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CLIENT ALERT: Will Ohio Recognize a Biddle Claim in a Post-HIPAA World?

The Ohio Supreme Court will soon determine whether Ohio will allow patients to bring a private state law claim against a healthcare provider for an alleged HIPAA violation involving the disclosure of protected health information (“PHI”), when the healthcare provider discloses PHI for the purpose of collecting payment from a patient on a past due account.  The Ohio Supreme Court will decide this issue in a case styled Menorah Park Center for Senior Living v. Irene Rolston. [1]

                                                           

In Menorah Park, a rehabilitation center, Menorah Park, filed suit in the Shaker Heights Municipal Court to collect payment from a patient, Mrs. Rolston.  When Menorah Park filed its complaint, it attached unredacted billing statements that contained PHI, including “a description of medical services provided to [Mrs. Rolston]; the dates the services were provided; medical procedure codes; charges, credits, and balances on [Mrs. Rolston’s] account; and other information.” [2] While HIPAA generally prohibits the unauthorized disclosure of PHI, HIPAA expressly authorizes the disclosure of PHI for the purpose of collecting payment from a patient.[3]    Such disclosures are subject, however, to the minimum necessary requirement which states that the healthcare provider must make reasonable efforts to limit the disclosure of PHI “to the minimum necessary to accomplish the intended purpose of the use, disclosure, or request.”[4]

In response to Menorah Park’s complaint, Mrs. Rolston filed a class-action counterclaim, on behalf of herself and others similarly situated, claiming that Menorah Park had also improperly disclosed other patients’ PHI in over 250 similar cases filed in the same court.  Mrs. Rolston claims that she suffered between $6,000 and $15,000 in damages, and that each class member (between 40-250 patients) suffered similar damages—bringing the total potential damages of the class-action to between $240,000 to $3,750,000 (or more). 

Mrs. Rolston characterized the class-action as a breach of confidence for the unauthorized disclosure of non-public medical information that [Menorah Park] learned within a physician-patient relationship.  Mrs. Rolston claims that the Ohio Supreme Court previously recognized a similar claim, referred to as a “Biddle Claim,” in a case styled Biddle v. Warren General Hospital.[5]

In Biddle, the Ohio Supreme Court recognized an independent claim for the unauthorized, unprivileged disclosure to a third party of non-public medical information that a physician or hospital has learned within a physician-patient relationship.  The Ohio Supreme Court decided Biddle, however, on September 15, 1999, before the U.S. Department of Health and Human Services (the “HHS Department”) published HIPAA’s privacy-rule regulations on December 28, 2000.

The trial court in Menorah Park dismissed the Biddle Claim, and Mrs. Rolston appealed to the Eighth District.  On appeal, Menorah Park argued that federal HIPAA regulations preempted or trumped the patient’s Biddle Claim because as a matter of well-established federal law, HIPAA does not provide a patient with a private cause of action against a healthcare provider for violating HIPAA.  Instead, as healthcare providers know, under HIPAA only the HHS Department may penalize healthcare providers for HIPAA violations.  The Eighth District rejected Menorah Park’s arguments finding that HIPAA did not preempt a Biddle claim, and reversed and remanded the class-action to the trial court for further proceedings. 

Menorah Park appealed to the Ohio Supreme Court, claiming that a split of authority exists between the Eighth District’s decision in Menorah Park, and a post-Biddle decision by the Tenth District Court of Appeals in OhioHealth Corp. v. Ryan, in which the Tenth District dismissed a Biddle Claim like the one brought by Mrs. Rolston in Menorah Park.  The Ohio Supreme Court accepted Menorah Park’s appeal on October 1, 2019.

In OhioHealth, a hospital filed suit against a patient to collect payment. [6]  The patient countered with a Biddle Claim similar to Mrs. Rolston’s in Menorah Park.[7]  In affirming the trial court’s dismissal of the Biddle Claim in OhioHealth, the Tenth District held that “HIPAA permits the use or disclosure of individually identifiable health information when it is for the purpose of obtaining payment. . .[and] [c]onsequently, the disclosure cannot be deemed ‘unauthorized, unprivileged disclosure’ as required under the theory announced in Biddle.”[8]  The Court in OhioHealth also explained “we are aware of no applicable exceptions to preemption, and because HIPAA is applicable to these circumstances, HIPAA is the governing authority.”[9]  Finally, the OhioHealth Court noted, “[s]ignificantly, HIPAA does not allow a private cause of action, according to Ohio law[,]” and therefore, even if the patient had a claim for a HIPAA violation, “he is without authority to bring it to court.”[10]

Although not as on point as OhioHealth, the decision in Sheldon v. Kettering Health Network, decided in 2015, anticipated the problem with enforcing a Biddle Claim in a post-HIPPA world: “recognition of a Biddle claim post-HIPAA presents a seemingly unsolvable conundrum” because some cases, like Menorah Park, would involve the use of HIPAA’s authorized disclosure regulations to form the basis of a state law private cause of action when HIPAA does not provide a private cause of action.[11]

The parties in Menorah Park will submit briefing to the Ohio Supreme Court soon, and it is likely that other healthcare providers and/or healthcare provider associations may file amicus briefs with the Ohio Supreme Court to take the position that Ohio should not recognize the class-action claims filed in Menorah Park.  The recognition of such a claim could lead to a flood of other similar class-actions against healthcare providers who use Ohio’s courts to collect on past due accounts.

Even if the Ohio Supreme Court decides patients cannot bring a private cause of action for an alleged HIPAA violation, healthcare providers should still nevertheless remember that HIPAA does provide for other substantial and severe penalties, including, but not limited to, potential fines by the HHS Department.  Therefore, regardless of how the Ohio Supreme Court decides Menorah Park, healthcare providers should comply with HIPAA’s regulations governing the disclosure of PHI when pursuing payment from a patient.

[1] Ohio Supreme Court Case No. 2019-0939, on appeal from Menorah Park, 8th Dist. NO. 107615, 2019-Ohio-2114.

[2] See Menorah Park, 8th Dist. No. 107615, 2019-Ohio-2114 at ¶ 3.

[3] See 45 C.F.R. 164.502(a)(1)(ii).  HIPAA defines “payment” to include, among other things, billing, claims management, collection activities, activities undertaken by a health plan to obtain premiums or provide coverage, and activities undertaken by a healthcare provider or health plan to provide reimbursement.  See 45 C.F.R. § 164.501 (“Payment” definition).

[4] See45 C.F.R. § 164.502(b).

[5] 86 Ohio St.3d 395 (1999).

[6] 10th Dist. No. 10AP-937, 2012-Ohio-60.

[7] The patient’s counterclaim in OhioHealth v. Ryan was not a class-action, and OhioHealth filed a redacted account statement as an attachment to its complaint.

[8] OhioHealth Corp., 2012-Ohio-60 at ¶ 15.

[9] Id. at ¶ 17 (citing Lumley v. Marc Glassman, Inc., 11th Dist. No. 2007-P-0082, 2009-Ohio-540, ¶ 89).

[10] Id. at ¶ 18.

[11] 2nd Dist. No. 26432, 2015-Ohio-3268 at ¶ 28.

 

CLIENT ALERT: IRS Announces 401(k) and HSA Contribution Limits for 2020

With 2020 just around the corner, the IRS announced important information for the upcoming year for both 401(k) Contributions and Health Saving Accounts (HSAs).

CLIENT ALERT: U.S. Department of Labor, Wage and Hour Division Sets Enforcement Record

In advance of Halloween, the U.S. Department of Labor announced the results of its Wage and Hour Division's (WHD) recovery efforts for Fiscal Year 2019, and it reads like a horror story. The good news to lull you into a feeling of safety was that the 18,844 Complaints Registered was the fewest amount over the past 22 years or published records.

CLIENT ALERT: Proposed New Rules to both the Stark Law and the Anti-Kickback Statute

On October 9, 2019, as part of the “Regulatory Sprint to Coordinate Care,” the Centers for Medicare and Medicaid Services (“CMS”), along with the US Department of Health and Human Services, Office of Inspector General (“OIG”), proposed new rules to both the physician self-referral law (“Stark Law”) and the Anti-Kickback Statute (“AKS”). Rule changes are aimed at fostering innovative arrangements for coordinating care consistent with a shift to a value-based system. Both proposed rules are expected to be published to the Federal Register on October 17, 2019. Public comments are due 75 days after publication.

CLIENT ALERT: New Overtime Rule Raises Minimum Salary Requirements and Other Changes to the Fair Labor Standards Act

Today, the U.S. Department of Labor (DOL) issued its Final Rule updating the regulations under the Fair Labor Standard Act: Effective January 1, 2020, employees who make less than $35,568 are now eligible for overtime pay under a final rule issued by the U.S. Department of Labor (“DOL”). The DOL expects 1.3 million workers to become newly eligible for overtime by updating the thresholds. The new rule will raise the salary threshold to $684 per week ($35,568 annualized) from $455 per week. This means that even if your employee qualifies under one of the overtime exemptions, if the employee is not earning at least $684/week, the employee will be eligible for overtime and minimum wage requirements.

CLIENT ALERT: BWC issuing $1.5 billion in premium refunds to Ohio employers

The Ohio Bureau of Workers’ Compensation (BWC) has now reported that the Board of Directors approved a proposal to send $1.5 billion of the agency’s revenues to Ohio employers covered by the BWC system.