How HIPAA Regulations Affect Your California Estate Plan
Posted by Janet Brewer on Mon, May 03, 2010 @ 09:26 AM
The U.S. Department of Health and Human Services’ final regulations regarding the privacy provisions of the Health Insurance Portability and Accountability Act (HIPAA) now apply to all health care providers. These rules regulate how health care information is collected by doctors, hospitals and other providers and how it’s shared with health care plans and third-party payors.
HIPPA extends to trustees
Health care providers now must comply with strict rules regarding the privacy of patient information. The regulations require that individually identifiable health information, called “protected health information,” be safeguarded. They apply to health plans, health care providers and clearinghouses, and extend to the patient and anyone acting on his or her behalf, such as a trustee, a health care agent or an attorney-in-fact.
Although HIPAA was intended to protect a patient’s medical privacy, situations may arise in which the release of medical information can be critical to the operation of your estate plan.
HIPAA primer
Under the new regulations, health care providers are prohibited from discussing a patient’s status or releasing his or her medical records to a spouse or other family members unless they obtain written consent from the patient.
Failure to comply can result in a $100 fine for each disclosure violation and criminal penalties. For a knowing privacy rule violation, penalties can include a $50,000 fine and imprisonment up to one year. If the provider makes the violation with the intent to use the health information for commercial gain or malicious harm, the penalty increases to a $250,000 fine and up to 10 years in prison.
Effects on an estate plan
It’s common practice for powers of attorney and trusts to contain a provision stating that an agent or successor trustee can’t act unless you, as the principal under the power of attorney or the trust’s creator, are unable to make decisions for yourself. To avoid placing this burden on a family member, the determination of capacity often is left to a physician. He or she is required, under the document, to certify in writing that you are unable to make decisions before a successor can step in.
Under the new HIPAA rules, a physician can’t provide a successor fiduciary with a written certification of your incapacity unless you’ve previously authorized the release of medical information to the successor. If you haven’t, and no longer have the capacity to consent, the successor cannot obtain certification of your incapacity and, consequently, will be unable to assume responsibility for the management of your assets.
Without the appropriate consent under HIPAA, one option is for an attorney-in-fact to petition the state court for the appointment of a guardian. This is both a time-consuming and expensive process.
Revisions to your estate plan
To avoid court involvement, update your medical directive or health care power to specifically authorize your representative to obtain your medical records in accordance with HIPAA. The medical directive should clearly state the consent and authorization and should reference HIPAA.
Emergencies happen unexpectedly
Because the federal government’s final HIPAA regulations now apply to all health care providers, it’s wise to review and revise your medical directive or health care power of attorney. Taking time to update your plan today can ease the burden on your successor trustee or family member in the case of an emergency.
All the best,
