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The health care industry thought it had the Bush administration on its side. After all, at the behest of other large campaign contributors, the White House has scuttled or delayed regulations governing arsenic in drinking water, logging and workplace ergonomics. So when Secretary of Health and Human Services Tommy Thompson announced in February that he was reviewing health care executives expected similar treatment. Instead, Thompson announced Thursday that he was letting the rules take effect as scheduled, stunning an industry that gave the Republicans $26 million in the 2000 election and had lobbied vigorously against the regulations, charging that they will cost billions of dollars to implement. Doctors, hospitals, insurers and pharmacies now have two years to comply with the privacy rule. By all accounts, they’ll need every last hour. Interviews with medical professionals indicate that the industry is ill-prepared to cope with the new mandate. Authorized by a 1996 law called the Health Insurance Portability and Accountability Act, or HIPAA, the regulations limit the disclosure of individuals’ medical records and give patients broad new rights to track and control their health information. West Hartford, Conn., physician William Pickering is typical of doctors who don’t know HIPAA from a hip replacement. “I have no idea what the new regulations are,” Pickering says of his new duty to obtain his patients’ permission before divulging their medical information to pharmacies, laboratories and insurance companies. He is not alone. “There’s no way that our 1,200 physicians in their private practices can really become facile with these new regs,” says Tom McAfee, the chief medical officer for Brown & Toland, one of California’s largest physician management groups. Under the regulations, patients can request that custodians of their medical records provide an audit trail to show who has seen their health information. That means every doctor’s office, medical insurer and hospital must devise a system to track patients’ data and limit information released to third parties. But privacy is just one part of HIPAA’s brief. The law also requires the adoption of uniform standards for electronic transactions by October 2002. Complicating matters, regulations have yet to be issued to establish standards to ensure the security of patients’ medical information, as required by the law. Some medical institutions have held off upgrading their computer systems, in the hope that HIPAA would be delayed or rewritten. Even hospitals that are modernizing face a daunting task. At Chicago’s Rush-Presbyterian-St. Luke’s Medical Center, information on a single patient can still reside anywhere from a paper chart to an old computer system to a new Oracle database. Hospital Chief Information Officer Pat Skarulis says her team is developing a patient database to create an audit trail but is unsure whether its systems will be compliant with HIPAA. At the nine-doctor Johnson Clinic in rural Rugby, N.D., administrator Carol Schwan finds the new rules overwhelming. She says she has yet to determine if the clinic’s computers will be able to transmit data securely as the law will require. Pharmacy giant CVS, which is being sued by an AIDS patient for alleging acquiring his medical records without his consent, had not prepared for HIPAA’s consent provision, according to spokesman Todd Andrews. “The point here is to try to get the regulations changed,” he said in an interview two days before the Bush administration approved the privacy rules. But bowing to the new political reality, CVS executives now say they support privacy standards and will work with the administration “to eliminate any confusion” surrounding their implementation. Secretary Thompson signaled last week that he will ease some consent requirements for pharmacies and make other unspecified changes. Meanwhile, some congressional Republicans have signaled their displeasure with the regulations. Still, it’s clear that the Bush administration isn’t all about business. Copyright � 2001 The Industry Standard

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