Memo from Jim Pyles:

The decision and order in our case in Citizens for Health v. Thompson was issued by District Court Judge Mary McLaughlin this afternoon. She has ruled in our favor on standing but, unfortunately, against us on the other issues. The decision is quite thinly reasoned and principally recites and endorses the government's arguments with little analysis. She denies our constitutional claims, for example principally for the reason that:

The Amended Rule is wholly permissive with respect to whether a covered entity should seek consent from a patient before using his or her information for routine purposes. Slip op. at 38.

Of course, this was precisely our point. The patient's ability to exercise his or her right to medical privacy has been transferred by the federal government to covered entities.

The court's analysis of the other issues was similarly sketchy:

1. Standing--The court ruled that the Plaintiffs had standing to bring this action on the following grounds:

A. The court need only find that one of the plaintiffs have standing in order to deny the government's motion to dismiss.

B. Dr. Deborah Peel has standing to bring the action because

1. She has demonstrated that she has suffered injury in fact because at least three providers denied her requests for restrictions (a consent process) for her and her family, others have not responded, and the notices she has received state that they will routinely disclose her health information. P. 23.

2. Her injury is "imminent or highly likely to occur" because she has received many notices from providers telling her that they are using her health information for routine purposes. P. 23.

3. "The Amended Rule has changed the landscape established by the Original Rule for the disclosure o health information for routine purposes. That fact does not mean that the change is in violation of law. But it does mean that Dr. Peel can challenge the change." P. 24.

4. The court ruled that Dr. Peel's injury in fact is causally connected and traceable to the action of HHS in issuing the rule--"There is causation...because the Amended Rule has a sufficiently determinative or coercive effect on the action of the providers." P. 25.

C. HHS did not violate the rule making requirements of the Administrative Procedure Act

1. HHS' explanation of the Amended Rule was adequate because it explained the change in detail, discussed possible alternatives and determined that recession of the right of consent was the most efficient means to achieving the purposes of HIPAA. P. 30.

2. The court conceded that HHS did not address the extensive findings in the Original Rule but held that HHS only needed to establish a rational connection between its decision and the findings connected with the Amended Rule (i.e.; that consent might cause some delays in health services). P. 31.

3. The court did not dispute that HHS failed to respond to many public comments but concluded that this was significant only if it failed to address relevant factors which, in this case, was promoting "efficiency and effectiveness" of the health care system. P. 33.

D. The Rule was within the scope of authority granted to HHS by Congress under HIPAA.

1. The Amended Rule is reasonably related to purposes of HIPAA to improve the efficiency and effectiveness of the health care system. P. 35

2. "Although HIPAA also required the Secretary to protect the privacy of health information, the Court finds nothing in the statute requiring the Secretary to maximize privacy interests of efficiency interests. His mandate is to balance privacy protection and the efficiency of the health care system--not simply to enhance privacy." P. 35. (Here the court ignored HHS' own findings with respect to Congressional intent that privacy was the sine qua non of an efficient health system.)

3. The Rule is not retroactive because it was amended before the effective date and because it "does not impair any stricter privacy rights created by state law, ethical codes or standards of practice." P. 37.

E. The Amended Rule does not violate the plaintiffs' 5th or 1st Amendment rights.

1. "Because the Amended Rule does not compel anyone to use or disclose the plaintiffs' health information for routine purposes without the plaintiffs' consent, the Court finds that the Amended Rule does not violate the plaintiffs' constitutional rights." P. 37 (Apparently an HHS rule authorizing providers to discriminate against minorities would be permitted under this rationale if the rule did not compel the discrimination.)

I urge you all to read the decision carefully. I will provide you with an analysis of the many arguments we made that the court simply did not address.

I wish we could have secured a better result, but the analysis indicates that in challenging federal regulations, the presumptions are all in favor of the government.

Jim Pyles