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From Health Law Daily, June 3, 2013

Court lifts 33-year-old ban on disclosure of Medicare payments to physicians

By Paul Clark

A Florida district court has lifted a 33-year-old “permanent” injunction that has forbidden HHS from disclosing Medicare reimbursement amounts for individual physicians (Florida Medical Association, Inc. v Dept. of Health, Education & Welfare, May 31, 2013, Howard, M). The decision came about in part because of the actions of two parties: Jennifer Alley, owner of Real Time Medical Data (RTMD), which uses Medicare data to assist hospitals in strategic planning and marketing; and Dow Jones and Company, owner of the Wall Street Journal, which sought access to specific Medicare data for a series of articles on Medicare it was preparing.

Background. In March 1977, the Secretary of the Department of Health, Education and Welfare (now HHS), which administered the Medicare program, released a list identifying physicians or groups of physicians who received $100,000 or more in Medicare reimbursement in 1975. The information as released was determined to be “inaccurate in many ways” (Fla. Medical Ass’n v. Dep’t of Health Education and Welfare, 479 FSupp 1291 (M.D. Fla. 1979)). That same month, the Secretary published a rule (42 FR 14703) that adopted “the principles of the Freedom of Information Act (FOIA) as guiding rules for the disclosure of information by [HHS].”

In November 1977, the Secretary directed its carriers to publish a list identifying all physicians and providers who received Medicare reimbursement that year. In March 1978, the Florida Medical Association and six individual physicians filed suit to enjoin the scheduled disclosures, alleging that further release of such information would violate FOIA, the Privacy Act, the Trade Secrets Act, and the U.S. Constitution. A temporary restraining order was granted in April 1978, and a permanent injunction was granted in October 1979 by U.S. District Court for the Middle District of Florida. At the time, the district court determined that, through examining competing public and private interests, the proposed disclosure “at least in the individually identifying manner,” violated FOIA.

In November 1980, HHS published a modification of its disclosure policy in the Federal Register (45 FR 79172, Nov. 28, 1980), stating that “the public interest in the individually identified payment amounts is not sufficient to compel disclosure in view of the privacy interests of the physicians.”

The injunction was modified in 1982 so HHS would not be prevented from disclosing individual payment information regarding physicians suspected of unlawful acts (Fla. Medical Ass’n v. Dep’t of Health Education and Welfare, No. 78-178-Civ-J-S (M.D. Fla. Dec. 2, 1982)).

Alley decision. In 2009, the Court of Appeals for the Eleventh Circuit ruled that Jennifer Alley’s company, RTMD, was not entitled to HHS' records for all Medicare claims paid in 2002 for procedures performed in Florida, Georgia, Mississippi, and Tennessee because complying with the company's FOIA request would violate the permanent injunction (Alley v HHS, 11th Cir., Doc. No. 08-16914, Dec. 18, 2009). The court instructed Alley that if she wished to raise issues regarding whether the 1979 permanent injunction should be vacated or modified, she could do so in the Florida district court which issued the permanent injunction.

Wall Street Journal articles. In 2010 and 2011, in preparation for a series of articles on Medicare, the Wall Street Journal filed a FOIA request seeking access to the Carrier Standard Analytic File, a set of Medicare data. HHS initially refused to honor the request, but the agency and the Journal eventually reached a settlement where the Journal was allowed to purchase from HHS a portion of the Carrier File with all billings for approximately 5 percent of Medicare recipients. The agreement also allowed Dow Jones to challenge the permanent injunction.

Arguments against injunction. Both RTMD and Dow Jones argued that the injunction should be vacated under Rule 60(b)(5) of the Federal Rules of Civil Procedure as being “no longer equitable.” RTMD argued that “because the balance between the physicians’ privacy interests in maintaining Medicare reimbursements confidential and the public interest in disclosure of Medicare reimbursement amounts has changed greatly since 1979,” continued enforcement of the injunction was a “manifest injustice.”

Dow Jones focused on the public interest in the disclosure of Medicare data, noting that the program “has grown twenty-fold in nominal dollars, and nearly three-fold as a percentage of the federal budget” since the permanent injunction had gone into effect.

HHS further argued that a subsequent significant change in the law made continued enforcement of the 1979 injunction no longer equitable. HHS cited Edison v Dep’t of Army (672 F.2d 840 (11th Cir. 1982)) in which the court “held that the Privacy Act does not authorize injunctive relief against a government agency to prevent it from disclosing information.”

The Florida Medical Association and the American Medical Association countered that neither the facts nor the law has changed since 1979, and that neither RTMD nor Dow Jones have made a “clear showing of grievous wrong” that would justify lifting the injunction.

The district court in this decision stated that the Eleventh Circuit’s proscription of available Privacy Act relief in Edison constitutes a significant change in subsequent law, “which renders continued enforcement of the 1979 FMA Injunction inequitable and detrimental to the public interest.” Further, the court stated that the Privacy Act upon which the 1979 Injunction is based, is “no longer good law,” and thus the permanent injunction “rests upon a legal principle that can no longer be sustained.”

The case number is 3:78-cv-178-J-34MCR.

Attorneys: Jack R. Bierig (Sidley Austin LLP) for Florida Medical Association, Inc. and American Medical Association. James C. Luh, U.S. Department of Justice – Civil Division, for the Department of Health, Education and Welfare.

Companies: Florida Medical Association, Inc.; American Medical Association; Department of Health, Education and Welfare; Blue Shield of Florida, Inc.; Group Health, Inc.

MainStory: TopStory CaseDecisions CMSNews ConfidentialityNews FloridaNews

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