Consumer Watchdog Asks HHS To Repeal Rule Allowing Health Care Providers To Decide When Notification of Breached Electronic Medical Records Is Necessary

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‘Harm Standard’ Violates Congressional Legislative Intent In Protecting Privacy

WASHINGTON, D.C. — Consumer Watchdog today called on the Health and Human Services Department to repeal a rule that allows health care providers and insurers to decide whether consumers must be notified when the security of their electronic confidential health information has been breached.

In a letter to HHS Secretary Kathleen Sebelius the nonprofit, nonpartisn consumer advocacy group said the HHS regulation violated the intent of Congress when it charged the department with writing the rules requiring notification if electronic medical records are breached. Consumers must be notified whenever there is a breach of medical records, the group said.

The American Recovery and Reinvestment Act of 2009 (ARRA) requires notification if there is an “unauthorized acquisition, access, use, or disclosure of protected health information which compromises the security or privacy of such information.”  The act charged HHS with writing and implementing the rules.  But HHS decided to interpret “compromises the security” of data to include a substantial harm standard.

“Under the HHS interpretation, if the breaching entity decides there is no significant risk of financial, reputation or other harm to the individual, the provider or health insurer never has to disclose that the sensitive information was used or disclosed in violation of the federal privacy rule,” wrote John M. Simpson, consumer advocate. “In other words, the company responsible for protecting the sensitive data gets to decide if it needs to bother to tell anyone that sensitive health data was breached.  This is simply outrageous.”

Consumer Watchdog asked what prompted HHS to flout Congressional intent. “Could it be that Congress managed to fend off the pressures of the health care industry in passing ARRA only to have the lobbyists return to exert their influence on the rule making process?”

Read Consumer Watchdog’s letter here.

Consumer Watchdog noted that  Rep. Henry Waxman, Rep. Charles B. Rangel, Rep. John Dingell, Rep. Frank Pallone Jr., Rep. Pete Fortney Stark and Rep. Joe Barton have written Secretary Sebelius protesting that the HHS rule violates Congressional intent. The Congressmen’s letter said:

“The primary purpose for mandatory breach notification is to provide incentives for health care entities to protect data, such as through strong encryption or destruction methodologies and to allow individuals to assess the level of unauthorized use of disclosure of their information.  Such transparency allows the consumer to judge the quality of a health care entity’s privacy protection based on how many breaches occur, enabling them to choose entities with better privacy practices. Furthermore, a black and white standard makes implementation and enforcement simpler.”

Read the Congressional letter here.

Consumer Watchdog said that the Federal Trade Commission, charged with writing breach regulations for non-HIPPA covered entities such as Personal Health Records vendors  like Google Health did not find any justification for introducing a “harm” standard.  “The FTC remained true to Congressional intent and to promoting the public interest,” the letter said.

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Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at:

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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