California hospitals will face tougher penalties for patient privacy breaches and must do more to inform state regulators of such lapses, according to two new laws signed earlier this week by Gov. Arnold Schwarzenegger.
The state will create the Office of Health Information Integrity within the California Health & Human Services Agency, and appoint a director to assess penalties against individuals who violate patient privacy, with fines up to $250,000. Monies from the penalties will be used to support healthcare quality-improvement projects. The director can also recommend to state and federal licensing authorities further regulatory action.
Another new law sets fines for hospitals that fail to protect patients' information of up to $250,000. The law also raises fines for serious medical errors in hospitals from $25,000 to up to $125,000 per violation.
For facilities, the fines for disclosing private medical information range from $25,000 to $250,000 per event. If several individuals access the same patient's file, for instance, the penalty would be $25,000 for the first violation plus $17,500 for every additional person who peeks at the file, up to a maximum of $250,000.
Hospital employees who sell a patients' information to a third party, like a tabloid magazine or private investigator, face fines of up to $250,000, face the possibility of being stripped of their licenses to practice medicine and be referred to state legal authorities for further action under the new law. Also, the facility where the person is employed must report the incidents to the state. Facilities that don't report the privacy breeches face fines of $100 per day of nonreporting after five days of learning about it.
Sharing the information with others, giving it to a private contractor for fundraising purposes and carelessly discarding records in a way that could jeopardize patient privacy are also subject to stiffer fines and other penalties under the new laws.
A spokeswoman for the California Public Health Department said she did not know when the new office would be up and running.
The California Hospital Association supported both bills, which were crafted in response to a rash of cases at Ronald Reagan UCLA Medical Center where personnel peeked at celebrities' medical records, including those of Britney Spears, Farrah Fawcett and the governor's wife, Maria Shriver. The state Public Health Department, which licenses hospitals, has six ongoing investigations at the hospital. The hospital has made changes to its privacy policies and records-keeping protocols as a result of the probes.
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