Will HIPAA Sabotage Your Estate Plan?
You may have recently noticed that your doctor, pharmacy and
other health care providers now ask you to sign a receipt for their
"Notice of Privacy Practices."
The reason for this is a law (one intended to protect your
personal information from identity theft or public disclosure)
which also unfortunately impairs your estate plan in several
unforseen and unintended ways.
The Health Insurance Portability and Accountability Act ("HIPAA")
was passed to provide a secure way for health information to be
transferred from one health provider to another, or from health
providers to insurance companies and individuals (including the
person whose information is involved).
HIPAA strictly limits the disclosure of your medical information by
physicians, dentists, psychiatrists and other health care providers
and pharmacists, and imposes fines of up to $250,000 as well as
jail time for up to 10 years in the event any health information is
wrongfully disclosed.
Why HIPAA Affects Your Estate Plan
Statistically, there is better than a 50% chance that you will
someday suffer a serious accident or illness and become unable
to handle your financial and medical decisions. In that event, your
estate plan documents proved for a successor to take over for
you. First, your Living Trust and your General Power of Attorney
take care of your financial decisions. Second, your Medical Power
of Attorney and Directive to Physicians and Family or Surrogates
handle your health care and treatment decisions. These
successors will urgently need access to your medical information
in order to make critical estate and health decisions for you!
Clearly, you would prefer for your successors to have immediate,
hassle-free access to your medical records so they can handle
your important matters right away. Unfortunately, HIPAA can
prevent your successors from getting these needed medical
records.
Is an Authorization to Release Medical Information Sufficient?
Generally, NO. By merely signing an "Authorization to Release
Medical Information," you are not protecting your estate plan from
the unforseen and unintended impairments caused by HIPAA.
First of all, HIPAA does not provide one standard form for such
authorization. And relying on an authorization form provided by a
specific health care provider, government authority or agent may
be a big mistake! We have critically examined the exact wording
of the law, and almost all forms we have seen are inadequate!
Many "HIPAA Authorizations" fail to include certain required
disclosures to the signing party and fail to refer to specific
terminology of the Act, thereby threatening the validity and
acceptance of the authorization by third parties holding your
medical information or the medical information of your Trustee or
agent. Worse yet, many authorizations are overly broad and may
give others access to medical information when it is not yet
necessary or appropriate!
In addition to the concerns pertaining to the authorization itself,
the HIPAA limitations may also negatively impact your estate
plan documents. Your Living Trust, Will, General Power of
Attorney and Medical Power of Attorney all should be updated to
include provisions that will permit your successor trustee or agent
to sign a valid authorization on your behalf if you become
disabled and your authorization is invalid due to changes in the
law, or because it is too old or simply cannot be located.
These documents also need to provide a set of alternate or
back-up procedures if your authorization or the one signed by your
successor trustee or agent cannot be properly implemented, even
though it may be valid. For example, your doctor might refuse to
honor your authorization because he may question your legal
capacity at the time it was signed or he narrowly interpret the
kind of information permitted to be released and decides to
withhold some important item. Similarly, your doctor may refuse
to write a letter stating you are incapacitated to avoid any
possibility of penalty for his actions. If you do not have a back-up
procedure in your estate plan documents to cover events such as
these, then you may be forced into a court guardianship.
And, if this is not complicated enough, we also have to consider
what may happen if you are disabled or deceased and one of your
successor trustees or agents then becomes incapacitated. How
will your documents permit the next named successor to step in
immediately if they do not have a proper Authorization to Release
Medical Information from the first successor who can no longer
act? We have come up with a practical mechanism to deal with
this issue so, again, proceedings can be avoided.
other health care providers now ask you to sign a receipt for their
"Notice of Privacy Practices."
The reason for this is a law (one intended to protect your
personal information from identity theft or public disclosure)
which also unfortunately impairs your estate plan in several
unforseen and unintended ways.
The Health Insurance Portability and Accountability Act ("HIPAA")
was passed to provide a secure way for health information to be
transferred from one health provider to another, or from health
providers to insurance companies and individuals (including the
person whose information is involved).
HIPAA strictly limits the disclosure of your medical information by
physicians, dentists, psychiatrists and other health care providers
and pharmacists, and imposes fines of up to $250,000 as well as
jail time for up to 10 years in the event any health information is
wrongfully disclosed.
Why HIPAA Affects Your Estate Plan
Statistically, there is better than a 50% chance that you will
someday suffer a serious accident or illness and become unable
to handle your financial and medical decisions. In that event, your
estate plan documents proved for a successor to take over for
you. First, your Living Trust and your General Power of Attorney
take care of your financial decisions. Second, your Medical Power
of Attorney and Directive to Physicians and Family or Surrogates
handle your health care and treatment decisions. These
successors will urgently need access to your medical information
in order to make critical estate and health decisions for you!
Clearly, you would prefer for your successors to have immediate,
hassle-free access to your medical records so they can handle
your important matters right away. Unfortunately, HIPAA can
prevent your successors from getting these needed medical
records.
Is an Authorization to Release Medical Information Sufficient?
Generally, NO. By merely signing an "Authorization to Release
Medical Information," you are not protecting your estate plan from
the unforseen and unintended impairments caused by HIPAA.
First of all, HIPAA does not provide one standard form for such
authorization. And relying on an authorization form provided by a
specific health care provider, government authority or agent may
be a big mistake! We have critically examined the exact wording
of the law, and almost all forms we have seen are inadequate!
Many "HIPAA Authorizations" fail to include certain required
disclosures to the signing party and fail to refer to specific
terminology of the Act, thereby threatening the validity and
acceptance of the authorization by third parties holding your
medical information or the medical information of your Trustee or
agent. Worse yet, many authorizations are overly broad and may
give others access to medical information when it is not yet
necessary or appropriate!
In addition to the concerns pertaining to the authorization itself,
the HIPAA limitations may also negatively impact your estate
plan documents. Your Living Trust, Will, General Power of
Attorney and Medical Power of Attorney all should be updated to
include provisions that will permit your successor trustee or agent
to sign a valid authorization on your behalf if you become
disabled and your authorization is invalid due to changes in the
law, or because it is too old or simply cannot be located.
These documents also need to provide a set of alternate or
back-up procedures if your authorization or the one signed by your
successor trustee or agent cannot be properly implemented, even
though it may be valid. For example, your doctor might refuse to
honor your authorization because he may question your legal
capacity at the time it was signed or he narrowly interpret the
kind of information permitted to be released and decides to
withhold some important item. Similarly, your doctor may refuse
to write a letter stating you are incapacitated to avoid any
possibility of penalty for his actions. If you do not have a back-up
procedure in your estate plan documents to cover events such as
these, then you may be forced into a court guardianship.
And, if this is not complicated enough, we also have to consider
what may happen if you are disabled or deceased and one of your
successor trustees or agents then becomes incapacitated. How
will your documents permit the next named successor to step in
immediately if they do not have a proper Authorization to Release
Medical Information from the first successor who can no longer
act? We have come up with a practical mechanism to deal with
this issue so, again, proceedings can be avoided.
PAGE 2
Every day do
something that
will inch you
closer to a
better
tomorrow.
Doug Firebaugh
something that
will inch you
closer to a
better
tomorrow.
Doug Firebaugh
A skillful man
reads his
dreams for
self-knowledge,
yet not the
details but the
quality.
Ralph Waldo
Emerson
reads his
dreams for
self-knowledge,
yet not the
details but the
quality.
Ralph Waldo
Emerson
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