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Privacy, Workers' compensation, Protected Health Information, Federalism, Ex parte communications


This Article is the first to address the challenges of federalism in protecting medical privacy in workers’ compensation after the promulgation of the HPR and to propose legal change. The Article argues that workers’ compensation programs must align with the federal privacy protections of the HPR and proposes actions for the U.S. Department of Health and Human Services (HHS) and states to remedy departures. Part I discusses the complex relationship between the HPR and workers’ compensation. This relationship is often misunderstood by legislatures and courts, compounding the challenges of federalism in this area. Specifically, Part I addresses the HPR’s § 164.512(l) exception, permitted and authorized disclosures under the HPR, and the scope of such disclosures under legal and practice of medicine restrictions.

Part II examines preemption challenges under the HPR and health information policy. The HPR’s § 164.512(l) exception and standard preemption provisions are discussed in the context of HHS’s intent to facilitate administrative proceedings, seek a balanced exchange of information between employees and employers, and prevent fraud. Current judicial interpretation of § 164.512(l) stands in stark contrast to these intentions. Courts assume § 164.512(l) is a blanket exclusion from federal privacy protections, rather than an exception that must be read “through,” or interpreted in the spirit of, the HPR. While the HPR allows states to develop privacy protections consistent with the Rule, states fail to fill in the legislative gaps given the limited reach of state constitutional provisions, the routine waiver of statutory privacy protections in the context of workers’ compensation, and the ineffective statutory limitations on scope of PHI disclosure.

Part III provides the first published survey of states’ response to protecting workers’ privacy. It examines four areas: scope of PHI disclosure in workers’ compensation proceedings, legality of ex parte communications between parties and treating or examining physicians, requirements for notice of such communications, and requirements for protective orders governing disclosure of PHI.

Part IV argues that the gap in legal protection created by § 164.512(l) highlights a federalism relationship best understood as “symbiotic federalism,” whereby different levels of government are mutually dependent. While the HPR exclusion recognizes states’ historic role in administering workers’ compensation programs and assumes that they are in the best position to establish privacy protections to administer claims efficiently, the HPR also serves as a floor for privacy protection. Thus, this Part argues § 164.512(l) affords states opportunities for developing privacy protection but does not authorize legal departures that violate the spirit of the HPR. As a result, HHS must clarify the meaning of § 164.512(l) and encourage states to comply with it. Compliance requires states to create law that imposes meaningful restrictions on PHI disclosures in workers’ compensation proceedings, narrowly tailoring them to what is necessary to administrate claims. If states fail to comply, conflicting state workers’ compensation statutes must be preempted. Additionally, if HHS authorizes ex parte communications, the agency could require notice and protective orders for PHI disclosures.

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Indiana Law Journal