Michigan proposed law to amend the Mental Health Code would authorize the Department of Community Health or a community mental health services program to disclose mental health patient records in accordance with HIPAA’s authorization to disclose protected health information (“PHI”) for treatment, payment, and health care information. HIPAA preempts state or federal law that is inconsistent with HIPAA unless, among others, the state or federal law gives more privacy protection than HIPAA does. For example, 42 Code of Federal Regulations, Part 2, requires a court order for substance abuse treatment information, not merely a subpoena. Michigan’s new proposed Senate Bill 1052 would allow disclosure of mental health information PHI as necessary for treatment, payment, and health care operations. Health care operations are normal functions of a health care practice, such as quality assurance, utilization review, and peer review, among others. See 45 C.F.R. § 164.506 for the definition and a complete analysis from the Department of Health and Human Services (“DHHS”) website.

Under the current bill, the holder of the record may disclose client information under the following circumstances:

• As necessary for the recipient to apply for or receive benefits.
• As necessary for the purpose of outside research, evaluation, accreditation, or statistical compilation (with conditions attached).
• To a provider of mental or other health services or a public agency, if there is a compelling need for disclosure based on a substantial probability of harm to the recipient or other individuals. (This circumstance does not appear inconsistent with HIPAA’s authorized disclosure to prevent a serious and imminent threat to the health or safety of the patient or others. 45 C.F.R. § 164.512(j)(1)(i).)

Under this proposed law, the holder of the record would have broader authority to disclose the information as necessary for treatment, payment, or health care operations unless some other provision of law further restricted the disclosure. For example, copyright protected data, such as raw mental tests results, will generally prohibit the disclosure of such data, under HIPAA § 1172(e), “Protection of Trade Secrets.”

The Fiscal Impact section of the proposed bill states that it would have no fiscal effect on state or local government, so it appears likely to be signed into law.