Fraud probes don't override doctor-patient privileges

Utah's highest court made a strong statement to protect physician-patient privilege when it ruled that doctors and law enforcement officials are both responsible for guarding patient's private medical records in state fraud investigations, state doctors say.

Although the case that spurred the ruling involves a chiropractor, the decision will affect physicians as well. The Utah Supreme Court declared that doctors have the right to claim the privilege when they are subpoenaed for medical records in an insurance fraud investigation.

But the court was firm in ruling that doctors cannot invoke the privilege simply to shield themselves from an inquiry. In such cases, the court emphasized, the burden of protecting patients' medical records shifts to the state and lower courts, which must take precautions to ensure privacy.

The ruling likely will make it difficult for physicians to try to protect themselves from a fraud investigation by relying on patients' interests, said Chet Loftis, counsel to the Utah Medical Assn. But the decision underscores the importance of the privilege, recognizing that it belongs foremost to the patient, he said.

"The court has said it's really going to protect the privilege, and it's not going to make any exceptions unless they are very clear and unless they are in the patient's best interest," Loftis said. The UMA did not take a position on the case, but to the extent that it addresses privilege, "we believe the ruling supports patient confidentiality," he said.

The case stems from a 2001 complaint by the state Workers' Compensation Fund against chiropractor Brian D. Burns, DC, accusing him of fraudulent billing.

The complaint alleged that Dr. Burns ordered MRI and EMG tests, which a chiropractor is not authorized to request, and that he billed the insurance claims under the names of physicians who never treated the patients, court records show. The Insurance Fraud Division of the Utah attorney general's office took over the investigation from the state insurance commission and sought to subpoena 300 patient records.

A trial court allowed the subpoena and granted the state's request for secrecy to keep the medical files sealed in its investigation of the allegations.

Dr. Burns challenged the order, raising the doctor-patient privilege to protect the confidential medical records. He also said the order violated his constitutional rights against self-incrimination, because no charges were levied against him, according to court documents.

But the trial court agreed with the state's argument that Utah's Insurance Fraud Act trumps the privilege, because it requires insurers to release any information relevant to suspected insurance fraud. Because no formal charges had been issued, Dr. Burns appealed directly to the Utah Supreme Court for special relief.

In its decision, the high court reversed the trial court's finding. Utah's insurance fraud statute does not impose any direct responsibility on doctors to release privileged information, the court found. "We decline to insert such a substantive requirement," Justice Matthew B. Durrant wrote.

At the same time, the court found that rules surrounding doctor-patient privilege don't give physicians or chiropractors a blanket protection from releasing patient information for insurance fraud investigations. The justices determined that "evidence of such fraud has bearing on a physician's presumed authority to claim the privilege on behalf of the patient."

In this case, the court found that Dr. Burns sought to claim the privilege for his own benefit, and it denied his request to stop the subpoena. The court upheld the state's secrecy order as a means of protecting patients' confidentiality until the allegations were resolved.

But the court emphasized that "our opinion in this case should not dissuade physicians from zealously guarding their patients' confidences. Rather, we merely recognize that, in instances where a physician seeks to claim the physician-patient privilege to serve his or her own interest rather than the patient's, a court may find that the physician lacks authority to do so," Durrant wrote.

In such cases, law enforcement officials and the lower courts, in particular, should not order physicians to disclose confidential medical records "without first taking measures to protect the records from public disclosure," the opinion stated. The court found that the secrecy order served this purpose.

Dr. Burns' attorney, Michael Martinez, disagrees that the decision upholds the doctor-patient privilege. The court carved out a ruling that will allow the state to justify investigations, he said.

"They have to have substantiation and can't just cast a wide net," Martinez said. "The impact is pretty clear. Now the state will allege that every time they go after records that it's not in the interest of the patient but the doctor."

But Assistant Attorney General Laura Dupaix argues that the secrecy order protected Burns' records. Accordingly, the state met its obligation to ensure patients' expectations of confidentiality, she said.

"Billing fraud is a crime against the patient, as well," Dupaix said. "The point [of the ruling] is simply that privilege is important, but physicians don't get to raise it just to hide their own criminal behavior."

Dr. Burns denies the allegations in the case. Attorneys said no charges have been filed, but if they are, Martinez said, "We will raise the issue again with the court."