State Fines Hospital For Patient Confidentiality Breach; Requires HIPAA Training For Executives

by BakerHostetler

A California hospital that disclosed a patient’s medical record in response to a California Watch investigative report on the alleged inappropriate billing practices of the hospital’s parent organization was recently cited by the California Department of Health (CADPH) for multiple breaches of state patient confidentiality law.

Although the California Watch report detailed the patient’s visit to the hospital’s emergency room, it did not identify the patient by name. However, in an attempt to "correct factual inaccuracies and false statements" contained within the investigative report, the hospital’s chief executive officer (CEO) and chief medical officer (CMO) disclosed the patient’s records to several newspapers. This prompted a claim, published in an article by the Los Angeles Times, that the hospital had violated privacy laws in an effort to discredit the report.

The hospital countered that the disclosure of the patient’s medical record was legal because the patient had "voluntarily disclosed her medical records" to the investigative reporter. The hospital further stated that the patient, by publicly engaging in the investigative story, waived her HIPAA rights, and in fact, "wanted her medical information to be disclosed and examined."

  • After investigation by the CADPH, the hospital was cited with five violations of the California Health and Safety Code, including:
  • Failure to inform the affected patient of the unlawful or unauthorized access, use or disclosure of a patient’s medical information;
  • Failure to prevent unlawful or unauthorized access to, and use or disclosure of a patient’s medical information; and
  • Failure to report to the CADPH an unlawful or unauthorized access to, or use or disclosure of, a patient’s medical information.

The citations were upheld on appeal; the hospital was fined $95,000 for violations of California law and a corrective action plan submitted by the hospital was approved. The corrective action plan included:

  • Education to the CMO, CEO and director of marketing regarding HIPAA laws; and
  • Review by the CMO, CEO and director of marketing of the hospital’s policies and procedures pertaining to patient privacy, breach reporting and proper use of patient health information.

Under HIPAA and the California Confidentiality of Medical Information Act (CMIA), a patient’s medical information cannot be disclosed without the patient’s written authorization. HIPAA provides for civil penalties of up to $50,000 per violation. Deliberate breaches provide for criminal sanctions of up to $250,000 in fines and ten years in jail. California statute provides for an administrative penalty of up to $25,000 per patient whose medical information was disclosed and up to $17,500 per subsequent disclosure of that patient’s medical information.

Most HIPAA and state law cases pertain to the negligent handling of patient information (e.g., theft of laptop containing patient information or employees reading celebrity medical charts). The above incident is one of the few cases involving hospital executives deliberately disclosing medical information without authorization.

For more information or assistance with privacy issues, HIPAA and the CMIA, please contact Ted Kobus at or 212.271.1504, Lynn Sessions at or 713.646.1352, or Kimberly M. Wong at or 212.271.2028.

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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