Physicians' legal appeal seeks to overturn HIPAA

May 12, 2003

A group of South Carolina physicians and the South Carolina Medical Association (SCMA) plan to appeal a lower court ruling upholding the constitutionality of the Health Insurance Portability and Accountability Act. Last month, the 4th U.S. Circuit

A group of South Carolina physicians and the South Carolina Medical Association (SCMA) plan to appeal a lower court ruling upholding the constitutionality of the Health Insurance Portability and Accountability Act.

Last month, the 4th U.S. Circuit Court of Appeals upheld an August 2002 ruling against the physicians. It found that Congress had acted appropriately in delegating legislative power to the Department of Health and Human Services to draft and enforce the HIPAA regulations.

The three-judge circuit court stated that Congress had "laid out an intelligible principle to guide agency action."

The physicians maintain, however, that certain provisions of the rules exceed HHS' authority. They argue, for example, that privacy regulations should only apply to electronic health information. But the circuit court stated that such a narrow interpretation would achieve the opposite of the rule's intent by discouraging providers from computerizing personal health information.

The SCMA originally filed suit in federal court in South Carolina in July 2001 against HHS, seeking to overturn the HIPAA privacy rules promulgated in December 2000 by the Clinton administration and allowed to take effect by the Bush administration in April 2003.

The lawsuit was joined by the Louisiana State Medical Society. It challenged the constitutionality of the regulations, arguing that Section 264 of HIPAA "unlawfully allowed the Secretary to create patient privacy regulations with virtually no congressional guidance, nor even the legislative establishment of a federal patient privacy program."

The suit also challenged a HIPAA provision that permits state laws to govern disclosures and use of medical information where state laws are deemed to be more stringent than the federal regulations, arguing that the determination of whether state laws are more stringent is "no easy task." Thus, the regulations are too vague to be enforced, especially through criminal penalties.

In August 2002, a federal judge dismissed the lawsuit and found that HHS did have sufficient authority to draft the rules. The groups appealed the case to the 4th Circuit Court in January.
The appeal will be filed with the U.S. Supreme Court.