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June 14, 2000, Wednesday

SECTION: PREPARED TESTIMONY

LENGTH: 1495 words

HEADLINE: PREPARED TESTIMONY OF NICOLE BEASON ESTHER PETERSON FELLOW WASHINGTON OFFICE, CONSUMERS UNION

BEFORE THE HOUSE COMMITTEE ON BANKING AND FINANCIAL SERVICES

SUBJECT - THE MEDICAL FINANCIAL PRIVACY PROTECTION ACT

BODY:
Consumers Union1 (CU) appreciates the opportunity to testify about medical and financial privacy protection, and the sharing of medical information. CU has advocated for medical privacy for many years. We recently filed comments with the Department of Health and Human Services on their proposed rule for Standards for Privacy of Individually Identifiable Health Information.

Consumers Union believes that any legislation on medical privacy should provide consumers (1) with the right to amend and/or correct their health information records; (2) have access to their medical records, and decide whether to release individually identifiable medical or financial information, the "opt-in" approach. We also believe that health care providers, financial institutions and other holders of health and financial information have a duty to maintain the confidentiality of individually identifiable health information and should be held accountable for protecting an individual's privacy interest. Because H.R. 4585 addresses these issues, Consumers Union supports Chairman Leach's legislation, but believes it should be strengthened. Americans support strong federally mandated protections for the privacy of individually identified health information. In 1993, a Lou Harris poll found that 97% of those who were surveyed believed that protecting their medical privacy was important, and 36% found that it was absolutely essential. Another poll showed that 96% of Americans believed that rules should be implemented to state which individuals have access to medical records and the information that they can obtain. My testimony today will focus on issues that are of primary concern to consumers -- notice and consent, sharing of information within multi-business corporations, and the ability to amend and correct their information.

The bill provides that a financial institution may not disclose any consumer's individually identifiable health information unless it has provided clear and conspicuous written notice, an opt-in measure for consumers, and has obtained written consent by the consumer that has not been withdrawn. Consumers should be given written notice in plain language of how their individually identifiable health information will be used and by whom. This notice should explain which information will be collected, for what purpose it will be used, how it will be protected, and the consequences of providing or withholding requested information.

Individually identifiable health information provided to a financial institution by a consumer should not be transmitted to anyone else including affiliates and third parties without the consumer's informed consent. The fact that the bill provides that consumer consent has to be given before the release of private health information can be made is of utmost importance. Personal information should not be shared unless consumer authorization has been secured for a specific use. There should also be special procedures implemented for those who are disabled. This is important in such cases where a disabled person is incapable of giving written consent. There needs to be procedures in place to allow a fiduciary to act on the individual's behalf. This "opt-in" measure affords greater privacy protection for consumers because it allows them to give informed consent to share their highly sensitive health information before that information can be shared by financial institutions.

To protect medical privacy, it is important that the "opt-in", which waives the privacy interest, should be clear. Because consumers may never read these broad forms, specific disclosures need to be given regarding medical privacy. General, boilerplate consent forms, which contain provisions that allow private information to be dispersed to a broad range of entities deserve scrutiny.

In addition to covering the sharing of information with third parties, this bill extends those protections to the sharing of information with affiliates. This makes clear the intent of the bill is to ensure that health information is not shared with any other party without the consumer's consent. Many consumers do not understand the distinctions between affiliates and third parties. Financial institutions, especially in the aftermath of financial modernization, may consist of a family of companies. Those companies may offer everything from insurance to investment products. If the bill did not cover affiliates, health information could be shared throughout all these companies and could be used inappropriately.

The bill provides that a financial institution shall amend, correct, or delete material information identified by a consumer that is materially incomplete or inaccurate, or shall notify the consumer of its refusal to do so. In doing so, the institution must give reasons for its refusal, the identity of the entity that created the information, and refer the consumer to that person in order to amend or correct the information, or file a statement of what the consumer believes should be the correct information.

Consumers should have the right to ensure the accuracy of their own health information. Consumers should also have the ability to amend and correct inaccurate information. Should a consumer consent to sharing their health information, inaccurate information may have serious consequences for them. For example, they could be declined insurance coverage because their records falsely indicate that they have a poor medical history. Therefore, it is important that a proper system be implemented to allow consumers to amend and/or correct any mistaken or inaccurate information. It is also important for the consumer to receive notice of any refusal and the identity of the original creator of the disputed information.

The Fair Credit Reporting Act can serve as a model for the regulators to use to implement this requirement. Specifically, we are concerned that one of parties who has a vested interest in this information is not allowed to make a blanket determination as to whether the disputed information is included or shred with other parties. Though the bill allows a consumer to receive information about the original creator of the disputed information, covered entities may not implement full and fair procedures to handle discrepancies in individuals' medical records. They should not be allowed to automatically deny a consumer's request to amend and correct medical information. The FCRA provides a proper framework for giving consumer's the ability to amend and correct inaccurate information, because it provides a heightened standard of fairness.

We believe that the FCRA is relevant in this context because it governs the accuracy of information contained in financial records, the importance of which is similar to medical information. Therefore, medical records should be afforded, at a minimum, the same level of protection that is given to financial records under the FCRA.

There are additional concerns about H.R. 4585 that we share with other consumer advocates. The exceptions, if any, should be limited. The bill should not contain any loopholes that would allow financial institutions to share a consumer's medical information counter to the intent of this bill. Also, a financial institution should not be allowed to use health information about a consumer without the consumer's consent, not just for decisions regarding a loan or credit, but for any product or service offered by the institution to the consumer. We are also concerned about health information that may already be in the financial institution's possession. If the intent of this bill is to stop information sharing, then it should apply prospectively to information that banks have already obtained.

Consumers Union appreciates the opportunity to testify on this important issue. Consumers care about the privacy of their health information and this bill will help to protect that information when dealing with increasingly complex transactions in the financial services industry.

NOTES

1. Consumers Union is a nonprofit membership organization chartered in 1936 under the laws of the State of New York to provide consumers with information, education and counsel about goods, services, health, and personal finance; and to initiate and cooperate with individual and group efforts to maintain and enhance the quality of life for consumers. Consumers Union's income is solely derived from the sale of Consumer Reports, its other publications and from noncommercial contributions, grants and fees. In addition to reports on Consumers Union's own product testing, Consumer Reports with approximately 4.5 million paid circulation, regularly, carries articles on health, product safety, marketplace economics and legislative, judicial and regulatory actions which affect consumer welfare. Consumers Union's publications carry no advertising and receive no commercial support.

END

LOAD-DATE: June 15, 2000

Document 14 of 124.


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