President Clinton Issues Strong New Consumer Protections to Ensure the Privacy of Medical Records

President Clinton Issues Strong New Consumer Protections to Ensure the Privacy of Medical Records

Wednesday, December 20, 2000

Today, President Clinton will release a final regulation establishing the first-ever federal privacy protections for the personal health information of all Americans. This rule, which applies to health insurers, virtually all health care providers and clearinghouses, will give consumers more control over and access to their health information; set boundaries on the use and release of health records; safeguard that information; establish accountability for inappropriate use and release; and balance privacy protections with public safety. The final regulation improves on the proposed rule by strengthening several key protections, including: extending protections to personal medical records in all forms – including paper records and oral communications; providing for written consent for routine use and disclosure of health records; protecting against unauthorized use of medical records for employment purposes; and ensuring that health care providers have all the information necessary to appropriately treat their patients.

THE PRIVACY OF INDIVIDUAL MEDICAL RECORDS IS NOT CURRENTLY PROTECTED. Today, despite the increase in the collection and dissemination of personal data, there is no comprehensive federal requirement to provide patients with basic privacy protections.

PRESIDENT CLINTON TAKES FINAL ACTION NECESSARY TO IMPLEMENT NEW NATIONAL SAFEGUARDS FOR SENSITIVE HEALTH INFORMATION. The final regulation, which will be fully implemented within two years, is being issued under the authority of the bipartisan Health Insurance Portability and Accountability Act (HIPAA). This regulation, which underscores the Administration's commitment to safeguarding the security of personal health information, will:






FINAL REGULATION INCLUDES KEY CHANGES TO STRENGTHEN PRIVACY PROTECTIONS. In response to over 50,000 comments submitted by the public, the final regulation being released today strengthens patient protection and control over their health information by:

Financial Impact of Implementation of Privacy Regulation. Recognizing the savings and cost potential of standardizing electronic claims processing and protecting privacy and security, the Congress required that the overall financial impact of the HIPAA regulations reduce costs. As such, the financial assessment of the privacy regulation includes the ten-year $29.9 billion savings HHS projects for the recently released electronic claims regulation and the projected $17.6 billion in costs over 10 years projected for the privacy regulation. This produces a net saving of approximately $12.3 billion over 10 years for the health care delivery system while improving the efficiency as well as privacy protections.

PRESIDENT CLINTON CALLS ON THE CONGRESS TO ENACT PRIVACY LEGISLATION TO FINISH THE JOB. Today, President Clinton will once again call on Congress to finish the job on privacy. The regulation being finalized today represents a critical step towards protecting patient privacy that became necessary after Congress failed to act in the three-year timeframe it gave itself in 1996. However, the President's administrative authority is limited by statute and there remains an urgent need for federal privacy protections to: strengthen penalties and to create a private right of action so citizens can hold health plans and providers accountable for inappropriate and harmful disclosures of information; extend privacy protections to cover other entities that routinely handle sensitive medical information, such as life insurers and worker's compensation programs; and to place appropriate limits on the re-use of medical information by other entities. Today the President is doing what he can in this area. He is issuing an Executive Order to limit the re-use and re-disclosure of certain medical records within the Federal government, but new legislation would be needed to extend these protections more broadly.

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