HIPPA’s Impact On Workers Compensation Claim Management
A major goal of the Privacy Rule under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) is to assure that individuals’ health information is properly protected while allowing the flow of health information needed to provide and promote high quality health care and to protect the public's health and well being. The Privacy Rule strikes a balance that permits important uses of information, while protecting the privacy of people who seek care and healing. Given that the health care marketplace is diverse, the Rule is designed to be flexible and comprehensive to cover the variety of uses and disclosures that need to be addressed.
There is absolutely no question that HIPPA has, and will continue to have, a significantly impact on the organization’s ability to manage its worker injury claims. The following are some of the key areas that are affected:
First, because employees have the right to control the release of their medical information, employers must get consent for every release of information. Not only is this cumbersome from the employer’s perspective it can create havoc on determining return-to-work strategies. As an example, suppose that the provider treats a worker with an apparently covered worker injury claim. Learning of the claim through the employer's first report of injury, the carrier asks the provider for a medical report. Further suppose the provider finds in their mandatory HIPAA files a “do not disclose” order. Notwithstanding state law that may authorize disclosure without a release, the provider is caught in a clash of laws. The provider may take the position that HIPAA privacy takes precedence over state WC law. By doing this, the workers’ indemnity benefits may be halted and providers will probably not receive payment for services rendered. While the provider is within their rights to withhold services, the employer may then be placed in an untenable position. The right to medical treatment provided by the employer is established by statute in virtually all jurisdictions. Denial of that right by employer, by imposition of disclosure requirements upon the provider as a condition for payment, could be considered conduct subject to sanction as a violation of the medical treatment requirement. If the worker has filed a “do not disclose” order, the employer must pay the provider without review of records, deny the claim and shift the burden of production of justifying records onto the worker in expensive formal litigation while risking sanction for unjustified delay of medical treatment, or change to another provider that will be less troubled by the “clash of laws”. The latter choice will often be restricted by existing restrictions upon the choice of providers under state WC laws.
Second, the new privacy regulations can affect claim management strategies. They can affect return-to-work and accommodations for workers if employers do not have enough information." As an employee, an employee might tell an employer after an injury, 'I can work, but I can't lift,' or 'I can't come back to work for two weeks.' Without sufficient medical information, an employer is not going to know what to do. As another example, for workers' compensation cases to be resolved, the parties involved need to be able to root out fraud and abuse. A lot of times, this is done via review of medical records. Unless the medical records are available the proper claim management strategy will be weakened significantly. They can cause problems for employers trying to investigate whether a condition is related to workers' compensation or to disability. Also having to go back to the physician or health care provider to get authorization every time the employer wants to discuss or release a piece of information may be problematic, because a lot of physicians will clam up, concerned about the civil and criminal penalties in the regulation.
Third, disability injury claims will be much more difficult to manage. For the vast majority of claims simple reports by the treating physician are all that are required to pay and close a claim. Over 70 percent of workers compensation claims are “medical only” and involve no lost time. In these cases, if a properly presented bill for services is consistent with the date and nature of the injury, the insurer or administrator pays the claim promptly without detailed investigations. In a fraction of the cases more detailed medical and other facts must be gathered to justify payment, or continued payment. The adjuster needs to determine if the medical services support a valid workers' compensation claim. Here the adjuster may want to look at the history statement in the provider notes to see if there was a pre-existing condition that was responsible for the injury, or there was other activity that was more likely the cause of the injury (e.g., sporting activity). These cases may involve more extensive records requests. In some cases, there may be questions as to the reasonableness or necessity of the medical treatment being provided. For example, if a worker is diabetic, treatments may need to be longer or different than if the worker were not. Even though the diabetes itself is not work-related, it plays a role in justifying the treatment of the work-related injury. These types of issues may require extensive disclosures of the background medical condition of the worker, in order to justify the current treatment. In such cases, the principles of disclosure and informed consent might be applied. The claimant must be notified that failure to release records may result in a delay or denial of payment for medical and indemnity payments, depending on current state law.
Fourth, healthcare providers vary as to their privacy procedures in order to comply with HIPPA. These regulations require covered entities to establish privacy policies but provide no standard guidelines. As a result, there can be as many different privacy policies as there are doctors, hospitals and health plans. There is no guarantee of uniformity. Therefore, employees must increasingly make an effort to understand the privacy standards the health care provider will use in treating their injured employees and make a determination as to whether their privacy standards pose insurmountable problems. In fact, this evaluation may lead to the employer limiting or avoiding the use of their medical services.
Fifth, state workers compensation laws vary and are dynamic. The Privacy Rule permits covered entities to disclose protected health information to workers’ compensation insurers, State administrators, employers, and other persons or entities involved in workers’ compensation systems, without the individual’s authorization to the extent the disclosure is required by state or other law. However state workers compensation laws vary as to whether the required release of medical information is permitted. In those states where the law supports the employer this clearly is not an issue. In those states where the law is either silent or specifically requires employee consent it will be. That being said, this still does not eliminate the problem of the healthcare provider imposing its privacy standards on the claim anyway.
Sixth, even if healthcare providers do provide information, they may decide to provide only the minimum information necessary. The HIPPA regulations prohibit medical providers from releasing anything more than the minimum information necessary for workers' compensation-related purposes. Who determines what information is necessary and what is extraneous? The regulations place that burden squarely on the shoulders of health care providers. But health care professionals often out of their element when making such decisions and err on the side of caution.
Finally, employers must have a process to comply with HIPPA and implement it consistently. Not only does this include obtaining employee consent. They must have procedures to limit access to the medical information on a need-to-know basis. The employer also becomes responsible for providing notice of information practice, maintaining security on the information the employer is holding, providing appropriate access to that information and giving employees the right to correct and amend any information.
At first blush it may seem that the HPPA regulations make the workers compensation claim process almost impossible to manage. However, it is still possible for the employer to respond promptly to a work-related injury and manage disability injuries in compliance with HIPPA. As with the FMLA and ADA, the key is to understand and stay current with the law itself plus have a good working knowledge of how HIPPA integrates with state workers compensation law.
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