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HIPAA: OCR Releases New FAQs Clarifying Disclosures Amongst Covered Entities

On June 26, 2019, the Department of Health and Human Services Office for Civil Rights (OCR) issued two new FAQs that clarify:

  1. The parameters around covered entities sharing protected health information (PHI) for a recipient covered entity’s health care operations; and

  2. That once a covered entity receives PHI under HIPAA, the recipient covered entity may use and disclose it without individual authorization in any way permitted by HIPAA (even if different than the reason the covered entity initially received the PHI).

These FAQs, although focused on health plans, clarify for all covered entities the types of disclosures of PHI that are permitted for a recipient covered entity’s health care operations and that a covered entity is not restricted by HIPAA to only using and disclosing PHI for the purpose it was initially received.

FAQ 1: Disclosures for the Recipient’s Health Care Operations

The first new FAQ addresses the ability of one covered entity to disclose PHI to another covered entity for the recipient covered entity’s health care operations. Covered entities increasingly seek to share PHI for health care operations purposes in today’s interconnected world and HIPAA’s parameters around such disclosures have historically been misunderstood. 

HIPAA permits a covered entity to disclose PHI to another covered entity for the recipient’s health care operations activities, if:

  1. Each covered entity either has or had a relationship with the individual whose PHI is being requested;

  2. The PHI pertains to such relationship; and

  3. The disclosure is for a purpose listed in paragraph (1) or (2) of the definition of “health care operations” or for the purpose of health care fraud and abuse detection or compliance.

45 C.F.R. § 164.506(c)(4).

Paragraphs (1) and (2) of the definition of “health care operations” include the following activities:

  1. Conducting quality assessment and improvement activities, including outcomes evaluation and development of clinical guidelines, provided that the obtaining of generalizable knowledge is not the primary purpose of any studies resulting from such activities; patient safety activities; population-based activities relating to improving health or reducing health care costs, protocol development, case management and care coordination, contacting of health care providers and patients with information about treatment alternatives; and related functions that do not include treatment.

  2. Reviewing the competence or qualifications of health care professionals, evaluating practitioner and provider performance, health plan performance, conducting training programs in which students, trainees, or practitioners in areas of health care learn under supervision to practice or improve their skills as health care providers, training of non-health care professionals, accreditation, certification, licensing, or credentialing activities.

The OCR’s FAQ response clarifies that since case management and care coordination are among the activities listed in paragraph (1) of the definition of health care operations, if Health Plan A (a covered entity) provides health insurance to an individual who receives access to the provider network of another plan provided by Health Plan B, Health Plan A could disclose PHI to Health Plan B so that Health Plan B can coordinate the individual’s care, without individual authorization. The OCR included a reminder that the disclosures remain subject to HIPAA’s minimum necessary requirements.

FAQ 2: Uses and Disclosures by Recipient Covered Entity that Differ from Reason PHI was Received Initially

The second FAQ clarifies that if a covered entity has received PHI under HIPAA, the recipient covered entity can use and disclose PHI as permitted under HIPAA without individual authorization. This is the case even if the covered entity initially received the PHI for a different purpose. The FAQ then specifically addresses health plans using PHI they have received for another purpose for their own marketing communications.

HIPAA prohibits covered entities from using or disclosing an individual’s PHI for “marketing” purposes without an authorization, subject to limited exceptions. 45 C.F.R. § 164.508(a)(3). However, the definition of “marketing” excludes, among other things, communications to describe a health-related product or service (or payment for such product or service) that is provided by, or included in a plan of benefits of, the covered entity making the communication, unless the covered entity receives financial remuneration in exchange for making the communication.

For example, if Health Plan A discloses PHI to Health Plan B, Health Plan B can then use that PHI as permitted by HIPAA. HIPAA would permit Health Plan B to use the individual’s PHI to send communications about Health Plan B’s products and services (e.g., a health plan that may replace the individual’s current health plan), without individual authorization, assuming Health Plan B does not receive remuneration for sending the communication and complies with any applicable business associate agreements. 

OCR’s FAQs are key to understanding how the OCR interprets HIPAA’s regulations. These new FAQs are likely to be heavily relied on by covered entities as they use and disclose PHI for care coordination, case management, and other purposes going forward.  

© 2020 Foley & Lardner LLPNational Law Review, Volume IX, Number 179


About this Author

Jennifer Hennessy, Foley Lardner Law Firm, Privacy Security and Healthcare Attorney

Jennifer J. Hennessy is a privacy and security and health care regulatory attorney with Foley & Lardner LLP. Her practice includes advising businesses on compliance with state and federal data privacy and security laws. She assists covered entities and business associates in complying with the HIPAA Privacy and Security Rules, and also advises businesses and individuals on compliance with state data privacy laws and federal law 42 C.F.R. Part 2, Confidentiality of Alcohol and Drug Abuse Treatment Records. She frequently guides clients through data incident management...

Jennifer L. Rathburn iFoley & Lardner LLP Milwaukee data protection programs, data incident management lawyer

Jennifer L. Rathburn is a partner with Foley & Lardner LLP. Ms. Rathburn focuses on counseling clients on data protection programs, data incident management, and breach response and recovery, as well as the monetization of data, the Health Insurance Portability and Accountability Act (HIPAA), and other privacy and security issues. She is one of the founders of the Midwest Cyber Security Alliance and has a deep understanding of the complex risk, operational, and legal issues companies must address to maintain the confidentiality of, access to, and integrity of their data.

As a member of the firm’s Technology Transactions & Outsourcing and Privacy, Security & Information Management Practices, Jennifer routinely helps clients prepare for and respond to data security incidents, from preparing incident response plans, advising on cybersecurity programs, and handling the breach notification response process. Her depth of experience in this area and her collaboration with IT, risk, forensic, dark web, communication/PR, and other data experts provides a multi-disciplinary, practical approach to client issues.

Additionally, Jennifer guides clients in all aspects of preparing for and maintaining compliance with U.S. privacy and data security laws as well as the EU’s General Data Protection Regulation (GDPR). Such efforts include conducting readiness assessments; performing data mapping and inventory; reviewing and revising privacy, data security, and incident response policies and plans; updating customer- and employee-facing privacy and consent notices as well as third-party vendor templates and agreements; evaluating the appointment of a Data Protection Officer; and educating and training board members, staff, and other key stakeholders.