HHS on Friday issued its long-awaited proposed medical records privacy regulations, which would control disclosure of patient data that hospitals and other providers electronically transmit and maintain.
Violations of privacy standards would be subject to new federal penalties of up to 10 years in prison and a $250,000 fine. These would apply to anybody who obtained medical records with the intent to use them for commercial advantage, personal gain or malicious harm.
Providers will remain subject to various state-enacted standards for paper records; the proposed regulations would apply to computer printouts of electronic transactions.
Hospitals still submit a majority of claims on paper. Yet a significant number of hospitals submit claims electronically, said Karen Milgate, senior associate director of government affairs at the American Hospital Association.
State standards for electronic data exchange still may apply in many instances. The regulations allow state laws to supersede federal standards if state laws are stronger.
The proposed regulations were mandated by a 1996 health insurance reform law. It required Congress and President Clinton to enact a comprehensive privacy law by August. If they didn't meet that deadline, HHS could draft rules on electronic transactions.
Despite the work of the Senate Health, Education, Labor and Pensions Committee, no congressional committee ever produced or voted on a privacy bill.
The proposed rules say hospitals and other providers must develop clear procedures for handling confidential patient data, name officers to oversee those procedures and notify patients about privacy protection practices.
Milgate said the AHA is primarily concerned with standardizing rules across the country and maintaining the continuity of patient care. It wasn't clear how the proposed rules might affect patient care, as details about the rules are still emerging.
After the proposed regulations are published in the Federal Register, which is expected this week, the public will have 60 days to comment on them before they become final.