I posed a question in Part 1 of this post which I will summarize here:  is personal health information provided to a Patient Assistance Program (PAP) in order to help with covering the cost of prescription drugs protected as “protected health information” (PHI) under HIPAA?

Let’s use two examples.  Say Patient A, who knows he can’t afford the out-of-pocket costs for a branded drug prescribed by his doctor, goes to the pharmaceutical manufacturer’s website where he sees that the company has a PAP and on-line application form into which he enters his personal information to see if he qualifies for assistance.  Patient B is also concerned about the cost of a non-formulary drug prescribed for her, but the hospital where Patient B’s physician works has an arrangement with the PAP whereby the PAP will work with a patient’s insurance carrier to get coverage for drugs not included on the carrier’s formulary.  What happens if the PAP’s system is hacked and the personal health information of both Patient A and Patient B is compromised?  Does HIPAA apply and will the PAP notify Patient A and Patient B of the breach?

The answer is a qualified “yes”, because HIPAA would be applicable only if the PAP is functioning as a covered entity or business associate as those terms are defined under HIPAA when it receives and maintains the personal health information.  It’s the role the PAP plays with respect to the patient (and his or her information) that matters when trying to figure out whether the patient’s information is HIPAA-protected as PHI, rather than just the type of information the PAP receives and maintains.

Generally speaking, a pharmaceutical manufacturer (and its PAP) will be a “covered entity” under the HIPAA regulations if it is a “health care provider who transmits any health information in electronic form in connection with a transaction . . . .” (italics added).  The term “health care provider” is defined very broadly under the HIPAA regulations, and a “transaction” is defined (in relevant part) as “the transmission of information … to carry out financial or administrative activities related to health care.”  The manufacturer (and its PAP) is a “business associate” if it performs functions on behalf of a covered entity that require it to create, receive, maintain or transmit PHI.

The same mini-analysis can be applied to other business entities that “create, receive, maintain or transmit” PHI as a useful first step to understanding whether and how the personal health information may be protected.