HIPAA

New Laws Require Estate Plan Review and Revision

Change is constant. Several recent changes in the law require you to review and possibly revise your trust or supporting documents. Moreover, although you may choose not to review your trust and supporting documents regularly, changes to Ohio and federal law last year make this year a vitally important year for review and revision.

The most important federal change affecting your estate plan is the adoption of the much touted privacy rules of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) which took effect on April 14, 2003. Until the recent prescription drug bill, these regulations were considered to be the biggest development in health care legislation since the 1965 enactment of Medicare. The legislation applies directly to virtually every physician, dentist, nurse, pharmacist and health care provider in the nation. The legislation applies indirectly to virtually every industry that in any way obtains, records, reports, maintains, or relies upon health care information, including broker-dealers and insurance companies.

Because the privacy rules impact everyone’s access to health care information, particular care must now be exercised when drafting documents that affect, require, or contemplate the release of health care information. Because a well-drafted living trust will typically contain provisions planning for competency issues, the trust must be amended to permit trustees and successor trustees to obtain and utilize health care records and information. Moreover, the General Durable Power of Attorney and Nomination of Guardian should be amended to comply with the requirements of HIPAA.

An example will demonstrate just how important this revision can be to the estate plan. If you have a “springing” general power of attorney the appointed attorney-in-fact might be unable to establish the condition causing the “springing” power (usually incapacity or incompetency as established by two physicians), because the attorney-in-fact might be unable to obtain medical records! If you have a springing power of attorney, you should ensure revision as soon as possible.

Many practitioners are relying upon assurances bu proponents of the Act that HIPAA contemplated state health care powers of attorney and advanced directives, and are advising that no revision to these documents is necessary. Nonetheless, there are apparent differences between state and federal terms and definitions. Consequently, revisions to state forms should be considered. Aside from assuring that the documents retain their “practicality,” in that they would continue to be accepted in the state in which the documents are drawn, revision to conform to federal law might make acceptance of the documents in other states more likely.