Medicare injunction lifted, potentially opening access to reporters

The public may be able to more closely scrutinize the multi-billion dollar federal Medicare program after a judge last week lifted a 33-year-old injunction that barred access to the healthcare program's records.

On Friday, U.S. District Judge Marcia Morales Howard ruled that an injunction initially granted in 1979 under the Privacy Act of 1974 could no longer be sustained after other courts had narrowed the ability of parties to obtain injunctions under the law. The ruling means that Freedom of Information Act requests for records related to the $549 billion government program cannot be automatically dismissed, potentially opening Medicare to greater public scrutiny.

The vast database of insurance claim information has been closed since a federal court in Florida ruled that the privacy rights of physicians and patients trumped the public’s right to know.

In essence, the court in 1979 agreed with the American Medical Association and other physicians' groups that the physicians' privacy interests were weighty enough to prevent disclosure of the records when requested under FOIA.

The court's broad injunction stood for more than three decades. But in 2011 the Wall Street Journal and Center for Public Interest intervened in a case where a party seeking to lift the injuction argued that subsequent decisions interpreting the Privacy Act meant that a court could no longer impose a blanket restriction denying access to the Medicare records.

The court on Friday agreed, ruling that the Privacy Act allows a court to prevent the release of records in particular cases but does not allow for a categorical restriction on access to all Medicare reimbursement records.

"Before the Court is an injunction which forever prohibits a federal agency or any other court from evaluating the merits of a FOIA request and/or release of information pursuant to FOIA, regardless of whether the nature of the information or surrounding factual circumstances have changed," the court wrote. "Such an injunction is impermissible under the Privacy Act and conflicts with the objectives of FOIA to encourage disclosure."

According to the court, the legal landscape of the Privacy Act changed in 1982 when the U.S. Court of Appeals in Atlanta (11th Cir.) ruled that while the act allows individuals to prohibit government from disseminating their own records, they do not have a right to enjoin a broad range of records. According to Judge Howard's ruling, the cases "reflect a significant change in Privacy Act law that was unforeseen" at the time of the 1979 injunction.

Debates over the value of access to the Medicare records were revisited when the Wall Street Journal used restricted information to publish a series of articles in December 2010, exposing fraud in the Medicare system.

The series revealed evidence of tens of millions of dollars in fraud, waste and abuse by Medicare providers after examining billing data from a randomly selected sample of five percent of Medicare recipients.

The records were disclosed only after the Wall Street Journal agreed to pay HHS and to drop its FOIA case in early 2009. The data would only contain billings for a randomly selected five percent of Medicare recipients. The agreement also required that the Wall Street Journal agree not to publish any information that could lead to the indentification of an individual doctor's identity.

An attorney for the Wall Street Journal said the decision should help the public understand a very large and expensive government program.

“Medicare has expanded and now occupies a much larger footprint,” said Laura Handman, an attorney who represented the Wall Street Journal in the case. “The court will also look at the fact that in the last 34 years we have moved to electronic billing, which means the opportunity for fraud is much greater.”

But lifting the injunction will not automatically release all data. Instead, the court allowed the same FOIA exception from thirty years ago to stand. In other words, members of the press must still file a FOIA request that will be subject to denial on a case-by-case basis.

According to the America Medical Association (AMA), last week's decision will likely be appealed.

"The American Medical Association is considering its options on how best to continue to defend the personal privacy interests of all physicians, " said AMA President-elect Ardis Dee Hoven in a statement.

Despite the potential roadblocks to accessing the data, Handman said she is optimistic that the records will shed light on potential waste and fraud in Medicare.

“We can see patterns in the data that the WSJ gathered, and that was only five percent of the data that they were able to explore in their series, ‘Secrets of the System,’” said Handman. “We weren’t allowed to report on individual doctor’s names. In this case, we hope no such restrictions will be there and that we’ll get 100 percent of the data."