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Congress intended the Health Insurance Portability and Accountability Act (HIPAA) of 1996 to protect people from invasions of their privacy about their medical records. Unfortunately, the well-intentioned legislation created HIPAA issues in estate planning. A Texas estate planning attorney can explain these problems and craft an estate plan that will meet your needs and goals without running afoul of the HIPAA regulations.
HIPAA Problems for Estate Planning
In a nutshell, doctors and hospitals can get into serious trouble with the authorities, including fines, losing their license to practice medicine, and even facing criminal charges, if those violate the rules of HIPAA and disclose someone’s private medical information without proper authorization. The only person who can have access to that information is the patient, unless he gives permission, using a HIPAA-compliant form.
For hundreds of years, many doctors talked with close friends and relatives of someone with a grim medical diagnosis and counseled them through a difficult time. HIPAA forbids doctors from providing that service if it means disclosing medical information about the patient.
The family doctor, for example, used to be able to talk with someone and let them know that their loved one has dementia and needs someone to manage his financial matters and daily care. Today, doing so could end the doctor’s career.
Many estate planning documents involve an assessment of someone’s mental competence, but it is increasingly difficult to enforce those papers, even if the person who signed the document did so to protect himself in case he ever became incompetent.
Let’s say that someone signed a Durable Power of Attorney and a Healthcare Power of Attorney that designated his daughter as his agent to handle his financial matters and medical decisions if he became incapacitated. Years later, he developed Alzheimer’s disease.
He became combative and angry if anyone suggested that he needed dementia care. He refused to let his daughter manage his money, even though he made massive mistakes, like paying the electric company $10,000 for an $87 power bill. He forgot to pay the water bill for so long that the utility company shut off his water. His doctor would not release to his daughter the information she needed from his medical records to support her assertions that her father was incompetent because of Alzheimer’s.
How to Avoid Problems in Estate Planning
While the person still has the capacity, the lawyer can take steps to avoid HIPAA problems down the road. Here are a few suggestions:
- Have the person sign a HIPAA authorization that gives the health care providers permission to release his personal health information to specific people named in the document. The authorization must follow all the rules for HIPAA releases.
- Make sure all Power of Attorney documents are Durable. A standard (non-durable) power of attorney terminates automatically when the person who signed it becomes incapacitated.
- When setting up a trust, incorporate a HIPAA authorization into the trust document that authorizes the successor trustee to obtain personal medical information to verify if the trustee becomes incapacitated.
- All documents related to making healthcare decisions, like a medical power of attorney or a healthcare proxy, need to include HIPAA authorizations to allow the person designated in the document access to the person’s medical records. The named decision-maker will need to review the medical records to confirm that the person is, indeed, incompetent, and the agent has the authority to make medical decisions and to learn the person’s medical history to make informed medical decisions on his behalf. People should not have to make medical decisions for other people when ignorant of the pertinent medical information.
A Texas estate planning attorney can talk to you and help you “HIPAA-proof” your estate plan. Contact us today.