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					                                                                Policy Memorandum 2003-34
                                                                                Exhibit 2A


                 HIPAA PRIVACY, USE AND DISCLOSURE OF PHI
                      PRE-ENROLLMENT UNDERWRITING
                                 Chapter 22
                           Background Documents


82490 Federal Register / Vol. 65, No. 250 / Thursday, December 28, 2000 / Rules and Regulations

        (3) The rule expands the range of insurance related activities to include
those related to the creation, renewal or replacement of a contract for health
insurance or health benefits, as well as ceding, securing, or placing a contract for
reinsurance of risk relating to claims for health care (including stop-loss and
excess of loss insurance). For these activities, we also eliminate the proposed
requirement that these uses and disclosures apply only to protected health
information about individuals already enrolled in a health plan. Under this
provision, a group health plan that wants to replace its insurance carrier may
disclose certain protected health information to insurance issuers in order to
obtain bids on new coverage, and an insurance carrier interested in bidding on
new business may use protected health information obtained from the potential
new client to develop the product and pricing it will offer. For circumstances in
which no new contract is issued, we add a provision in § 164.514(g) restricting
the recipient health plan from using or disclosing protected health information
obtained for this purpose, other than as required by law. Uses and disclosures in
these cases come within the definition of ‘‘health care operations,’’ provided that
the requirements of § 164.514(g) are met, if applicable. See § 164.504(f) for
requirements for such disclosures by group health plans, as well as specific
restrictions on the information that may be disclosed to plan sponsors for such
purposes. We note that a covered health care provider must obtain an
authorization under § 164.508 in order to disclose protected health information
about an individual for purposes of pre-enrollment underwriting; the underwriting
is not an ‘‘operation’’ of the provider and that disclosure is not otherwise
permitted by a provision of this rule.
82514 Federal Register / Vol. 65, No. 250 / Thursday, December 28, 2000 / Rules and Regulations

Pre-Enrollment Underwriting
       As in the proposed rule, covered entities must obtain the individual’s
authorization to use or disclose protected health information for the purpose of
making eligibility or enrollment determinations relating to an individual or for
underwriting or risk rating determinations, prior to the individual’s enrollment in a
health plan (that is, for purposes of pre-enrollment underwriting). For example, if
an individual applies for new coverage with a health plan in the non-group market
and the health plan wants to review protected health information from the
individual’s covered health care providers before extending an offer of coverage,
the individual first must authorize the covered providers to share the information
with the health plan. If the individual applies for renewal of existing coverage,


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                                                                Policy Memorandum 2003-34
                                                                                Exhibit 2A
however, the health plan would not need to obtain an authorization to review its
existing claims records about that individual, because this activity would come
within the definition of health care operations and be permissible. We also note
that under § 164.504(f), a group health plan and a health insurance issuer that
provides benefits with respect to a group health plan are permitted in certain
circumstances to disclose summary health information to the plan sponsor for the
purpose of obtaining premium bids. Because these disclosures fall within the
definition of health care operations, they do not require authorization.

82546 Federal Register / Vol. 65, No. 250 / Thursday, December 28, 2000 / Rules and Regulations

Section 164.514(g)—Underwriting
         As described under the definition of ‘‘health care operations’’ (§ 164.501),
protected health information may be used or disclosed for underwriting and other
activities relating to the creation, renewal, or replacement of a contract of health
insurance or health benefits. This final rule includes a requirement, not included
in the NPRM, that health plans receiving such information for these purposes
may not use or disclose it for any other purpose, except as may be required by
law, if the insurance or benefits contract is not placed with the health plan.
82772 Federal Register / Vol. 65, No. 250 / Thursday, December 28, 2000 / Rules and Regulations

       Examples of other circumstances in which authorizations are required
under the final rule include disclosure of protected health information to an
employer for an employment physical, pre-enrollment underwriting for insurance,
or the sharing of protected health insurance information by an insurer with an
employer. The Department assumes there is no new cost associated with these
requirements because providers have said that obtaining authorization under
such circumstances is current practice.

82803 Federal Register / Vol. 65, No. 250 / Thursday, December 28, 2000 / Rules and Regulations

45 C.F.R. § 164.501 (definition of health care operations)

(3) Underwriting, premium rating, and other activities relating to the creation,
renewal or replacement of a contract of health insurance or health benefits, and
ceding, securing, or placing a contract for reinsurance of risk relating to claims for
health care (including stop-loss insurance and excess of loss insurance),
provided that the requirements of § 164.514(g) are met, if applicable;

82820 Federal Register / Vol. 65, No. 250 / Thursday, December 28, 2000 / Rules and Regulations

45 C.F.R. § 164.514(g)

(g) Standard: Uses and disclosures for underwriting and related purposes. If a
health plan receives protected heath information for the purpose of underwriting,
premium rating, or other activities relating to the creation, renewal, or
replacement of a contract of health insurance or health benefits, and if such


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                                                     Policy Memorandum 2003-34
                                                                     Exhibit 2A
health insurance or health benefits are not placed with the health plan, such
health plan may not use or disclose such protected health information for any
other purpose, except as may be required by law.


                                   STATE LAW


Civil Code Section 56.10

56.10. (a) No provider of health care, health care service plan, or contractor shall
disclose medical information regarding a patient of the provider of health care or
an enrollee or subscriber of a health care service plan without first obtaining an
authorization, except as provided in subdivision (b) or (c).
  (b) A provider of health care, a health care service plan, or a contractor shall
disclose medical information if the disclosure is compelled by any of the
following:

(9) When otherwise specifically required by law.

(c) A provider of health care, or a health care service plan may disclose medical
information as follows:

(9) Unless the provider of health care or health care service plan is notified in
writing of an agreement by the sponsor, insurer, or administrator to the contrary,
the information may be disclosed to a sponsor, insurer, or administrator of a
group or individual insured or uninsured plan or policy that the patient seeks
coverage by or benefits from, if the information was created by the provider of
health care or health care service plan as the result of services conducted at the
specific prior written request and expense of the sponsor, insurer, or
administrator for the purpose of evaluating the application for coverage or
benefits.
  (10) The information may be disclosed to a health care service plan by
providers of health care that contract with the health care service plan and may
be transferred among providers of health care that contract with the health care
service plan, for the purpose of administering the health care service plan.
Medical information may not otherwise be disclosed by a health care service plan
except in accordance with the provisions of this part.
  (11) Nothing in this part shall prevent the disclosure by a provider of health
care or a health care service plan to an insurance institution, agent, or support
organization, subject to Article 6.6 (commencing with Section 791) of Part 2 of
Division 1 of the Insurance Code, of medical information if the insurance
institution, agent, or support organization has complied with all requirements for
obtaining the information pursuant to Article 6.6 (commencing with Section 791)
of Part 2 of Division 1 of the Insurance Code.




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                                                     Policy Memorandum 2003-34
                                                                     Exhibit 2A


Civil Code Section 1798.24

1798.24. No agency may disclose any personal information in a manner that
would link the information disclosed to the individual to whom it pertains unless
the disclosure of the information is:

(d) To those officers, employees, attorneys, agents, or volunteers of the agency
which has custody of the information if the disclosure is relevant and necessary
in the ordinary course of the performance of their official duties and is related to
the purpose for which the information was acquired.
  (e) To a person, or to another agency where the transfer is necessary for the
transferee agency to perform its constitutional or statutory duties, and the use is
compatible with a purpose for which the information was collected and the use or
transfer is accounted for in accordance with Section 1798.25. With respect to
information transferred from a law enforcement or regulatory agency, or
information transferred to another law enforcement or regulatory agency, a use is
compatible if the use of the information requested is needed in an investigation of
unlawful activity under the jurisdiction of the requesting agency or for licensing,
certification, or regulatory purposes by that agency.
  (f) To a governmental entity when required by state or federal law.




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