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Smith v. American Home Products Corp.9/23/2003
Argued August 8, 2003
Presently before this court is a unified motion by defendants, the phenylpropanolamine ("PPA") manufacturers, compelling ex parte physician interviews and seeking judicial approval of a revised medical authorization. Plaintiffs, consumers of PPA who allege injuries caused from the use of the drug, claim that regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub.L. 104-191, 110 Stat.1936 (codified in scattered sections of 18 U.S.C.A., 26 U.S.C.A., 29 U.S.C.A., and 42 U.S.C.A.) effective April 14, 2003 ("HIPAA" or "the Act") preempt the informal discovery procedures permitted under Stempler v. Speidell, 100 N.J. 368, 495 A.2d 857 (1985). Plaintiffs contend that defendants' proposed medical authorization is moot as the standards under Stempler are less stringent than the federal act's requirements for patients' "protected health information" ("PHI"). 45 C.F.R. § 164.501. The issue of HIPAA's preemption of Stempler is one of first impression in New Jersey.
For the reasons set forth below, the court holds that HIPAA is an express but selective preemption of New Jersey law. It does not conflict with the general principles of N.J.S.A. 2A:84A-22.4 and the informal discovery techniques permitted under Stempler. However, the current proposed medical authorization offered by the defense does not comport with HIPAA or the Stempler safeguards. Therefore, the motion is granted in part and denied in part.
I. BACKGROUND
A. HIPAA and the Privacy Rule.
In 1996, the United States Congress enacted HIPAA. One of the primary purposes of the Act is to standardize and increase the efficiency of common electronic transactions in health care through the "administrative simplification" provisions of HIPAA as well as to protect the security and privacy of individually identifiable health information ("IIHI"). Congress entrusted the Secretary of the Department of Health and Human Services with the task of creating national standards to "ensure the integrity and confidentiality of the information" to be collected and disseminated. 42 U.S.C.A. § 1320d-2(d)(2)(A). The regulations promulgating these standards as created by the Department of Health and Human Services became effective on April 14, 2003, and are collectively known as "the Privacy Rule," which sets forth standards and procedures for the collection and disclosure of "protected health information" ("PHI"). The Privacy Rule establishes patients' rights and requires that health professionals implement various procedures regarding the use of and access to health care information. It prohibits "covered entities" from using and disclosing PHI except as required or permitted by the regulations. 45 C.F.R. § 164.501 and C.F.R. § 160.103. There are three categories of "covered entities": (1) health plans; (2) health care clearinghouses; and (3) health care providers. 45 C.F.R. § 160.103.
The Privacy Rule prohibits covered entities from using or disclosing PHI in any form oral, written or electronic except as permitted under the Privacy Rule. 45 C.F.R. § 164.502(a). "Use" and "disclosure" are defined very broadly. 45 C.F.R. § 164.501. "Use" includes an examination of PHI; "disclosure" includes divulging or providing access to PHI. The Privacy Rule is also centered on the concept that, when using PHI or when requesting PHI from another covered entity, a covered entity must make reasonable efforts to limit PHI to the "minimum necessary" to accomplish the intended purpose of the use, disclosure or request. 45 C.F.R. § 164.508. In other words, even if a use or disclosure of PHI is permitted, covered entities must make reasonable efforts to disclos
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