[ Tuesday, December 31, 2002 ]
State Law Preemption. An interesting state law preemption case has already been decided (if you're a BNA subscriber, you can see a summary
here). It's a whistleblower case, United States ex rel. Steward v. The Louisiana Clinic, in the US Federal District Court for the Eastern District of Louisiana. The whistleblowers filed a false claims action against the Louisiana Clinic and its doctors, and the doctors sought a protective order on any medical records used as evidence or disclosed as part of the discovery process. The basis of the false claims lawsuit is that the clinic submitted bills for services performed outside of New Orleans as having been performed in New Orleans (there's higher Medicare reimbursement for services performed in New Orleans than in other areas of Louisiana). Other claims were for "insurance only" billing (i.e., waiving copays) and billing for unnecessary services.
As you might have guessed, the whistleblowers are former employees. The US declined to intervene in the lawsuit, thereby freeing the whistleblowers to bring the suit themselves, on behalf of the US, and to gain a large portion of any fines or penalties if the court determines that the False Claims Act was indeed violated.
The preemption issue is this: there is a Louisiana state statute that allows a non-party patient to sue a physician or other care provider if the care provider discloses, in the course of a lawsuit, confidential medical information about the patient without authorization. Under the Federal Rules of Evidence, and under HIPAA, this disclosure would be allowed. Therefore, the Louisiana statute is actually more stringent than HIPAA, and under the language of HIPAA, more stringent state statutes are nor preempted.
However, the court found that the Louisiana law allows a court to issue an order for disclosure, despite a lack of consent from the patient, if the court determines that the release is proper. Therefore, this part of the Louisiana statute could still be complied with and HIPAA could be complied with. The court's way of doing so was to restrict the use and disclosure of un-redacted information to counsel for the whistleblowers, 2 of his paralegals, and one expert for each party. The court also allowed the government to receive un-redacted copies, since it is the real party in interest to the litigation.
Jeff [10:46 AM]
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