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10/18/2008
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George V. Hulme
George V. Hulme
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New Calif. State Legislation Threatens Stiff Medical Privacy Penalties

Two new state medical privacy laws, AB211 and SB541, make it possible for institutions and individuals to be fined up to $250,000 for being lax when it comes to the medical privacy of California residents. It's about time.

Two new state medical privacy laws, AB211 and SB541, make it possible for institutions and individuals to be fined up to $250,000 for being lax when it comes to the medical privacy of California residents. It's about time.The fines can't roll enough as far as I'm concerned.

From this story, which originally appeared in the AIS's Health Business Daily:

Hospitals and other covered entities in California may have to beef up their privacy and security compliance programs in light of recently enacted state legislation that slaps stiffer penalties on entities and employees who violate patient privacy. The legislation, approved in mid-September and signed by Gov. Arnold Schwarzenegger (R) on Sept. 29, follows privacy breaches of several high-profile celebrities, including singer Britney Spears and California First Lady Maria Shriver.

We covered the Britney Spears UCLA fiasco when that story broke, and I delivered an overview of these two new California laws on my other blog at TransformationEnablers.com.

In a nutshell, AB211 requires health care providers to take appropriate safeguards to protect patient medical information, while SB541 sees that those in violation could be penalized $100 a day, up to $250,000.

Some say that these security requirements aren't necessary, because we already have HIPAA. This quote is from the same story as above:

"There is an argument to be made that a law like this isn't absolutely necessary, because certainly HIPAA required reasonable safeguards of patient information or protected health information," says Reece Hirsch, a partner in Sonnenschein Nath & Rosenthal's San Francisco office.

Still, the California legislation is significant in some respects, he tells RPP. It takes data-security concepts found in federal law and applies them at the state-law level, he says.

"Perhaps most significantly, it also attaches a whole new regime of fines and penalties related to violations of those standards," Hirsch adds. "Some people might say the HIPAA privacy and security rule has not been very vigorously enforced thus far by HHS. This sort of provides a basis for state authorities to impose some fairly significant penalties when there is a perceived privacy or security breach."

I say the stronger argument is that HIPAA has not been vigorously enforced, and it's about time a state has stood up to do so.

California set the precedent with SB 1386, and the state is about to do it again.

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