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From Health Law Daily, February 4, 2015

Federal court passes torch to Hawaii high court in HIPAA discovery challenge

By Bryant Storm, J.D.

The U.S. district court for the District of Hawaii reserved ruling on a question related to the discoverability of de-identified patient information in an unfair competition case between two healthcare providers. The court reserved judgment so that it could certify the question of a Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191) violation to the Hawaii Supreme Court. (Pacific Radiation Oncology, LLC. v. The Queen’s Medical CenterJanuary 30, 2015, Kobayashi, L.).

Competition. Pacific Radiation Oncology, LLC, (PRO), through its six physicians, performed procedures at Queen’s Medical Center because it was the only treatment facility on Oahu that was both licensed by the Nuclear Regulatory Commission and had an operating room—qualities that PRO required to provide services to its patients. Following concerns that PRO was diverting Queen’s patients, Queen’s made a unilateral decision to restrict use of the operating room to physicians who were Queen’s employees, effectively terminating PRO physician privileges. PRO and its physicians sued Queen’s and the Queen’s board members individually, asserting unfair competition and interference with their business under Hawaii law (see Hospital’s HIPAA violation does not help doctors’ unfair competition case, September 23, 2014).

Appeal. At an earlier stage in the litigation, PRO requested an injunction to prevent Queen’s from acquiring a list of patients, their physicians, and diagnoses under subpoena. The court held that PRO did not satisfy the injunction requirements, reasoning that although the disclosure constituted a HIPAA violation, PRO’s unfair competition claims were unrelated. The court instead treated the request for an injunction as a request for sanctions, which the court granted. PRO and its physicians initiated a discovery appeal. PRO moved to enjoin Queen’s from making any further disclosures of the patient list. Additionally, two patients, designated as John and Mary Doe, intervened in the action and argued, on appeal, that Hawaii state law prohibited production of the patient information because the patients and their medical information were not at issue in the case. The patients also argued that de-identification would not serve as an acceptable remedy because Queen’s already had the complete identified medical records in its possession.

De-identified. The court set out to decide whether the patient medical records at issue were relevant and whether the de-identified versions had to be produced. The court held that the medical records were relevant to Queen’s defenses. Specifically, the court reasoned that Queen’s restricted PRO physician privileges out of a concern that PRO physicians were “improperly diverting patients” they saw at Queen’s facilities. The court next addressed the issues of whether production of the medical records violated the Hawaii constitution and evaluated whether de-identification was possible under the circumstances. The court reasoned that due to the limited dissemination of the previously disclosed information, de-identification remained a practical solution to the discovery problem. Although, the district court acknowledged that at least one physician and a staff member would be able to re-identify patient records after losing access to the previously disclosed information, discovery procedures could be developed to eliminate risks associated with such isolated cases.

Hawaii. The court then considered—given the fact that de-identification remained possible—whether the Hawaii Constitution permitted de-identified disclosure of the medical records. The court reasoned that Hawaii law presented unique challenges because Hawaii was one of few states to include an express privacy right in its constitution. The court reasoned that the current situation differed from any existing Hawaii case law because the issue centered on information that Queen’s already had in its possession and had a compelling interest in retaining—in a de-identified form—for litigation purposes. In light of the lack of controlling case law and due to the court’s unwillingness to predict how the Hawaii Supreme Court would rule on the issue, the district court decided to certify to the Hawaii high court the question of “whether a non-party patient’s de-identified medical records are discoverable in a civil action between the patient’s physician and the facility where the patient had a consultation and/or treatment.” The district court indicated that it would provide the parties an opportunity for limited briefing following the Hawaii Supreme Court’s response.

The case is No. 12-00064 LEK-KSC.

Attorneys: Clare E. Connors (Davis Levin Livingston Grande) for Pacific Radiation Oncology, LLC, and PRO Associates, LLC. Claire Wong Black (Alston Hunt Floyd & Ing) for The Queen's Medical Center, and Queen's Development Corp.

Companies: Pacific Radiation Oncology, LLC; PRO Associates, LLC; The Queen's Medical Center; Queen's Development Corp.

MainStory: TopStory CaseDecisions HIPAANews EmploymentNews HawaiiNews

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