Physician-Patient Privilege

by Ohio Supreme Court Justice Paul Pfeifer

Most people are familiar with the concept of physician-patient privilege. Here at the Supreme Court of Ohio we recently reviewed a case that focused on that subject. The case involved Dr. William Schlotterer and Medical Mutual of Ohio, which provided coverage to many of Schlotterer’s patients.

To document the services that he provides to his patients, Schlotterer submits reports to Medical Mutual detailing the services rendered; the insurance company accordingly reimburses him. As part of these reports, Schlotterer assigns AMA-developed codes to each patient visit, based on his assessment of the patient’s condition, the extent of the examination and so forth.

Medical Mutual compensates Schlotterer based on the codes he assigns. The code warranting the highest reimbursement, to be used “rarely” and only for “complex medical decisions,” is 99215.

A review of Schlotterer’s billing reports in 2004 revealed a high percentage of 99215 code submissions. Medical Mutual then requested medical records for ten families, which Schlotterer provided. After reviewing those records the insurer determined that the 99215 billing code was not warranted in those cases. A subsequent investigation into Schlotterer’s coding practices allegedly revealed that he had been overpaid by almost $270,000 for 99215 code submissions.

Medical Mutual filed a complaint against Schlotterer for – among other things – fraud. Schlotterer denied the allegations. To determine the amount of the alleged fraud, Medical Mutual filed a motion for an order directing Schlotterer “to respond to discovery” of patient records. These records were to have obscured any information that would identify the patients. Schlotterer opposed the motion based on the physician-patient privilege.

The certificates of coverage issued to Schlotterer’s Medical Mutual patients include the following language: “You consent to the release of medical information to Medical Mutual when you…sign an Application. When you present your identification card…you are also giving your consent to release medical information to Medical Mutual,” which “has the right to refuse to reimburse for Covered Services if you refuse to consent to the release of any medical information.”

The participation agreement signed by Schlotterer contains similar provisions: “Provider agrees to furnish, upon request, to Medical Mutual…all requested Records relating to claims filed with Medical Mutual.”

Given that, the trial court granted Medical Mutual’s motion, ordering Schlotterer to respond to the discovery requests. Schlotterer appealed, and the court of appeals vacated the trial court’s decision, holding that the order to comply with the discovery requests violated the physician-patient privilege. After that, the case came before us for final review.

The physician-patient privilege is designed to “promote health by encouraging a patient to fully and freely disclose all relevant information which may assist the physician in treating the patient.” Under Ohio law, medical records are generally privileged from disclosure. The privilege does not apply, however, where the patient has given express consent to disclosure.

A consent to the release of medical information is valid, and waives the physician-patient privilege, if it is voluntary, express, and reasonably specific in identifying to whom the information is delivered. The requirement of specificity allows patients to know exactly who will have access to their medical records in order for them to make an informed decision regarding waiver of the privilege.
The majority of our court concluded that the certificates of coverage provided to Schlotterer’s patients met the necessary requirements for disclosure: they were voluntary, qualified as express consent, and the “provisions are reasonably specific in identifying to whom the release is made” – Medical Mutual.

Schlotterer argued that the release did not authorize Medical Mutual to investigate fraud; instead he claimed that the consent forms allowed for review of the medical records only before the insurer makes a coverage determination. By a six-to-one vote our court disagreed.

The majority maintained that the language in the consent form does not limit the release to permission to determine whether services will be reimbursed, but merely explains the consequences should a patient withdraw his consent. Because Schlotterer’s patients consented to release their medical information to Medical Mutual, the majority concluded that the consent exception to the physician-patient privilege applies in this case.

I concurred with part of the majority opinion, but I also dissented in part. The insureds in this case did not consent to release medical information to enable Medical Mutual to pursue a lawsuit against a doctor; they consented to release medical information to enable Medical Mutual to determine whether specific insurance claims should be paid.

The insureds upheld their end of the bargain: their medical information was available to the insurance company before the claims were paid. Once the claims had been paid, Medical Mutual, in effect, attempted to contort a specific, single-purpose consent to release into a general, all-purpose consent to release.

One thing is abundantly clear: the insureds did not consent to the release of their medical information for any purpose other than to determine whether their claims would be paid. Because the claims have been paid, the consent to release is no longer available to the insurance company. Therefore, I believe that the majority’s interpretation of the consent to release in this case is much too broad.

Nevertheless, the information sought by Medical Mutual should be available to it to pursue a claim against Schlotterer for fraud. Thus, I would have adopted a new exception to the physician-patient privilege – one suggested by the Ohio State Medical Association and American Medical Association.

They said, “the exception should be narrowly defined and applied only after a demonstrated compelling need for the information sought.” Adopting a more narrow exception would allow insurance companies to pursue claims against allegedly fraudulent doctors without eroding the physician-patient privilege.

The result that the majority opinion reached is laudable because its effect is to allow an insurance company to combat fraud, but the means used are too general and too likely to result in further litigation to determine the bounds of the general exception.

Nonetheless, the majority opinion reversed the judgment of the court of appeals and sent this case back to the trial court for further proceedings.

EDITOR’S NOTE: The case referred to is: Med. Mut. Of Ohio v. Schlotterer, 122 Ohio St.3d 181, 2009-Ohio-2496. Case No. 2008-0598. Decided June 3, 2009. Majority opinion written by Chief Justice Thomas J. Moyer.