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Guest Article

Supreme Court Ruling on Privacy Protection Will Have HIPAA Implications for Medical Privacy Standards

From the Employer's Guide to the Health Insurance Portability and Accountability Act, published by Thompson Publishing Group, Inc.

Summary:An upcoming Supreme Court case on whether an individual's privacy rights are violated when hospital drug test results are turned over to law enforcement authorities will affect the governmental use exemption from privacy protections under proposed privacy regulations.

(June 6, 2000) - In a case with implications for proposed federal privacy regulations, the U.S. Supreme Court has agreed to decide whether an individual's medical privacy rights are violated by a hospital policy of testing urine for cocaine use and turning the results over to law enforcement authorities without the individual's knowledge or consent. The case is Ferguson v. Charleston, No. 99-936, cert. granted Feb. 28, 2000 (S.Ct. 2000).

Facts of the Case

Under a program through the Medical University of South Carolina and Charleston, S.C., the urine was tested of pregnant women who were suspected of cocaine use. Under certain circumstances, the test results were reported to law enforcement officials. The women who were tested contended that the urine drug screens constituted searches within the meaning of the 4th Amendment and violated their privacy rights under the Constitution.

In Ferguson v. City of Charleston, 186 F.3d 469 (4th Cir., July 13, 1999), the 4th U.S. Circuit Court of Appeals ruled that the federal government has a special interest in protecting the health of children whose mothers use cocaine during pregnancy, and that a state has a compelling interest in identifying lawbreakers and deterring future misconduct. Because the testing policy furthered that public interest, the court ruled that it outweighed any privacy rights under the Constitution.

However, the dissent in that ruling argued that the government's special need overrides an individual's 4th Amendment privacy protections when the purpose is primarily for other than law enforcement. The dissenting judge argued that the hospital's program had a predominant prosecutorial intent and thus violated the 4th Amendment's protections against warrantless searches.

The issue of rights to medical information privacy has implications for proposed privacy rules issued by the Department of Health and Human Services (HHS). These rules, mandated under the Health Insurance Portability and Accountability Act (HIPAA), are designed to protect medical information privacy. The rules prohibit disclosure of medical or financial information related to health plans except in certain situations. For example, the proposed rules exempt from privacy protections the disclosures of group health plan medical and financial information for certain law enforcement activities. This will be a key issue before the Supreme Court in the Ferguson case.

The proposed rules would require warrants and subpoenas in some requested disclosures. In other proposed circumstances, such as administrative requests, it is not clear what would be required for law enforcement officials to obtain medical information from group health plans. Privacy protections as established by the Supreme Court in the Ferguson case could limit or further the disclosures as contemplated by the privacy rules.

Even if the purpose of the information is not for law enforcement, privacy protections could arise under this case. As the 4th Circuit stated, there still must be a compelling governmental interest that outweighs privacy rights to overcome Constitutional privacy protections. Depending on the outcome of the Supreme Court case, the extent that the government could require plan sponsors to release individual medical information could be limited. Plan sponsors would be compelled not to provide the information simply upon government request or demand.


If the information is protected under the Constitution or 4th Amendment, the implications for group health plans include:

  • they generally could not be compelled to disclose health plan information per government requests for law enforcement without a warrant or individual permission;
  • they could be at greater risk of legal action for disclosing information to the government when it is less clear whether the government's purpose is for law enforcement or other special public need; and
  • they may need legal help in determining when information could be disclosed to the government without violating 4th Amendment or other Constitutional guarantees to privacy.

Oral argument before the Supreme Court is scheduled for after Oct. 1, 2000. It is unlikely that the final privacy rules will be issued before the end of this year. A Supreme Court ruling in Ferguson would have an immediate impact on group health plan operations, however, regardless of the privacy regulations.

Reprinted with permission from the June 2000 supplement to Employer's Guide to the Health Insurance Portability and Accountability Act, ©Thompson Publishing Group, Inc., 2000. All rights reserved.

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