Kay Fuller Argues First Medical Records Privacy Case

The issue of confidentiality of medical records and the restrictions placed upon insurers’ receipt, use and retention of the records is growing across the country. On April 21, 2010, Martin & Seibert, L.C. shareholder E. Kay Fuller argued what is believed to be the first case challenging those restrictions. Fuller argued State ex rel. State Farm Mut. Auto. Ins. Co. v Bedell before the West Virginia Supreme Court of Appeals on behalf of State Farm. Ms Fuller is not new to the arena of privacy issues as she previously argued Martino v. Barnett, 215 W.Va. 705, 595 S.E 2d 65 (2004), a case found by the West Virginia Supreme Court of Appeals to create a “novel” issue unresolved throughout the nation. In Martino, the Court held:

Through a judicial process exception, the Gramm-Leach-Bliley Act and the Privacy Rule of the West Virginia Insurance Commission allow the use of any judicial process expressly authorized by statute or court rule, whether by way of discovery or for any other purpose expressly authorized by law, to obtain information relevant to the proceeding to which the judicial process relates from an insurance company that would otherwise fall within the privacy protections under the Act or the Rule. However, trial courts have a right and a duty to fashion protective orders which limit access to necessary information only and uphold such principles of nondisclosure as attorney-client privilege and work product immunity.

State Farm pursued a Petition for Writ of Prohibition against the Circuit Court of Harrison County, West Virginia which entered a protective Order setting forth terms and conditions on State Farm’s receipt, use and retention of a claimant’s medical records who was making an underinsured motorist claim.

State Farm argued the Order violated Insurance Commissioner regulations, West Virginia Insurance Commissioner Informational Letter 172, federal and state privacy laws and federal and state reporting laws. While the Trial Bar has utilized privacy rights to deny access and to limit the use of medical records, Ms. Fuller argue that restrictions by various courts in a state or across the nation restrict the industry from the conduct of their regular business activities which are already highly regulated by state insurance commissions and departments and the protections afforded by HIPAA, GLBA, and UTPA,

The challenged Order prohibited State Farm from scanning medical records or otherwise maintaining the records in an electronic format and called for the return or destruction of the records at the conclusion of the litigation which State Farm alleged is in contravention of insurance record retention regulations.
The Order also prohibited dissemination of any “medical information” which the Circuit Court did not define.

With the proliferation of medical confidentiality Orders from the trial bar, many of which call for severe restrictions on an insurance company’s use of medical records, many are looking to the West Virginia Supreme Court’s opinion to strike the appropriate balance of interests.

Fuller continues to counsel clients on emerging privacy trends and guidance as to appropriate security and access safeguards to avoid attacks from the trial bar which might impede an insurer’s ability to fully investigate claims and to provide critical claim information to further anti-fraud initiatives. She is regularly called upon to lecture in this arena and is involved in the development of claim protocols for insurers who are beginning the transition to electronic record keeping systems.