The Azar Effect on Fees for Medical Records

Locked doors and artificial barriers

If you’re a personal injury attorney, you know how important medical records are to your clients’ cases. Without them, you couldn’t evaluate the case, your client couldn’t prove her injuries, and the jury couldn’t assess damages. In this way, if your client is denied access to her medical records, she’s essentially denied access to the courts (which is a constitutional right in Florida, we may add). And until recently, fees for medical records were never so excessive as to deny your client access to them. Unfortunately, the Ciox Health, LLC v. Azar opinion just changed all that.

In brief background, prior to Azar, there was a Department of Health and Human Services (HHS) rule that limited the fees applicable to a “third-party directive” – i.e., where the patient directed her physician to transmit her medical records to a third party. In practice, the HHS rule often resulted in fees limited to $6.50 per transmission.

The fee limitation on third-party directives benefitted the patient in a variety of circumstances, but most notably in the context of a personal injury claim. Specifically, if the patient asked each of her physicians to transmit her medical records her attorney, she had to pay only $6.50 for each transmission, regardless of the volume of medical records transmitted. And therein lies the importance of the fee limitation to your client: because fees for medical records are a cost of the lawsuit, the fee limitation kept the cost of the lawsuit low, which, in turn, kept the value of the lawsuit and your client’s recovery high.

Unfortunately, the fee limitation no longer applies to third-party directives, thanks to Azar (and, of course, Ciox Health, a multi-million-dollar release-of-information (ROI) company). The court invalidated the HHS rule based on a procedural deficiency. This means that your client’s cost of sending her medical records to you is far more than $6.50 a pop, which, in turn, means that the value of your client’s lawsuit just took a nosedive.

But it goes beyond just the value of the lawsuit – or how much your client will ultimately recover – because in some cases, the cost of the medical records could foreclose the possibility of recovery altogether. For instance, in June, an ROI company charged a fee of more than $42,000 for medical records related to a single hospital stay. Now, imagine if the value of the injury claim evidenced by those records is less than $42,000. The cost of the lawsuit just surpassed its value, and – boom – the courtroom doors just closed on your client.

To be fair, there is a workaround – an individual request for access where the medical records are sent directly to your client – but it’s unworkable in the personal injury context. And an unworkable workaround isn’t a workaround at all. So where do we go from here? Read our next post, or, even better, contact us. We have some ideas in mind.

Disclaimer: The information provided through these blog posts does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available through these blog posts are for general informational purposes only.

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