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

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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