A Senate committee last week abruptly postponed a hearing to revise and approve a medical records privacy bill.
In dispute is whether the bill should allow patients to sue providers that illegally disclose the patients' confidential health information.
Republicans on the Senate Health, Education, Labor and Pensions Committee want to strip a provision from the bill that makes hospitals and other providers liable for compensatory and punitive damages in such a lawsuit. The damages would be in addition to criminal sanctions, including jail time and civil penalties worth thousands of dollars per violation.
Hospitals, too, want to eliminate the damages provision, arguing that criminal and civil penalties are substantial enough. Democrats said they will support the bill only with the provision.
In an effort to strike a compromise, Committee Chairman Jim Jeffords (R-Vt.) postponed the hearing and rescheduled it for June 9.
Under the requirements of a 1996 health insurance reform law, Congress has until August to pass medical-records privacy legislation. After that, HHS can enact standards through regulation.
In a speech at the National Press Club last week, HHS Secretary Donna Shalala urged Congress to move the legislation forward.
"I do not want to put privacy regulations in place. I want Congress to do it," Shalala said. "It will take some energy and a final push from us, but I think it will be done."
Hospitals also object to provisions they say would give federal fraud investigators more leeway to demand patient records without a federal warrant or court order. For instance, the law allows police to seize medical records without a warrant when in pursuit of or trying to locate crime suspects.
Hospitals and privacy advocates such as the American Civil Liberties Union are working to limit police access to medical records.
The legislation broadly allows disclosure of medical records for treatment, payment and healthcare operations such as quality improvement or health plan ratings. Patients would authorize such disclosure as a condition of enrollment in a health plan.
The bill doesn't nullify stronger state laws already on the books, but it bars states from passing privacy laws in the future. That provision also has angered Democrats, who would like to allow states to pass laws stronger than the proposed federal one.