Privacy Regulations Under HIPAA Raise Concerns for P/C Insurers

While privacy regulations under the Health Insurance Portability and Accessibility Act (HIPAA) do not apply directly to property/casualty insurers, the industry is expecting a significant impact due to health care providers’ misunderstanding about the requirements and because insurers’ requests for medical information from providers must comply with the regulations. HIPAA’s privacy regulations became April 14.

The HIPAA privacy rule covers health plans, health care clearing houses and health care providers. Insurers who cover medical benefits under auto and other liability policies and for workers’ compensation claims are not required to be in compliance, but requests for the information from covered persons must comply. The National Association of Independent Insurers (NAII) is concerned that confusion about the rules could delay claims processing.

“For property/casualty insurance companies, obtaining a comprehensive health information history is critical to the timely and fair settlement of claims. We have already seen problems emerge and the regulations are not even effective yet. One example that illustrates our concerns involves a medical provider that requested that the insurer sign a business associate agreement before the provider would release the information,” said Nancy Schroeder, NAII assistant vice president, workers’ compensation. “This type of response from a provider highlights the confusion and gray areas that still exist regarding this rule.”

According to the NAII, insurers are not “business associates” in this case, but cautious medical providers may mistakenly assume that they can only release information if the insurance company becomes a business associate.

In the auto insurance claims’ area, NAII highlighted where confusion could occur, such as:

·the fact that insurers may request the entire record as long as the request is clear and the authorization complies with HIPAA; and

·a requirement that covered entities provide only the “minimum” information necessary to accomplish the purpose of a disclosure, (applies to some requests under a workers’ compensation policy, but does not apply to requests that are authorized by the individual).

“NAII still has concerns about the ‘minimum necessary’ provisions which will allow health care providers the discretion to offer only bare bones information to insurance company claims representatives in some workers’ compensation claims,” Schroeder said. “We are also concerned that providers may not be aware that the ‘minimum necessary’ does not apply if the requests for more information are authorized by the individual.”

In the workers’ compensation area, Schroeder said other issues raise concerns, including:

·the fact that the workers’ compensation exemption is based on the assumption that state laws contain specific language that authorizes the release of information. Many states do no not have specific language and this may create confusion regarding what information can be released; and

·whether there is a good understanding that individuals do not have the right to request restrictions on disclosure of information under the workers’ compensation exemption.

“The NAII is actively monitoring how the regulations are impacting property/casualty insurance coverage,” Schroeder said. “We hope to work with the Department of Health and Human Services (HHS) to clarify some of the gray areas so that insurers are able to obtain records in a timely manner and providers are able to understand what is required of them in supplying the information.”