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You want me to do what? Subpoenas for Confidential Medical Records

By Darren H. Weiss •

Healthcare practice today is more highly regulated than ever and is subject to an ever-increasing number of federal and state statutes and regulations. The average healthcare practitioner has neither the time nor the inclination to wade through the regulatory morass that is the current state of affairs. Unfortunately, however, the unprepared practitioner may find herself in this scenario without the guidance of competent counsel. More significantly, without appropriate legal direction, a well-intentioned practitioner may find herself on the wrong side of the law, even in the course of attempting to help out a patient.

Such a conundrum is perhaps nowhere more salient than in the context of the interplay between the undeniable—and federally-protected—confidentiality of medical records and compulsory service of process. A common scenario appears as follows: Healthcare Worker sees Patient regularly in the State of Maryland. During the course of treatment, Healthcare Worker receives a subpoena demanding that Healthcare Worker turn over the entirety of Patient’s medical record. What does Healthcare Worker do? Is she required to turn over Patient’s medical record? Is she permitted to speak with the person or entity propounding the subpoena? May she disclose any information concerning Patient? Is the industry in which Healthcare Worker is employed relevant to the inquiry? Is the purpose for which the medical record is sought important in determining whether and to what extent Healthcare Worker may—even must—hand over documents? Is it important or relevant who is requesting the medical record?

The reality is that resolution of these important questions depends on an in-depth understanding of state and federal confidentiality laws and procedures. Whereas Healthcare Worker may not ignore the subpoena, she is not required to produce or otherwise disclose the apposite medical record unless certain assurances are met. For example, Maryland’s Confidentiality of Medical Records Act requires that, in certain situations, a healthcare practitioner first receive written assurance that the patient whose medical records are sought has received notice of the subpoena and an opportunity to object (and that said objection, if any, has been resolved). See, e.g., Md. Code Ann., Cts. & Jud. Proc., § 4‑306. Even where disclosure pursuant to a subpoena is permitted or required, however, in certain situations only those portions of a patient’s medical record which are relevant to the purpose for which the records are sought may be disclosed. This means that, in certain scenarios, the healthcare practitioner must also understand the rationale underlying the compulsory process. This must be done, however, in such a way so as not to violate statutorily-protected client confidences, which prohibit most healthcare practitioners from disclosing or admitting that a given individual is even a patient of that practitioner. In addition to the foregoing, there are further statutory protections when a healthcare practitioner works in the field of mental health. Where mental health records are sought by compulsory process, not all types of records are required to be disclosed, and the records are subject to certain restrictions not applicable to other types of records.See, e.g., Md. Code Ann., Cts. & Jud. Proc., § 4‑307.

Complicating matters further is the federal Health Insurance Portability & Accountability Act of 1996, better known by the acronym “HIPAA.” HIPAA also governs the protection and confidentiality of medical records and, where more protective than applicable state law, preempts and overrides state law. Consequently, resolution of a particular inquiry regarding confidentiality requires a healthcare practitioner to compare the law of the state where she practices and/or the state from which the compulsory process has issued with HIPAA: where protection from disclosure under HIPAA is more restrictive, the healthcare practitioner follows HIPAA. HIPAA has its own set of rules for, among other things, the types of assurances a healthcare practitioner must receive prior to disclosing a medical record in response to a subpoena. See, e.g., 45 C.F.R. § 164.512.

Finally, there are an additional set of rules where records are sought for the purpose of investigating various crimes such as child abuse or neglect, or even abuse or neglect of a vulnerable adult. In such cases, although medical records are still privileged and protected, a healthcare practitioner may be subject to certain disclosure and reporting requirements—regardless of whether compulsory process ever issues. Failure to comply could potentially result in criminal or other civil and professional liability.

Intended as a primer and an illustration of the procedural, statutory, and regulatory quagmire in which healthcare practitioners regularly find themselves, the foregoing barely scratches the surface of some of the most pressing legal concerns confronting healthcare practitioners in their everyday practice. Successfully navigating the tributaries of state and federal privacy law requires more than being an adept and intelligent citizen; a healthcare practitioner requires the experience, understanding, and results-oriented focus of an attorney well-versed in these serious issues.

If you would like to learn more about Kelly|Dorsey’s business, litigation, and alternative dispute resolution practice groups, please fill out and send the Contact Form on our Contact Us page. You can also connect with Kelly|Dorsey through FacebookTwitter, and Linkedin. Attorney Darren H. Weiss can be reached via email at dweiss@kellydorseylaw.com or telephone at (410) 740-8750.

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I Like My Business Partner, But…

By Gregory A. Dorsey •
I see it time and time again. Friends or colleagues share a vision for the next online craze, the premiere medical practice, the one restaurant that satisfies the palates of all, the hair salon of choice, or the best local general contractor. Whatever the envisioned business, the initial vision rarely includes ensuring the business is formed to legally withstand the reality of the business lifecycle – at some point the partners (used generally to refer to an association of two or more persons to carry on as co-owners a business for profit) may find themselves embroiled in a legal dispute concerning the continued existence of the business partnership.

I am routinely engaged to lead a business partner through dissociation (a split) or defend a business partner (or the operating entity) against a threatened dissociation (a split). In either scenario, there are times when the entity structure (for example, a partnership, limited liability company, statutory close corporation, etc.) through which the business operates was not well thought out. There are also times when the organizational documents of the business, (for example, the charter, bylaws, operating agreement, partnership agreement, etc.) are in disarray and/or were prepared by the business partners, their accountant, a friend, or are an amalgamation of documents from myriad sources. My experience has proven it is equally important for individuals who desire to enter into a business relationship to ensure their entity structure and organic documents aptly deal with the end of their relationship as with the beginning – especially when the dissociation is hostile and litigation is the avenue by which we elect to resolve the dispute. Even if we are asked to negotiate an amicable resolution to the dissociation, the entity structure and organic documents are paramount to a favorable outcome.

For example, the statutory framework governing dissociating from a Maryland limited liability company (where the relationship between members is also governed by an operating agreement) affords remedies different than the statutory framework governing dissociating from a Maryland close corporation (where the relationship between stockholders is also governed by a unanimous stockholders’ agreement).

According to the Maryland Limited Liability Act, unless otherwise agreed, a member may withdraw from a limited liability company prior to the dissolution and winding up of the limited liability company by giving not less than 6 months’ prior written notice to the other members at their respective addresses as shown on the books and records of the limited liability company. Md. Code Ann., Corps. & Ass’ns, § 4A-605. If a person ceases to be a member of a limited liability company, and the limited liability company is not dissolved as a result, then, within a reasonable time after the person ceased to be a member, the limited liability company may elect to pay the person or the person’s successor in interest, in complete liquidation of the person’s membership interest, the fair value of the person’s economic interest in the limited liability company as of the date the person ceased to be a member, based upon the person’s right to share in distributions from the limited liability company. Md. Code Ann., Corps. & Ass’ns § 4A-606.1.

A number of questions emerge: What happens if the limited liability company elects not to pay the dissociating member the fair value of his or her economic interest or the parties disagree as to the monetary amount? In that circumstance, what rights, if any, does the dissociating member retain in the limited liability company? What if the business turns for better or worse after the 6 month notice was given, but before the date of withdrawal? Can the dissociating member file a petition for judicial dissolution instead of giving not less than 6 months’ prior written notice of his or her intent to withdraw? Does judicial dissolution affect the fair value of the member’s economic interest? As of what date is the fair value valued? Can the remaining members (individually or collectively) avoid dissolution? If not, how does dissolution of the limited liability company change the relationship between the members? Does judicial dissolution terminate the existence of the limited liability company?

In the same vein, the stockholder of a corporation that elected to be a statutory close corporation may, in certain circumstances, demand fair value for his shares. Md. Code Ann., Corps. & Ass’ns, § 3-302. If the stockholders are unable to reach agreement on said value, the stockholder desiring to dissociate may petition a Court for judicial dissolution of the corporation and the appointment of a receiver. Any one or more stockholders who desire to continue the business of a close corporation may avoid the dissolution of the corporation or the appointment of a receiver by electing the purchase the stock owned by the petitioner at a price equal to its fair value. Md. Code Ann., Corps. & Ass’ns, § 4-406.Of course, the same questions which emerge in the context of limited liability companies are also present: as of what date is fair value determined? What happens if business improves or declines after the petition for judicial dissolution is filed? How are other claims between the stockholders affected by judicial dissolution? Does the close corporation cease to exist? How does the corporation continue to meet its obligations and operate its business? Additional concerns arise regarding a stockholder’s ability to transfer or alienate his shares. A stockholder of a statutory close corporation cannot transfer his shares in the corporation unless all stockholders consent or the transfer is expressly permitted in a unanimous stockholders’ agreement.

You may like your business partner, but when the time comes to sever your business relationship, or if you want to ensure your organic documents aptly deal with the end of your business relationship, it is important to choose the right attorney and law firm. As proven litigators and trusted advisors to many, Kelly|Dorsey, P.C. is your firm of choice. Whether faced with an amicable dissociation or a dissociation that requires not only an intimate knowledge of the applicable law, but also the keen ability to zealously resolve disputes in the courts or through arbitration, the attorneys at Kelly|Dorsey, P.C., draw on a wealth of specialized experience in handling the dissociation of ownership interests in various types of operating business entities.

If you would like to learn more about Kelly|Dorsey’s business, litigation, and alternative dispute resolution practice groups, please fill out and send the Contact Form on our Contact Us page. You can also connect with Kelly|Dorsey through FacebookTwitter, and Linkedin. Attorney Gregory A. Dorsey can be reached via email at gdorsey@kellydorseylaw.com or telephone at (410) 740-8750.


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