Status of Medical Records Following Departure of Practice Physician
When a physician leaves an existing medical practice, the practice has a recognized proprietary interest in its medical records – not the patient and not the departing physician. In Part I of a two part blog series, we examine how the law applies to this unique area of corporate divorce regarding medical practices.
Doesn't the Patient Own the Medical Records?
No. This is a common misunderstanding. Indeed, the patient does not own the medical records. Naturally, an individual medical record provides a physician the means for documenting and evaluating a patient’s illness, diagnosis, and care. With that in mind, HIPAA provides a patient the general right to access and inspect medical records associated to their care. 45 C.F.R. § 164.524. However, while a right to access can be enforced in a way that is similar to property rights, the patient does not actually possess a “property interest” in the medical records associated to their care.
Courts addressing this precise issue have determined that a person has no property interest in the medical records. Gotkin v. Miller, 379 F.Supp. 859, 863 (E.D.N.Y. 1974). Conversely, courts have routinely held that “possession and ownership of the medical records has always remained with the hospitals” or similar provider. Id. See Waldron v. Ball Corp., 210 A.D.2d 611 (NY 3d Dept’t 1994) (medical records belong to the provider); Estate of Finkle, 395 N.Y.S.2d 343 (N.Y. 1977) (“…the vast majority of states hold ‘that medical records are the property of the physician or the hospital and not the property of the patient.’”); Wolfe v. Beal, 353 A.2d 481 (Pa. 1976) (same); Cannell v. Medical and Surgical Clinic, S.C., 315 N.E.2d 278 (Ill. Ct. App. 1974) (same); Wallace v. University Hosps. of Cleveland, 164 N.E.2d 917, 918 (Ohio Ct. C.P. 1959) (original records are the property of the hospital, and a patient only has a right to access the information contained in the record); Abelson's Inc. v. New Jersey State Bd. of Optometrists, 5 N.J. 412, 75 A.2d 867 (N.J. 1950) (same); McGarry v. J. A. Mercier Co., 262 N.W. 296 (Mich. 1935) (same); Corliss v. E. W. Walker Co., 64 F. 280 (Cir. Ct. Mass.1894) (same). See also Robinson v. Okpor, 2015 WL 138170 (Tenn. Ct. App. Jan. 9, 2015) (Affirming dismissal of plaintiff’s claim that she owned her medical records, and physician’s alleged wrongfully converted such records).
Further, many state legislatures have expressly adopted the position that the practice owns the medical records it generates, including the Tennessee General Assembly. Tenn. Code Ann. § 68-11-304(a)(1) (“Hospital records are and shall remain property of the various hospitals, subject, however, to court order to produce the records.”); Fla. Stat. Ann. § 456.057(1) (“the term ‘record owner’ means any health care practitioner who generates a medical record after making a physical or mental examination of, or administering treatment or dispensing legend drugs to, any person[.]”); Ga. Code Ann. § 31-33-3(a) (“. . . nothing in this chapter shall be construed as granting to a patient or person any right of ownership in the [patient] records, as such records are owned by and are the property of the provider.”); La. Rev. Stat. Ann. § 1165.1(A)(2)(a) (“Medical records of a patient maintained in a health care provider’s officer are the property and business records of the health care provider.”); Miss. Code. Ann. § 41-9-65(1) (“Hospital records are and shall remain the property of the various hospitals, subject however to reasonable access to the information contained in the records upon good cause shown by the patient, his personal representatives or heirs, his attending medical personnel and his duly authorized nominees, and upon payment of any reasonable charges for that service.”); S.C. Code Ann. § 44-115-20 (“The physician is the owner of medical records in his possession that were made in treating a patient and of records transferred to him concerning prior treatment of the patient.”); Va. Code Ann. § 32.1-127.1:03 (“Health records are the property of the health care entity maintaining them[.]”). See also Tenn. Comp. R. & Regs. 0880-02-.15(e)(3) (“A physician or the estate of a deceased physician may sell the elements that comprise his/her practice, one of which is its goodwill, i.e., the opportunity to take over the patients of the seller by purchasing the physician’s medical records.”).
Doesn't the Departing Physician Own the Medical Records?
No. But the question of who owns medical records – between the practice and the departing physician – is admittedly a more complex issue of propriety commercial information. Indeed, a medical practice generates and maintains a tremendous amount of data within its medical records, much of which “has considerable commercial value for purposes such as marketing to physicians or conducting medical research.” Mark A. Hall, Property, Privacy, and the Pursuit of Interconnected Electronic Medical Records, 95 Iowa L. Rev. 631, 643 (2010). Among the data included in a compilation of medical records are patient lists, addresses, pricing information, billing information, insurance information, treatment schedules treatment codes, and whole host of other types of data that could be used for commercial purposes. See Med. Wellness Assoc. P.C. v. Heithaus, 2001 WL 1112991 (Pa. 2000).
Several courts addressing the question of ownership between a practice and a departing physician have ruled in favor of the practice. For example, in Parsley v. Assoc. in Internal Med., 126 Misc.2d 996, 484 N.Y.S.2d 485 (N.Y. Sup. Ct. 1985), a court unequivocally held that medical records belong to the practice, and the departing physician has no right to the original or copies unless provided for by contract. Parsley, at *997. In Parsley, a physician departing a practice sought an order directing the practice to make available originals or copies of patient records, without patient authorizations, for those patients for which he was the treating physician. Id. Among other assertions, the departing physician asserted that the practice had a duty under New York Public Health Law, and he had a “great need” for such records. Id. The court recognized that the practice itself has patients because, under New York law, there was no statutory requirement that any physician be specifically assigned to any patient. Id. Based on that recognition, the court held that “it is the corporation which has the property right in the patient records, rather than the employee physician who, as an agent of the corporation, treats the patients and makes the records. The court perceives no reason to accord a property interest in the records to the individual employee physician who made them.” Id. (emphasis added).
In another more recent New York case, Pullman v. Gormley, 13 Misc.3d 1234(A), 831 N.Y.S.2d 356, 2006 N.Y. Slip. Op. (N.Y. Sup. Ct. 2006), the court similarly analyzed the ownership issue in the context of a physician leaving a practice where the practice survived after his departure. Pullman, at *2. Quoting the medical publication, American Medical News, the court recognized that in such a scenario, “‘[t]he medical record is the property of the group practice, which must retain it for a number of reasons. The information in the record belongs to the patient [who retains the right to direct transfer of such information.]’” Id. at *3 (quoting American Medical News, June 23/30, 1997, p. 92). The court nonetheless allowed the departing physician to obtain copies of medical records associated to patients the physician treated, but only to the extent provided in the departing physician’s employment agreement. Id. (employment agreement expressly provided the right to “copy . . . all medical records . . . pertaining to parties treated by [the physician].”)
Other courts have held that medical records are “clearly” the property of the practice, subject to the departing physician’s right to copies of such records assuming the physician obtains an authorized release. See Albany Med. Coll. v. McShane, 489 N.E.2d 1278 (N.Y. Ct. App. 2002); Damsker v. Hague. 93 A.D.2d 729, 461 N.Y.S.2d 27 (N.Y. Sup. Ct. 1983); Greater Southeast Community Hosp. Corp. v. Campbell, No. 00-000049 (D.C. Sup. Ct. 2000) (medical records are the property of the hospital and not the property of departing physicians).
Although no Tennessee court has addressed this precise issue, recognizing that the practice owns its medical records makes practical sense. Indeed, the Markle Foundation – an influential organization directing the use of medical information to promote the general good – described the value a practice possesses in its medical records as follows:
[P]roviders treat patient information as a highly proprietary asset that serves as a means of differentiation from the competition.
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[Providers have an important interest in the] protection or preservation of rights and income derived from proprietary assets of business organizations, physician practice, hospital, or other concern. . . . Rights in data, methods of handling data, [and] derivative uses [of such data].
Financial, Legal And Organizational Approaches to Achieving Electronic Connectivity in Healthcare, Connecting For Health, Markle Foundation, Oct. 2004, at 18, 38.
Accordingly, it is evident that a practice owns the medical records it creates over the associated patients and physicians. Notwithstanding, this raises another question that we will address in Part 2. That is, whether the precise nature of that property right constitutes a protectable proprietary interest – like any other intellectual property – and what remedies a practice may have if its ownership rights in its medical records have been intruded upon. In other words, can medical records constitute trade secrets or confidential information?