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Prime Healthcare Services Hit with Privacy Breach Lawsuit

Prime Healthcare Services has been hit with a lawsuit for repeatedly violating the privacy of a former patient of the Shasta Regional Medical Center.

The lawsuit was filed in the Shasta County Superior Court last month by Medicare patient Darlene Courtois, 64. The plaintiff claims that her confidential medical files were shared with 785 employees of the Shasta Regional Medical Center in 2011 without her authorization.

The medical information was allegedly emailed to medical center employees by the CEO of the medical center in what is believed by Courtois to be an attempt to discredit a news story published by California Watch. The story covered the healthcare chain’s “unusual and lucrative billing practices.”

Reporters from California Watch investigated the unusually high number of Kwashiorkor cases dealt with by the hospital in 2009 and 2010. Kwashiorkor is a relatively rare form of protein malnutrition. Each year, fewer than 20,000 individuals are diagnosed with the condition in the United States. Kwashiorkor is more commonly associated with areas hit by famine, and is associated with individuals with a low level of education who are unaware how to eat properly.

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As part of the report, California Watch interviewed Courtois, who had visited Shasta Regional Medical Center after suffering a fall. Courtois was treated for her injuries, but the medical center reportedly billed Medicare for the treatment of Kwashiorkor. Courtois told reporters that she had never heard of the condition, and had not been told she had it. She had however, previously been admitted and treated at the hospital for “complications of diabetes.”

The medical center had billed Medicare for treating Courtois Kwashiorkor, as well as for treating well over 1,000 cases of Kwashiorkor over the course of two years. Reporters said this rate was more than 70 times the national average. According to the California Watch report, “Medicare pays a treatment bonus of more than $6,000 for each patient diagnosed with kwashiorkor.”

The email containing Courtois’s medical information was allegedly sent in response to the story, and the same medical information was shown to the editor of a local newspaper. That information resulted in the successful pulling of a story covering the alleged billing anomaly.

The lawsuit comes after the Department of Public Health fined Ontario-based Prime Healthcare Services $95,000 for the breach of privacy, although that fine is currently being appealed.

Should the lawsuit be ruled in favor of the plaintiff, damages of up to $1,000 could be awarded for each privacy violation. That figure could therefore be multiplied 785 times for the privacy violations resulting from the email. Prime Healthcare Services maintains the lawsuit has no merit.

Author: Steve Alder is the editor-in-chief of HIPAA Journal. Steve is responsible for editorial policy regarding the topics covered on HIPAA Journal. He is a specialist on healthcare industry legal and regulatory affairs, and has several years of experience writing about HIPAA and other related legal topics. Steve has developed a deep understanding of regulatory issues surrounding the use of information technology in the healthcare industry and has written hundreds of articles on HIPAA-related topics.