WARREN, Ohio-In the wake of a recent Ohio Supreme Court decision, hospitals in Ohio are trying to balance patients' privacy with the need to collect payment on overdue medical bills.
In a precedent-setting case, the state's high court ruled that Warren (Ohio) General Hospital breached patients' confidentiality when it gave its law firm copies of patient registration forms without their consent.
The court also established an independent tort, or civil law, that bans the unauthorized, unprivileged disclosure to a third party of private medical information gained during the patient-physician relationship. Under the new tort, a third party may be held liable for inducing the disclosure of such information.
"Since the law firm was employed by the hospital, and not by the hospital's patients, its duty under the law is to preserve the confidences and secrets of the hospital, not the hospital's patients," the court wrote in its Sept. 15, 1999, opinion.
The high court returned the case to the circuit court for a trial. Patients, who filed the class-action complaint in 1995, allege that the hospital and law firm invaded their privacy, intentionally inflicted emotional distress upon them and acted negligently with privileged medical information.
No trial date has been scheduled. Warren General sold its assets to 136-bed St. Joseph Health Center in Warren two years ago, so only its not-for-profit corporate shell is on trial.
"We were hopeful they would see past the sensational aspects of the case," said Daniel Keating, a lawyer with Keating Keating & Kuzman in Warren who is representing Warren General. "We're disappointed but not completely surprised."
Struggling with an increasing number of patients who didn't pay their medical bills, Warren General hired the law firm Elliott Heller Maas Moro & Magill in Akron, Ohio, to screen patient forms for those eligible to receive Supplemental Security Income, a federal program that allows the needy, disabled and blind to qualify for Medicaid coverage of their medical bills.
Finding patients eligible for SSI was like finding money for the hospital. The law firm reviewed about 12,000 patient records during the course of nearly three years and received a contingency fee for each eligible patient it uncovered.
However, the hospital turned the forms over to the law firm without first obtaining patients' consent.
In addition, the law firm was using the patient information to try to develop personal client relationships and beef up its business. For example, the law firm would call potential candidates for SSI and set up appointments with an attorney at the firm to discuss the SSI application process.
"Law firms engage in collections frequently, but this (kind of) collection effort was so smarmy, the Supreme Court couldn't let it go," said Michele Gerroir, a healthcare lawyer with Baker & Hostetler in Columbus, Ohio, who was asked to comment on the case by MODERN HEALTHCARE. "It's really going to be a significant expense for hospitals to engage in debt collection. They're really going to have to police the information they send out."
Harry Rhodes, director of products and services at the American Health Information Management Association in Chicago, said hospitals nationwide can avoid such privacy problems by using the proper language in their contracts with third parties and in their patient consent forms.
"People shouldn't be afraid to outsource their collections, but they have to make sure that confidentiality is protected," Rhodes said. "It's less costly to outsource (collections), but it has to be done right."