Hopefully, it wont come to that. But just to be safe, workers comp insurers must be particularly vigilant to make sure that privacy regulations do not keep them from doing their job in investigating claims.

The problem centers on the fact that the rule allows “covered entities”–such as physicians, hospitals, health plans and other providers–to only disclose medical information deemed by the provider to be “minimally necessary” to workers comp insurers. Insurers fear this puts healthcare providers on the spot legally, forcing them to determine exactly what is “minimally necessary” information.

In this litigation-happy society, who would blame a healthcare provider for playing it safe and giving out as little data as possible to workers comp insurers? This is bound to hinder claims handling, and could open the door to widespread fraud.

Insurers need to put systems in place to monitor the response from providers under the new rules. Are they getting all the information they used to receive (and need)? If not, they must hold HHS to its promise to revise the rule so that workers comp insurers arent left holding the bag.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 19, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.