Overview of 2013 Amendments to HIPAA Privacy, Security, Breach Notification and Enforcement Rules

The 2013 Amendments include a number of sweeping changes to the HIPAA Rules, including the expansion of the definition of a business associate to include their subcontractors that handle protected health information (“PHI”); a lower threshold for determining whether a breach has occurred for reporting purposes; and restrictions on “marketing” activities and the “sale” of PHI.

Click here to read this Overview Summary of the 2013 Amendments. Duane Morris is issuing a series of Alerts on the 2013 Amendments. Please see the in-depth Alerts already distributed by the firm on changes under the 2013 Amendments to the definition of a business associate and changes to the breach notification requirements. We will continue to issue Alerts on discrete HIPAA topics.

New HIPAA Breach Notification Rule May Prove Costly for HIPAA-Covered Entities

One of the most significant changes in the final HIPAA amendments is the Breach Notification Rule, which modifies and clarifies the definition of “breach” and the risk-assessment approach required for breach notification. In light of this heightened standard, covered entities, business associates and downstream contractors should consider carefully reviewing their breach notification policies and procedures, training materials and contractual arrangements in an effort to avoid potential liability under the Breach Notification Rule.

Click here for more information on the most significant changes to the Breach Notification Rule.

Final HIPAA Amendments Expand HIPAA Net: Business Associates Now Required to Enter into Business Associate Agreements with Subcontractors

Among the most significant changes of the Final HIPAA amendments are the provisions that extend the Privacy and Security Rules’ stringent compliance obligations to business associates (BA) and expand the definition of BAs to include subcontractors of BAs. Why the changes? The HITECH Act of 2009 specifically extends direct liability to BAs and expands the list of obligations for BAs. The Department of Health & Human Services extends BA obligations even further to ensure the privacy and security of all PHI throughout the HIPAA ecosystem.

Click here to read a summary of the key provisions under the 2013 amendments, as well as factors that may be worthwhile for covered entities and business associates to consider in light of these amendments.

Affordable Care Act Declared Constitutional … For the Most Part

On June 28, 2012—the last day of the 2011 term—the U.S. Supreme Court ruled in a 5-4 decision, with Chief Justice Roberts writing for the majority, that the individual mandate provision of the Patient Protection and Affordable Care Act (the “Act”) is constitutional based on Congress’s taxing power. A key passage read from the bench by Chief Justice Roberts is as follows:

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Supreme Court Upholds ACA’s Individual Mandate

On June 28, 2012, the United States Supreme Court upheld the Affordable Care Act’s (“ACA”) individual mandate in a long-anticipated decision on the constitutionality of the ACA. The Court upheld the ACA’s individual mandate under Congress’ taxing power, and also held that the lawsuits challenging the ACA were not barred by the anti-injunction act. The Court, however, found the ACA’s Medicaid expansion unconstitutional because it “threaten[ed] States with the loss of their existing Medicaid funding if they decline to comply with the expansion.”

The full slip opinion may be accessed here.

CMS Delays Data Collection Under ACA’s Physician Payments Sunshine Act to January 1, 2013

On May 3, 2012, the Centers for Medicare and Medicaid Services (CMS) officially announced that it will delay data-collection and reporting requirements under the Patient Protection and Affordable Care Act’s (ACA) Physician Payments Sunshine Act (the “Sunshine Act”), due in part to the large number of comments received in response to CMS’s December 19, 2011, proposed rules. Data collection by CMS will not start until at least January 1, 2013.

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Antitrust Laws No Help to Excluded Physicians

When physicians are excluded from medical staff privileges because the hospital has entered into an exclusive agreement with other physicians, the element of “exclusion” often raises the suggestion that somehow the antitrust laws are implicated and competition has been adversely affected. The recent opinion of the United States Court of Appeals for the Third Circuit in Bocobo v. Radiology Consultants of South Jersey, P.A., et al. , No. 07-3142 (3d Cir. April 13, 2012)(not precedential), explains why the antitrust laws do not afford a remedy to an excluded physician when a hospital contracts with a provider group that does not include the plaintiff physician.

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CMS Releases New Medicare Advantage and Medicare Part D Rules, Implements Several Provisions of ACA

On April 12, 2012, the Centers for Medicare & Medicaid Services (“CMS”) released a final rule with comment period (“Final Rules”) implementing changes to the Medicare Advantage program and Medicare’s prescription drug benefit program, referred to as Medicare Parts C and D, respectively. Part C and D plan sponsors and other participants should carefully review the changes, particularly those related to increased transparency and exclusion from Parts C and D. The Final Rules are the latest effort by CMS to improve accountability, transparency, and effectiveness of the Medicare program.

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HHS Releases Final Rule and Interim Final Rules on Affordable Care Act’s State Health Insurance Exchanges

On March 12, 2012, the U.S. Department of Health and Human Services (HHS) released the long-anticipated Final Rule and Interim Final Rules (the “Rules”) on the Patient Protection and Affordable Care Act’s (ACA) state health insurance exchanges (“Exchange(s)”), a key element of President Obama’s healthcare reform plan. Set to go into effect on January 1, 2014, the goals of the Exchanges are to enhance competition, improve availability of affordable health insurance options and allow small businesses the same purchasing power that large businesses currently enjoy. As described in the Rules, the Exchanges will operate as competitive marketplaces, allowing individual consumers and small businesses to directly compare pricing and quality of health insurance options, among other factors.

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Aetna Sues Surgery Centers Over Billing Practices

In a bold and seemingly unprecedented move, Aetna recently sued several California surgery centers for an alleged “fraudulent billing scheme”. The lawsuit alleges that the surgery centers induced physicians to refer patients to the surgery centers with promises that the patients would not have any financial responsibility for their coinsurance and deductibles. Aetna claims that the surgery centers then turned around and submitted charges for reimbursement that were artificially inflated driving up the cost of health insurance coverage.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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