State Senate Backs Patient Privacy Bill

Legislation aimed at protecting patient privacy by fining health care plans up to $250,000 for the unauthorized sharing of confidential records won lopsided approval of the state Senate on Monday.

The bill would prohibit the disclosure of medical information to insurance and pharmaceutical companies and other commercial interests without the patient’s consent.

Carried by Sen. Liz Figueroa (D-Fremont), the measure was filed in response to widespread allegations of breaches in doctor-patient confidentiality by managed health- care organizations.

Patient information already is “shared nationwide in a databank that will boggle your mind,” senators were told by Sen. Jackie Speier (D-Daly City), chairwoman of the Insurance Committee and an industry critic.

On a 34-3 vote, the bill (SB 19) was sent to the Assembly, which has approved similar bills in the past only to have them die in a conference committee or be vetoed.

Sen. Bill Morrow (R-Oceanside), who voted against the proposal, agreed that penalties for violating patient confidentiality should be stiff, but argued that a maximum $250,000 fine per violation was too steep.

The California Healthcare Assn., an industry trade group, opposes the maximum $250,000. Instead, it has urged adoption of a fine capped at $10,000 per violation. Supporters, however, said the visibility of such a large fine was necessary. “There is no other way to get the attention of this industry,” said Sen. Steve Peace (D-El Cajon), also an industry critic.

During debate, Peace recounted a recent incident in which, he said, the privacy of his wife’s medical records was violated by their health maintenance organization.

As a consequence, he said, his family’s “sense of confidence, sense of identity and sense of control have been permanently destroyed.”

“We are looking at a world that has a totally different ethic as far as privacy,” is concerned, Peace said.

The unauthorized disclosure of confidential patient information--such as the sale of personal data without consent--long has been against state law. Current law allows victims to recover compensatory damages, but limits punitive damages to $3,000 and attorney fees to $1,000.

The Figueroa bill also would prohibit a health-care plan from requiring an applicant to waive his or her patient confidentiality rights as a condition of receiving health coverage.

Speier warned that inaccurate information can find its way into a doctor’s records without the patient’s knowledge and can become instantly available in insurance industry databanks. In some cases, she said, such information can be used to reject an applicant for health insurance.

“I would suggest that you need to think twice before you tell a physician anything,” Speier advised.