Comment: Some commenters asserted that term "contrary" as defined at § 160.202 was overly broad and that its application would be time-consuming and confusing for states. These commenters argued that, under the proposed definition, a state would be required to examine all of its laws relating to health information privacy in order to determine whether or not its law were contrary to the requirements proposed. It was also suggested that the definition contain examples of how it would work in practical terms.
A few commenters, however, argued that the definition of "contrary" as proposed was too narrow. One commenter argued that the Secretary erred in her assessment of the case law analyzing what is known as "conflict preemption" and which is set forth in shorthand in the tests set out at § 160.202.
Response: We believe that the definition proposed represents a policy that is as clear as is feasible and which can be applied nationally and uniformly. As was noted in the preamble to the proposed rules (at 64 FR 59997), the tests in the proposed definition of "contrary" are adopted from the jurisprudence of "conflict preemption." Since preemption is a judicially developed doctrine, it is reasonable to interpret this term as indicating that the statutory analysis should tie in to the analytical formulations employed by the courts. Also, while the court-developed tests may not be as clear as commenters would like, they represent a long-term, thoughtful consideration of the problem of defining when a state/federal conflict exists. They will also, we assume, generally be employed by the courts when conflict issues arise under the rules below. We thus see no practical alternative to the proposed definition and have retained it unchanged. With respect to various suggestions for shorthand versions of the proposed tests, such as the arguably broader term "inconsistent with," we see no operational advantages to such terms.
Comment: One comment asked that the Department clarify that if state law is not preempted, then the federal law would not also apply.
Response: This comment raises two issues, both of which deserve discussion. First, a state law may not be preempted because there is no conflict with the analogous federal requirement; in such a situation, both laws can, and must, be complied with. We thus do not accept this suggestion, to the extent that it suggests that the federal law would give way in this situation. Second, a state law may also not be preempted because it comes within section 1178(a)(2)(B), section 1178(b), or section 1178(c); in this situation, a contrary federal law would give way.
Comment: One comment urged the Department to take the position that where state law exists and no analogous federal requirement exists, the state requirement would not be "contrary to" the federal requirement and would therefore not trigger preemption.
Response: We agree with this comment.
Comment: One commenter criticized the definition as unhelpful in the multi-state transaction context. For example, it was asked whether the issue of whether a state law was "contrary to" should be determined by the law of the state where the treatment is provided, where the claim processor is located, where the payment is issued, or the data maintained, assuming all are in different states.
Response: This is a choice of law issue, and, as is discussed more fully below, is a determination that is routinely made today in connection with multi-state transactions. See discussion below under Exception Determinations (Criteria for Exception Determinations).