Prior Authorization Lawsuit

When Should A Lawsuit Filing Party Use HIPAA Prior Approval?

A prior authorization lawsuit is a lawsuit that was initiated in a federal court against a healthcare provider without the knowledge or consent of the patient. In essence, the lawsuit says that the doctor/patient was put on the surgical list without proper notice or a valid justification. The lawsuit further claims that this violates the Health Insurance Portability and Accountability Act or HIPAA. The United States Justice Department, through the United States Department of Health and Human Services, or the HRSA, has sent out cease and desist letters to hospitals in an attempt to prevent these lawsuits from being instituted. This has caused many hospitals to limit the number of elective surgeries that they will allow to be performed on a given patient.

The reason why a prior authorization lawsuit can be pursued in federal court is due to HIPAA.

The 1996 HIT Act, as it is commonly known, was designed to provide patients with greater access to their health information. It required that all individuals who visit a hospital must be given a statement that states the purpose of the visit, as well as any information relevant to the procedure that the individual is undergoing. However, prior authorization did not apply to elective procedures. For example, a patient could go into a doctor’s office for a standard hair replacement procedure and request that the doctor perform the procedure without first obtaining prior authorization.

The reason for this limitation lies in HIPAA’s commitment to protecting the privacy rights of individuals.

HIPAA states that individuals have the right to file a lawsuit if they were not given prior authorization or if the procedure was not performed according to standard protocol. The United States Justice Department has interpreted this provision of HIPAA in a way that allows doctors and other health care providers to defend themselves from frivolous suits if there was a prior approval. When a lawsuit is brought against a health care provider solely because of these regulations, the doctor or hospital will often seek to have the suit thrown out. Attorneys representing the defendant will often attempt to have the lawsuit dismissed by filing a motion to dismiss stating that the provisions of HIPAA conflict with prior law. In these situations, an attorney may advise their client to seek prior permission from the court to avoid such a loss.

There are two major problems with prior authorization.

The first is that it requires doctors and hospitals to spend the time and resources in obtaining the proper approval, regardless of whether that approval came from a judge, the board of physicians, or a panel of administrative law judges. This means that many doctors and hospitals will choose to submit their forms to the appropriate regulatory agency rather than spend the time and resources in receiving prior authorization for elective procedures. Hospitals that suffer a loss from such a decision face another problem: they have already spent the time and resources in receiving prior approval, so they cannot file a motion to dismiss that same request with the courts.

The second problem with prior authorization is that it can create a chilling effect on future lawsuits against those who violated HIPAA. Without prior authorization, a person who has suffered a violation of their HIPAA rights does not have the standing to pursue a lawsuit against the erring party. This means that if there is a subsequent lawsuit, the plaintiff will not have been properly served with the complaint, and is stuck defending against the prior authorization itself.

There is an exception to this, however. If the doctor or hospital was found to have engaged in fraudulent billing practices, they will still be held accountable for their actions. However, without prior authorization from the patient, the plaintiff cannot proceed with a lawsuit until the offending entity receives permission from the court. Whether this permission comes from the court or the government (the FDA), it is rarely granted without prior authorization.

While the FDA and other government entities may not always approve of prior authorization filings, the courts will generally allow them.

Many plaintiffs prefer to pursue their lawsuits via the prior authorization process because they know that their rights will likely be more protected. Moreover, the process provides them with a higher level of security. A plaintiff simply needs to submit a complaint and attach any relevant documents required to support their claims. The hospital or doctor will issue a response, and then the case will move forward.

The plaintiff must merely show that the hospital or doctor violated the HIPAA rules and regulations before filing their suit. Then, they must provide the court with evidence that this violation has caused them to suffer damages. If the plaintiff can provide the requisite proof, the court will allow the lawsuit to proceed.

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