Consumer Federation of California

Voters approve of requirement for damage awards for privacy breaches

California lawmakers are poised to weaken a patient privacy law that enjoys overwhelming voter support.   77% of voters support the Confidentiality of Medical Information Act (CMIA), which gives patients the right to sue a health care provider for damages of $1000 for each medical record that is released without the patient’s permission, a statewide survey found.

Support for current law increased when voters heard the argument that allowing privacy lawsuits could cost violators ‘tens of millions of dollars.’

AB 439 (Skinner) would immunize large health care corporations that commit massive patient privacy violations from damage awards, as long as they can provide an ‘affirmative defense’ whenever sued by patients. AB 439 would deny a judge the discretion to award damages based on a review of all the circumstances surrounding the breach. The bill will be heard in the Senate Judiciary Committee on Tuesday July 3.

AB 439 is sponsored by McKesson Corporation, a large pharmaceutical distributor and healthcare information systems business. McKesson reported revenues of $122 billion in its 2012 Annual Report. It ranks #15 on the Fortune 500.

Opponents of AB 439 include: Consumer Federation of California, Consumer Action, Consumer Watchdog, CALPIRG, Privacy Rights Clearinghouse, California Alliance for Retired Americans, Electronic Frontier Foundation and World Privacy Forum.

Grove Insight conducted the poll of 600 likely November 2012 voters on June 26, 27 and 28, 2012.  87% of Democrats, 73% of Decline to State voters, and 67% of Republicans support current medical privacy law.  The argument that lawsuits could cost privacy violators ‘tens of millions of dollars’ strengthened support. 32% of voters said that made them more likely to support the law, and only 15% said they were more likely to oppose the law ‘ nearly identical to the opposition level at the start of the survey. 43% said the argument made no difference.

‘Lawmakers who favor AB 439 are out of step with their constituents. Californians want to hold health care businesses accountable in court – and want these corporations to pay a stiff price when they violate our medical privacy. AB 439 eliminates an important financial deterrent against cutting corners when it comes to safeguarding our health records. The State Senate should reject this deeply flawed measure,’ said Richard Holober, Executive Director of the Consumer Federation of California.