardians of the medical record. 

New information technologies should not be employed to stretch 

the limits of appropriate access that have been established in professional custom and law. Third, legal and ethical sanctions for violations of patient privacy should keep pace with developments in 

technology. Existing legal sanctions, such as breach of fiduciary duties, malpractice, breach of implied contract, all help to protect confidentiality and provider patient relationships. These protections, 

which have been established in professional standards, statutes 

and case law, should not be undermined. 

Appropriate legal sanctions need to be developed to cover insurers, managed-care entities, and medical record data banks that 

handle and store sensitive medical information but do not have the

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tradition of the physician/patient relationship. Throughout your deliberations, please remember that patient privacy is fragile, and 

that once it is lost, it cannot be regained and its loss cannot be 

truly compensated. I will be happy to answer your questions. 

[The prepared statement of Dr. Hoge follows:]

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Mr. HORN. We thank you very much for that statement and I am 

going to put in the record the comments of the Health Insurance 

Association of America. They were invited to testify, but they were 

not able to make it, so their statement, without objection, will go 

in the record at this particular point. They raise some interesting 

questions, which we might get into during the question period here. 

Let me just ask all of you here, what type of penalties are appropriate for individual medical privacy rights and if someone violates 

them, what do you suggest? Let’s just go right down the line. 

Ms. Goldman. 

Ms. GOLDMAN. Thank you. Well, I certainly believe—— Mr. HORN. You did the right thing. You pulled the microphone 

toward you. All those microphones need to be pulled toward you. 

This was built in the 1960’s, but they use the 1890’s sound system, 

so we have a problem. 

Ms. GOLDMAN. I certainly believe that any Federal law should incorporate a variety of remedies. One remedy is not going to be sufficient. There should be a private right of action that gives an individual the ability to come in and bring a lawsuit against someone 

who has harmed them. Also, I think that an appropriate Federal 

agency, such as HHS, should be able to assess a civil penalty, so 

if the individual can’t afford a lawyer, the Government can come 

in and say you have done wrong. And I also think, under very egregious circumstances, there should be criminal penalties as well. 

Mr. HORN. Well, if there is a criminal penalty, what should it be? 

I mean, is it a misdemeanor or is it a felony, let us start there. 

Ms. GOLDMAN. Well, I think that by the time you reach the level 

at which you would be liable for criminal penalty, I think you 

should be looking at a felony. A criminal penalty, particularly 

under a number of the proposals that are out there, would be 

where there has been intentional, malicious disclosure of personal 

information, where there is a course of conduct over a period of 

time, the person—— Mr. HORN. Pattern and practice. 

Ms. GOLDMAN. Pattern and practice, flagrant violator, should certainly be a felony. 

Mr. HORN. What is your feeling, Dr. Palmisano? 

Dr. PALMISANO. Thank you, Mr. Chairman. The American Medical Association believes penalties and sanctions for unintentional 

disclosures of identifiable patient information, where the disclosure 

does not result in demonstrable harm to the subject of the disclosure should be commensurate with the violation. Repeated such 

unintentional disclosure should receive stronger penalties if they 

indicate a negligent business practice. 

Penalties and sanctions related to improper disclosure for commercial purposes, profit malicious purposes or where there is significant patient harm should be more stringent. In addition to monetary sanctions, legislation could include the loss by a data base 

company, for example, of its privilege to hold or transmit protected 

medical information, thus reducing the potential for companies to 

accept the monetary penalties for improper, intentional disclosures, 

as a cost of doing business. 

In other words, we don’t want them to say, well, gee, there is this 

little penalty. We will just pay it because we are making so much 

139

money here, but they would lose the right to function in that capacity in the future. 

Mr. HORN. Has your association considered the thought of compulsory arbitration, rather than going through the court system? 

Some associations do this. I mean, the patient would sign either 

mediation, which is not compulsory or a compulsory arbitration 

agreement. Rather than going into court on some of these, they 

would sign that if something happens to the record, let’s say, you 

would have compulsory arbitration, and that would be, perhaps, an 

arbitrator picked by the patient, one picked by whoever, the doctor 

or hospital, whatever the violation source is, and the two usually 

pick a third. 

Dr. PALMISANO. The American Medical Association for years has 

been in favor of alternative resolution mechanisms to the current 

court system. We believe it is expensive and very inefficient and 

that does not serve both sides very well, in our opinion. In this situation, I guess there would be two issues. The first issue would be 

how would you resolve the issue and we certainly have been in 

favor, as an association, of voluntary binding arbitration? 

For instance, in Louisiana, we have that as an alternative to the 

court system, if both sides agree prior to the event occurring, and 

there is a period of time, a cooling off period where you can change 

your mind, but after that, it is a binding arbitration. So in general, 

we are in favor of that. The next issue goes to the penalty phase 

of it. Would the arbitrator have available to him or her certain penalties that would be mandated to follow, based on how egregious 

the act was and so on? 

Mr. HORN. That would be the civil side of it, certainly. Obviously, 

they wouldn’t be getting into the criminal side. But you also have 

the sort of rent-a-judge approach in many jurisdictions where X 

judges regularly decide very difficult disputes and both parties 

agree and it gets it out of waiting 1 or 2 or 3 years to come up in 

some court systems. 

Dr. PALMISANO. In general, the AMA has been in favor of such 

methods, where we could have alternative ways to resolve that. We 

just want to make sure there is fairness, due process and so on. 

Mr. HORN. Dr. Johns, any feelings on this? 

Ms. JOHNS. Mr. Chairman, part of our model legislative language 

and key provisions for national regulations in regard to this included civil and criminal penalties. Now, as far as distinguishing 

felony and when that should occur and so forth, I don’t believe that 

we had gotten into that particular detail. I do feel comfortable in 

testifying, however, that the provisions, as they are stated in H.R. 

52, is something that our association supports. 

Mr. HORN. Dr. Gabriel, do you have any thoughts on that? 

Dr. GABRIEL. Not really. I would agree with what has been said 

before. I think it really depends a lot on the type of abuse, the motivation for it, whether the abuse is for commercial reasons, whether there has been patient harm, and I can tell you that in our own 

institution and I know in many others, even the mildest level of 

abuse results in termination of employment. So I think there has 

to be that and that the IRB has an important role in monitoring 

it and making sure those abuses do not occur. 

Mr. HORN. Dr. Andrews. 

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Dr. ANDREWS. Well, first tight controls over data within the research setting are effective in preventing these types of violations. 

However, we do also concur that there should be penalties and that 

those penalties should be commensurate with the disclosures. 

PhRMA has developed no specific recommendations about penalties. 

Mr. HORN. Dr. Hoge. 

Dr. HOGE. I think the only thing I would add, I think it is important for all of us to keep in mind confidentiality is sort of a tricky 

thing to regulate, that once privacy has been breached, suing someone doesn’t do you much good. The fact they are punished may not 

do you much good. Internally, in a hospital, terminating an employee, I think obviously makes a lot of sense, but what we see over 

and over again is that the result of bringing a lawsuit or seeking 

some kind of legal redress would be wider dissemination of the information that the person wanted to keep confidential in the first 

place. So there is a little difficulty here. 

At the APA, we have seen criminal penalties wax and wane in 

various versions of the bills. No penalty is too severe if the transgression is severe, assuming the underlying rules are set appropriately. 

I do want to add one other comment. You asked the earlier panelists if they had any disagreements. I think the biggest fault line 

I perceive in this issue over the last 31⁄2 years pertains to the preemption issue. I think it is—my view is it is beyond a doubt, the 

APA has spent countless, hundreds of thousands, if not millions of 

dollars over the last generation, developing case law, statutes in 

States all over the country. 

We were instrumental in the Jaffey v. Rudman case. It is cited 

prominently in your draft bill. I think it is not correct to say that 

privacy is not protected in this country or that the States aren’t 

doing an adequate job. Many States and many courts are doing a 

very adequate job. So I think the pre-emption issue is an issue, and 

I think to put the whole moose on the table, that the people who 

are interested in pre-emption are interested in the efficiencies that 

pre-emption would provide, not in privacy protection. 

I think it is clear if a State wants to come along and raise the 

bar from any Federal law that might be passed, that that can only 

help patient privacy. I don’t see any logical way of getting around 

that conclusion. So I think we need to understand now we are talking about privacy versus efficiency, and obviously the APA is going 

to come down on the side of patient privacy. 

Mr. HORN. I note in the Health Insurance Association of America 

testimony, this is the last time I will cite it, but it is relevant to 

this question. They say under Subtitle E, enforcement of the Condit 

bill: ‘‘We find it troublesome that the act creates a private right of 

action and the right to obtain punitive damages. Such provisions 

raise the potential for a large increase in frivolous litigation. Regulating health information does not require creating a new cause of 

action. We suggest that broad exceptions should exist for inadvertent disclosures and those made in good faith and plaintiffs 

should be required to show specific harm.’’ 

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Are there any reactions, anybody, to that? It is a little different 

than some of your testimony, so I thought I would throw that in 

for the record. 

Dr. PALMISANO. Mr. Chairman, just one comment about frivolous 

actions. The American Medical Association is on record repeatedly 

that we are in favor of anything that discourages frivolous actions 

and certainly in the Health Care Quality Improvement Act, which 

created certain protections for peer review and also created the National Practitioner Data Bank. 

There is a provision in there that if someone files a claim without 

merit, and so on, that the individual can be sanctioned. And certainly I think in any legislation that we need to look at situations 

for people who don’t really have a basis for it, and do this just to 

harass. So we would be in favor of something of that nature. 

Mr. HORN. That is a serious problem, without question, in some 

types of litigation. I think I said a year ago, when we were able 

to override the President’s veto, when he was sort of defending 

that, 1 or 2 years ago, I guess it was, the fact is the American Bar 

Association, if it wants to be a professional organization, ought to 

be dealing with these matters. That is what professions are supposed to do, regulate their members. We haven’t seen it yet. Maybe 

some day they will decide they are a profession and do something 

about it. It is despicable, some of the filings, absolute blackmail. 

And that is what has Congress upset in this area. 

For those where you have a true pattern and practice, that is 

something else. However, where you simply have somebody fishing 

around, trying to, in essence—and I went through this as a university executive and president. They filed suits and they figure you 

will buy them off at $10,000 a month or something, and if you got 

50 suits filed, that is a pretty good income. So that is serious, how 

we deal with this and try to get the people that are really violating 

the law, versus the sort of snooping expeditions or whatever we call 

it, where we just have that kind of conduct by a small handful, less 

than 1 percent or one-tenth of 1 percent, but enough to be annoying. So let us see here. 

All the panel has really taken a look at this one. Under H.R. 52, 

Secretary of Health and Human Services would be required to develop standards for maintaining the confidentiality of patient 

health records. Health care is provided in a wide diversity of settings in the country and they are pretty well represented here. We 

could have had another panel there 50 feet long and health care 

is provided in these settings, ranging from single practitioners in 

rural areas who provide care at multiple locations to large centralized hospitals. Can we expect a single records maintenance standard to be appropriate in all these different settings? If not, how 

should we take the differences into account? 

Any feelings on that? Let’s start with Dr. Hoge. 

Dr. HOGE. Are you asking me about my feelings because I am a 

psychiatrist? 

Mr. HORN. Sure, that is what I hear psychiatrists ask about. My 

one course in psychology taught me that. 

Dr. HOGE. I have some thoughts on that. I think it is extremely 

difficult to regulate the use of medical information in all the various contexts. 

142

You mentioned going from research to data base to provision of 

health care, and I think that is one way in which many of the draft 

bills have gone off course. We know a lot about how to regulate 

physicians because we have had physicians and patients for as long 

as we can remember, and we have had case law and profession— we have had professional standards and professional training now 

for, again, as long as we can remember, as long as our grandfathers can remember. So we know a lot about that. 

And the bills kind of take an outline from how we think about 

doctors and try to make everyone else fit into that outline. I don’t 

think it does a very good job. I think this is a strange way to make 

a law. I think it would make a lot more sense, if we need a Federal 

bill concerning physicians and it doesn’t undermine existing State 

laws and case laws of malpractice, so be it. 

I think what is really needed in 1997 and in the future are laws 

that regulate data banks, managed care companies, insurers, and 

all of the entities now that have come to hold medical information 

that 30 or 40 or 50 years ago no one had even heard of these entities. I think it is particularly important because of the march on 

information technology. If you think up an information technology 

journal, you will see that some people believe that the insurance 

record and the medical record will be the same thing when we have 

all the computers up and running and software available. I find 

that a frightening Orwellian future. So I think what we need is 

some sort of regulation that starts to look at these other entities. 

I think we also need to keep in mind, like the various panelists 

earlier acknowledged, the physician should be the only one to 

change the record. They know the patients. They know what they 

are worried about, their privacy concerns, and their health care 

problems. 

Our professional standard requires that physicians look out after 

the best interest of patients. That is not true of any of the other 

entities that I have mentioned. So we need to have—just like the 

physician should have certain prerogatives in that setting, with regard to that question—certain prerogatives with regard to the use, 

disclosure and dissemination of all health care records. Data banks 

should be relatively restricted and tightly regulated ways in which 

they can use health care information. 

Mr. HORN. You mentioned Orwell. Do you see physicians sort of 

using their own personal code in some of their records so if they 

did get misused by one of their staff or any of the food chain along 

the way, so to speak, that it would be very difficult to know what 

that number or that letter meant unless you had a subpoena and 

you were a witness in court where you were asked to translate it, 

something like that? But the average person who wants to make 

trouble in the publicity sense would not know what that means. 

Dr. HOGE. Well, of course we spend 4 years in medical school 

learning terms that no one else can understand. 

Mr. HORN. That is the making of a profession. 

Dr. HOGE. Right, make up your own language. 

But the serious answer to that I think would be this: I hear psychiatrists increasingly tell me I have changed the way I write my 

notes now, changed the way I keep records, because I don’t know 

who is going to see it. When the insurance people come in and reVerDate 0ct 31 2002 09:50 Nov 14, 2002 Jkt 081024 PO 00000 Frm 00146 Fmt 6633 Sfmt 6602 W:\DISC\45252 45252
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view the charts, I don’t know if the insurance reviewer is really a 

friend, a neighbor of the patient. Some of that gets entered into 

various data banks. I don’t know who is going to see that. So we 

have a number of things. 

We have patients who say, I have insurance and it does cover 

some mental health care, but I don’t want to use it because I know 

it is going to go and the records are going to be reviewed by—it 

may make its way back to my corporation because we have our 

own in-house review of insurance payments. So I don’t want to use 

it. I want to pay out-of-pocket. 

Of course, it is a sorry state of affairs in this country that we 

don’t have mental health coverage on par with many other countries, however even when we do, people feel they can’t use it. 

Prominent politicians, on occasion they have many ways they can 

be hurt by mental health treatment records. 

Then I have physicians telling me, psychiatrists telling me I 

don’t put very much in the record now. So if I want to go back now 

and look 5 years ago, my records are very detailed. But 5 years 

from now, if I want to look at my record, I am not going to have 

exactly the same kind of information. It’s going to take more reconstruction to get to that. 

So what we are seeing, because of this march of technology, the 

lack of regulation of insurance companies and other people, I think 

we are seeing an erosion of the quality of medical recordkeeping in 

this country already. 

Mr. HORN. Let me throw another question into it, and maybe you 

can all just go down the line and answer two of them, because it 

is relevant here. 

That question is, should a Federal medical privacy law such as 

we are considering, not necessarily the one we are considering but 

a law, pre-empt all State laws, or should we—and a lot of Californians feel this way when it gets to air pollution and control of frozen chicken and other hearings we have held around here—if the 

State has a stricter standard, to let the State standard apply if it 

is stricter than the Federal standard? 

And I would also like to hear from all of you some time today, 

is there a State law that you think is the best law in this area 

right now? And of course States, as you know, have a system, if 

we have got a good law, trying to get the uniform code activity of 

other States with that model statute across the country. 

So we face the problem of what is that relationship if we do do 

something in Federal law and we have sort of given the HHS Secretary an anointment which maybe she shouldn’t have, and maybe 

Congress ought to battle these things out. Because they don’t have 

to listen to people. We do have to listen to people. 

That is where we are on that one, and I would just like to know 

what your feelings are in that whole jumble: What is the best State 

law and should there be Federal pre-emption, et cetera? 

Dr. HOGE. On what is the best State law, I think that is difficult 

to sort out, because much of the law is incorporated in either State 

laws or it is instilled in professional case law and practice, and that 

may vary somewhat from jurisdiction to jurisdiction. But, increasingly, physicians are held to a single national standard. So I think 

144

finding out where the best practices are and the best regulation 

will be a very, very difficult thing to sort out. 

Regarding pre-emption, as I alluded to earlier, I think that is the 

major fault line in this legislation. Because many of the bills that 

I have seen I think would erode existing privacy protections in this 

country, with regard to physician/patient relationships and the systems that physician control, which are held to, I think, a fairly 

stringent standard under malpractice law and existing case law. 

I think we need to keep in mind that the only arguments for preemption are arguments of efficiency and ease of transmission of information. There is no way to justify, if you do come out with a law 

which sets the bar at a certain level, if a State wants to raise the 

bar, that can only be protective of privacy. I don’t see any privacy 

argument against a nonpre-emptive Federal law. 

Mr. HORN. Dr. Andrews. 

Dr. ANDREWS. Yes. First, I would like to respond to your earlier 

question about different controls in different settings. 

There are certain universal principles about data protection such 

as the need of safeguards for personally identifiable data and penalties for severe breaches as we discussed. But the specifics are 

very different, as you mentioned earlier today, and in writing the 

legislation, the devil really will be in the detail; and we should be 

extremely careful in those details should they be put in the legislation so that those details do not inadvertently create barriers to research that will ultimately benefit the public in the long run. 

Regarding specific State legislation, first of all, let’s not use Minnesota as an example of model legislation. I think that was probably very carefully crafted legislation and yet, as you have already 

heard, the Mayo Clinic has an incredible record of some of the most 

distinguished, productive, and tightly controlled research; and we 

have already seen that the Minnesota law creates some impediments to future research using that valuable resource. 

Regarding pre-emption, one of the compelling reasons for Federal 

requirements is to provide a uniform set of rules; and if individual 

States are permitted to add additional requirements, then the benefits of those uniform rules may be lost and researchers will again 

be faced with an inconsistent patchwork of requirements that may 

impede research and hurt patients. We need to remember that 

much research today does not know geographic boundaries and involves multiple States and multiple countries. 

Mr. HORN. Dr. Gabriel, how about it, in terms of the single 

records maintenance standard appropriate in all settings? And do 

you agree that the Minnesota law has those major problems you 

have heard about from yourself and others? 

Dr. GABRIEL. I absolutely agree. In response to both of your questions, one size does not fit all. Integrated health care delivery systems like Mayo are different. A patient can access the system at 

100 different points, can see numerous providers. There are dozens 

of, referrals going on all the time. It is hard to even define what 

constitutes a point of access. So I don’t think the same rules can 

apply to an individual provider as to integrated health care delivery systems like Mayo. 

There really has to be a way to facilitate the appropriate flow of 

information, because that is our strength, is that we can do all of 

145

this, that the lines are going in all different directions to the benefit of the patient. 

In fact, with our recent experience with the Minnesota law, we 

have a partner in Rochester, a much smaller center, who have had 

far fewer problems. Because everyone comes in the same front 

door, and their system is basically sticking a red sticky on the 

chart, and if you see a red sticky, don’t read the record. But we 

have to have a very complicated information management system 

that is constantly updated, and we are always looking at where the 

patients are going, so it is an entirely different kettle of fish. 

We favor pre-emption to the State law, again, for the same reason. Mayo operates in five different States. Our patients go back 

and forth from one State to another. Our research covers more 

than one State. So it just makes a whole lot of sense to have uniformity. 

Mr. HORN. If Minnesota law doesn’t meet the test of your particular standards, are you aware of any State law that comes closer 

than Minnesota? 

Dr. GABRIEL. I am not. 

Mr. HORN. OK. Well, I would say to all of you when you go back 

on the plane or train or bus or whatever and have some thoughts 

in this area, please write us. We will put it in the record at this 

point and others. Because what we are interested in is the best 

thinking in this area that is going on. Obviously, six people don’t 

represent all of the best thinking in America, but it is a start. 

For your professional associations and their high-paid staff, we 

would certainly welcome actual line-by-line criticism of the bill. 

That might not be the bill, but that is a start—or the Slaughter 

bill or whatever you want. And we would like your specific criticisms so we can get the total picture. 

We don’t enter into this with a lot of preset ideas, except maybe 

on frivolous lawsuits. But we would like your thinking line-by-line. 

If you have a thought, don’t be bashful. 

So lets ask Dr. Johns. How do you feel on the diversity of the 

setting? Do you think we can do a law that has the basic standard 

that can cover all that diversity? And if you know of a State law 

that does this well, we would like to hear about it. And do you 

think there ought to be Federal pre-emption? 

Ms. JOHNS. First of all, HIMA is in favor of pre-emption. And I 

think when we look at the issue of confidentiality we also have to 

separate issues of confidentiality and security practice. 

In regards to the confidentiality in H.R. 52, we are looking at inclusions of key provisions in regards to health information, as opposed to carving out regulations for specific types of entities. 

New entities in the health care industry arrive on almost a daily 

basis, so to regulate individual entities does not, in our minds, 

seem to be either feasible or reasonable. However, focusing directly 

on the health information that can be within any type of entity is 

the important part of H.R. 52; and we have key provisions such as 

access, such as disclosure, such as limiting information in order 

to—for specific use to perform a specific responsibility, and also 

provisions on redisclosure. So from that aspect, looking at it from 

that perspective as opposed to separate entities we think is very, 

very important. 

146

We also feel, as I mentioned, that we need a national standard. 

We don’t have that now. And we need to—it is so imperative that 

we begin to address this issue on a national standard. 

Also, data does cross State lines. Integrated delivery systems 

themselves may have facilities in two, three, four, five, and many 

more States. So the issues regarding the health information need 

to be standardized across the country. 

Another point that was made by Dr. Hoge is the issue of patients 

feeling comfortable with being able to confide in their health care 

providers. And certainly previously I pointed that out in our testimony, that one of the mainstays of confidentiality is this confidence 

that the patient has in being able to share information. 

The kinds of situations that we are encountering today where patients withhold information and providers are not as specific with 

regards to their documentation result from not having general preemptive legislation that ensures all of us that we will have confidentiality and privacy. 

In regards to identifying a specific bill throughout the country 

and the State, I am not aware of that; and I am not prepared to 

provide that information at this time. 

Mr. HORN. Well, we would certainly welcome any thoughts your 

organization has. You have got a vast group out there. Or complaints where—please don’t take this portion of law; it doesn’t 

work. 

Ms. JOHNS. We would be happy to provide that. 

Mr. HORN. Dr. Palmisano. 

Dr. PALMISANO. Thank you, Mr. Chairman. 

Regarding pre-emption, the American Medical Association is of 

the opinion that without a showing that the proposed Federal 

standard would be properly protective of patient privacy, any Federal law should provide a floor rather than a ceiling when applied 

to patient confidentiality protections. It is understood that there 

are many who believe that there should be a uniform Federal 

standard to facilitate electronic data interchange. 

The AMA is concerned, however, that heightened standards will 

be lost to Federal legislation. If, however, the law is high enough 

to secure protection of patient information in the Federal language, 

the AMA would revisit the pre-emption issue. 

I think Dr. Hoge’s comments are issues we share concerns about. 

We think there are many concerns in States, and tomorrow they 

may pass a new law in a State that is ideal, and it is perhaps 

quicker to go through a State if we see a problem with confidentiality and raise a standard at a State level. So we think at the 

present time it should be a floor, not a ceiling. 

Regarding the uniform coding issue, we don’t have a problem—

for simplification, we don’t have a problem with the provider identification number. For instance, the American Medical Association 

has an identification number for physicians. We would like that to 

be considered as a number that would be appropriate for physicians. 

Regarding a patient identification number for simplification, we 

are very much concerned about that; and we continue to study 

that. Our testimony in the past and continues to be at the present 

time, we are opposed to a unique patient identifier because it can 

147

too easily be linked up with Social Security numbers and other 

mechanisms that would allow someone who doesn’t have the right 

to get there to gather a lot of information about the patient. We 

have a lot of concern about that. 

The other issue on uniform coding and so on, we certainly think 

that the current procedural terminology that is in place, CPT coding system, it is in common use; and we hope that the choice of 

coding system will allow for the CPT to compete fairly with any 

other system that is being considered. 

Regarding the wide range of practices throughout the United 

States, from clinics to small practitioner, I certainly don’t want us 

to forget the small practitioner who may be a family practitioner 

in a small town, and this individual finds the administrative burdens continue to increase. Managed care has drastically affected 

the practice of medicine throughout the United States, and any 

other burdens might cause that practitioner to say it is not any 

fun, I can’t do for my patients what I need to do for my patients, 

and we will see physicians retiring earlier, leaving communities, 

and that is a problem. 

So any law that would eventually be passed by Congress, we 

would hope that it would not create burdens on individuals who 

elect not to get involved in that methodology. If they are working 

just in their area and not transmitting the data, it would be on a 

voluntary basis. So someone doesn’t say, now I have to buy a very 

expensive computer system; I have to bring in consultants. And 

many times, after that is over with, the physicians find out after 

they have spent a lot of money and they are not any better off. In 

fact, they are worse off because nobody understands the system. 

So we want to make sure that those who elect not to be involved 

in transmission of data to central data bases, they don’t have to do 

that. And whatever comes out of Congress we are concerned about 

some clearinghouse in the sky where all of this data is going to be 

there. We are concerned about someone getting in and cracking 

into that information; and, as you have heard multiple times today, 

privacy has to take the No. 1 position over efficiency. 

Mr. HORN. Since I grew up in rural America, I am very sympathetic with the type of examples you have cited and others. 

Now it seems to me the AMA, as a professional association, may 

sponsor workshops in which physicians or their office administrators could be educated and trained and specialized software. Do 

you develop software that can be used nationwide that would solve 

a lot of these problems? We do not want to drive that poor individual physician who was taught to do good in medical school out 

of serving rural America. 

Dr. PALMISANO. Yes, sir, we have extensive programs at the 

State level and the American Medical Association level. 

And I know I will hear this—I am in practice before the colleagues, and when I get back and sort of give them a recap on how 

we are participating, our great civics lesson, in America, the greatest land in the world, how through democracy we can give our 

voice. And then my partner, who is my mentor in training, he just 

always looks at me and says, come back to the real world here. Do 

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trative burden? Why I don’t leave here until 8 at night even though 

I have an office manager. We have to hire consultants to come in. 

He is as sophisticated as anyone I ever met with computers, with 

the methodology to make sure everything is kept proper. But he 

says it is a tremendous burden. 

So I always listen sympathetically and say, ‘‘well, I know, but we 

just want to make it simple and make sure our voice is heard.’’ And he says, ‘‘we already know how to do it. The problem is the 

rules keep changing.’’ For instance, when the fraud alert two came out, I had occasion 

to be treating a very prominent member of our community. His 

wife and he had some connection with the judicial system, and he 

was upset because I was an hour late. I sent word because there 

was an emergency I had to run into the operating room and lend 

a hand with a very critical patient, and when I got there he started 

to lecture me as he often does. 

And I like him a lot, and I listened, and I said, ‘‘Sir, if you would 

sit down and help me understand an alert I just got from our Federal Government about fraud alert two, which had to do with if you 

write off the balance of a patient, that is considered a crime.’’ I said 

I don’t quite understand that. It looks like it says that in English. 

And he said that just can’t be so. 

So I went and treated his wife and came back, and he says, ‘‘I 

just can’t believe that.’’ I said, ‘‘That is part of the administrative 

burden.’’ We have patients that come up. I don’t want to do means 

testing on my patients when they say, ‘‘Doctor, can you just accept 

the assignment?’’ Sure, I will accept the assignment, but now I 

have to do means testing. 

Those are the many, many little things that keep coming up; and 

one little thing doesn’t sound like a lot, but if you add another 

thing and another thing and another thing, that gets to be a lot. 

I am trying to treat the sick and help people. When I can’t cure 

them, I want to comfort them. But I am just getting overwhelmed 

by the burden. And no matter what comes out, whatever we call 

it—we can call it simplification, call it privacy, but we don’t want 

to create a burden that is more burdensome. We don’t want to create a system that allows someone—like in other countries that kick 

down the door in the middle of the night and say I am just here 

to inspect and make sure there is no fraud going on in this home. 

This is the land of America. So that is our plea. 

Thank you. 

Mr. HORN. Well, I know a lot of doctors in my urban community 

that completely agree with you about the burdens that have been 

placed on the private physician; and, as you suggest, some of them 

are being driven out of the profession by simply the water treatment harassment that they are getting. Whereas one or two drops 

wouldn’t bother you, but when it adds up to Niagara Falls coming 

in your direction, you worry a little bit. 

Ms. Goldman. 

Ms. GOLDMAN. The position that I am taking on pre-emption in 

this Congress is slightly different than the one I took last Congress, and I would like to just lay out how I have arrived here. 

I have come to believe that pre-emption of State law in the privacy area is not the right approach to take. First of all, the States 

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that currently have laws on the books that deal with access to 

records and allow people to limit disclosure of their own records are 

being complied with right now by the people sitting at this table 

who say it would be unworkable to have a Federal law that allowed 

for States to pass those. Right now, we have 50 different States 

with 50 different approaches, and people are not only managing to 

comply with those different laws, they are flourishing and doing 

quite well. 

The second thing is that, with the passage of a Federal privacy 

law, regardless of where the floor was, most States, I think, would 

feel that the issue had been addressed. The States that have been 

extremely active right now in passing legislation are doing so because there is a vacuum, because there is a serious need, either because there has been a story in their State or a problem in their 

State and they have to address it. 

And the States that have been particularly active are your home 

State, Mr. Chairman—California—Minnesota, New York, and Massachusetts. Where they have active consumer groups, the States’

attorneys general have been active in those States; and while they 

may have passed laws that are imperfect from the perspective of 

the pharmaceutical industry and the health information industry, 

they are fulfilling a need. 

So I would say in this area we cannot only create a floor which 

is a high floor so those States that are weaker or problematic are, 

in effect, pre-empted, because the State law must meet that floor, 

but it would discourage other States that would say ‘‘finally Congress has addressed the issue, we don’t need to be tinkering with 

it.’’ And I think it would allay a lot of concerns that the pro-preemption folks have been pressing, which is how would we comply 

with a few variations in the Federal law, when right now they are 

dealing with 50 variations. 

The only other point I want to make is to pick up on something 

Dr. Gabriel said, that one size doesn’t fit all. One size probably 

doesn’t fit all, that if we do create a Federal flaw—floor—excuse 

my New York accent——

Mr. HORN. It is either a Freudian or Jungian slip. 

Ms. GOLDMAN. No, it is my accent. If we do create a floor which 

is a high one, I think then only States where there have been very 

serious, egregious violations and States with particular instances 

they want to address will enact legislation. The context is very important as well. 

I have worked in the privacy and civil rights area for a decade, 

and there is no other Federal privacy law or Federal civil rights 

law that pre-empts State law, and I think it would be a dangerous 

precedent to set. Those laws recognize that the privacy law is 

meant to do something good, to protect an interest that is considered vital to a national interest; and if a State finds it is important 

to go above that floor, they should be free to do so. I think particularly in this instance it would be wrong to constrain the States. 

Mr. HORN. OK. Any other comments you have heard your colleagues on that you would like to correct now that we are down to 

number 6? 

Dr. HOGE. No corrections. 

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I might bring to your attention Senator Leahy’s draft bill which 

is, I think, going to be introduced in the next couple of weeks which 

I think provides a reasonable platform on many of these issues. 

Mr. HORN. We are in contact with the Senator’s staff on that, 

and we have worked with Senator Leahy on various occasions. 

Let me get back to fraud detection. One criticism leveled at H.R. 

52 by the insurance community is that it would inhibit antifraud 

activities. Insurance companies would be limited in the claims investigations they would perform. Should there be a specific exemption for claims investigation and antifraud investigations? Anybody 

have a strong view on that? 

Dr. HOGE. Yes, I do. It is not clear to me why the insurance industry would say that. There are many countries that have national health care systems that don’t intrude on patients’ privacy 

the way they are proposing. There are many ways of detecting 

fraud and abuse through billing patterns, number of billings today, 

without getting access to identifiable, protected, sensitive health 

care information. 

It is just being done throughout the world in other ways, including Canada which has a society not so different from ours, again 

by looking at patterns of billing rather than specific, identifiable information. 

So I think once they have justification—— Mr. HORN. Let me stop you right there. Let me be sure I understand you. 

Often what we are talking about is some software has been developed that when a certain type of operation is performed, lets 

say, there are certain things that relate to that; and one can look 

through the bill in a systematic way and even by software that 

would say, well, gee, I wonder why this was done. That isn’t normal or usual with this particular operation. 

To give you a real horrible example, a woman, not in my district, 

but in a neighboring district, wrote about going to a hospital, having a particular type of operation she went in for. In the process 

of being there, they also did a mastectomy, claimed the bill. She 

thought that was strange since she had had a mastectomy 10 years 

before. 

So, obviously, there are some things thrown on these bills by unscrupulous hospitals and unscrupulous physicians and unscrupulous HMOs, whatever. There are a few bad apples we always find 

somewhere, and that is sort of what we are confronted with. I don’t 

see how you deal with that operation without knowing the name 

of the patient. 

Dr. HOGE. Well, I think the example you gave probably would be 

sufficient to get a court order to get access to the records or maybe 

it is the first step to ask the hospital or doctor whether there was 

an error or whether they wanted to correct this or so on. 

Maybe I jumped too early. Because the law enforcement, the insurance company, they would love to have access—relatively free, 

unfettered access to records and look for lots of things. I think the 

question is how much access to allow people to have without having any demonstrable cause. 

Dr. Palmisano a minute ago talked about kicking down the doors. 

Once you have things on-line, we are talking about the computer 

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equivalent of kicking down doors when law enforcement and insurance companies have unfettered access. 

I think the standard that is common in this country in almost 

every State that I am familiar with is if there is probable cause, 

a reasonable demonstration that records have to be accessed and 

that can be proven to a judge, that you get a court order; and sometimes you have to make accommodations to patient privacy. 

There are a couple of Federal cases that you should be aware of. 

The Ariyoshi case—— Mr. HORN. Do you want to spell that for the record? 

Dr. HOGE. I think it’s A-R-I-Y-O-S-H-I. It is a Hawaii State— State of Hawaii or Attorney General of Hawaii v. Ariyoshi, I believe, where the Medicare fraud investigation unit came in and 

grabbed a psychologist’s records, snapped them all up. They were 

sealed by the judge. There was a court case that ultimately ensued, 

and the resolution was the court said you do have reasonable basis 

for looking at certain parts of this information, the billing aspects 

and so on, but you don’t have a right to look at their private information, what the psychologist wrote about their fantasies or their 

fears or their personal life. 

So judicial supervision of access to records or access to private 

information I think is ingrained in our society. We don’t allow the 

police, even if they think there might be a crack house somewhere 

if the neighborhood, to go door to door and look in every house 

looking for it; and that may deter—may lead to some decrement in 

law enforcement. I am not pro-crack house, but I think we have to 

protect privacy, and the result of that is we have some decrement 

in law enforcement and fraud and abuse investigation. 

Mr. HORN. Any comment you want to make on that, Dr. 

Palmisano? 

Dr. PALMISANO. Yes, sir. The American Medical Association certainly is against fraud, but we do not want the standard for investigation lowered beyond probable cause. 

The example you gave, if someone had a mastectomy 10 years 

ago and is being billed for it now, that should be corrected. If it 

was a clerical error, to determine if it’s a clerical error or knowingly and intentionally done to defraud, those have to be investigated. 

But when you have a reasonable belief and evidence to show that 

there probably is more than likely fraud going on, you can get that 

order to go search that information; and it ought to be limited to 

the information you need to search and not go through all the other 

information. 

When individuals have the power to invade your office records or 

hospital records at will with a very low standard, not only is it—

it is unAmerican in our opinion, but also it is very expensive. Because you have the finances of the Federal Government basically 

funding this, your taxpayers’ money funding this. You are paying 

all these different lawyers to come in to advise you what to do, and 

it gets extremely expensive. 

Mr. HORN. Well, this example, in fact, was on the information 

company where the doctor is sending forth the bill, lets say, where 

the patient has given them their health care information as to 

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tempt to apply whatever antifraud standard is the usual procedure 

with that company, and the degree to which they are saying that 

companies would be limited in the claims investigations they could 

perform under H.R. 52. I don’t know if they are right on that or 

not. Obviously, we are going to explore it. 

And the question was, should there be a specific exception for 

claims investigations and antifraud investigation from the privacy 

standard which might be very high. But the whole reason you take 

insurance, presumably, is to get the payment. But it ought to be 

the accurate, truthful payment that justifies that. 

Dr. PALMISANO. Well, we don’t think there ought to be an exemption. 

The American Medical Association, first, we are against fraud. 

We have helped the FBI to help root out fraud, so we are on record 

for that. But we think the standard ought to be kept high so they 

are not fishing expeditions. 

Also, the approach that would solve a lot of so-called fraud problems is the approach that the American Medical Association put 

forward on the Worldwide Web site called Saving Medicare. It has 

been distributed to Congress. Basically, let the patient get more involved, let the patient get back in the driver’s seat, let the patient 

be a fraud investigator so the patient has some responsibility in 

looking at the bill. The patient will know she didn’t have a mastectomy and know right off the bat that is an error. 

The fact of getting rid of controlling prices, get down to letting 

the doctors set their own conversion factors and publicize that. 

Then the patients and the physicians get involved and we get back 

to a society with less regulations. It is impossible to write regulations to cover all possible situations. 

I think in terms of the heroic American effort when we were involved in the Normandy invasion after the people on the beach 

were killed—at Omaha beach. Ninety percent of the people that hit 

the beaches that day from the 116th, from Virginia, they were 

killed on the spot. Their ship was sunk, and they swam to shore 

and had to get up. 

The reason we were able to get up there and knock out the machine guns—the reason we were able to knock out those big guns 

is because Americans were resourceful. If they had to follow some 

little rule book and regulation—now, if the German Army does 

this—they would have all been killed that day. In fact, Colonel 

Rudder couldn’t lead the attack. The General said, ‘‘Colonel Rudder, don’t do this attack;’’ and he said, ‘‘I am going to have to disobey you, sir. I have got to lead the men. Otherwise, it won’t get 

done.’’ And he did it. 

That is why they say Hitler’s Youth Crew lost out to the American Boy Scouts. The Boy Scouts were very resourceful. 

Every time we come up with more harassment on physicians and 

patients, we end with a system that really doesn’t work. It becomes 

more burdensome. So we would hope that would remain on the 

forefront. 

Today we are talking about privacy and confidentiality, and we 

want to enhance that, protect that. But, on the other hand, we 

don’t want to have rules and regulations that end up creating more 

burden and don’t protect that. 

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Mr. HORN. Ms. Goldman. 

Ms. GOLDMAN. My only comment to add to the ones that have 

been made is I think it is really important that we recognize that 

there should be fourth-amendment-type limits on Government access to certainly health information. H.R. 52 and the other bills 

that have been discussed do that. We do it to varying degrees, and 

the Justice Department has expressed concern about those provisions, and I am not aware that they have signed off on any of 

them. 

I think it is a natural response on the Justice Department’s part 

to say we now have unfettered access to personal health information. Please don’t make us be bound by the fourth amendment. 

That is an understandable response, but it is certainly not the 

right one. 

The fourth amendment is not an absolute bar to law enforcement 

access to records. What it says is, you must meet the standards, 

probable cause or clear and convincing standard before you can get 

access; and it is a protection on the individual. It is certainly not 

an absolute bar. And it is one, again, we see in the privacy laws 

we already have at the Federal level and ones that should be built 

into this Federal policy as well. 

Mr. HORN. I must state one of the goofier implementations of privacy law in my field of education was when the Department of 

Education—and I happened to head a national coalition to create 

it, so I favored the Department—that we had strict rules written 

into that law that you could not impose curricula on States, et 

cetera. But they visited Pennsylvania State University and later 

California State University at Long Beach; and they said, oh, you 

can’t display the thesis of a student in the library without the 

signed exception to the Buckley Act—of the privacy right. 

Now only an idiot would make that kind of ruling. Unfortunately, 

it went up the high hierarchy. And the Secretary, when the complaint was given to him, stuck by that stupid policy. 

Now the whole purpose of the dissertation and thesis is to be examined by the outside world. So here we have the case of a Federal 

law being used where the thesis writer could have massive plagiarism. The professors might have missed it. You can’t keep up on 

everything in every field. That thesis is signed off, and it is normally deposited everywhere in America in the university library or 

the microfilm operation for dissertations in Michigan. 

There is an example of people going haywire with a, quote, privacy right, unquote. There is no privacy right, it seems to me; and 

yet they could get away with it. They could have plagiarized; and 

under the Department of Education’s great interpretation, they can 

be free because no one will ever see it. It is not on the library shelf. 

I don’t know if they are still doing it, but they were doing that several years ago. 

Ms. GOLDMAN. I would agree with you. That is an unfortunate 

application of a privacy law. 

My experience has been a little bit different in that what I tend 

to see is underenforcement of existing privacy laws or weak construction of the existing privacy laws and not overzealous application. But it would be interesting to see if that is still the interpretaVerDate 0ct 31 2002 09:50 Nov 14, 2002 Jkt 081024 PO 00000 Frm 00157 Fmt 6633 Sfmt 6602 W:\DISC\45252 45252
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tion, because I agree with you that what is a public record ought 

to be available. 

Mr. HORN. All right. Let us move to the next series of questions, 

and H.R. 52 requires health researchers to receive approval from 

a certified institutional review board in order to review patient 

records. Is that acceptable to most of you or how do you feel on 

that? Are there any problems with that section, which is 152 of the 

bill? 

Ms. GOLDMAN. Well, what is interesting is that the approach 

taken by H.R. 52 and the one taken in last year’s bill introduced 

by Senators Leahy and Bennett is one that at least recognizes 

there are Federal regulations right now that require all federally 

funded researchers to get the informed consent of individuals 

whose information may be the subject of research. So, as Dr. Gabriel said earlier, there are already requirements on federally funded researchers to have to get the informed consent, unless the IRB 

agrees that a waiver is appropriate and there is a standard for the 

waiver. 

The Senate approach basically said, lets codify those regulations 

so that all researchers—not just federally funded researchers but 

all researchers will have to comply with informed consent. I think 

the pharmaceutical industry last year had concerns about that, but 

that has a fair amount of unanimity that that is a pretty good 

start. 

I think H.R. 52, again, tries to bring in the Institutional Review 

Board and create another level of hierarchy, which I don’t think is 

a bad idea, to say someone should be watching the IRBs. Because 

even though there has been some studies commissioned in recent 

months, there is no record, no factual basis to know how IRBs work 

as a whole, how we look at the consent mechanism, when and 

where they approve waiver applications. So we know little about 

how IRBs work. We do know they adhere to privacy issues, consider them in the application for research. 

Mr. HORN. Now is there any type of research that does not require such approval? 

Ms. GOLDMAN. The research that does not require approval are 

ones that do not involve identifiable data. And I would agree, if you 

are not using identifiable data, you should not have to get the consent of the records covered, because it is not within the privacy 

scope. Nonidentifiable data has to be clearly nonidentifiable data, 

and there is discussion about what that means. But I would agree 

that nonidentifiable data is outside the scope of a privacy bill. 

Dr. ANDREWS. I would like to make a couple of comments. 

First, relating to IRB review and approval——

Mr. HORN. It is Institutional Review Boards. I just want the audience to know what we are talking about. 

Dr. ANDREWS [continuing]. The regulations are quite strict on 

IRBs. There is currently a commission that is looking at the IRB 

process and that, I assume, will also be looking at not only the protection of patients against medical risk but also privacy risks. 

There seems to be no need for additional legislation on this point 

which might pre-empt or prematurely set some legislation in place 

to pre-empt the outcome of that commission’s reports. 

155

Regarding what information is considered identifiable, I think 

that is a key point; and we feel that the language in the current 

H.R. 52 is a little too broad in identifying what would be considered personally identifiable data. For studies that use data bases 

that contain a key or an encrypted code that could potentially be 

used to link back to medical records, those studies currently do not 

require IRB approval or patient-informed consent. They generally 

are considered to fall below the level of minimal risk that would 

determine the need to have informed consent. 

In addition, as you have also heard from Dr. Gabriel, informed 

consent is frequently not feasible in these circumstances in using 

very large data bases answering questions that may arise many 

years after the information was collected, because there is difficulty 

locating patients in our highly mobile society, getting consent itself 

may introduce a bias, and because contacting patients may also 

constitute a violation of patient privacy. 

In addition, as you have also already heard, if you use only the 

patient data from those who have been located and provided consent, you may introduce a bias in the study which may invalidate 

the study findings. 

Mr. HORN. Dr. Hoge has a comment. 

Dr. HOGE. Actually, yes, and maybe in the way of a question. I 

am a little unclear if a doctor enters in the data base that you are 

talking about has a code, could be stripped of that code. 

I guess the point I am asking, it seems it would be reasonable 

to ask IRB approval if there is going to be the future capacity to 

relink that code to the person’s actual identity, because now you 

have got a privacy concern that someone should be overseeing. But 

if you are going to take the information, strip it, it doesn’t seem 

to be a problem, but maybe I am misunderstanding. 

Dr. ANDREWS. I think there is something in between that. I believe that data bases totally stripped of identifiers should be excluded. Then there are data bases that have an encrypted code that 

could be linked back, and we also feel those should be exempted. 

I think the actual relinking, which I think is what you are referring to—someone is taking the code, relinking, identifying patients 

and abstracting additional information to supplement the original 

study; and those do need very tight security over the relinking and 

may need and usually are, I believe, covered by IRB review and approval at the moment. 

Dr. HOGE. If I might—but, again, if there is a potential to relink 

through the code, that means you either have the plan or some expectation of relinking it; and, therefore, there is some privacy 

risk—I don’t understand. It seems a little disingenuous. If you are 

not planning on relinking, why don’t you just strip it? And if you 

are planning to relink it, it seems to me you are back at a point 

where you have got to get IRB. 

Mr. HORN. Do you want to respond to that, Dr. Andrews? 

Dr. ANDREWS. The reality is these data bases often have been so 

carefully developed that this encrypted code is available for the researcher. The researcher cannot by themselves identify the patient, 

and they have no interest in doing so. They are interested in the 

aggregate data. It is the local physician or a third party that would 

be able to take that encrypted code and link back. 

156

Mr. HORN. Dr. Gabriel. 

Dr. GABRIEL. I just wanted to make the point that all of the research that I mentioned in my statement is already covered by the 

IRB. In fact, at our IRB we apply the regulations to everything, 

federally funded or not. So I would endorse having the IRB approval for all of these studies. 

Mr. HORN. Dr. Palmisano. 

Dr. PALMISANO. Thank you, Mr. Chairman. 

I just wanted to emphasize that when we put in the statement— both oral statement and written statement—that medical information used for research purposes should have all identifying information removed unless a patient specifically consents to the use of his 

or her personally identifiable information; and on the subject of research it can be a troublesome category of exceptions to the general 

requirement for patient consent. Although in conclusion, we are 

generally satisfied that the IRB patient protections are adequate, 

we believe that a scientist should be able to pursue legitimate research without unreasonable barriers and that it is possible to do 

this while still protecting patients’ privacy. What we don’t want to 

see is the term research applied to a whole spectrum of economic 

analysis that solely benefits shareholders rather than patients. 

I guess I would like to pose a question back on H.R. 52. On page 

39, it states that the project has been determined by a certified Institutional Review Board to be of sufficient importance to outweigh 

the intrusion into the privacy of the protected individual who is the 

subject of the information that will result from the disclosure. So 

it appears from this reading that privacy will be invaded, and the 

IRB is saying that the research is of sufficient importance. So it is 

not being treated as an IRB study. 

Consultation is being obtained with the IRB to decide whether or 

not it is of sufficient merit to invade privacy, and what we say is 

that medical information used for research purposes should have 

all identifying information removed unless a patient voluntarily 

and knowingly and willingly consents to that information. 

So it is right to go through the Institutional Review Board. We 

think—a lot of them we hold in high regard. 

On the other hand, we don’t know that this is going to protect 

the privacy—it goes back to the philosophical discussion, is the teleological approach to the philosophical base whereby you say, well, 

the end justifies the means, so we are going to invade privacy to 

do this research and find out these potentially good things. We 

think the patient’s privacy must be paramount. 

Thank you. 

Mr. HORN. Dr. Gabriel. 

Dr. GABRIEL. I wanted to respond to that a little bit. 

As we said before, the researcher is not aware that this is Mrs. 

Jones’ data. The only place that privacy might be invaded—there 

has to be a point somewhere where you collect the data from the 

medical records, put it in a data base, strip the identifiers, and that 

is where the analysis happens. 

So I have a question. How do you define nonidentifiable data? 

There has to be—so the point, at least in the way we do things, 

we have usually a nurse administrator abstract a piece of information from a medical record and then that is put in a data base with 

157

hundreds of other people’s data and then the information or the patient identifiers are removed. So when you were reading that I was 

thinking maybe that was what they were referring to. 

Dr. PALMISANO. Mr. Chairman, it is just a question. I am not 

sure what is being referred to. I think it is vague as written here. 

It may be because of my ignorance, I don’t know, but I would like 

it clarified. 

I certainly understand how I could see a scenario. I don’t consider myself a computer wizard, but I would see where you could 

send someone who understood confidentiality and taken an oath, 

could go to medical records and say, all names will be removed and 

codes will go in there and these codes don’t necessarily link up, but 

it identifies whatever you need to identify without identifying the 

individual and that would be given to the researcher. It appears 

from what I have heard that would satisfy the researcher. 

So I think that could be done from a technological basis, and 

those who are much smarter than I am in computer methodology 

could come up with an even better way than that. But it appears 

that the information could be interpreted by a reasonable individual to say that we are going to allow the name to be kept with 

this record because the research is of such moment that the IRB, 

they agree, is really of great moment. So they have this invasion 

of privacy without the individual knowing; and the individual may 

say, no, I did not want you to allow that. I did not want to take 

the risk, however small, 10th of 1 percent that it would be discovered by someone else. 

Mr. HORN. Perhaps we should have staff talk to the National Institutes of Health. Because you could have a project that takes 5 

to 10 years, maybe, to come to some conclusion; and the question 

is, if you do discover something that relates to that sample or you 

want a later subsample of that, is there a way you can tie that 

back to the good of the patient? 

Yes, Dr. Andrews. 

Dr. ANDREWS. Let me address this question of relinkage. 

While I may strip a data set, there are some circumstances 

where you would want to have the ability to go back and relink; 

for example, if you are doing a study on the safety of a particular 

kind of drug and you may follow patients for 6 months. If you obtain a signal that this drug may be causing cancer and the latency 

period is longer than 6 months, then you might want to use that 

same cohort of patients, extended for a longer period of time, in 

which case you need to take the data set back to its origin, relink 

through a very careful time-limited linkage, and gather the information that would then go into the data base that would no longer 

have the identity. It would be that linkage process that would need 

to be carefully safeguarded, rather than the whole data base. So I 

think we are all saying the same thing. 

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Ms. GOLDMAN. I have to add one thing on the research. 

I think there is a fair amount of agreement the vast amount of 

research that is done in this country is done with the deidentified 

data, out the personal identifiers. For that small group of research 

that is done with identifiers, I again say that it is very important 

that informed consent of patients be obtained. Because, as a few 

people have testified, there is a concern about there being a bias, 

that those that opt out would create a bias. At least it is a known 

bias. 

You know, there are a small group of people who say, I am uncomfortable being a part of this research project because I am concerned with confidentiality or I am concerned about losing my job 

or whatever it is, which are real concerns on the part of the individual. 

The current situation we have, where identifiable data is used in 

research without individuals’ consents, the bias in those research 

projects involve people who give inaccurate information because 

they are afraid of the lack of privacy. People who lie, people who 

don’t seek treatment, those create biases; but we don’t know about 

them. We can’t quantify them. At least—if they opt out and the information is asked for and it is withheld, at least you know who 

is saying I do not want to be a part of this research project. 

Mr. HORN. Well, that leads to the next question. If some patients 

are willing to give general waivers at the outset of their treatment 

permitting future disclosures of records to providers, researchers 

and others, should H.R. 52 prevent that or should each research 

project require informed consent of the patient to be sampled at 

that particular time? 

Ms. GOLDMAN. The way H.R. 52 is written is in authorization 

there has to be an identification of who the recipients would be and 

what the information would be used for. 

If the authorization is written broadly enough—and, again, getting that authorization does not then condition whether or not you 

deliver benefits or services. If people want to be part of ongoing research and that research is specified, it is not my judgment to 

make. I think these are individual judgments that people should 

make. 

The beauty of the privacy law that is crafted like this, it lets people make those choices. It lets doctors talk to the patients and say, 

I would like you to be involved with this; I think it would benefit 

you. It allows researchers to come in and have contact with people 

and talk to them about the benefits and risk. That is what is allowed here. It allows people to make their own choices and not myself or anyone else in this room to say here is the standard, here 

is what should apply. 

Mr. HORN. OK. We are going to wind this up. 

Anything any of you have on your mind that we haven’t asked 

about in this hearing record? 

Dr. HOGE. I think you were a born therapist. 

Mr. HORN. We don’t get those wages—sorry—salary, whatever, 

bills paid. 

OK, I want to thank you all very much for coming. You have all 

raised some new questions, as any good hearing does; and we will 

be following up. Just like your comments, as we go, if there is a 

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new draft bill put together, we will send them to you. We would 

like your comments. Those of your association would be very helpful. 

With that, this hearing is adjourned. 

Oh, let me just put the staff on the record. I want to thank the 

following people that worked on this. 

J. Russell George, the staff director and chief counsel; and Mark 

Uncapher, who is on my left, your right, the counsel for this hearing; John Hynes, professional staff member; Andrea Miller, clerk. 

David McMillen, professional staff member for the minority; Ron 

Strohman, professional staff member for the minority; Jean Gosa, 

clerk for the minority; and Sheridan Parker, minority research assistant. 

We have had interns with this particular hearing: Mike Pressicci, 

Grant Newman, Melissa Holder; and our court reporters are 

Katrina Wright and Tracy Petty. 

Now we are adjourned. 

[Whereupon, at 12:30 p.m., the subcommittee was adjourned.] 

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