Workers’ Comp Problems Addressed in HHS Medical Privacy Regulations

Modifications to a final medical privacy rule issued by the U.S. Department of Health and Human Services (HHS) stopped short of resolving concerns that workers’ compensation carriers and employers have with the rule’s potential impact on the workers’ comp system, according to the American Insurance Association (AIA).

The initial rule, published by HHS in December 2000, was finalized with modifications issued in the last week. The rule is designed to protect the use of individually identifiable health information by health plans, health care clearinghouses, and certain health care providers.

The rule’s preamble now appears to clarify the intention of HHS not to interfere with the state-based workers’ comp system. AIA had expressed concern that the rule could discourage medical providers from providing information to workers’ comp insurers in order to process workers’ comp claims and provide related benefits to injured workers. Disclosure roadblocks could have slowed or in some cases halted the delivery of workers’ comp benefits to injured workers.

“We commend HHS and the Office of Management and Budget for acknowledging that the new privacy rules should not interfere with how the workers’ compensation system operates,” John Savercool, AIA vice president, federal affairs, said.

The initial privacy rule was not intended to cover workers’ compensation or other forms of property/casualty insurance, but it did so indirectly by requiring “covered entities,” including physicians, hospitals, health plans, and other medical providers, to disclose only the amount of medical information deemed by the provider to be “minimally necessary” to insurers in workers’ comp cases. This standard would have effectively required medical providers to make legal judgments about what information is needed to process a claim.

AIA had asked HHS to exempt workers’ compensation from the requirements. HHS officials said statutory reasons prevented them from doing that, but they said modifications could be made later if problems develop, according to Savercool.

“We’re encouraged by HHS’ clearly stated intent that this rule should not disrupt needed information disclosures that serve as a foundation for the workers’ comp system,” he added.