When considering the proper use or disclosure of patient data, most health care providers look immediately to the Health Insurance Portability and Accountability Act (“HIPAA”) privacy rules. But that may not be enough. As the plaintiff in Isidore Steiner, DPM, PC dba Family Foot Center v. Marc Bonanni learned, state law also must considered. In general, a state law will be applied instead of HIPAA if the state law is more stringent and protective of patients’ protected health information (PHI).

In Bonanni, the Family Foot Center, a HIPAA-covered entity, was seeking to enforce a non-compete agreement with its former employee, a physician. Believing the former employee was soliciting its patients in violation of the agreement, the Center requested its former employee’s patient lists as part of pre-trial discovery. The physician objected on the ground that HIPAA and Michigan law on physician-patient privilege protected information of non-party patients from disclosure without their consent. The Center filed a motion to compel the disclosure.

The trial court denied the motion, reasoning that the names, addresses, and phone numbers of non-party patients were privileged under Michigan law. The Center appealed.

Under HIPAA, a covered entity generally may not use or disclose an individual’s PHI without a written authorization or providing the individual the opportunity to agree or object. However, it may do so for example, when responding to a subpoena or discovery request, upon satisfying certain conditions. 45 CFR 164.512(e). Nevertheless, HIPAA further provides that even this limited exception can be trumped by a more stringent state law that prohibits such use or disclosure of PHI.

The appellate court held that under Michigan’s physician-patient privilege, MCL 600.2157, the right to waive the privilege rests solely with the patient. Further, unlike HIPAA, the privilege did not contain exceptions for disclosing patient information in judicial proceedings. The Court concluded that Michigan’s physician-patient privilege conflicted with HIPAA and provided more stringent protections for the PHI at issue. Therefore, the state’s privilege law trumped HIPAA. The Court affirmed the denial of the Center’s discovery motion. In reaching this result, it rejected the Center’s plea that it could not proceed with its non-compete action without the requested information. The Court stated:

To this, we say that it is not our role to address either the wisdom of a physician’s efforts to restrict with whom a patient may consult or the appropriate business or legal means by which a corporation can effectively protect its practice. Instead, our limited role is to decide whether the names, addresses and telephone numbers of non-party patients are protected from disclosure by law.

Health care providers receive requests for PHI in many different contexts, not just in connection with litigations. This ruling makes clear that when making disclosures of PHI, considering only HIPAA could be risky. Because this analysis is not limited to Michigan (see, for example, recent Ohio decisions, Turk v. Oiler and Grove v. Northeast Ohio Nephrology Associates, Inc.), providers should undertake a detailed analysis of the applicable federal, state and local laws and regulations prior to making any disclosure.

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.