Using a lavish press conference as the backdrop, HHS officials announced yesterday proposed changes to the HIPAA regulations as well as an updated web page listing those breaches impacting more than 500 individuals.  The purpose of the new Rules issued yesterday is to align the HIPAA rules with the HITECH Act passed last year.   Specifically, the press announcement states: 

The proposed modifications to the HIPAA Rules issued today include provisions extending the applicability of certain of the Privacy and Security Rules’ requirements to the business associates of covered entities, establishing new limitations on the use and disclosure of protected health information for marketing and fundraising purposes, prohibiting the sale of protected health information, and expanding individuals’ rights to access their information and to obtain restrictions on certain disclosures of protected health information to health plans.  In addition, the proposed rule adopts provisions designed to strengthen and expand HIPAA’s enforcement provisions.

Under the proposed Rules (which are 234 pages in length), (1) individuals would have more convenient access to their protected health information (PHI) if available in electronic format; (2) covered entities would only need to protect the health information of decedents for 50 years after their death, as opposed to protecting the information in perpetuity as is required by current HIPAA requirements; and (3) the definition of who constitutes a business associate is expanded.

If these proposed rules are adopted, the expanded view of what constitutes a business associate will include the following:

We propose to add language in paragraph (3)(iii) of the definition of “business associate” to provide that subcontractors of a covered entity – i.e., those persons that perform functions for or provide services to a business associate, other than in the capacity as a member of the business associate’s workforce, are also business associates to the extent that they require access to protected health information. We also propose to include a definition of “subcontractor” in §160.103 to make clear that a subcontractor is a person who acts on behalf of a business associate, other than in the capacity of a member of the workforce of such business associate. Even though we use the term “subcontractor,” which implies there is a contract in place between the parties, we note that the definition would apply to an agent or other person who acts on behalf of the business associate, even if the business associate has failed to enter into a business associate contract with the person.

During the coming weeks there will be much analysis given to these proposed Rules but when it is all sorted out, it is anticipated that the above-listed three changes will be deemed to be among the more significant.  Giving individuals the ability to access their PHI in a particular electronic format will drive up costs, limiting record keeping to 50 years will reduce costs given current encryption technologies, and expanding the definition of business associates to a vague circular definition will throw a monkey wrench to just about any entity looking to comply with HIPAA.  These proposed Rules are certainly a nice gift to privacy lawyers looking to boost their summer hourly billing.