On December 2, 2022, the U.S. Department of Health and Human Services (“HHS”), through the Office for Civil Rights (“OCR”) and the Substance Abuse and Mental Health Services Administration (“SAMHSA”), issued a proposed rule to implement statutory amendments enacted by Section 3221 of the 2020 Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).  Specifically, the proposed rule would harmonize certain provisions of the Confidentiality of Substance Use Disorder Patient Records under 42 C.F.R. Part 2 (“Part 2”) with the Health Insurance Portability and Accountability Act of 1996, as amended, and its implementing regulations (collectively, “HIPAA”).  

Section 3221 of the CARES Act amended several provisions of the statute underlying the Part 2 regulations to better align Part 2 with HIPAA.  For example, as amended, the statute permits an individual’s substance use disorder records regulated by Part 2 (“SUD Records”) to be used and disclosed in accordance with a single prior consent and allows HIPAA covered entities and their business associates to disclose SUD Records for treatment, payment, and health care operations in accordance with HIPAA when an individual has provided consent to the disclosure of his/her SUD Records.  Prior to the changes made by the CARES Act, the disclosure of SUD Records required a specific, written consent for each proposed disclosure, and it was permissible to disclose SUD Records without consent only in limited circumstances (e.g., medical emergency or court order).  As a result, entities subject to both HIPAA and Part 2 were required to follow different, more restrictive procedures for the disclosure of SUD Records than for the disclosure of other protected health information (“PHI”). 

The CARES Act required HHS to engage in rulemaking to implement various statutory changes.  Specifically, the proposed rule would modify Part 2 in accordance with the CARES Act by:

  • Generally allowing for the redisclosure of SUD Records in the same manner permitted by the HIPAA Privacy Rule (i.e., allowing for a single consent to suffice for Part 2 covered entities as it relates to further disclosures of SUD Records for treatment, payment, and health care operations), though the proposed rule requires any disclosures of SUD Records to non-HIPAA covered entities or business associates be pursuant to contractual or legally equivalent restrictions on the recipient’s use and disclosure of SUD Records in accordance with those permissible under Part 2;
  • Giving individuals a right to an accounting of and restriction on disclosures of SUD Records, in accordance with the rights individuals have under HIPAA with respect to their PHI;
  • Expanding the prohibition on the use and disclosures of SUD Records in civil, criminal, administrative, and legislative proceedings against patients unless patient consent or a court order is issued;
  • Applying the same civil and criminal penalties to violations of Part 2 as apply to violations of HIPAA (e.g., the imposition of civil monetary penalties);
  • Applying the same breach notification standards to breaches of SUD Records as apply to breaches of PHI in accordance with the HIPAA Breach Notification Rule;
  • Modifying the requirements for a Part 2 patient confidentiality notice to more closely align with the requirements and content of a HIPAA Notice of Privacy Practices (“NPP”); and
  • Aligning the requirements for a valid written consent under Part 2 with the requirements for a valid HIPAA authorization under the Privacy Rule.

The proposed rule would also modify the HIPAA Privacy Rule to require covered entities that receive and maintain SUD Records—and thus must comply with Part 2 requirements for these records—to modify their NPPs to reference patients’ rights with respect to SUD Rrecords.  For example, impacted covered entities would be required to disclose the uses and disclosures of SUD Records that are permitted or required without an authorization.

The CARES Act also contained certain antidiscrimination provisions related to SUD Records that HHS intends to implement as part of a separate rulemaking process.

Comments on the proposed rule are due by January 31, 2023.

Photo of Anna D. Kraus Anna D. Kraus

Anna Durand Kraus advises on issues relating to the complex array of laws governing the health care industry. Her background as Deputy General Counsel to the U.S. Department of Health and Human Services (“HHS”) gives her broad experience with, and valuable insight into…

Anna Durand Kraus advises on issues relating to the complex array of laws governing the health care industry. Her background as Deputy General Counsel to the U.S. Department of Health and Human Services (“HHS”) gives her broad experience with, and valuable insight into, the programs and issues within the purview of HHS, including Medicare, Medicaid, fraud and abuse, and HIPAA privacy and security. Anna is co-chair of the firm’s Health Care Industry practice group.

Anna regularly advises clients on Medicare reimbursement matters, particularly those arising under Part B and the Part D prescription drug benefit. She also has extensive experience with the Medicaid Drug Rebate program. She assists numerous pharmaceutical and device manufacturers, health care providers, pharmacy benefit managers, and other health care industry stakeholders to navigate the challenges and opportunities presented by the Affordable Care Act.

Anna is a trusted adviser on health information privacy, security and breach notification issues, including those arising under the Health Insurance Portability and Accountability Act (“HIPAA”) and the Health Information Technology for Economic and Clinical Health (“HITECH”) Act. Her background in this area dates back to the issuance of the original HIPAA privacy regulations.

Anna’s clients depend on her to guide them through compliance with the Anti-Kickback statute, the Stark regulations, and other laws preventing fraud and abuse in the health care industry. Her deep knowledge of these laws has made her an important component of the firm’s representation of pharmaceutical companies and health care organizations under federal investigation or facing allegations under the False Claims Act. In addition, clients contemplating acquisitions in the health care sector rely on her to guide due diligence efforts.

Photo of Olivia Vega Olivia Vega

Olivia Vega provides strategic advice to global companies on a broad range of privacy, health care, and technology issues, including in technology transactions, mergers and acquisitions, and regulatory compliance. Within her practice, Olivia counsels clients on navigating the complex web of federal and…

Olivia Vega provides strategic advice to global companies on a broad range of privacy, health care, and technology issues, including in technology transactions, mergers and acquisitions, and regulatory compliance. Within her practice, Olivia counsels clients on navigating the complex web of federal and state privacy and data security laws and regulations, including on topics such as HIPAA, California’s Confidentiality of Medical Information Act, and the California Consumer Privacy Act. In addition, Olivia maintains an active pro bono practice.

Photo of Elizabeth Brim Elizabeth Brim

Elizabeth Brim is an associate in the firm’s Washington, DC office, where she is a member of the Data Privacy and Cybersecurity and Health Care Practice Groups and advises clients on a broad range of regulatory and compliance issues related to privacy and…

Elizabeth Brim is an associate in the firm’s Washington, DC office, where she is a member of the Data Privacy and Cybersecurity and Health Care Practice Groups and advises clients on a broad range of regulatory and compliance issues related to privacy and health care.

Elizabeth’s practice includes counseling clients on compliance with the complex web of health information privacy laws and regulations, such as HIPAA, the FTC’s Health Breach Notification Rule, and state medical and consumer health privacy laws as well as state consumer privacy and genetic privacy laws. She also advises clients on health care compliance issues, such as fraud and abuse, market access, and pricing and reimbursement activities.

Elizabeth routinely advises on regulatory compliance as part of transactions, clinical trial programs, collaborations and other activities that involve genetic data, and the development and operation of digital health products. As part of her practice, Elizabeth routinely counsels clients on drafting and negotiating privacy and health care terms with vendors and third parties and developing privacy notices and consent forms. In addition, Elizabeth maintains an active pro bono practice.

Elizabeth is an author of the American Health Law Association treatise, Pricing, Market Access, and Reimbursement Principles: Drugs, Biologicals and Medical Devices and the U.S. chapter of the Global Legal Insights treatise, Pricing & Reimbursement Laws and Regulations.

Photo of Lauren Browdy Weiner Lauren Browdy Weiner

Lauren Browdy Weiner is an associate in the firm’s New York office. She is a member of both the Healthcare and Food, Drug, and Device Practice Groups.

Prior to law school and joining the firm, Lauren had a career in media relations and…

Lauren Browdy Weiner is an associate in the firm’s New York office. She is a member of both the Healthcare and Food, Drug, and Device Practice Groups.

Prior to law school and joining the firm, Lauren had a career in media relations and public affairs, working across the healthcare industry.