By Kim Coghill

Washington Editor

WASHINGTON - Days before the medical privacy rules approved in the waning days of the Clinton administration were scheduled to take effect, Secretary of Health and Human Services Tommy Thompson announced that implementation will be stalled for 30 days while his office opens the floor for additional public comments.

The rules were scheduled to become law Monday, Feb. 26. Upon approval in late December, health care providers began scrambling to put pressure on Bush to block implementation of what they called "expensive" rules. Critics said the rules would cost the health care system up to $18 billion over 10 years, while supporters said the rules would produce a $12 billion savings through streamlining regulations and billing practices.

According to the former administration, the privacy rules were written to give patients more control over their medical records while placing stiffer penalties on health plans, Internet web sites and other organizations that distribute medical information without consent.

But in a prepared statement released after Bush blocked implementation of the rules, Karen Ignagni, president and CEO of American Association of Health Plans, said, "In recent months, consumers, employers, physicians, other providers and health plans have all expressed strong concern that the regulations put forth in the final days of the Clinton administration do not strike the proper balance between protecting patient privacy and essential health care quality activities."

Clinton's rules, Ignagni said, differ from the guiding principle that was outlined in the original proposed rule in significant ways that may reduce - not improve - consumers' access to quality health care. The rules also fail to apply lessons learned from unintended consequences at the state level, where inconsistent and sometimes conflicting requirements have complicated the ability of providers and health plans to provide quality health care, the statement said.

Donna Shalala, former HHS secretary, said the standards limit the nonconsensual use and release of private health information; give patients new rights to access their medical records and to know who else has accessed them; restrict most disclosure of health information to medical records and to know who else has accessed them; restrict most disclosure of health information to the minimum needed for the intended purpose; establish new criminal and civil sanctions for improper use or disclosure; and establish new requirements for access to records by researchers and others.

Most providers will be required to get patients' consent for routine use and disclosure of health records in addition to requiring their authorization for nonroutine disclosures.

Employees will be protected against unauthorized use of medical records, as employers will not be able to access health information without authorization from the patient.

Just last week, Lawrence Gostin, a law professor at Georgetown University in Washington, addressed Clinton's privacy rules during an FDA-sponsored Science Forum, saying the former administration was on the right track, but approved rules that could create an unnecessary burden that likely would not serve their purpose. (See BioWorld Today, Feb. 16, 2001.)

As proposed by the Clinton administration, the regulations establish criminal and civil penalties to punish anyone improperly using or disclosing personal health information, including a fine of up to $50,000 and a year in prison for intentional disclosure. Disclosure with intent to sell the data would be punishable by a fine of up to $250,000 and up to 10 years in prison.

Details of the new public comment period and process will be published in the next few weeks in the Federal Register.

Bush Proposes $2.8B NIH Budget Increase

Officials at the National Institutes of Health wouldn't comment Monday following publicity surrounding President George Bush's proposal to increase the NIH budget by 13.8 percent - a $2.8 billion increase over this year's $20.3 billion budget, which ends Sept. 30.

But Carl Feldbaum, president of Washington-based Biotechnology Industry Organization, was pleased with the prospect, saying, "I think this is the right time for a large increase, following the progress in deciphering the human genome. The $2.8 billion increase is appropriate given the potential for research and we applaud the president's proposal."

An NIH spokesman said his office may have a comment Wednesday, a day after Bush is scheduled to present his budget proposal before a joint session of Congress.

At this point, the NIH said it is too early to determine how the funding, if approved by Congress, will be divided among academic organizations seeking research grants. The NIH, he said, likely would be prepared to discuss its overall fiscal 2002 budget in about a month.

During Clinton's last two years in office, the NIH budget grew by 30 percent, totaling $18.8 million in fiscal 2000. (See BioWorld Today, Feb. 8, 2000.)

Last year the NIH budget included $73 million in funding over two years to pay for construction of a neuroscience research center at the facilities located in Bethesda, Md. n