2008 February 03 | money news blog

Archive for February 3rd, 2008

03 02 2008

IS PURE WEIGHT LOSS VIOLATING HIPAA PRIVACY LAWS? (Part 2)

Posted by: in Networking

(FranchisePick.Com) Background: December, 2007, Pure Weight Loss (formerly LA Weight Loss) announced it was closing all its 400 centers nationwide by Jan. 4., 2008. With no notice and little explanation, Pure Weight Loss left thousands of customers without a weight loss program, without the half-million dollars they’d collectively prepaid for Pure Weight Loss services and products, and with NO information regarding the whereabouts of their confidential financial and health records, which include both credit card data, personal disclosures and blood test results.

In Part One, we asked: Is Pure Weight Loss violating the HIPAA* Federal privacy law?

FranchisePick.com commenters have shared some disturbing information about the alleged mishandling of and indifference to Pure Weight Loss members’ confidential records:

Ramone [former manager]: At my center they were just left behind .(I worked for LA Franchise, but was shut down the same time as Pure) Only current or 2007 files were boxed and sent in . I as a former manager was very concerned about this but all my regional wanted boxed and sent was current. I left 2 file cabinets full of client charts with very private info in them behind to probably be tossed into the trash by either the building manager or the next tennant. No one at the home office of the franchise I worked for seemed to care. As the manager I was very upset by this, but where could I store them , so they all sit there as I’m sure is the case at most of the Pure Centers.

Curious [customer]: Were you prohibitted from shredding them or mailing them to your clients?

Ramone [former manager]: It was as if they didn’t even exist. I was given no agenda for them. When I ask what would happen to all of them, I was told someone eventualy would come and pack up everything.I think we all know this is just not going to happen.

Barb [customer]: What DOES happen to our confidential info? They have our names, ss#, address, and the Care Credit account #. This isn’t good.

Lynn [former manager]: Our center, here in the Chicago Market, happened to get them all boxed and dumped off at the UPS station. We boxed ALL of ours up. Let me assure you, too, it was done at our own goodwill.

There was no organization. I had no idea what was going on until the last day. We were supposed to have been sent boxes and such.. but I only received labels. I went and purchased boxes. There was a small group made up of former employee, myself and our children bundled them all and shipped them to Corporate.

Our biggest concern was that they would be left in our center for the “clean up” crews to go through. The clean up crews sent in my the leasing company.. not Pure.

rose [customer]: ...I’m worried about the records - that’s very bad. Those guys need to be accountable for the HIPAA laws.

Kim Matunis [customer]: How can we go about finding out where our medical records are…..I’m very afraid!!

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03 02 2008

IS PURE WEIGHT LOSS VIOLATING HIPAA PRIVACY LAWS? (Part 2)

Posted by: in Networking

(FranchisePick.Com) Background: December, 2007, Pure Weight Loss (formerly LA Weight Loss) announced it was closing all its 400 centers nationwide by Jan. 4., 2008. With no notice and tiny explanation, Pure Weight Loss left thousands of customers without a weight loss program, without the half-million dollars they’d collectively prepaid for Pure Weight Loss services and products, and with NO information regarding the whereabouts of their confidential financial and health records, which include both credit card data, personal disclosures and blood test results.

In Part One, we asked: Is Pure Weight Loss violating the HIPAA* Federal privacy law?

FranchisePick.com commenters have shared some disturbing information about the alleged mishandling of and indifference to Pure Weight Loss members’ confidential records:

Curious [customer]: Were you prohibitted from shredding them or mailing them to your clients?

Barb [customer]: What DOES happen to our confidential info? They’ve our names, ss#, address, and the Care Credit account #. This isn’t good.

Our biggest concern was that they would be left in our center for the “clean up” crews to go through. The clean up crews sent in my the leasing company.. not Pure.

rose [customer]: ...I’m worried about the records - that is very bad. Those guys need to be accountable for the HIPAA laws.

Kim Matunis [customer]: How can we go about finding out where our medical records are…..I am very afraid!!

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No Comments »

03 02 2008

IS PURE WEIGHT LOSS VIOLATING HIPAA PRIVACY LAWS? (Part 1)

Posted by: in Networking

(FranchisePick.Com) In December, 2007, Pure Weight Loss (formerly LA Weight Loss) announced it was closing all its 400 centers nationwide by Jan. 4., 2008. With no notice and little explanation, Pure Weight Loss left thousands of customers without a weight loss program, without the half-million dollars they’d collectively prepaid for Pure Weight Loss services and products, and with NO information regarding the whereabouts of their confidential financial and health records, which include both credit card data, personal disclosures and blood test results.

The PA Attorney General is suing Pure Weight Loss and PWL CEO Vahan Karian for fraud. But is Pure Weight Loss also guilty of blatantly violating the “HIPAA” Federal privacy law?

According to the SUMMARY OF THE HIPAA PRIVACY RULE issued by the U.S. Department of Health & Human Services:

The U.S. Department of Health and Human Services (“HHS”) issued the Privacy Rule to implement the requirement of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). 1 The Privacy Rule standards address the use and disclosure of individuals’ health information—called “protected health information” by organizations subject to the Privacy Rule — called “covered entities,” as well as standards for individuals’ privacy rights to comprehend and control how their health information is used…. A major goal of the Privacy Rule is to assure that individuals’ health information is properly protected…

Violations of the HIPAA Privacy Rule can be substantial, especially the criminal penalties for sharing information with third parties for financial gain:

Civil Money Penalties. HHS might impose civil money penalties on a covered entity of $100 per failure to comply with a Privacy Rule requirement.88 That penalty may not exceed $25,000 per year for multiple violations of the identical Privacy Rule requirement in a calendar year. HHS may not impose a civil money penalty under specific circumstances, such as when a violation is due to reasonable cause and did not involve willful neglect and the covered entity corrected the violation within 30 days of when it knew or should have known of the violation. OCR Privacy Rule Summary 18 Last Revised 05/03

Criminal Penalties. A person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA faces a fine of $50,000 and up to one-year imprisonment.89 The criminal penalties increase to $100,000 and up to five years imprisonment if the wrongful conduct involves false pretenses, and to $250,000 and up to ten years imprisonment if the wrongful conduct involves the intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or or malicious harm. Criminal sanctions will be enforced by the Department of Justice.

At least one FranchisePick.com commenter mentioned that since blood tests were involved, the information in the Pure Weight Loss files would be subject to HIPAA privacy rules.

Did Pure Weight Loss follow proper procedures in handling the confidential files of thousands of members of their 400 weight loss centers?

Leave your comments below because that’s what our readers will answer in: IS PURE WEIGHT LOSS VIOLATING HIPAA PRIVACY LAWS? (Part 2)

WHAT’S YOUR TAKE? COMMENTS WELCOME.

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