Pharmacist found liable for $1.44 million in HIPAA professional liability case

Insureon Staff.
By Insureon Staff
August 19, 2013
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In a recent HIPAA violation case, a pharmacist at an Indiana Walgreens was held liable for $1.44 million. Read the details of this particular case and how pharmacists can avoid similar lawsuits.
Pharmacist helping patient.

An Indiana court has awarded a plaintiff $1.44 million in a professional liability case she brought against a pharmacist, according to reports from Mondaq. The case highlights how HIPAA requirements affect the day-to-day work required of pharmacists and other allied health professionals, as well as the potentially stratospheric cost of violating those requirements.

Here’s a look at what happened in the Indiana case and how you can ensure that your allied health practice maintains HIPAA compliance and avoids costly fines and judgments.

HIPAA privacy violation: improper disclosure of client information

According to sources, the million-plus-dollar judgment resulted from a Walgreens pharmacist improperly accessing one patient’s information and sharing it with her husband. Upon gaining access to the patient’s information, the husband harassed and intimidated her. The alleged reason for the harassment and intimidation was that the patient had a prior relationship with the pharmacist’s husband that resulted in the birth of a child. The husband apparently used information from the patient’s file to deny child support payments the patient requested.

The Indiana Superior Court ruled in favor of the patient, noting that accessing and sharing her information violated standards of care outlined by HIPAA. In its decision, the court noted that the pharmacist was negligent and guilty of privacy invasion and publication of negligent facts (a professional liability / malpractice matter). It also found that Walgreens had liability for failing to terminate the pharmacist after it learned about the behavior.

What’s perhaps most interesting for other pharmacists and allied health professionals, however, is the potential decision of higher courts.

HIPAA violations, standards of care, and causes of action

This case made the news in part because it marks the first time a court awarded a plaintiff such a large judgment for a defendant’s violation of standards of care defined by HIPAA. Here’s why that matters for allied health professionals:

Standards of care as causes for action

In law, a “cause of action” is a legal reason why a plaintiff seeks damages from a defendant. In this case, the patient cited the pharmacist’s violation of HIPAA’s standards of care as cause for action. Because the court ruled in the patient’s favor, it set a precedent for allowing other patients to sue allied health professionals (and receive financial awards) over HIPAA violations.

Variations in state law

The Indiana court’s ruling, however, could be vastly different from rulings in similar cases in other states. That’s because state law determines the extent to which HIPAA violations can be considered causes of action, and whether those violations can result in more than monetary (civil) damage awards. In other words, some states might come down even harder on HIPAA violators.

Establishment of legal precedents

There are still relatively few legal precedents for how HIPAA violations are handled. Specifically, it’s possible that, depending on state laws, HIPAA violations could lead to criminal as well as civil penalties. The Indiana Walgreens case led only to civil penalties (a monetary fine). For this reason, allied health professionals need to be prepared to defend themselves and their practice if and when they’re charged with professional liability for HIPAA violations.

How to protect yourself and your practice

So what can pharmacists and other allied health professionals do to ensure that they’re protected from lawsuits over HIPAA violations? Obviously, the most important thing is to make sure you are aware of HIPAA care standards, especially as they relate to disclosure of patient information, and that you establish protocol to ensure your employees adhere to those standards.

It’s also important to remember that, even if you don’t think you violated HIPAA guidelines, a dissatisfied patient could bring a lawsuit against you. If your state doesn’t have clear legal precedents outlining how such a lawsuit should be handled, you’ll need legal representation to help you argue your case. A solid malpractice / professional liability insurance policy can pay for the costs of mounting such a defense, which is crucial given the high cost of legal fees.

Finally, keep lines of communication open among yourself, your patients, and your employees. Many legal actions can be avoided by addressing small problems before they grow into big ones.

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