Medical Records and the Law

Theories of Liability 403was shielded from liability by a qualified privilege. Specifically, the hospitalhad acted in good faith and in pursuit of its valid business interestin obtaining compensation. In addition, the statement was limited inscope to the proper purpose, occasion, manner, and parties, having beendisclosed only as required on the standard insurance claim forms. As illustratedby this case, the qualified privilege provides important protectionagainst defamation liability for healthcare providers who releasepotentially defamatory information to insurers, health plans, utilizationreviewers, and others with control over payment for medical services.However, healthcare personnel are cautioned to consider other legaltheories and statutes, discussed throughout this chapter and elsewherein the book, that may create liability.Courts have also applied the qualified privilege against defamationwhen the interest of a healthcare provider is not directly affected. Suchcases may arise when medical records information is disclosed to employers,insurance companies, litigating parties, news media, or others.For example, an insurance company was sued by one of its insuredsafter the company had informed an agency subscribed to by other lifeinsurance companies that the insured had a heart condition.The courtdismissed the suit, holding that the insurance company’s disclosurewas shielded by qualified privilege. 23 In a later case based on virtuallyidentical facts, a court found that a qualified privilege to exchangemedical information was supported by the insurer’s and agency’s businessinterest in the information, as well as by the public’s interest inthe insurance industry. 24 Another court has held that, in an action predatingHIPAA and under that state’s privacy statute, a qualified privilegeprotects parties who disclose medical information where thedisclosure is reasonably necessary to protect or further a legitimatebusiness interest. 25The qualified privilege may also apply when the release of informationserves a public duty, such as protecting the community from highlycontagious diseases. 26 For example, in an early case, the NebraskaSupreme Court held a physician not liable for disclosing to the owner23Mayer v. Northern Life Insurance Company, 119 F. Supp. 536 (N.D. Cal. 1953).24Senogles v. Security Benefit Life Insurance, 536 P. 2d 1358 (Kan. 1975); see also Hauge v. FidelityGuaranty Life Insurance Company, No. 91-C-20033 (N.D. Ill. 1992) (unpublished).25Bratt v. International Business Machines Corporation, 467 N.E. 2d 126 (Mass. 1984).26Annotation, Libel and Slander: Privilege of Statements by Physician, Surgeon, or Nurse ConcerningPatient, 73 A.L.R. 2d 325.