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http://www.nytimes.com/2002/08/10/politics/10PRIV.html

Bush Rolls Back Rules on Privacy of Medical Data

By ROBERT PEAR

ASHINGTON, Aug. 9 — The Bush administration today formally rolled back some major protections for the privacy of medical records adopted by President Bill Clinton. But at the same time, it also set new standards for the use of personal information to market prescription drugs and other health care products.

The new rules, the first comprehensive federal standards for medical privacy, will affect virtually every doctor, patient, hospital, drugstore and health insurance company in the United States.

The rules are the final version of changes proposed in March, embody more than five years of work and have the force of law. Most health care providers and insurers have to comply by April 14 or face civil and criminal penalties, including a $250,000 fine and 10 years in prison for the most serious violations.

The administration decided to abandon the core of the Clinton rules, a requirement that doctors, hospitals and other health care providers obtain written consent from patients before using or disclosing personal medical information for treatment or paying claims. Instead, providers will have to notify patients of their remaining rights and have to make "a good-faith effort to obtain a written acknowledgment of receipt of the notice."

Administration officials made the change despite opposition from consumer advocates, patients' rights groups and psychiatrists.

The secretary of health and human services, Tommy G. Thompson, said the rules struck a common-sense balance.

"The prior regulation, while well intentioned, would have forced sick or injured patients to run all around town signing consent forms before they could get care or medicine," Mr. Thompson said.

The rules guarantee patients access to their medical records and limit the information that can be disclosed for various purposes.

The issue of medical privacy now goes to the political arena. Some Democrats are already making an issue of the new rules.

Senator Edward M. Kennedy, Democrat of Massachusetts, said the administration was "favoring the interests of powerful corporations over those of ordinary Americans."

In a recent speech, Terry McAuliffe, chairman of the Democratic National Committee, said the White House seemed to worry less about the privacy of medical records than about the secrecy of Vice President Dick Cheney's energy task force.

Under this administration, Mr. McAuliffe said, "it's O.K. to reveal personal medical information about the American people, but when the oil companies meet with policy makers to ask for special favors, that's guarded like a state secret."

The new rules won praise from the American Hospital Association and the American Association of Health Plans, which represents health maintenance organizations.

A spokeswoman for the H.M.O. group, Susan M. Pisano, said, "The final rules represent a balanced, workable approach that protects privacy without undermining patients' health care."

The rules appear to set strict standards on using personal data from patients for marketing. They prohibit drugstores from selling personal medical information to a drug company or other business that wants to sell products or services.

In the last few years, some drug companies have paid pharmacies for customer health information and used it to try to sell products to individuals with conditions like osteoporosis, diabetes or depression.

Mary R. Grealy, president of the Health Care Leadership Council, which represents large health care corporations, said the new rules were "stronger and tougher" than the Clinton rules on marketing.

Representative Edward J. Markey, Democrat of Massachusetts, said the Bush administration had made some improvement in the marketing rules, but left some loopholes.

"The final regulations appear to shut down some of the existing avenues of commercial exploitation of personal medical data by third parties without the knowledge or consent of the patient," said Mr. Markey, who is co-chairman of the Congressional Privacy Caucus. "But the regulations still allow a drug company to pay a pharmacy to act as its agent and allow the pharmacy to do the marketing without disclosing the financial arrangement."

Although a drugstore could not sell health information on a patient to a drug company, Mr. Markey said, the drug company could pay a pharmacist to recommend that patients switch from one drug to another. The definition of "marketing" in the new rules excludes communications to a patient by a health care provider who is promoting goods and services offered by the provider itself.

An administration official confirmed that reading of the rules.

Dr. Paul S. Appelbaum, president of the American Psychiatric Association, criticized the decision to drop the consent requirement.

"This abolishes the traditional control that patients have had over access to their medical records," Dr. Appelbaum said. "It may discourage patients from revealing information to their physicians that's necessary for their treatment, and it may encourage doctors not to record important but embarrassing information in the patients' medical charts."

Lobbyists for hospitals, drugstores and insurance companies saw the Clinton rules as unworkable. Pharmacists had said it would be difficult to obtain written consent from a patient whose doctor phoned in a prescription that was picked up by a neighbor or a relative.

The Mayo Foundation of Rochester, Minn., said the consent requirement was an "affront to patients" and "bad medical practice," because it would force doctors to secure written consent from patients before even inquiring about their problems.

But Democrats and consumer groups said those standards were needed because of an explosion in information technology that permitted the dissemination of medical data with the click of a computer mouse.

The new rules include these provisions:

¶In general, information from a person's medical records cannot be disclosed to an employer unless the patient specifically authorizes the disclosure.

¶Patients can review their medical records and request changes to correct errors.

¶Researchers can use medical records to track an outbreak of disease if they strip the records of the patients' names, addresses, Social Security numbers and other "direct identifiers."

The federal rules establish minimum protections for medical privacy. State laws providing more protection will still apply.

Under the rules, the "incidental use or disclosure" of personal information is allowed. For example, doctors can still use sign-in sheets in waiting rooms and talk to patients in semiprivate hospital rooms without fear of violating the rules.

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