AUSTIN, TX – House Bill 2015 sailed through the Texas House (144-0) and Senate (31-0) and was signed into law last year by Governor Rick Perry.
Now the law – which as of Jan. 1 requires health plans to supply Texas employers with reports on individuals whose total claims exceed $15,000 in one year, including related-claims details such as member ID number, amounts paid, dates of service and applicable procedure and diagnosis codes – has drawn scrutiny from privacy advocates and legislators, including the bill’s author.
The law was designed to give employers an overall picture of employee claims history in a timely manner to purchase the best insurance at the lowest possible cost, according to State Rep. John Smithee (R-Amarillo), the bill’s author.
“There needs to be some balance between the employer, who is paying for healthcare services, and employees who use those services,” he said.
The Texas Association of Businesses supported the bill. President Bill Hammond said, “My hope is the impact (on businesses) will be good decisions on buying health insurance and saving money.”
Samuel Francis, executive vice president and general counsel at JI Specialty Services and board member of the Texas Association of Benefit Administrators, which supported the bill, stressed that, under the law, protected health information may only be disclosed once proper certification by the employer plan sponsor is delivered in accordance with HIPAA regulations and Texas law.
“The new Texas law is in full compliance with federal law and rules,” he said.
“Employers who have done the work to put proper safeguards in place in full compliance with federal law take privacy very seriously and have safeguards in place to protect individually identifiable information,” he added.
Deborah Peel, MD, founder of Patient Privacy Rights, questioned the requirement for specific data and the ability by employers to keep that data private and not exploit it. “The idea that they need information to negotiate premiums or rebid contracts is completely false,” she said.
Peel said global costs from the previous year should be sufficient to determine forecasting.
“The bill will obviously help some of the requestors of the data make more educated decisions,” said Margaret Jarvis, spokesperson for Blue Cross Blue Shield of Texas (BCBSTX). “But keep in mind that many large employers have already had access to aggregate/collective information reported for their group that can be used for cost forecasting and benefit-needs forecasting. This data is just more specific.”
Peel disputed statements that the law complies with HIPAA, and she is not alone. The Texas Association of Health Plans raised the privacy issue during the bill’s debate, said executive director Jared Wolfe.
“There is some trepidation among health plan legal departments that they are being given the option of violating federal law, HIPAA, by complying with HB 2015 or risking violating state law in an effort to comply with HIPAA,” he said.
“We have also sought clarification at the federal level on whether complying with the bill will lead plans to run afoul of HIPAA, but we have not received a response,” he said.
UniCare, an affiliate of WellPoint, is concerned about the law’s impact on patient privacy, said spokesperson Tony Felts.
“At this time, we are attempting to comply with the bill as passed and are carefully considering how implementation of the law may impact UniCare and its members,” he said.
Smithee said no consumer groups testified during the bill’s debate, making him suspicious that health plans are generating the commotion.
Still, he acknowledged, “One of the problems is we frankly don’t have enough history. What I’m really interested in is real-life problems, not theories of what could happen.”
What will be valuable to legislators next session (January 2009), he said, is hearing if real patient issues arise that require the law “to be corrected to the extent that it needs to be corrected.”
State Senator Rodney Ellis (D-Houston) agreed.
“As Texas is the first state to pass such a law, my colleagues in the legislature and I will be reviewing the effect of HB 2015 this coming session,” he said.
“We need to tread very carefully when it comes to protecting the privacy rights of hardworking Texans,” he added. “When employers are given access to an individual employee’s sensitive medical information, the potential for abuse is far too high.”