A New York HMO can be held liable for a breach of privacy even though the employee who released a patient's records wasn't acting in the normal course of business, a New York court has ruled.
The Third Department of the Appellate Division of New York courts ruled 3-2 in Jane Doe vs. Community Health Plan-Kaiser Corp. that the HMO is liable for the breach of confidentiality that occurred when an employee released the mental health records of a patient, who sued under a pseudonym.
Attorneys for both sides expect the case to be heard by the Court of Appeals. Under New York law, the panel of judges will decide whether to hear the case.
The ruling came as interest in the confidentiality of medical records is growing. A federal law, the Health Insurance Portability and Accountability Act of 1996, soon will make it a crime to release patient information to anyone not authorized to know it (see May, page 38). However, since the privacy regulations haven't been finalized, the HMO cannot be held accountable under this law.
Jane Doe, who lives in Albany, worked as a supervisor at a home for people with disabilities, says her attorney, Lee Greenstein. Several of the people who worked for her speculated about her sexuality, he says. An employee's sister was a clerk at the social worker's office where Doe went for counseling. The clerk found Doe's file, which included notes that stated Doe was gay, and shared the information with her sister and other employees of the group home.
The Third Department ruled that breach of confidentiality applies in this case. "To hold otherwise would render meaningless the imposition of such a duty on a medical corporation since the wrongful disclosure of confidential information would never be within the scope of the employment of its employees," the justices wrote.
There isn't case law in New York dealing with this issue, Greenstein says. But "there's an established cause of action in the breach of confidentiality. There's an established right to sue for releasing confidential information," he says.
CHP/Kaiser plans to ask the appellate court to hear the case, says Paul Collins, an attorney with Hinman, Straub, Pigors & Manning, which represented the health plan. "This constitutes a change in the law not authorized by the Legislature," Collins says. "We feel the Court of Appeals should take a look at it. It creates new law and abandons traditional concepts of employer liability."
CHP/Kaiser should be responsible for errors and omissions made by employees who are acting within the scope of their jobs, Collins says, but "this is not the case here."