Standards for Privacy of Individually Identifiable Health Information. Final Privacy Rule Preamble.. Notice Requirements

12/28/2000

Comment: Several commenters expressed their belief that the administrative and cost burdens associated with the notice requirements were understated in the proposed rule. While some respondents took issue with the policy development cost estimates associated with the notice, more were focused on its projected implementation and production costs. For example, one respondent stated that determining "first service" would be an onerous task for many small practices, and that provider staff will now have to manually review each patient's chart or access a computer system to determine whether the patient has been seen since implementation of the rule.

Response: The policy in the final rule has been changed to make the privacy policy notice to patients less burdensome. Providers will be able to distribute the notice when a patient is seen and will not have to distribute it to a patient more than once, unless substantive changes are made in the notice. This change will significantly reduce the cost of distributing the privacy notices.

Comment: Some commenters also took issue with the methodology used to calculate the cost estimates for notices. These respondents believe that the survey data used in the proposed rule to estimate the costs (i.e., "encounters," "patients," and "episodes" per year) are very different concepts that, when used together, render the purported total meaningless. Commenters further stated that they can verify the estimate of 543 million patients cited as being seen at least once every five years.

Response: In the course of receiving treatment, a patient may go to a number of medical organizations. For example, a person might see a doctor in a physician's office, be admitted to a hospital, and later go to a pharmacy for medication. Each time a person "encounters" a facility, a medical record may be started or additions made to an existing record. The concept in the proposal was to identify the number of record sets that a person might have for purposes of estimating notice and copying costs. For example, whether a person made one or ten visits in the course of a year to a specific doctor would, for our purposes, be one record set because in each visit the doctor would most likely be adding information to an existing medical record. The comments demonstrated that we had not explained the concept well. As explained below we modified the concept to more effectively measure the number of record sets that exist and explain it more clearly.

Comment: Several commenters criticized the lack of supporting evidence for the cost estimates of notice development and dissemination. Another opinion voiced in the comments is that the estimated cost for plans of $0.75 per insured person is so low that it may cover postage, but it cannot include labor and capital usage costs.

Response: Based on comments and additional fact finding, the Department was able to gain a better understanding of how covered entities would develop policies and disseminate information. The cost analysis below explains more fully how we derived the final cost estimates for these areas.

Comment: A commenter noted that privacy policy costs assume that national associations will develop privacy policies for members but HHS analysis does not account for the cost to the national associations. A provider cost range of $300-$3,000 is without justification and seems low.

Response: The cost to the national associations was included in the proposal estimates, and it is included in the final analysis (see below).

Comment: A commenter states that the notice costs discussion mixes the terms "patients", "encounters" and "episodes" and 397 million encounter estimate is unclear.

Response: A clearer explanation of the concepts employed in this analysis is provided below.