Protection of Health Information Under HIPAA and the FTC Act: A Comparison

Protection of Health Information Under HIPAA and the FTC Act: A Comparison

Legal Sidebari

Protection of Health Information Under
HIPAA and the FTC Act: A Comparison
July 28, 2022
On June 24, 2022, the Supreme Court decided Dobbs v. Jackson Women’s Health Organization,
overturning Roe v. Wade, and holding that the U.S. Constitution does not confer a right to abortion.
Following the decision, individual states may begin to prohibit abortions or enforce preexisting bans on
abortion, including through the imposition of criminal penalties. This has raised concerns by some
regarding the privacy of medical information from law enforcement investigations, particularly
reproductive health information held by providers, health plans, smartphone apps, and others. Although
Congress is considering legislation to establish a nationally applicable consumer privacy framework for
digital information generally, current federal laws addressing the privacy of health information are not
uniform and may depend on the type of entity holding such data. Specifically, the Privacy Rule of the
Health Insurance Portability and Accountability Act of 1996 (HIPAA) generally applies only to protected
health information (PHI) held by certain health-care-related entities, known as HIPAA covered entities. In
contrast, some non-HIPAA covered entities’ privacy practices may be regulated by the Federal Trade
Commission Act (FTC Act).
HIPAA Privacy Rule
Authorized by HIPAA, the Privacy Rule was first promulgated by the Department of Health and Human
Services (HHS) in 2001. The Rule generally governs the use or disclosure of PHI held by HIPAA covered
entities or their business associates. On June 29, 2022, following the Dobbs decision, HHS’s Office of
Civil Rights (OCR) issued new guidance addressing HIPAA’s protection of reproductive health
information. On July 8, 2022, President Biden issued an executive order directing the Secretary of HHS to
consider taking actions, including providing additional guidance, to strengthen the protection of
reproductive health care services under the HIPAA Privacy Rule. HIPAA’s definitions of covered entities
and PHI are important to understanding the scope of protections offered by the Privacy Rule. This section
describes these definitions and discusses relevant exceptions to the general prohibition against disclosure
without consent, as well as the potential impact HHS’s new guidance may have on such exceptions.
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Definition of Covered Entities
Under HIPAA, a covered entity includes three categories of entities: health care providers that transmit
claims information electronically, health insurers, and health care clearinghouses. A business associate of
a covered entity generally includes a person who creates, receives, maintains, or transmits PHI on behalf
of a covered entity, or a person who receives PHI while providing legal, actuarial, accounting, consulting,
data aggregation, management, administrative, accreditation, or financial services for a covered entity.
Generally, business associates must comply with all Privacy Rule requirements in the same manner as a
covered entity. (For purposes of this Legal Sidebar, the term “covered entity” will be used to refer to both
HIPAA covered entities and their business associates.)
Following the Dobbs decision, some employers have announced an intention to reimburse employees for
expenses related to abortion, such as the costs of traveling to another state to obtain a legal abortion. This
has caused some to ask whether information submitted to an employer for reimbursement would be
protected by the HIPAA Privacy Rule. Because the definition of a covered entity includes health plans,
the answer may depend upon the manner in which the employer has offered such a benefit. If it is offered
as part of a group health plan offered to its employees, information submitted to the employer in its
capacity as plan sponsor would likely be protected by the HIPAA Privacy Rule. In contrast, if the benefit
is offered through a different mechanism, such as an employee assistance program, the employer would
not appear to qualify as a covered entity, and the information would likely be outside the scope of HIPAA
Privacy Rule protection.
Definition of Protected Health Information
Information in any form or medium that a covered entity creates or receives generally is considered PHI if
it is individually identifiable and relates to (1) the physical or mental health of an individual, (2) the
provision of health care to an individual, or (3) the payment for the provision of health care to an
individual. For example, the results of a pregnancy test administered by a provider, the fact that an
individual received an abortion, or the fact that a claim for reimbursement of abortion expenses was filed
with an insurer would all be considered PHI.
Information that has been “de-identified” is no longer considered PHI. De-identification can be
accomplished through two means. The HIPAA Privacy Rule includes a de-identification “safe harbor” that
requires the removal of eighteen enumerated data elements (such as names, telephone numbers, email
addresses, street addresses, account numbers, IP addresses, and photographs). Alternatively, a covered
entity may utilize some other method of anonymization that a qualified expert formally determines has a
“very small” risk of re-identification.
HIPAA Privacy Rule and Relevant Exceptions
The general default established by the HIPAA Privacy Rule is that a covered entity may only use or
disclose PHI for treatment, billing, or health care operations without authorization. All other disclosures
require authorization from the individual or providing the individual with an opportunity to agree or
object, unless 1 of 12 exceptions applies. Notably, these exceptions describe situations in which a
provider may disclose PHI without violating the HIPAA Privacy Rule; the Rule does not impose an
independent obligation on providers to make a disclosure simply because it may qualify for an exception.
Many of these exceptions are not particularly relevant to reproductive health information. For example,
the list of exceptions includes disclosures for identifying decedents, for organ donation purposes, and for
workers’ compensation programs. However, three exceptions address disclosures that may be of particular
relevance to concerns about reproductive health privacy.

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Disclosures Required by Law
First, the HIPAA Privacy Rule permits covered entities to make disclosures that are required by law,
including state law, without authorization. In its June 29 Guidance, HHS reiterated that this exception
only applies where disclosure is required, and not merely permitted, by another law. Specifically, the
phrase “required by law” is defined by the Rule to mean “a mandate contained in law that compels an
entity to make a use or disclosure of protected health information and that is enforceable in a court of
law.” For example, many states require certain persons, including health care providers, to alert state or
local officials when evidence indicating child abuse or firearms violence are present. Many states also
require health care providers to provide regular reports to state officials on abortions performed. To the
extent that these laws require such disclosures be made, the HIPAA Privacy Rule does not stand as an
independent obstacle to such disclosures.
Disclosures to Law Enforcement
Second, the HIPAA Privacy Rule permits a covered entity to disclose PHI, without authorization, to law
enforcement in certain circumstances. Covered entities may disclose PHI in response to a warrant,
subpoena, or similar process that is part of a legitimate law enforcement inquiry. The HIPAA Privacy Rule
also permits a covered entity to disclose PHI to law enforcement in limited circumstances related to
criminal activity, such as when a covered entity has a good faith belief that the PHI constitutes evidence
of a crime that occurred on the premises. Health care providers responding to a medical emergency may
also disclose PHI that appears necessary to alert law enforcement to the commission of a crime, the
location of such crime or the victim, and the identity, description, or location of the perpetrator.
Threats to Health or Safety
Third, the HIPAA Privacy Rule permits uses and disclosures of PHI, without authorization, to avert a
serious threat to health or safety. Specifically, a covered entity may, consistent with applicable law and
standards of ethical conduct, use or disclose PHI if the covered entity, in good faith, believes the use or
disclosure is necessary to prevent or lessen a serious and imminent threat to the health or safety of a
person or the public, and is made to a person or persons reasonably able to prevent or lessen the threat,
including the target of the threat. In its June 29 Guidance, HHS OCR stated that “an individual’s intent to
get a legal abortion, or any other care tied to pregnancy loss, ectopic pregnancy, or other complications
related to or involving a pregnancy does not qualify as a serious and imminent threat to the health or
safety of a person or the public.”
Enforcement of the HIPAA Privacy Rule
The HIPAA Privacy Rule is primarily enforced by HHS OCR, although state attorneys general may also
pursue civil monetary penalties for violations. Federal courts of appeal have universally held that the
Privacy Rule does not create an individual private right of action for persons whose information may have
been inappropriately disclosed. Potential penalties for disclosures of PHI in violation of the HIPAA
Privacy Rule include per-incident civil monetary penalties between $100 and $50,000 (depending on the
degree of culpability), subject to annual maximums. Knowing violations of the HIPAA Privacy Rule may
also be subject to criminal penalties.
FTC Act
Many entities that collect consumers’ health information are not required to comply with HIPAA because
they are not HIPAA covered entities or business associates. In particular, there are a wide array of
smartphone apps that monitor users’ health data. Some of these apps focus on reproductive health by, for

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example, tracking users’ menstrual cycles or pregnancies. Unless overseen by a health care provider, these
apps are not subject to HIPAA. Furthermore, health information collected by these apps may be sold to or
collected by other third parties, such as data brokers, whose business model typically involves compiling
troves of data on individuals from various sources and reselling that data.
Such activities, while not regulated by HIPAA, are subject to the FTC Act. The FTC Act applies to all
“persons, partnerships, and corporations,” other than a handful of exempt entities such as nonprofits,
banks, and common carriers. The Act prohibits these persons and entities from engaging in “unfair or
deceptive acts or practices” in commerce. Per FTC guidance, an act or practice is “deceptive” if it
involves a material representation or omission that is likely to mislead a reasonable consumer. For an act
or practice to be “unfair,” the FTC Act states that it must cause a substantial injury to consumers that is
not reasonably avoidable and not outweighed by “countervailing benefits.”
In contrast to the HIPAA Privacy Rule, the FTC Act does not impose specific data privacy standards on
covered companies, such as a requirement to obtain consumers’ consent before disclosing their data.
However, the FTC Act’s prohibition on “unfair or deceptive” acts or practices generally requires
companies to abide by whatever promises they make to consumers about how they will handle personal
data; the FTC often brings enforcement actions when companies fail to live up to these promises. For
example, in 2021, the FTC announced a settlement with the developer of a fertility tracking app, Flo
Health Inc. The settlement resolved allegations that the company violated the FTC Act by disclosing
sensitive health information to third parties, despite representations that it would keep users’ information
private.
Following Dobbs, the FTC may increasingly focus on reproductive privacy. Some Members of Congress
and President Biden have recently urged the FTC to use its authority to protect the privacy of consumers’
reproductive health information. On July 11, 2022, the FTC published a blog post saying that it would use
the “full scope of its legal authorities” to protect consumers’ privacy and would “vigorously enforce the
law” upon discovering the misuse of consumers’ sensitive health data.
Considerations for Congress
The HIPAA Privacy Rule and the FTC Act regulate health data in very different ways. The HIPAA
Privacy Rule imposes a broad prohibition on covered entities sharing PHI without an individual’s
authorization, subject to specific exceptions spelled out in the regulations. In contrast, the FTC Act does
not create any bright-line limitations on the use of health data. Under the FTC Act, companies generally
may do as they wish with consumers’ data, as long as they are not acting deceptively or unfairly.
Whether health data falls under HIPAA’s Privacy Rule or the FTC Act does not turn on the nature or the
sensitivity of the data itself but on the entity that has it. If a company is not a HIPAA covered entity, then
its privacy practices may be regulated at the federal level only by the FTC Act. Further, some entities that
may receive reproductive health information from individuals may fall outside of both the HIPAA Privacy
Rule and the FTC Act. For instance, some nonprofit entities, often referred to as “crisis pregnancy
centers,” may offer a limited range of free pregnancy options, such as counseling, but may not provide
licensed medical services. Such entities might receive information about visitors’ reproductive health such
as pregnancy status and length of gestation. However, such an entity may not be subject to the HIPAA
Privacy Rule if it does not qualify as a health care provider, and may not be covered by the FTC Act if it
is a nonprofit.
Several bills have been introduced in the 117th Congress that would create stricter privacy requirements
for non-HIPAA covered entities that maintain health data. Some of these bills would create
comprehensive data privacy regimes that are not limited to health data. For instance, the American Data
Privacy and Protection Act (ADPPA) (H.R. 8152) would give consumers various rights to access, correct,

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and delete their data, and would apply to most entities, including nonprofits. It also would require, absent
a specific exception, entities to obtain consumers’ consent before transferring their “sensitive covered
data,” which includes health information, to a third party.
Other bills are narrower in scope, specifically focusing on health data maintained by non-HIPAA covered
entities. For example, the Protecting Personal Health Data Act (S. 24) would direct HHS to issue data
privacy and security regulations governing non-HIPAA covered devices, services, applications, and
software that are marketed to consumers with the “substantial use or purpose” of collecting health
information. The My Body, My Data Act of 2022 (H.R. 8111/S. 4454) is narrower still, as it focuses only
on reproductive data. It would apply to most non-HIPAA covered entities, including nonprofits, and
would create various privacy protections for “personal reproductive or sexual health information,”
including a requirement that entities only collect and use these data if the individual has consented or if
they are strictly necessary to provide a service or product that the individual has requested.

Author Information

Chris D. Linebaugh
Edward C. Liu
Legislative Attorney
Legislative Attorney

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