HBA-TYH C.S.H.B. 1928 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1928 By: Maxey Insurance 4/8/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE While private information concerning a patient's medical condition is protected as confidential under many provisions of the law, these protections are scattered throughout the codes, thus leaving loopholes through which such information can be accessed and used. For instance, patients with sensitive conditions that they had believed to be confidential have been the subject of direct marketing of drug treatments. Such marketing is often justified as an attempt to educate patients about better or less expensive treatments; however, the companies who participate in such direct marketing are often financially linked to the companies whose drugs they market and stand to benefit financially by influencing a patient's choice of treatment. C.S.H.B. 1928 provides several measures of protection for patients. It prohibits the acts of selling, sharing, or using, for marketing purposes, any individually identifying patient health information. It allows patients whose health information is disclosed to file a civil suit. Health care entities who violate the prohibition will be subject to disciplinary action by the agency that licenses or regulates them. Additionally, a person who knowingly violates the prohibition will have committed a Class C misdemeanor offense. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 71, V.T.C.S., by adding Article 4590j, as follows: Art. 4590j. LIMITATIONS ON DISCLOSURE OF CERTAIN PATIENT HEALTH INFORMATION Sec. 1. DEFINITIONS. Defines "benefit manager," "health benefit plan," "health care provider," "patient health information," "person," and "third-party administrator." Sec. 2. APPLICATION; EFFECT ON OTHER LAWS. (a) Provides that this article applies to a health care provider, health benefit plan, benefit manager, and any other person who, in the course and scope of the person's employment, business, or professional practice, has access to patient health information. (b) Provides that this article does not supersede or otherwise affect any requirement regarding confidentiality of a patient's personal information that is established under state or federal law. Sec. 3. PROHIBITED ACTS; EXCEPTIONS. (a) Prohibits a person from selling, sharing, or using, for marketing purposes, any individually identifying patient health information. This includes selling, sharing, or using patient health information describing patients who have certain diagnoses or use certain types of drugs in order to solicit an individual patient to use another type or brand of drugs. (b) Prohibits a person from requesting or requiring a patient to sign a consent form authorizing the disclosure or otherwise waive the confidentiality of information described by this section. (c) Provides that this section does not prohibit the transmission of patient health information: (1) from one health care provider to another in the course of providing treatment or referring the patient to another provider for treatment; (2) from a health care provider to the operator of a health benefit plan or person authorized by the operator of a health benefit plan as necessary to process a claim relating to coverage under the health benefit plan; (3) by a health care provider to a state agency authorized by law to collect the information, including the Texas Health Care Information Council or the Texas Department of Health; or (4) by the issuer of a health benefit plan as necessary to obtain reinsurance. (d) Provides that this section does not prohibit: (1) general advertising about a specific health care product or service; (2) a person from requesting and receiving information regarding a particular health-related product; (3) a person from requesting and receiving information regarding the person's own treatment or claims, or those regarding the person's dependent; or (4) a health care provider from recommending a specific treatment, product, or service to an individual patient of that health care provider. Sec. 4. CAUSE OF ACTION. (a) Provides that a person is liable for damages to a patient whose individual health information is disclosed. (b) Provides that a plaintiff who prevails in an action brought under this section is entitled to recover compensatory damages, exemplary damages if authorized under Chapter 41 (Exemplary Damages), Civil Practice and Remedies Code, court costs, and reasonable attorney's fees. Sec. 5. GROUNDS FOR DISCIPLINARY ACTION. (a) Provides that in addition to any other penalty provided by law, a health care provider who violates Section 3 of this article commits an act that constitutes a ground for appropriate disciplinary action by the state agency that licenses, certifies, or otherwise regulates the practice of that health care provider. (b) Provides that an insurer, health maintenance organization, or other person regulated by the Texas Department of Insurance who violates Section 3 of this article commits an unfair or deceptive act or practice in the business of insurance and is subject to the penalties imposed under Article 21.21 (Unfair Competition and Unfair Practices), Insurance Code. Sec. 6. CRIMINAL PENALTY. Provides that a person commits a Class C misdemeanor offense if the person knowingly violates Section 3 of this article. Provides that each violation constitutes a separate offense. SECTION 2.Makes application of this Act prospective. SECTION 3.Effective date: September 1, 1999. SECTION 4. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original bill to change the definition of "health benefit plan" to refer to chapters and articles in the Insurance Code, rather than "this code" (the provisions proposed by this Act are to be added to Title 71, V.T.C.S.), as proposed in the original bill. The substitute modifies the original bill in proposed Section 3 to provide that a person subject to this article may not sell, share or use, for marketing purposes, any individually identifying patient health information, rather than a list of patients containing information through which a patient could be identified. The substitute modifies the original bill by adding a new section 3(c)(4) to include as a transaction that this section does not prohibit: the transmission of patient health information by the issuer of a health benefit plan as necessary to obtain reinsurance. The substitute modifies the original bill in proposed section 6 to provide that each violation constitutes a separate offense. The substitute modifies the original bill to make nonsubstantive format changes and conforming changes.