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Improper Disposal of Medical Records

Natalie Kelly, NAS Insurance Services/Lloyds Associate Vice President of Claims

Allegation 

Violation of Health Care Privacy and Security Rules.

Disposition 

Settled without fines or penalties. Legal and patient notification costs totaled $85,000.

Case summary 

Employees of a physician disposed of medical records inappropriately by placing them into office recycling bins. Although the contents of the recycling bins were supposed to be shredded, these instructions were not communicated to the building’s janitorial services. As a result, the files were transferred to the building’s recycling area without being shredded. Although only approximately 500 patients were involved in the breach, the physician could not be sure which files had been placed in the recycling bins and which had not. Therefore, all of the physician’s 7,500 current and past patients had to be notified of the breach. The physician was also required to notify the Department of Health and Human Services (HHS), which responded by opening an investigation and requiring the physician to implement a program to comply with Privacy and Security Rules. Once its investigation had been completed, HHS dismissed the matter without assessing fines or penalties against the physician.
Analysis 

The insured’s responsibility to safeguard patients’ protected health information was not met. Failure to adequately supervise the destruction of the records created a scenario that could have resulted in a significant fine under HIPAA Privacy or other regulations. Although no fine or penalty was imposed, there were significant legal and patient notification costs related to compliance with privacy laws, and the insured’s staff were forced to deal with unwanted distractions that took time away from their normal duties.

Risk management principles 

Protecting patients’ health information should be given a high priority to avoid violations of HIPAA, HITECH, and other health information regulations. Avoid outsourcing or delegating the destruction of files or records to others unless you or your staff members are present to supervise the shredding of files or the destruction of data storage devices.

OMIC’s professional liability policy includes coverage for this type of event. Under the Broad Regulatory Protection and eMD Cyber Liability benefits, there is a $50,000 limit to pay for legal and patient notification costs related to alleged HIPAA Privacy and other regulatory and data breach violations. See Policy Issues for more information.

Learn about the 14 Additional Benefits in your OMIC policy that will protect you from these (and related) types of exposures.

Reflections on Being Chairman

My three-year tenure as OMIC’s Chairman concludes December 2013 as does my 15 years on OMIC’s Board and Committees. As I leave, a final and pleasant duty is to announce that Tamara R. Fountain, MD, will succeed me as your new Chair, effective January 1. Dr. Fountain’s experience, skills, and accomplishments are set forth fully in Eye on OMIC.

In 1999, when I was invited to serve as an OMIC committee member, I knew nothing about professional medical liability insurance and even less about the company and staff working behind the scenes to provide this essential coverage. After my first OMIC Board of Directors’ meeting, I returned to my practice in Austin, Texas, with an appreciation of the dedication, experience, and breadth of knowledge of OMIC staff and their close working relationship with board and committee members. I came to realize that the dedicated staff is the foundation that makes OMIC such a strong company able to serve our members and the profession so well. I wish to acknowledge all the staff from those who carry the responsibility of leading the company to those who do the detailed work involved in managing hundreds of claims, providing daily risk management advice, handling policies for 4,500 insureds, and accounting for hundreds of millions of premium dollars. I am grateful for all I have learned from the staff and appreciate their individual and collective efforts.

Supporting OMIC’s staff is an elite team of advisors and consultants who provide the critical actuarial, investment, reinsurance, and legal advice and expertise that has been instrumental in OMIC maintaining an A (Excellent) rating from A.M. Best since 2007. Many of these advisors have been with OMIC since the beginning and take great pride in their role in bringing about its success.

While serving on various standing committees (Underwriting, Claims, Risk Management, Finance), I witnessed this central tenet: OMIC will not settle a claim without the consent of the insured and will fight tirelessly when a strong defense is justified and the case is defensible. One extraordinary case involved defense costs in excess of $1 million, multiple jury trials, several appeals to a state supreme court, and 20 years of litigation before a final resolution was reached in favor of the defense. Throughout this long ordeal, OMIC stood by the insured. Having been the subject of a lawsuit myself, I speak from personal experience when I say that your livelihood, self esteem, and assets are only as safe as the company insuring you. With OMIC, you are assured of claims specialists and defense lawyers who are experienced in handling ophthalmic claims, Board members who are practicing ophthalmologists reviewing these claims, and a financially strong company that is able to endure even if a claim goes on for decades.

I’ve also come to appreciate the collaborative efforts of OMIC and the American Academy of Ophthalmology to improve patient care and minimize liability risks. Whether developing informed consent and wrong site/wrong IOL courses, establishing cooperative venture programs, or providing best practices, the staff of both organizations work jointly and cooperatively. OMIC could not have had better allies and stronger supporters to facilitate this collaboration than Academy Executive Vice Presidents Bruce E. Spivey, MD, H. Dunbar Hoskins Jr., MD, and David W. Parke II, MD.

Reflecting on my three years as Chairman, I realize I have gained more than I have given, learned more than I have taught, and had a lot of fun along the way. I leave the company in great hands and with thanks to those who have helped me along the way.

John W. Shore, MD, Chairman of the Board

Tamara Fountain to Chair OMIC Board in 2014

The OMIC Board of Directors has elected Tamara R. Fountain, MD, as Chair effective January 1, 2014. She succeeds John W. Shore, MD, who has reached the maximum number of years of service allowed under OMIC’s bylaws.

Dr. Fountain joined OMIC’s Board of Directors in 2007 after serving six years as a committee member. She has chaired the Strategic Planning, Marketing, and Risk Management Committees and currently serves on the Executive Committee as OMIC Secretary. In addition, Dr. Fountain has held several leadership positions within the American Academy of Ophthalmology.

Recognizing the significant contributions of Dr. Shore during his nearly 30 years of leadership within ophthalmology, she said, “We are navigating the changes in healthcare better than many other specialties because of the years of service of dedicated ophthalmologists like Dr. Shore who have led our company during many of our most successful years. I pledge every effort to continue to meet such high standards during my service as OMIC’s Chair.”

Dr. Fountain graduated with a BA from Stanford University and an MD from Harvard Medical School. After completing a residency in ophthalmology at Johns Hopkins’ Wilmer Eye Institute, she pursued fellowship training in oculoplastic surgery at Doheny Eye Institute of the University of Southern California. A professor of ophthalmology at Rush University Medical Center in Chicago, Illinois, Dr. Fountain maintains a private practice in oculofacial plastics at Rush and in the Chicago suburb of Deerfield. She resides in Northbrook with her two children, Natalie and Nicholas.

Patient Education Checkup Initiative! New Consent Forms and Videos by OMIC and the Academy.

Why take the risk? Outdated patient education materials and informed consent documents can increase the risk of a medical malpractice suit. Here are three simple yet effective risk-management strategies that could help you prevent or minimize the impact of a malpractice lawsuit or claim.

#1. Ensure your patient education materials are up to date. Using the Academy’s patient education brochures? Download this checklist to conduct an easy audit of your brochures from the Academy.

#2. Visit OMIC’s Consent Forms to ensure that you have the most current informed consent documents.

#3. Clearly document in your patient’s chart the educational materials provided and the informed consent obtained. Defense attorneys advise documenting the timing and receipt of educational materials by the patient with his or her initials.