5 Takeaways From Cook County’s New HIPAA Qualified Protective Order For Property and Casualty Insurers

The Law Division of the Cook County Circuit Court rang in the New Year with a new HIPAA Qualified Protective Order (QPO) following Judge John Ehrlich’s memorandum opinion in Shull v. Ellis, No. 15 L 9759. The New HIPAA QPO requires a party claiming personal injury to consent to an explicit waiver for other parties, including insurance companies, to use that party’s private health information (PHI). The Health Insurance Portability and Accountability Act (“HIPAA”) does not apply to property and casualty insurance companies. However, the Cook County Law Division’s new HIPAA Qualified Protective Order will affect property and casualty insurance companies in the following ways:

1. Property and Casualty Insurance Companies Must Comply with the HIPAA Qualified Protective Order.

Judge Ehrlich clarified that HIPAA does not apply to property and casualty insurance companies, but did not shy away from pointing out that property and casualty insurers are subject to “privacy provisions” in the Illinois Insurance Code and the Illinois Administrative Code. For example, Article XL of the Illinois Insurance Code includes a provision regarding the consent to disclosure authorization forms (215 ILCS 5/1007), as well as various penalties for its violators. The Illinois Administrative Code similarly imposes regulations of PHI by requiring insurance companies to maintain PHI for at least seven years and by allowing for the disposal of PHI when not needed under certain circumstances.

Judge Ehrlich further noted that the Illinois State Constitution (Ill. Const., art. I, Sec. 6) provides “constitutional privacy protections for health information.”

Thus, under Judge Ehrlich’s memorandum opinion, insurance companies are entitled to use, but must protect under the provisions of HIPAA, a claimant’s PHI which the insurance company obtains during insurance defense litigation.

2. The New HIPAA Qualified Protective Order Contains an “Explicit Waiver”

The New HIPAA Qualified Protective Order is lengthy and descriptive and looks more similar to a HIPAA form at a hospital than the old HIPAA Qualified Protective Order. The old HIPAA Qualified Protective Order narrowly stated PHI could be used by insurance defense counsel “in any manner reasonably connected with the . . . litigation” and further provided that insurance defendants must destroy PHI when no longer needed in litigation.

This language in the old HIPAA QPO was misleading and conflicted with the duty of insurance companies to “maintain a complete record of all books, records and accounts.” 215 ILCS 5/133. Therefore, Judge Ehrlich “concluded that a simple but comprehensive remedy comes in the form of a redrafted HIPAA QPO containing an explicit waiver executed by the person whose PHI will be disclosed.”

Now, the new HIPAA QPO provides explicit references to the use of PHI by insurance companies, including for purposes ranging from “adjusting” to “[s]tatistical information gathering” and “actuarial calculation.”

3. The HIPAA QPO Recognizes the Right of Insurance Companies to Use PHI

In formulating his decision, Judge Ehrlich acknowledged that “the use of records is vital to the insurance industry and the state’s regulation of it.” He went even further in stating “State. Farm is unquestionably correct that there exists a compelling state interest for insurers to review, use, and retain a plaintiff’s PHI.”

In fact, the HIPAA Protective Order provides that one of its underlying goals is to allow insurance companies to comply with other regulations regarding PHI and to “[f]urther the interest of the State of Illinois in regulating the business of insurance.”

4. Claimant’s Case can be Dismissed if she Does Not Agree to the New HIPAA QPO

If a claimant refuses to agree to a HIPAA QPO, then the court may impose sanctions on the claimant under Illinois Supreme Court Rule 219, including payment of attorney’s fees or having a claimant barred from testifying, or even dismissal of claimant’s complaint.

5. A HIPAA QPO is Not Required Outside of Litigation

A HIPAA QPO is only required where the claimant affected by the release of PHI is engaged in litigation. Judge Ehrlich clarified this issue and stated, “This court does not address the scenario in which a person at the pre-suit stage voluntarily discloses the same information to an insurer in hopes of settling a claim.” Nonetheless, it is important for insurers to ensure compliance with any applicable federal or state law regarding the use and safekeeping of PHI.

For questions about this topic or any other Insurance Defense topics, contact Paul Steinhofer or Jim Cook at McKenna Storer.

You may be interested in reviewing or downloading our Insurance Defense Practice Resume.

About Paul Steinhofer

Paul S. Steinhofer, a former prosecutor, has depth and experience in preparing and trying cases. His attention to detail and focus leave no stone unturned in his prosecution of his client’s position. A seasoned advocate, clients of McKenna Storer appreciate that Paul makes client communication a priority. Paul is a gifted, first-chair litigator who also excels at educating his clients, so they can understand and make informed decisions about their cases. Read his full bio here: Paul S. Steinhofer Full Bio