Hospitals fretting over how new patient-privacy regulations will hamstring their budgets and basic operations can take comfort in this: Their marketing activities will not be severely restricted.
Under final patient-privacy regulations issued late last year that implement provisions of the Health Insurance Portability and Accountability Act of 1996, providers can conditionally use patients' protected health information to target their marketing campaigns.
That represents an about-face for HHS, which proposed a version of the regulations that would have required patients to grant authorization to receive healthcare-related marketing materials.
HHS' final version of the regulations-which was published Dec. 28, 2000, in the Federal Register and is scheduled to take effect February 2003 pending a review by the Bush administration-sets conditions that must be met before providers can send their patients written information promoting a product or service. The conditions include:
* Marketing materials mailed to patients' homes must identify the name of the provider that sent them.
* Providers must disclose if they receive any kind of compensation for mailing the solicitation.
The first round of marketing materials must give patients an "opt-out" capability so that they can decline to receive future solicitations (except in cases where the communication consists of a newsletter or other broadly distributed announcement).
"The provision tries to prevent abusive practices without interfering with the ability of providers to deliver treatment and health-related information to their patients," an HHS spokesman said.
The American Hospital Association, which wants the regulations reconsidered, nonetheless supports HHS' intention of enabling providers to make patients aware of new therapies and medications without forcing them to receive unwanted communications.
"If a hospital has a new program that could benefit a segment of its patients, we want those patients to have that information in a variety of ways, including a direct communication from the hospital," said Melinda Hatton, Washington counsel for the AHA. The marketing provision, Hatton said, does not represent a fundamental change but "a framework for thinking about how to communicate with patients and what you need to disclose."
Observers agreed that more than anything else, HIPAA's marketing regulation requires hospitals to use good judgment and common sense in their marketing efforts.
"The regulation maintains the status quo for providers with regard to how they use patient information for marketing purposes, but injects some need for caution in those activities that people may not have thought to exercise before," said Bernadette Broccolo, a lawyer in the healthcare practice of Chicago-based Gardner, Carton & Douglas.
Under the marketing provision, hospitals and doctors "have a responsibility to market in good taste," said Les Stern, president of Northbrook, Ill.-based L. Stern & Associates, a marketing firm focused on healthcare and financial services. "In the grand scheme of things, I don't see that a lot has changed for providers. I think they should sigh with relief."
The line between educating patients and advertising to them can be a blurry one, observers agreed. The regulation addresses that confusion by setting two criteria for marketing in the context of managing care or coordinating benefits:
* Communication must be made orally (i.e., during a patient visit) or pertain to products of nominal value (i.e., a toothbrush).
* If communication is sent by mail, the provider cannot receive compensation from third party for sending it.
The second criteria, the AHA's Hatton said, "is a very important safeguard for ensuring that providers will not be influenced by third parties in how they communicate with patients."
As for payers, routine communications such as sending beneficiaries a list of the plan's participating providers is acceptable under the regulations, Hatton said.