Posted on: Friday, June 15, 2001
State's health privacy law repealed
By Kevin Dayton
Advertiser Capitol Bureau Chief
Lt. Gov. Mazie Hirono has signed a bill that repeals a controversial state health information privacy law that caused a stir in the insurance industry last year.
Hirono was acting governor yesterday while Gov. Ben Cayetano was traveling on the Mainland.
The privacy law was passed by the state Legislature in 1999, and caused some turmoil when it took effect July 1. The law created a "free-flow" zone for patients' medical information where records could move freely between doctors, hospitals, health insurers and other players in the health-care system.
However, the new law required that signed releases be obtained from patients before information that identified a patient could move outside of the "free-flow" zone. It also imposed criminal penalties for anyone who deliberately violated the new requirements.
The measure caught the insurance industry by surprise. Industry officials had believed they wouldn't be affected by the law, but discovered at the last minute they were wrong.
The insurance companies were not included in the free-flow zone, which meant the no-fault and workers-compensation insurance carriers suddenly needed signed releases before they could get access to records they had routinely received before for processing claims.
After complaints by industry officials, lawmakers met in special session last August to delay implementation of the bill.
This year, lawmakers agreed to repeal the law entirely after insurers noted the federal Department of Health and Human Services had issued new rules on medical privacy late last year. Companies must comply with the new federal rules within two years, and insurers said it would be burdensome to also have to comply with a new state law governing medical privacy.
Hirono also signed bills yesterday to make it easier for people and businesses to verify information such as births, deaths, marriages and divorce, and to eliminate what Hirono said are unnecessary requirements for real estate brokers and Hawai'i corporate securities.
