Law Office of Linda Sommers Green

Trust-in-a-Box: The Perils of Foolish Frugality

LINDA SOMMERS GREEN

Attorney at Law

200 Union Boulevard, Suite 316, Lakewood, Colorado  80228

(303) 984-9900 • Facsimile (866) 399-3560 • Cell (303) 619-8850 • www.coloradowills.org

August 15, 2005

                             IMPORTANT NOTICE

CONCERNING THE FEDERAL HEALTH INSURANCE

PORTABILITY AND ACCOUNTABILITY ACT (HIPAA)

Dear Friends and Clients:

I hope the below information will help you more fully understand HIPAA and its serious implications to your estate plan.   While I cannot control the advent of new Federal or State laws, I will always do my best to keep you informed of changes, such as HIPAA, which have an impact on the effectiveness of your legal documents. 

HIPAA, WHAT IS IT?   "On April 14, 2003, the privacy regulations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) took effect. HIPAA, which was crafted to address problems related to the portability of health insurance, gave rise to sweeping rules regarding the privacy of medical records. The privacy rules were in the works for seven years before they finally took effect in April 2003, and they apply to virtually every health care provider. Soon after the first of this year, 2004, the reaction to this new Federal law became apparent.  If you have been to a doctor, dentist, hospital or other health care provider lately (even an optometrist) you've undoubtedly been required to fill out a new set of forms as a result of HIPAA.

VIOLATIONS APPLY TO MEDICAL PROVIDERS – NOT YOU.     It is a violation for a medical provider to release any medical information relating to you unless you have signed a release which is HIPAA compliant.  The disclosure provisions of HIPAA call for a $100 fine for each violation. If the violation is "knowing", there are criminal penalties of up to a year in prison and a $50,000 fine. If the wrongful use of the information is for a commercial advantage, the penalty is up to seven years in prison and a $250,000 fine. It is, therefore, no surprise to find that medical staff and health care providers have become more and more resistant to releasing any health care information to unauthorized persons or even potentially unauthorized persons.  You can probably understand why medical providers have reacted so strongly to HIPAA.

HOW DOES THIS AFFECT ME?   What does this have to do with your estate planning documents? Living Trusts, Durable Financial Powers of Attorney, and Advance Health Directives name a successor Trustee or Agent to act on your behalf in the event of your incapacity.   In most estate planning documents, incapacity is established by the written opinion of one or more licensed physicians.  Unless your named successor Trustee or Agent can obtain your medical records for the doctor to evaluate whether or not you are incapacitated, no medical evaluation can take place. This will prevent those you have named in your legal documents from carrying out your wishes when you need medical attention or in the event of your incapacity.

SO WHAT DO I DO?   Estate planning journals, legal organizations, and knowledgeable attorneys are advising that documents be amended immediately to avoid running into a HIPAA related problem when the written opinion of a physician is needed.  To ensure that a physician is willing to release a written opinion to trigger the authority of a successor Trustee of a Living Trust, or an Agent under a Durable Financial Power of Attorney or Health Care Power of Attorney (including the Living Will), I advise amending your estate planning documents with the HIPAA amendment authorization. The authorization will permit the release of medical information under HIPAA, to the persons named as successor Trustees and Agents.

WHEN SHOULD I DO THE AMENDMENTS?   It is important to complete these Amendments at your earliest convenience as medical organizations are very insistent on having HIPAA compliant language in any medical release authorization.  The Maricopa Integrated Health System Policy & Procedure brochure states,

“HIPAA Alert: In order to release records under a written release signed

by the patient or the patient’s legal representative, a covered entity must

ensure this release meets the requirements of an authorization under the

HIPAA Privacy Standards.  45 C.F.R. 164.508.

ARE ALL AMENDMENTS CREATED EQUAL?   The HIPAA Amendments which I am providing for my clients have been “field tested” to ensure that they not only meet all legal requirements of the HIPAA law, but that they are acceptable by medical institutions, and that they maintain the integrity and enforceability of the documents they are amending – Caution:  Some commercially produced amendments can actually void the document they are trying to amend.  

Please call me with any questions.

Sincerest regards,                                

Linda Sommers Green

Attorney at Law

P.S.      Please note my change of address at the top of this letter.  My telephone number has stayed the same.