SAMHSA Amends 42 CFR Part 2, Seeking to Better Align the Regulation with Today’s Health Care Delivery System

by Stoel Rives LLP

Stoel Rives LLP

In another step towards modernizing the privacy rule designed to protect patient substance abuse records, the Department of Health and Human Services Substance Abuse and Mental Health Services Administration (“SAMHSA”) published a final rule on January 3, 2018, finalizing modifications initiated last year and amending 42 CFR Part 2 (“Part 2”) to make it easier for health care providers to disclose those records.[1]  The final rule, which becomes effective February 2, 2018, addresses when health care providers may use and disclose substance abuse records for purposes of payment, health care operations, and audits and evaluations, and better aligns Part 2 with requirements under HIPAA.  It also includes an option for health care providers to use a shorter notice of prohibition on re-disclosure.

Part 2 protects the confidentiality of records relating to the identity, diagnosis, prognosis, or treatment of any patient records that are maintained in connection with the performance of any federally assisted program or activity relating to substance use disorder education, prevention, training, treatment, rehabilitation, or research.  Prior to the new rulemaking, Part 2 only allowed a federally assisted substance use disorder program to release patient identifying information with the individual’s written consent, pursuant to a court order, or under a few limited exceptions.

SAMHSA has recognized a need to update Part 2 to provide for greater flexibility in disclosing patient identifying information within today’s health care delivery system while still retaining important privacy protections for individuals seeking treatment for substance use disorders.  To that end, the January 3, 2018 final rule includes the following major substantive changes:

  1. Abbreviated Notice of Prohibition on Re-Disclosure (42 CFR § 2.32(a)).  One of the most administratively onerous aspects of Part 2 is the requirement to provide a detailed notice prohibiting re-disclosure of records with each disclosure of substance abuse records made with a patient’s written consent.  See 42 CFR § 2.32(a).  The final rule gives health care providers the option to use an abbreviated notice, stating: “42 CFR part 2 prohibits unauthorized disclosure of these records.”  SAMHSA added the option to address concerns about character limits in free-text fields within electronic health record systems.
  2. Additional Disclosures for Payment and Health Care Operations Activities (42 CFR § 2.33(b), (c)).  The final rule allows a person or entity that receives substance abuse records for purposes of payment and health care operations pursuant to a patient consent to re-disclose records as may be necessary to its “contractors, subcontractors, or legal representatives to carry out payment and/or health care operations” on its behalf.  See 42 CFR § 2.33(b).  The text of the regulation itself does not identify what activities constitute “payment and/or health care operations,” but SAMHSA included in the preamble to the final rule a non-exhaustive list of such permissible activities that incorporates many of the activities included in the definitions of such terms in the HIPAA Privacy Rule at 45 CFR § 164.501.  Importantly, SAMHSA expressly stated that this authority for these lawful holders to re-disclose records under § 2.33(b) “is not intended to cover care coordination or case management” and that re-disclosures to “carry out such purposes are not permitted” under this regulation.  Also, re-disclosures to contractors, subcontractors, or legal representatives are not permitted for activities related to a patient’s diagnosis, treatment, or referral for treatment.

    The final rule also provides that a lawful holder that re-discloses substance abuse records to contractors, subcontractors, or voluntary legal representatives[2] for payment and health care operations activities must enter into a written contract with the recipient requiring the recipient to comply with the provisions of Part 2.  42 CFR § 2.33(c).  Although SAMHSA declined to provide specific contract terms, it listed requirements that would apply to the lawful holder, including the requirement to (1) furnish recipients with the notice required under § 2.33; (2) implement appropriate safeguards to prevent unauthorized uses and disclosures; and (3) report any unauthorized uses, disclosures, or breaches of patient identifying information to the lawful holder.  These contracts must be in effect by February 2, 2020.

  3. Additional Disclosures for Federal, State, or Local Governmental Agency Audits or Evaluations (42 CFR § 2.53).  The final rule clarifies that federal, state, and local governments providing financial assistance to, or regulating the activities of, health care providers subject to Part 2 may perform audits or evaluations of those programs and may access substance abuse records in connection with such an audit or evaluation.  See 42 CFR § 2.53.  The final rule also specifies that audits and evaluations may be performed by contractors, subcontractors, or legal representatives on behalf of third-party payers or quality improvement organizations, and that if disclosures are made for a Medicare, Medicaid, or CHIP audit or evaluation (including a civil investigation or administrative remedy), further disclosures may be made to a contractor, subcontractor, or legal representative to carry out the audit or evaluation.

In adopting the foregoing modifications, SAMHSA explained that it has attempted to align Part 2 with HIPAA, the HITECH Act, and their implementing regulations to the extent feasible, while also noting that Part 2 is separate and distinct from those other privacy laws.

SAMHSA plans to hold a public meeting to obtain additional input about the effect of Part 2 on patient privacy, health outcomes, and patient care.  The public meeting tentatively is scheduled for January 31, 2018.

[1] 83 Fed Reg 239 (January 3, 2018).
[2] This requirement does not apply to a legal representative that is required to represent the lawful holder by law.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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