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F I S C A L I M P A C T R E P O R T

SPONSOR Grubesic

DATE TYPED 2/19/05

HB

SHORT TITLE HMO Info Disclosure Exceptions

SB 624

ANALYST Hanika-Ortiz

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

SOURCES OF INFORMATION

LFC Files

Responses Received From

Children, Youth & Families Department (CYFD)

Office of the Attorney General (AGO)

Human Service Division (HSD)

Department of Health (DOH)

Health Policy Commission (HPC)

Public Regulation Commission (PRC)

SUMMARY

Synopsis of Bill

Senate Bill 624 seeks to amend NMSA 59A-46-27, Confidentiality of Medical Information and

Limitation of Liability, to achieve conformity with the privacy standard of the federal Health In-

surance Portability and Accountability Act (HIPAA), requiring Health Maintenance Organiza-

tions (HMOs) to disclose confidential medical information only as authorized by federal or state

statute or rule.

Significant Issues

The DOH reports federal HIPAA regulations require that health information be disclosed only

under strict guidelines, including consumer authorization. State government agencies and other

public and private health care delivery systems are required to comply with HIPAA. Individual

employees of organizations may be fined or terminated from federal programs if health informa-

Senate Bill 624-- Page 2

tion is inappropriately disclosed. HB 651 would allow disclosure only by federal or state statute

or rule.

SB 624 makes clear that the federal HIPAA Privacy Rule applies to HMOs. HPC remarks that

HMO’s were required by federal law to limit access to protected health information and be sub-

ject to confidentiality disclosure rules provided under the privacy regulation by April of 2003.

The bill addresses some confusion that may currently exist on the part of HMOs as to whether a

disclosure permitted under the HIPAA Privacy Rule, but not specifically addressed in the confi-

dentiality provisions of the HMO Law, are allowed.

PERFORMANCE IMPLICATIONS

The AGO notes the proposed amendment provides HMO’s with a statutory directive to comply

with the federal privacy rule. This obligation already exists, however there is no harm in clarify-

ing the HMO’s authority to disclose protected health information.

The HPC reports that under the current HIPAA rule, covered entities, including HMOs, are re-

quired to comply with state statutes for reporting of health information or hospital inpatient dis-

charge data without patient authorization.

FISCAL IMPLICATIONS

NFI

ADMINISTRATIVE IMPLICATIONS

Since HMO’s do not carry out all of their business within their agency, the privacy rule permits

providers to disclose protected health information outside of the agency. The HMO must enter

into a business associate agreement with other entities with which they do business. HMO’s may

disclose protected health information to another entity only to assist the HMO to carry out its

health care functions.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicate of HB 651

TECHNICAL ISSUES

None

OTHER SUBSTANTIVE ISSUES

Senate Bill 624 would include the disclosure of health information by federal or state statute or

rule, in compliance with HIPPA regulations. Every citizen in New Mexico receiving health care

services must sign a disclosure statement with regard to release of health information. Under

certain circumstances, health information may be required for review by the health provider, par-

ticularly when there is pending litigation or other unusual circumstances. HB 651 would allow

disclosure by federal or state statute or rule in addition to the current allowances, such as the ex-

tent that may be necessary to carry out the purposes of a HMO or upon consent of the enrollee or

Senate Bill 624-- Page 3

applicant. SB 624 would support the ability of organizations to obtain health information within

current HIPPA regulations, including HMOs.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

Proposed language does not add any protections beyond what is currently guaranteed under fed-

eral law.

ANA/yr