Smith v. American Home Prod. Corp.

• Decision Date: 23 September 2003
• Citation: Smith v. American Home Prod. Corp., 855 A.2d 608, 372 N.J.Super. 105 (N.J. Super. 2003)
• Parties: Theresa SMITH Plaintiff, v. AMERICAN HOME PRODUCTS CORP. WYETH-AYERST PHARMACEUTICAL, et al., Defendants.
• Court: New Jersey Superior Court

855 A.2d 608

372 N.J.Super. 105

Theresa SMITHPlaintiff, v.AMERICAN HOME PRODUCTS CORP. WYETH-AYERST PHARMACEUTICAL, et al., Defendants.

Superior Court of New Jersey, Law Division, Middlesex County.

Argued August 8, 2003.

Decided September 23, 2003.

Ellen Relkin(Weitz & Luxenberg), New York City and Kevin Haverty(Williams, Cuker & Berezofsky, Philadelphia, PA), for plaintiff.

Anita Hotchkiss(Porzio, Bromberg & Newman), Morristown and Kevin Gardner(Connell Foley), Roseland, for defendants.

Anne Patterson(Riker, Danzig, Scherer, Hyland & Perretti), Morristown, for amicus curiaeNew Jersey Defense Association.

Diane Sullivan(Dechert), Princeton, for amicus curiae Defense Research Institute.

Mark Lesser(Kronisch & Lesser), Livingston, for amicus curiaeAssociation of Trial Lawyers of America.

CORODEMUS, J.S.C.

Presently before this court is a unified motion by defendants, the phenylpropanolamine ("PPA") manufacturers, compelling ex parte physician interviews and seeking judicial approval of a revised medical authorization.Plaintiffs, consumers of PPA, allege injuries caused from the use of the drug claiming that regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996,Pub.L. 104-191, effective April 14, 2003, ("HIPAA") preempt the informal discovery procedures as permitted under Stempler v. Speidell,100 N.J. 368, 495 A.2d 857(1985).Plaintiffs contend that defendants' proposed medical authorization is moot as the standards under Stempler are less stringent than the federal act requiring patients' "protected health information"("PHI").45 C.F.R. § 164.501.The issue of HIPAA's preemption of Stempler is one of first impression in New Jersey.

For the reasons set forth below, the court holds that HIPAA is an express but selective preemption of New Jersey law.It does not conflict with the general principles of N.J.S.A. 2A:84A-22.4¹ and the informal discovery techniques permitted under Stempler.However, the current proposed medical authorization offered by the defense does not comport with HIPAA or the Stempler safeguards.Therefore, the motion is granted in part, denied in part.

I.BACKGROUND

A. HIPAA and the Privacy Rule.

In 1996, the United States Congress enacted the HIPAA,42 U.S.C.A. § 1320(d)et seq.(HIPAA or "the Act").One of the primary purposes of the Act is to standardize and increase the efficiency of common electronic transactions in health care through the "administrative simplification"² provisions of HIPAA as well as to protect the security and privacy of individually identifiable health information ("IIHI").³Congress entrusted the Secretary of the Department of Health and Human Services with the task of creating national standards to "ensure the integrity and confidentiality of the information" to be collected and disseminated.42 U.S.C.A. § 1320d-2(d)(2)(A).The regulations promulgating these standards as created by the Department of Health and Human Services became effective on April 14, 2003, and are collectively known as "the Privacy Rule," which sets forth standards and procedures for the collection and disclosure of "protected health information"("PHI").⁴The Privacy Rule establishes patients' rights and requires that health professionals implement various procedures regarding the use of and access to health care information.It prohibits "covered entities" from using and disclosing PHI except as required or permitted by the regulations.45 C.F.R. § 164.501and45 C.F.R. § 160.103.There are three categories of "covered entities": (1) health plans; (2) health care clearing-houses; and (3) health care providers.45 C.F.R. § 160.103.⁵

The Privacy Rule prohibits covered entities from using or disclosing PHI in any form oral, written or electronic, except as permitted under the Privacy Rule. 45 C.F.R. § 164.502(a)."Use" and "disclosure" are defined very broadly.45 C.F.R. § 164.501."Use" includes an examination of PHI; "disclosure" includes divulging or providing access to PHI.The Privacy Rule is also centered on the concept that, when using PHI or when requesting PHI from another covered entity, a covered entity must make reasonable efforts to limit PHI to the "minimum necessary" to accomplish the intended purpose of the use, disclosure or request.45 C.F.R. § 164.508.In other words, even if a use or disclosure of PHI is permitted, covered entities must make reasonable efforts to disclose only the minimum necessary to achieve the purpose for which it is being used or disclosed.The "minimum necessary" standard was implemented to prevent improper disclosure of PHI, yet to be flexible where a patient waives his or her privacy privilege for confidential medical information.

B.The New Jersey Supreme Court Permits Defense Counsel to Conduct Ex Parte Interviews with Plaintiff's Treating Physicians.

By virtue of filing a suit for personal injury, the plaintiff has placed his or her medical condition in issue, and consequently, has waived some of his or her privacy privilege.Stempler v. Speidell, supra,100 N.J. at 373, 495 A.2d at 859(1985)(citingN.J.S.A. 2A:84A-22.1 to -22.7).In Stempler,the Court found that the costs incurred and the time expended during trial preparation justified "personal interviews" as an "informal method of assembling facts and documents in preparation for trial."Id. at 382, 495 A.2d at 864.Defendants often conduct personal interviews of the treating physician of a plaintiff that has filed a suit for personal injury.These informal, personal interviews generally take place outside the presence of plaintiff's counsel.The New Jersey Supreme Court permits defendants to conduct these ex parte interviews of a plaintiff's health care provider so long as the defendant complies with specific patient authorization requirements.Id. at 373-82, 495 A.2d at 859-64.Those requirements are that defense counsel must: "provide plaintiff's counsel with reasonable notice of the time and place of the proposed interview; provide the physician with a description of the anticipated scope of the interview; and communicate with `unmistakable clarity' the fact that the physician's participation in an ex parte interview is voluntary."Id. at 382, 495 A.2d at 864.

II.CONTENTIONS OF THE PARTIES

A.Defendants Argue that Stempler Interviews are Permissible Under HIPAA.

1.Stempler interviews are consistent with HIPAA.

Defendants' briefs and reply assert that there is no conflict between StemplerandHIPAA.They base this declaration on the fact that once a plaintiff has waived his patient-physician privilege, there is no conflict between StemplerandHIPAA.Therefore, according to defendants, this court's preemption analysis is not warranted.HIPAA's broad statutory purpose, according to the defendants, is in harmony with Stempler.The primary purpose of HIPAA, as reflected in its legislative history, is aimed at regulating the commercial behavior of the national health care industry.68 Fed.Reg. 8334(Feb. 20, 2003).Any argument that HIPAA supercedes any state law is limited to that provision of state law that requires medical or health plan records to be maintained or transmitted in written rather than electronic form.42 U.S.C.A. § 1320d-7.

More importantly, the defendants note that HIPAA recognizes that a patient who may be a plaintiff in a personal injury case can waive his or her patient-physician privilege by expressly permitting the unrestricted use and disclosure of PHI through the use of a valid authorization.⁶45 C.F.R. §§ 164.508,164.502(b)(2).This provision is identical to the New Jersey statute that allows waiver of the patient-physician privilege when a personal injury case is placed into suit.N.J.S.A. 2A:84A-22.4.

Defendants disagree with plaintiffs' contention that HIPAA requires in all circumstances that "only minimal necessary amounts of [protected health] information... may be disclosed," pointing out that 45 C.F.R. § 164.502(b)(1) involves duties of a commercial nature such as billing, submitting insurance claims for payment and the like, i.e. where specific minimum information is needed in a personal injury case.

Defendants strongly take issue with plaintiffs' reliance of the "minimal necessary" standard, which does not apply to the requirement section (iii) uses or disclosures made pursuant to an authorization under 45 C.F.R. § 164.508.They claim: "Section 164.508 affirms that an authorization is a means by which a covered entity can use and disclose protected health care information, and the section provides the form requirements for a valid HIPAA authorization."

Defendants also contend that psychologists', psychiatrists', and therapists' interviews are appropriate where plaintiff's mental or emotional condition is in issue.Defendants rely upon the Appellate Division statement that stated in no uncertain terms:

[A] psychologist may be compelled to reveal relevant confidences of treatment when the patient tenders her mental or emotional condition in issue during the course of litigation.Under such circumstances, the patient's communications to her psychotherapist should not be enshrouded in the veil of absolute privilege.Rather, important public policy considerations favoring liberal pre-trial discovery compel disclosure of all relevant information.

[Arena v. Saphier,201 N.J.Super. 79, 81, 492 A.2d 1020, 1021(App.Div.1985).]

Defendants claim that the waiver of the psychologist-patient privilege has been upheld by the New Jersey Supreme Court in Kinsella v. Kinsella,150 N.J. 276, 302-03, 696 A.2d 556, 569-70(1997).In Kinsella,the Court recognized that given the sensitive and personal nature of the communications between psychologist and the patient, along with the critical role confidentiality has in the success of mental health therapy, this privilege is likened to the attorney-client privilege.However, as in the attorney-client privilege, there exist very narrow...