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Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

STATEMENT TO THE SECRETARY'S ADVISORY COMMITTEE ON REGULATORY REFORM, DENVER, MAY 15, 2002

RE: HIPAA "ADMINISTRATIVE SIMPLIFICATION"

Our organization would like to point out a simple fact that must be obvious to all members of this Committee: A set of regulations that

(1) is more than 1,500 pages in length, with a recent "clarification" running to about 200 pages;

(2) requires the addition of administrative personnel or at least a proliferation of job titles;

(3) requires the purchase of additional storage space and filing cabinets;

(4) adds many pages of required forms to the medical record;

(5) requires expensive compliance consultants, seminars, and subscriptions to monthly updates; and

(6) demands costly new computer systems, with exact specifications still undefined

is not described by the phrase "administrative simplification." Rather, it constitutes a program of administrative complexification, paperwork enhancement, and job security for compliance officers. One lawyer, an expert on these regulations, called HIPAA the "Highly Impossible Privacy Achievement Act." She said that was supposed to be a joke. Yet CMS uses the term "administrative simplification" with a straight face.

HIPAA also abolishes patient privacy, at least with respect to government and its authorized agencies and contractors. In response to public comments referring to a problem with unlimited administrative searches of supposedly confidential records, CMS asserted that no problem exists because there is no expectation of privacy due to the highly regulated nature of medical practice-contradicting the press releases about the Administration's commitment to privacy.

Recent proposed rulemaking recognizes the barriers that the regulations create for the timely provision of medical care and therefore removes the "consent" fig leaf. Of course, consent that is required in order to receive treatment can hardly be construed as voluntary. The revisions still fail to distinguish between use of information for treatment and disclosure to persons not directly involved in patient care. In attempting to solve a nonproblem, the Privacy Rule creates enormous new problems. The Rule makes it difficult for the x-ray technician to find the patient, while making it much easier for marketeers, law enforcement agencies, and central planners to mine medical records for purposes contrary to the patient's best interests.

Our hospital's attorney observed that the writer of the Privacy Rule had never in her life worked in a hospital in any capacity. This should be apparent from reading the Rule. Moreover, the cost estimates in the Rule have no nexus with reality; for example, the cost of getting a complicated form filled out and filed is equated to the cost of printing the form.

A few tweaks will not fix a monumental error. The regulation is totally contrary to the stated legislative intent of "administrative simplification" and cost saving. The imposed costs will be huge, including the destruction of small practices and loss of access to care.

At a minimum, there should be a threshold below which practices are exempted from this overbearing regulatory oversight.

And if this regulation is to constitute a "floor" of privacy as claimed, patients who forgo third-party payment should not be forced to have their data entered into a computer data base and should be allowed to enter contractual agreements with their physicians to protect their privacy.

If this Committee lacks the authority to implement anything other than tweaks in the actual regulations, it can at least insist on the proper use of the English language in describing the Rule. It is the biggest administrative nightmare in American history and the coup de grace for patient privacy. Accurate, forthright, and understandable description might lead Congress to understand the need to repeal the enabling legislation.

I want to make sure that the Committee understands: this is not just another case of how to deal with a few regulations or about how to get through a shakedown period after which everything will return to normal. We are not just griping about having to comply with a few more rules.

On the contrary: these regulations are a monumental upheaval/transformation for the medical system, and at least one-fourth of the economy, if one factors in the "business associates." The scale is comparable to the passage of Medicare in 1965. The waves created will cause many doctors to bail out or be thrown overboard. Future generations will feel the negative ripples.

Jane M. Orient, M.D.

Executive Director