HIPAA is an acronym most people have heard of, but don’t know what it stands for. You might see it in doctors’ offices or pharmacies. But you probably haven’t thought of what it really does, and how it applies to estate planning. HIPAA authorization is an important element of estate planning for medical things included in your plan so it’s good to discuss and confirm that your estate plan addresses this.

What Is HIPAA?

HIPAA stands for the Health Insurance Portability and Accountability Act of 1996. This federal law created national standards in the U.S. for protecting patients’ medical information from being disclosed without their consent. It also contains other elements to help with insurance access. The act is separated into 5 different sections, known as titles that address different elements:

• The first section covers health insurance reform, helping preserve insurance for those who move or lose jobs
• The second section involves administrative simplification, which is the most well-known section of HIPAA, adding national standards for privacy and medical organizations across the nation
• Title three covers tax-related provisions for medical care
• The fourth section addresses the application and enforcement of group health plans and pre-existing conditions
• The last section involves revenue offsets for life insurance, as well as those who lose their citizenship and must address income taxes

Why Is HIPAA Important?

HIPAA is used to improve health insurance access and privacy for patients. This is especially necessary in light of the growing frequency of information security breaches. This legislation was passed to surpass any state laws in place that address the protection of personal medical information.

Which Title Relates to Estate Planning?

The second title applies the most to estate planning. The administrative simplification title has 5 requirements for privacy regarding patient information:

• National provider identifier standard: This requires all healthcare entities to have a 10-digit national provider identifier number.
• Transactions and code sets standard: This makes healthcare organizations follow a single standard for electronic data submission and processing of insurance claims.
• Privacy rule: This specifically identifies how patients’ information can be distributed and disclosed, regarding health plans, companies, and businesses.
• Security rule: This sets standards for protecting patient data via data security.
• Enforcement rule: This creates specific guidelines for investigations into HIPAA violations.

These 5 titles create standards that are at least as strict as state law provisions. So any less restrictive state laws are overridden by this federal law, but any more restrictive state laws are still followed.

Where Does HIPAA Authorization Come In?

HIPAA authorization specifically is what is important for an estate plan. By including this authorization, you specify who has access to your medical records and can communicate with your healthcare providers. This is relevant for your power of attorney (POA) and instructions included in an advance directive, because both elements involve medical decisions.

Let’s look at these elements, with some common scenarios using fictional characters to demonstrate what might happen without HIPAA authorization.

Here’s an example regarding the POA:

Paula has created her estate plan and specified her power of attorney to be her friend from high school, Angela, who’s also in the medical field. But Paula doesn’t include the HIPAA authorization and ends up in a car accident. Acting as her POA, Angela needs access to her medical records and insurance so she can pay for the medical costs, but is not provided access since she is not Paula’s spouse and was not granted permission. As a result, the insurance communication and bills get more complicated for Paula once she is released from the hospital, even though Angela was supposed to be able to help as her POA.

Now let’s go over an example of the advance directive:

Andrew wrote up his estate plan and included his advance directive in case of an accident. He was very thorough and provided specific scenarios and decisions he’d like to make. But he doesn’t create HIPAA authorization for the document. Andrew has an accident and winds up in a coma so he can’t voice his requests, though his wishes are represented in the advance directive. Unfortunately, because this document wasn’t shared legally, Andrew’s health care representative (named in the advance directive) will not be able to access his medical records to make an informed decision about his future treatment.

It’s clear that these important medical decisions cannot be made without HIPAA authorization, so it is imperative to include this in your plan and specify who has access to this authorization. You save yourself from creating later complications, both financial and emotional, regarding these important medical decisions.

What About HIPAA Violations?

HIPAA violations involve any type of sharing of medical information without a patient’s consent. It’s very important because depending on the circumstances, a fine between $100 and $50,000 may be levied. Such fines are necessary because there have been so many instances where HIPAA has been violated with little consequences.

An LA Times article from July 2011 discusses how the UCLA Health System had to pay $865,500 as a settlement due to celebrities’ claiming that hospital employees reviewed their medical records without authorization. It seems back then, there were many instances of employees getting fired for looking at celebrities’ medical records.

Similarly, there are entire lists of HIPAA violations and celebrities out for the public to view. From singers or actors like Michael Jackson to George Clooney to famous activists like George Floyd, it’s clear that no one’s medical information is safe from HIPAA violations. That’s why it’s so important to establish authorization, so someone isn’t accidentally commiting a HIPAA violation while trying to follow your medical wishes.

How Can I Ensure My Estate Plan Follows HIPAA Laws?

The best way to ensure that your estate plan follows these complicated laws is to have an experienced attorney review your documents and details. They will determine how your plan does or doesn’t conflict with HIPAA authorization so that if needed, your medical arrangements are in order and can still be followed. Call us at 888-883-5529 for a free consultation today.