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Both HIPAA and the FTC Apply to Digitally Stored Personal Information

Both HIPAA and the FTC Apply to Digitally Stored Personal Information

In the ever-expanding field of health care law, the last thing health care entities and practitioners need is another agency creating rules and regulations that they must comply with, but that is exactly what has happened.

FTC Act Compliance Now Required

Last month, the Federal Trade Commission (FTC) refused to dismiss claims against LabMD Inc. relating to their practices of digitally storing personal information.  The company claimed that because they were already subject to the requirements of the Health Information and Portability Accountability Act (HIPAA) that the FTC Act did not apply.  The FTC did not agree; instead the commission found that the company’s failure to provide reasonable and appropriate security for personal information on its computer networks could lead to the disclosure of private medical information and identity theft.

The FTC is charged with preventing unfair trade acts and practices and protecting consumers.  As part of its mission, the FTC has been regulating data security.  The theory behind this is that the security failures can lead to potential consumer harms, which is an unfair trade practice. 

FTC Says No Preemption

The FTC does not believe that HIPAA or any other source of law prevents compliance with its regulations, nor does the FTC think it is foreclosed from regulating in the healthcare field.  The wide and divergent body of federal health care law will not protect companies from also having to comply with the FTC Act.

Businesses who store any type of personal consumer information should be aware that they must fully comply with FTC regulations.  For healthcare entities and practitioners, this just adds another layer of federal regulations to keep track of.  As if complying with HIPAA/HITECH wasn’t enough, now they will also have to comply with the FTC rules and regulations as well.  

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.