B-206769 L/M, OCT 5, 1982, OFFICE OF GENERAL COUNSEL

B-206769 L/M: Oct 5, 1982

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STATE OF SOUTH CAROLINA: THIS IS IN RESPONSE TO YOUR LETTER OF MARCH 12. THE COUNCIL WAS REQUESTED TO PERFORM THE AUDIT BY THE STATE GENERAL ASSEMBLY AS A RESULT OF "NUMEROUS ALLEGATIONS AGAINST THE DEPARTMENT CONCERNING GENERAL AND FINANCIAL MISMANAGEMENT. MISAPPROPRIATION OF PROPERTY BELONGING TO PATIENTS WHO HAVE DIED WHILE UNDER DEPARTMENT CARE.". THE SPECIFIC QUESTION IS "WHETHER OR NOT ANY SECTIONS OF 42 C.F.R. DISMISSED THE COUNCIL'S COMPLAINT THAT WOULD HAVE COMPELLED THE DEPARTMENT TO PROVIDE IT WITH THE RECORDS IN QUESTION. THE PRIMARY BASIS FOR THE DECISION UPHOLDING THE DEPARTMENT'S POSITION WAS THE COURT'S VIEW THAT THE AUTHORITY OF THE COUNCIL UNDER THE STATUTE THAT CREATED IT ONLY AUTHORIZED THE COUNCIL TO INVESTIGATE FISCAL MATTERS.

B-206769 L/M, OCT 5, 1982, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

MR. GEORGE L. SCHROEDER, STATE OF SOUTH CAROLINA:

THIS IS IN RESPONSE TO YOUR LETTER OF MARCH 12, 1982, CONCERNING THE AUTHORITY OF THE SOUTH CAROLINA LEGISLATIVE AUDIT COUNCIL (COUNCIL) UNDER FEDERAL REGULATIONS TO GAIN ACCESS TO PATIENT RECORDS IN CONNECTION WITH AN "EXPANDED SCOPE AUDIT" OF THE SOUTH CAROLINA DEPARTMENT OF MENTAL HEALTH (DEPARTMENT).

THE COUNCIL WAS REQUESTED TO PERFORM THE AUDIT BY THE STATE GENERAL ASSEMBLY AS A RESULT OF "NUMEROUS ALLEGATIONS AGAINST THE DEPARTMENT CONCERNING GENERAL AND FINANCIAL MISMANAGEMENT, PATIENT ABUSE, AND MISAPPROPRIATION OF PROPERTY BELONGING TO PATIENTS WHO HAVE DIED WHILE UNDER DEPARTMENT CARE." THE DEPARTMENT HAS CHALLENGED THE COUNCIL'S AUTHORITY TO GAIN ACCESS TO THESE PATIENT RECORDS ON VARIOUS GROUNDS, INCLUDING ITS INTERPRETATION OF FEDERAL REGULATIONS GOVERNING CONFIDENTIALITY OF PATIENT RECORDS IN FEDERALLY-ASSISTED STATE PROGRAMS OF THE TYPE INVOLVED HERE. THE SPECIFIC QUESTION IS "WHETHER OR NOT ANY SECTIONS OF 42 C.F.R. SUBCHAPTER A, PART 2 WOULD BAR AUDIT COUNCIL ACCESS TO PATIENT RECORDS IN ITS PERFORMANCE OF AN EXPANDED SCOPE AUDIT."

SUBSEQUENTLY, IN RESPONSE TO OUR REQUEST FOR ADDITIONAL INFORMATION, YOUR OFFICE ADVISED US BY LETTER DATED APRIL 12, 1982, THAT THE QUESTION OF THE COUNCIL'S ACCESS TO THE PATIENT RECORDS MAINTAINED BY THE DEPARTMENT HAD BEEN THE SUBJECT OF LITIGATION IN THE STATE COURTS. ON JUNE 30, 1981, IN THE CASE OF STATE OF SOUTH CAROLINA, COUNTY OF RICHLAND V. SOUTH CAROLINA DEPARTMENT OF MENTAL HEALTH, JUDGE WALTER J. BRISTOW, JR., OF THE FIFTH JUDICIAL CIRCUIT OF THE SOUTH CAROLINA COURT OF COMMON PLEAS, DISMISSED THE COUNCIL'S COMPLAINT THAT WOULD HAVE COMPELLED THE DEPARTMENT TO PROVIDE IT WITH THE RECORDS IN QUESTION. THE PRIMARY BASIS FOR THE DECISION UPHOLDING THE DEPARTMENT'S POSITION WAS THE COURT'S VIEW THAT THE AUTHORITY OF THE COUNCIL UNDER THE STATUTE THAT CREATED IT ONLY AUTHORIZED THE COUNCIL TO INVESTIGATE FISCAL MATTERS. HOWEVER, THE COURT ALSO CONCLUDED THAT THE RECORDS "ARE PROTECTED FROM DISCLOSURE BY SEVERAL STATE AND FEDERAL STATUTES AND REGULATIONS." THE COURT SPECIFICALLY CITED THE REGULATIONS CONTAINED IN 42 C.F.R. SUBCHAPTER A, PART 2 IN THIS RESPECT.

YOU FURTHER ADVISED US THAT THE CIRCUIT COURT'S DECISION HAD BEEN APPEALED TO THE STATE SUPREME COURT. SUBSEQUENTLY, WE INFORMALLY ADVISED YOU THAT IN ACCORDANCE WITH THE LONG-STANDING POSITION OF OUR OFFICE WITH RESPECT TO MATTERS THAT ARE CURRENTLY THE SUBJECT OF PENDING LITIGATION, WE WOULD NOT BE ABLE TO RESPOND SUBSTANTIVELY TO YOUR REQUEST FOR A LEGAL OPINION SINCE THE MATTER WAS BEFORE THE SUPREME COURT.

HOWEVER, BY LETTER DATED JUNE 28, 1982, YOU ADVISED US THAT LEGISLATION HAD JUST BEEN ENACTED BY THE SOUTH CAROLINA GENERAL ASSEMBLY GRANTING THE COUNCIL SPECIFIC AUTHORITY TO GAIN ACCESS TO THE RECORDS IN QUESTION. YOU FURTHER INDICATED THAT YOU NOW "ANTICIPATE DROPPING THE APPEAL *** MADE TO THE STATE SUPREME COURT." ACCORDINGLY, YOU REITERATED YOUR REQUEST FOR OUR LEGAL OPINION, INDICATING YOUR CONCERN THAT NOTWITHSTANDING PASSAGE OF THE LEGISLATION GRANTING THE COUNCIL THE AUTHORITY UNDER STATE LAW TO AUDIT ALL OF THE RECORDS WITHIN THE DEPARTMENT'S POSSESSION, THE DEPARTMENT WOULD "STILL ATTEMPT TO PROHIBIT THE AUDIT BASED ON THE FEDERAL REGULATIONS IN QUESTION."

IT IS OUR VIEW, FOR THE REASONS SET FORTH HEREAFTER, THAT THE REGULATIONS IN 42 C.F.R. SUBCHAPTER A, PART 2 DO NOT BAR THE COUNCIL FROM GAINING ACCESS TO THE PATIENT RECORDS IN QUESTION.

IN ADDITION TO DISCUSSING STATE LAW, SINCE CLARIFIED BY THE LEGISLATURE TO AUTHORIZE SPECIFICALLY COUNCIL ACCESS TO THE DEPARTMENT'S RECORDS, THE COURT WENT ON TO STATE THAT THERE WERE "STRONG PUBLIC POLICY REASONS" THAT WOULD NOT ALLOW THE DEPARTMENT TO BE COMPELLED TO PROVIDE THE COUNCIL WITH ACCESS TO THE RECORDS IN QUESTION SINCE "DISCLOSURE OF SOME OF THE RECORDS IS EXPRESSLY PROHIBITED BY *** FEDERAL LAW OR REGULATION." THE ONLY SPECIFIC FEDERAL LAW OR REGULATIONS CITED IN THIS CONNECTION ARE THOSE SET FORTH AT 42 C.F.R. SECS. 2.53 AND 2.54.

THE FEDERAL REGULATIONS CITED IN THE COURT'S OPINION HAVE THEIR GENESIS IN SECTION 333 OF THE COMPREHENSIVE ALCOHOL ABUSE AND ALCOHOLISM PREVENTION TREATMENT AND REHABILITATION ACT OF 1970, AS AMENDED, 42 U.S.C. SEC. 45 AND IN SECTION 408 OF THE DRUG ABUSE OFFICE AND TREATMENT ACT OF 1972, AS AMENDED, 21 U.S.C. SEC. 1175. THE CONFIDENTIALITY REQUIREMENTS OF BOTH OF THESE STATUTORY PROVISIONS WERE BROUGHT INTO CONFORMANCE WITH EACH OTHER UPON ENACTMENT OF PUB.L. NO. 93-282, APPROVED MAY 14, 1974. THIS RESPECT, 21 U.S.C. SEC. 1175 NOW READS IN PERTINENT PART AS FOLLOWS:

"DISCLOSURE AUTHORIZATION

"(A)RECORDS OF THE IDENTITY, DIAGNOSIS, PROGNOSIS, OR TREATMENT OF ANY PATIENT WHICH ARE MAINTAINED IN CONNECTION WITH THE PERFORMANCE OF ANY DRUG ABUSE PREVENTION FUNCTION CONDUCTED, REGULATED, OR DIRECTLY OR INDIRECTLY ASSISTED BY ANY DEPARTMENT OR AGENCY OF THE UNITED STATES SHALL *** BE CONFIDENTIAL AND BE DISCLOSED ONLY FOR THE PURPOSES AND UNDER THE CIRCUMSTANCES EXPRESSLY AUTHORIZED UNDER SUBSECTION (B) OF THIS SECTION.

"(B)(2) WHETHER OR NOT THE PATIENT, WITH RESPECT TO WHOM ANY GIVEN RECORD REFERRED TO IN SUBSECTION (A) OF THIS SECTION IS MAINTAINED, GIVES HIS WRITTEN CONSENT, THE CONTENT OF SUCH RECORD MAY BE DISCLOSED AS FOLLOWS:

"(B) TO QUALIFIED PERSONNEL FOR THE PURPOSE OF CONDUCTING SCIENTIFIC RESEARCH, MANAGEMENT AUDITS, FINANCIAL AUDITS, OR PROGRAM EVALUATION, BUT SUCH PERSONNEL MAY NOT IDENTIFY, DIRECTLY OR INDIRECTLY, ANY INDIVIDUAL PATIENT IN ANY REPORT OF SUCH RESEARCH, AUDIT, OR EVALUATION, OR OTHERWISE DISCLOSE PATIENT IDENTITIES IN ANY MANNER."

(THE CONFIDENTIALITY REQUIREMENTS OF 42 U.S.C. SEC. 4582 GOVERNING RECORDS RELATING TO ALCOHOLISM OR ALCOHOL ABUSE ARE SUBSTANTIVELY IDENTICAL.)

FULL DISCLOSURE OF THE DEPARTMENT'S RECORDS, INCLUDING PATIENT IDENTIFYING DATA TO THE COUNCIL, WHICH IS NOW SPECIFICALLY AUTHORIZED UNDER STATE LAW TO EXAMINE THEM FOR PURPOSES OF CONDUCTING A COMPREHENSIVE PROGRAM MANAGEMENT AND OPERATIONAL AUDIT AND WHICH IS SPECIFICALLY PRECLUDED FROM STATUTE FROM SUBSEQUENTLY DISCLOSING ANY SUCH INFORMATION, WOULD APPEAR TO BE CONSISTENT WITH AND AUTHORIZED BY THE FOREGOING STATUTORY PROVISION. THE REGULATIONS THAT WERE PROMULGATED PURSUANT TO 21 U.S.C. SEC. 1175(G), AS WELL AS 42 U.S.C. SEC. 4582(G), TO EFFECTUATE THE DISCLOSURE RESTRICTIONS IN THESE STATUTES, ARE MORE SPECIFIC THAN THE STATUTORY PROVISIONS (ALTHOUGH OBVIOUSLY THE REGULATIONS MUST BE CONSISTENT WITH THE STATUTORY REQUIREMENTS). IT IS THESE REGULATIONS THAT ARE AT ISSUE HERE.

IN ADDITION TO THE PROVISIONS SET FORTH AT 42 C.F.R. SECS. 2.53 AND 2.54, WHICH WERE CITED IN THE COURT'S OPINION, OTHER REGULATORY PROVISIONS ARE RELEVANT AS WELL. FOR EXAMPLE, 42 C.F.R. SEC. 2.52(A) PROVIDES AS FOLLOWS:

"(A) RESEARCH, AUDIT, AND EVALUATION. SUBJECT TO ANY APPLICABLE SPECIFIC PROVISION SET FORTH HEREINAFTER IN THIS SUBPART, THE CONTENT OF RECORDS PERTAINING TO ANY PATIENT WHICH ARE MAINTAINED IN CONNECTION WITH THE PERFORMANCE OF A FUNCTION SUBJECT TO THIS PART MAY BE DISCLOSED, WHETHER OR NOT THE PATIENT GIVES CONSENT, TO QUALIFIED PERSONNEL FOR THE PURPOSE OF CONDUCTING SCIENTIFIC RESEARCH, MANAGEMENT AUDITS, FINANCIAL AUDITS, OR PROGRAM EVALUATION, BUT SUCH PERSONNEL MAY NOT IDENTIFY, DIRECTLY OR INDIRECTLY, ANY INDIVIDUAL PATIENT IN ANY REPORT OF SUCH RESEARCH, AUDIT, OR EVALUATION, OR OTHERWISE DISCLOSE PATIENT IDENTITIES IN ANY MANNER. FOR THE PURPOSES OF THIS SUBPART AND FOR THE PURPOSES OF SUBSECTION (B)(2)(B) OF THE AUTHORIZING LEGISLATION, THE TERM 'QUALIFIED PERSONNEL' MEANS PERSONS WHOSE TRAINING AND EXPERIENCE ARE APPROPRIATE TO THE NATURE AND LEVEL OF THE WORK IN WHICH THEY ARE ENGAGED AND WHO, WHEN WORKING AS PART OF AN ORGANIZATION, ARE PERFORMING SUCH WORK WITH ADEQUATE ADMINISTRATIVE SAFEGUARDS AGAINST UNAUTHORIZED DISCLOSURES."

ALSO OF SIGNIFICANCE IN THIS CONNECTION IS THE FOLLOWING EXPLANATION OF THE BASIS FOR ALLOWING DISCLOSURE WITHOUT THE PATIENT'S CONSENT, AS SET FORTH IN 42 C.F.R. SEC. 2.52-1(K):

"FOR ALL OF THESE REASONS, THE AUTHORIZING LEGISLATION EXPRESSLY PROVIDES THAT PATIENT CONSENT IS NOT REQUIRED WITH RESPECT TO DISCLOSURES FOR RESEARCH, AUDIT, AND EVALUATION, NOR DOES IT PROHIBIT INDIVIDUAL PATIENT IDENTIFICATION IN CONNECTION WITH SUCH DISCLOSURES. WHILE IT IS ENTIRELY APPROPRIATE TO IMPOSE SAFEGUARDS AND PROCEDURES IN CONNECTION WITH THESE ACTIVITIES, IT WOULD BE WHOLLY INAPPROPRIATE TO USE THE RULEMAKING PROCESS TO IMPOSE AN ABSOLUTE REQUIREMENT OF PATIENT CONSENT WITH RESPECT TO ACTIVITIES WHICH BY STATUTE MAY BE CONDUCTED WITHOUT IT."

THIS BRINGS US TO THE PROVISIONS SET FORTH IN 42 C.F.R. SEC. 2.53 AND 2.54 THAT WERE SPECIFICALLY CITED BY THE COURT IN ITS OPINION. FIRST, SECTION 2.53 PROVIDES IN PERTINENT PART AS FOLLOWS:

"(A) IN GENERAL. WHERE RESEARCH, AUDIT, OR EVALUATION FUNCTIONS ARE PERFORMED BY OR ON BEHALF OF A STATE OR FEDERAL GOVERNMENTAL AGENCY, THE MINIMUM QUALIFICATIONS OF PERSONNEL PERFORMING SUCH FUNCTIONS MAY BE DETERMINED BY SUCH AGENCY, SUBJECT TO THE PROVISIONS OF THIS PART, WITH PARTICULAR REFERENCE TO THE ORGANIZATIONAL REQUIREMENTS AND LIMITATIONS ON THE CATEGORIES OF RECORDS SUBJECT TO REVIEW BY DIFFERENT CATEGORIES OF PERSONNEL.

"(B) FINANCIAL AND ADMINISTRATIVE RECORDS. WHERE PROGRAM RECORDS ARE REVIEWED BY PERSONNEL WHO LACK EITHER THE RESPONSIBILITY FOR, OR APPROPRIATE TRAINING AND SUPERVISION FOR, CONDUCTING SCIENTIFIC RESEARCH, DETERMINING ADHERENCE TO TREATMENT STANDARDS, OR EVALUATING TREATMENT AS SUCH, SUCH REVIEW SHOULD BE CONFINED AS FAR AS PRACTICABLE TO ADMINISTRATIVE AND FINANCIAL RECORDS. UNDER NO CIRCUMSTANCES SHOULD SUCH PERSONNEL BE SHOWN CASEWORKER OR COUNSELLOR NOTES, OR SIMILAR CLINICAL RECORDS. PROGRAMS SHOULD ORGANIZE THEIR RECORDS SO THAT FINANCIAL AND ADMINISTRATIVE MATTERS CAN BE REVIEWED WITHOUT DISCLOSING CLINICAL INFORMATION AND WITHOUT DISCLOSING PATIENT IDENTIFYING INFORMATION EXCEPT WHERE NECESSARY FOR AUDIT VERIFICATION."

SECTION 2.54 OF THE REGULATIONS PROVIDES AS FOLLOWS:

"(B) APPLICABILITY. THIS SECTION APPLIES TO ANY EXAMINATION OF THE RECORDS OF A TREATMENT PROGRAM WHICH IS CARRIED OUT FOR THE PURPOSE OF OR AS AID TO ASCERTAINING THE ACCURACY OR ADEQUACY OF ITS FINANCIAL OR OTHER RECORDS, OR THE EFFICIENCY OR EFFECTIVENESS OF ITS FINANCIAL, ADMINISTRATIVE, OR MEDICAL MANAGEMENT, OR ITS ADHERENCE TO FINANCIAL, LEGAL, MEDICAL, ADMINISTRATIVE, OR OTHER STANDARDS, REGARDLESS OF WHETHER SUCH EXAMINATION IS CALLED AN AUDIT, AN EVALUATION, AN INSPECTION, OR BY ANY OTHER NAME."

THE REMAINDER OF THIS REGULATION SETS OUT VARIOUS REQUIREMENTS RELATING TO THE SAFEGUARDING OF PATIENT IDENTIFYING INFORMATION THAT MUST BE SATISFIED BY THE EXAMINER AS A CONDITION OF OBTAINING SUCH INFORMATION. THE COUNCIL MUST, OF COURSE, COMPLY WITH THESE RESTRICTIONS AS APPLICABLE.

THE FOREGOING STATUTORY AND REGULATORY PROVISIONS ARE CLEARLY AIMED AT GIVING MAXIMUM RECORDS DISCLOSURE TO AUTHORIZED AUDIT AGENCIES WHILE PROTECTING CERTAIN SPECIFIED PERSONAL INFORMATION, PARTICULARLY WHERE, AS HERE, A STATE AUDIT AGENCY HAS BEEN GRANTED ACCESS BY A STATE LAW. WE DO NOT BELIEVE THAT THEY SHOULD BE USED TO PREVENT FULLY AUTHORIZED STATE AUTHORITIES, SUCH AS THE COUNCIL APPEARS TO BE, FROM OBTAINING THE DATA THAT IT NEEDS TO FULFILL THEIR STATE STATUTORY MANDATES.

BECAUSE THE AUTHORITY FOR IMPLEMENTING THE REGULATIONS DISCUSSED HEREIN RESTS WITH THE U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, SHOULD THE COUNCIL EXPERIENCE FURTHER DIFFICULTY IN OBTAINING ACCESS TO THE DEPARTMENT'S RECORDS, WE SUGGEST THAT YOU CONTACT THE HHS REGIONAL OFFICE FOR WHATEVER HELP THEY CAN GIVE YOU.

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