By Lisa Seachrist

Washington Editor

WASHINGTON - President Clinton and Health and Human Services Secretary Donna Shalala released the administration's proposal to protect electronic medical records privacy at an Oval Office ceremony Friday.

As a result of Congress failing to enact medical records privacy legislation by Aug. 21, as proscribed by the Health Insurance Portability and Accountability Act (HIPAA) of 1996, the administration is required to promulgate regulations to protect these records. That's a fact the president wasn't willing to let go unnoticed during his remarks.

"Now let me say something that is now well known," Clinton said. "I am taking this action today because Congress has failed to act, and because a few years ago Congress explicitly gave me the authority to step in if they were unable to deal with this issue. After three full years there wasn't a bill passed in either chamber."

Political digs aside, Clinton said he wanted Congress to pass legislation anyway. Penned in by restrictions written into HIPAA, the administration's efforts address only the protection of electronic medical records, not all forms of medical records.

"I ask congressional leaders, please help protect America's families from new abuses of their privacy," Clinton said. "You owe the American people a comprehensive medical privacy law."

Under Clinton's plan, people would have the right to review and correct their medical records. Access, by and large, would require patient consent and be limited to the minimum necessary rather than an entire medical record.

The administration proposal also calls for limiting the use and release of electronic medical records to prevent employers, health insurance companies, lenders, and other individuals from misuse of medical information. It establishes criminal and civil penalties for the disclosure and misuse of such information.

"This whole issue that medical information shouldn't be misused is something we wholeheartedly support," said Michael Werner, bioethics counsel and director of federal government relations for the Biotechnology Industry Organization. "But, we need to balance the needs for privacy with the need for researchers to get access to medical information to develop new drugs and therapies. We can't lose sight of that."

In Werner's opinion, the president's proposal contains several measures that are likely to make medical research more difficult and costly. First, the proposal requires all researchers using identifiable patient information to obtain either the consent of the individuals or an Institutional Review Board (IRB) OK to do the research without such consent.

"This move extends the IRB process to much more research," Werner said. Depending on the definition of identifiable the administration ultimately uses, coded information could fall under these guidelines. For example, the National Bioethics Advisory Commission determined that the existence of a key made any coded information identifiable information and subject to IRB review when it issued its report on using stored tissue samples for research.

In addition, the administration's regulations don't provide a federal preemption of state privacy laws. Much of the call for medical records privacy legislation has come from the fact that different states protect different subsets of medical information. The resulting patchwork of rules and regulations makes it difficult to manage the multicenter clinical trials vital to drug development. Werner said the problem of a patchwork can't be solved without federal preemption.

"We are hoping these rules will jump-start congressional efforts," Werner said. "We will be working hard to get this moving again in Congress. In the meantime, we will be filing comments and working with the administration."

Sen. Jim Jeffords (R-Vt.), chairman of the Health, Education, Labor and Pensions Committee, had sweeping medical privacy legislation in the works this year and even scheduled markups in June and July, but each had to be postponed because the legislation lacked consensus. The key issues slowing the legislation were a juvenile rights provision that many pro-life supporters viewed as an untenable pro-choice slant, and the right to private action should someone misuse medical information.

On the House side Rep. James Greenwood (R-Penn.) has spearheaded the privacy efforts.