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Jail Awaits 'Privacy' Rule Violators

John L. Perry

The rule, which has the effect of law, gives enormous enforcement powers to the secretary of the Department of Health and Human Services.

It was first proposed by Bill Clinton, and has now been adopted without change by President Bush.

With its enforcement powers go severe penalties the secretary may impose on anyone who refuses to go along with the federal government's "privacy" rule, which critics say is in reality an "anti-privacy" rule.

Those penalties may be applied to all providers of health services - including physicians, dentists, hospitals, clinics, nursing homes, pharmacies, home-care services and health-insurance plans.

They could face fines of as much as $250,000 and prison terms up to 10 years.

Of immediate consequence to patients receiving health services is this little-noticed provision on the "privacy" rule:

Section 164.506(b)(1) states that "a covered health-care provider may condition treatment on the provision by the individual of a consent under this section."

Section 164.506(b)(2) states that "a health plan may condition enrollment in the health plan on the provision by the individual of a consent under this section. ..."

A patient's consent to what?

As defined in Section 164.506(a)(1), it is the patient's consent to the health-care provider's "using or disclosing protected health information to carry out treatment, payment or health-care operations."

In layman's language: If you, as a patient, do not consent to your personal medical records being disclosed, your physician may refuse to give you medical care or you may be denied coverage by a health-insurance plan.

And what happens to your physician or health-insurance plan - or to any health-care provider - who refuses to go along with the requirements of the Department of HHS under this "privacy" rule?

Enforcement penalties applying to this "privacy" rule are covered by Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Section 1176 of that law provides civil monetary penalties of up to $100 "per person per violation" and up to $25,000 "per person for violations of a single standard for a calendar year."

Things get a lot tougher in Section 1177. For anyone who "knowingly" violates the requirements of the "privacy" rule the penalties range from $50,000 to $250,000 and/or imprisonment from one to 10 years.

Those are just the current penalties. Drafters of the rule during the Clinton-Gore administration were not content with the degree of severity of punishment.

In the lengthy Prologue to the rule, the drafters state:

"We believe that the penalties under the statute [Public Law 104-191] are woefully inadequate. We support legislation that would increase the amount of those penalties."

Three months into the Bush-Cheney administration, which adopted the rule that includes that Prelude, most of the personnel staffing HHS are still either career civil servants or outside consultants who played a part in drafting that language.

John L. Perry, a prize-winning newspaper editor and writer who served on White House staffs of two presidents, is senior editor for NewsMax.com.