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By Daniel J. Schulte
MDA Legal Counsel
From the August 2007 issue of the Journal

Question: The Michigan Department of Community Health ("MDCH") recently notified me that it would like to audit my practice. It has requested that I make available many patient records. Does HIPAA prevent me from making the disclosure of this information to the MDCH?

Answer: The Michigan Court of Appeals recently answered "no" to this question. The case involved a dentist under investigation for insurance fraud by the MDCH. The MDCH served the dentist with a subpoena seeking dental charts and radiographs pertaining to seven of the dentist’s patients. The subpoena was authorized by the Ingham County Circuit Court. Rather than complying with the subpoena, the dentist filed a motion seeking to quash the subpoena, arguing that disclosing the information violated: (1) HIPAA; (2) Michigan’s dentist-patient privilege statute; and (3) his due process rights guaranteed by the United States and Michigan constitutions.

The Court of Appeals recognized that the information sought by the subpoena was "individually identifiable health information" that is protected from disclosure by HIPAA. However, HIPAA contains an exception (45 CFR 164.512(d)) permitting disclosures of this information to "a health oversight agency for oversight activities authorized by law . . . ." The court concluded that the MDCH is a statutorily created entity that oversees public health policy and is responsible for overseeing licensed health care professionals in Michigan. Therefore, the court ruled that HIPAA does not prevent the MDCH from obtaining patient charts and radiographs in fulfillment of its investigative functions.

The court also rejected the dentist’s claim that disclosure violated Michigan’s dentist/patient privilege statute (MCL 333.16648(1)). The dentist’s argument ignored the clear language of this statute expressly providing an exception to the privilege when the disclosure is "permitted or required" by HIPAA.

Finally, the court rejected the dentist’s arguments that his right to due process was violated. Due process rights are not applicable to the investigatory stage of the proceedings that had been undertaken by the MDCH. If the MDCH decides based on the results of its investigation to pursue a licensing action against the dentist, then the dentist would be afforded all the applicable due process rights. These rights include notice of the licensing action, the right to an initial hearing, a compliance conference, formal hearing, discovery, appeal, etc.

This Court of Appeals decision clarifies (to the extent there was doubt) that HIPAA does not prevent the MDCH from obtaining patient records when investigating Michigan health professionals.

There is another important lesson to be learned from this case. Remember that when the MDCH and similar governmental agencies conduct investigations, they are private. Until the dentist in this case chose to litigate the propriety of the MDCH subpoena, the only people who knew of the investigation were the MDCH and the dentist. By seeking to quash the subpoena the dentist made what was a private matter a public one. The Court of Appeals decision, which includes the allegations being investigated, is now part of the public record. Additional public information (such as the parties’ briefs and their attachments) is contained in the Court of Appeals file.

It pays to always pick your battles carefully and thoroughly understand the consequences of all the possible outcomes.

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