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By Amy Goldstein
Washington Post Staff Writer
Friday, March 22, 2002; Page A01

The Bush administration yesterday proposed changing some of the federal rules designed to protect the confidentiality of Americans' medical records, including the ability of patients to decide in advance who should be able to use their personal health information.

The proposal would alter a federal safeguard, adopted by the Clinton administration, that compels patients to give written permission before their records may be disclosed to doctors, hospitals, pharmacies and insurance companies. The new version would erase that requirement and, instead, say that patients must at some point be notified of their privacy rights by those who use their records.

In other changes that would loosen privacy rules, the administration wants to enable more parents to find out what medical services their teenagers seek and make it easier for researchers to gain access to patients' records. In addition, business associates of various health care providers would be given more time before they have to follow the confidentiality rules.

But in at least one respect, the administration is suggesting a significant strengthening of privacy rights by allowing patients to decide up front whether to allow their records to be used for marketing purposes.

The proposal, issued yesterday by federal health officials, represents President Bush's effort to tailor a policy that has daunted presidents and lawmakers for years: how much control to give consumers over the proliferating access to medical records in an electronic age.

Last April, Bush announced that he would move ahead with the medical confidentiality regulation adopted by President Bill Clinton -- but indicated he would modify some rules to make them simpler and less onerous for health care companies and practitioners.

Yesterday, in disclosing what form those modifications will take, Health and Human Services Secretary Tommy G. Thompson said, "The changes we are proposing today will allow us to deliver strong protections for personal medical information while improving access to care."

The new version was largely criticized by privacy advocates, physicians and Democratic leaders on health care. But it was hailed by the insurance industry. "It's a major step toward creating a workable rule," said Karen Ignagni, president of the American Association of Health Plans. She and other insurance representatives, however, contended that the administration should go further to ease regulatory costs and give the industry adequate time to adapt to the rules.

Administration officials said they will allow a relatively quick, one-month period for outside comment on its proposal, before HHS administrators begin to refine it and issue a final version. It does not require congressional approval.

In the meantime, the parts of the Clinton-era rules with which Bush agrees have taken effect, although health care providers will not be required to comply with them until next year. The basic aspects that remain intact guarantee Americans the right to inspect their own medical records that are kept in electronic form, determine who else has seen them, and complain when they are used without permission.

The proposed changes are the latest phase in a controversy that has shuttled up and down Pennsylvania Avenue for years. In 1996, as part of a broader health reform law, Congress set itself a deadline for adopting patient-privacy protections, saying it had to do so within three years or cede that authority to HHS.

When lawmakers missed that deadline, Clinton's aides began writing the rules, which they finished shortly before he left office. Once Bush took over, opponents of the regulations resumed fierce lobbying, trying to capitalize on what they sensed was a more lenient attitude in the new administration toward federal regulation. Yesterday's proposals provide the first insight into how far Bush wants to go to address their complaints.

HHS civil rights officials, who briefed reporters on condition of anonymity, said that what they called "very targeted changes" were intended to protect patients' privacy while simultaneously eliminating facets of the original rules that they said would interfere with patients' access to care -- and weaken its quality. That reasoning essentially embraces the arguments the insurance industry has raised.

Specifically, the new version strikes a different balance in patients' control over access to their records.

While eliminating the requirement that consumers must give written consent for records disclosure, HHS officials said, the proposal would strengthen the requirement for health care providers to make sure patients are aware of their privacy rights. Doctors, pharmacies and others who use records would have to make a "good faith effort" to obtain written acknowledgment from patients, although not necessarily ahead of time, that they had been told about privacy practices.

HHS spokesman William Pierce said the revision would avert the possibility that "you could have been stopped in your tracks" from getting needed treatment for failing to give permission for use of records.

Janlori Goldman, director of Georgetown University's Health Privacy Project, said the elimination of advance permission "cuts the legs off the privacy regulation." Sen. Edward M. Kennedy (D-Mass.) said that giving permission before personal medical information is disclosed "is central to protecting people's medical privacy." And Donald Palmisano, the American Medical Association's secretary-treasurer, said, "there is more opportunity for patient privacy to be violated now."

In another contentious change, the administration's proposal would make it easier than Clinton intended for parents to see their children's medical records in any state that does not have a law that specifically guarantees minors their medical privacy rights. Privacy advocates said that change would deter teenagers from seeking sensitive health services, such as abortions or treatment for mental illnesses or sexually transmitted diseases.

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