In April 2000, the new Personal Information Protection and Electronic Documents Act (Bill C-6) was passed into law. Bill C-6 applies to all private sector organizations, and is intended to protect individuals against misuse of their personal information.
Federal legislation regarding government use of private information was enacted some time ago but Bill C-6 is the first national legislation to address privacy issues in the private sector. Provincially, Quebec introduced similar legislation in 1994.
Starting on January 1, 2001 the new legislation will apply specifically to federally regulated organizations, but the legislation will be phased in for all private sector organizations over the next three years.
Implementation Schedule
Stage 1
Federally-regulated private sector and out-of-province exchanges of personal information
• Starting on January 1, 2001, the law will apply to personal information of clients
and employees in the federally regulated private sector, such as airlines, banking,
broadcasting, interprovincial transportation and telecommunications.
• The law will also apply to all organizations that disclose personal information for
consideration outside a province or the country.
Stage 2
Health Information
• On January 1, 2002, the law will also apply to personal health information for the
organizations and activities already covered in the first stage.
Stage 3
Commercial use of personal information within individual provinces
• On January 1, 2004, the law will extend to every organization that collects,
uses or discloses personal information in the course of a commercial activity
within a province, whether or not the organization is a federally-regulated
business or not.
• However, the federal government may exempt organizations and/or activities
in provinces that have adopted privacy legislation that is similar to the federal law.
To summarize the highlights of Bill C-6, it
• requires organizations to obtain an individual’s consent when collecting, using or disclosing
the individual’s personal information,
• prohibits anyone else from making use of a person’s personal information without that person’s
permission, and
• allows personal information to be used only for the stated purpose for which it was collected.
Consent must be obtained again for any other use of that information.
The Bill also offers a means of recourse through the Federal Privacy Commissioner who will receive and investigate individual complaints, attempt to resolve disputes, initiate investigations or audits, and can impose tough penalties.
Bill C-6 and Group Insurance Plans
Preserving the confidentiality of personal information has always been important in the insurance industry. But in an age where computer technology allows insurers to gather and distribute information more efficiently than ever before, the new law provides clear guidance on how personal information should be handled.
Bill C-6 makes it clear that public and private sector organizations including Group Insurers have a responsibility to prevent unauthorized use of personal information. Insurers are reviewing their practices and procedures to ensure they comply with Federal and Provincial legislation as well as their own company and industry guidelines. Already we know that some longstanding industry practices will have to change.
For example,
• Any reports from insurers that identify individuals and reveal personal health information,
including plan member claim summaries and Explanation of Benefits forms (EOBs) cannot be
provided to plan sponsors;
• Some clients review and authorize claims prior to submitting them to their insurer. This practice is in conflict with Bill C-6. Direct submission of claims from plan members to the insurer will
become standard procedure. In addition to complying with privacy legislation, this procedure
offers real advantages to plan sponsors and plan members. Plan sponsors will gain
administrative efficiencies by no longer being involved in claims submission. In addition, plan
members can submit dental claims electronically which speeds up the claim submission and
payment process.
For More Information
For information on how the new legislation may affect your plan, contact your group insurance representative. You may also wish to seek professional advice to find out if Bill C-6 will require you to modify any practices or administrative procedures within your own business. For more information about Bill C-6, visit the Privacy Commissioner’s Web site at http://www.privcom.gc.ca.
There are some potential concerns with clients who have access to a Pay-Direct on-line drug system. Aside from the convenience of not having to submit claims for reimbursement, important health information is instantly communicated to the pharmacy. This is information such as potentially adverse interaction between drugs, whether or not the drug has been supplied too soon or too late, as well as potential abuse involving multiple doctors and/or pharmacies.
Information obtained from claims data is instrumental in assessing utilization patterns of specific drugs. Without the claims data the insurers would be unable to analyze reasons for the increasing costs of drug claims. Such analyses have been of value, not only to the insurers, clients and consultants, but also to Industry Canada and the Patented Medicine Prices Review Board.
The Act appears to imply an explicit consent is required each and every time a provider submits a claim on behalf of a client. We believe the time required for providers to comply may result in extra charges to the client and this may lead to requests that employer sponsored drug plans pay these extra charges. Aside from the extra charges that may be transferred to clients, the process would be very onerous for providers.
Consent forms devised by providers may be so detailed as to be confusing or worded in such a way that they become vague and meaningless. With this in mind, we do concur with the Report of the Health Minister’s Advisory Council, which calls for a definition of informed consent and the exemptions allowed.
In relation to the personal health information, much of Bill C-6 is vague, leaving us unsure how this new Act will truly affect the health industry. For instance, Bill C-6 is not intended to apply to provincially regulated entities such as hospital pharmacies. To this we ask, “is the claim for which an insurer pays a publicly owned hospital pharmacy in some way different from an identical claim paid to a privately owned community pharmacy?”
While we argue the health implications of Bill C-6, we are not opposed to its purpose. The concern is that it addresses health in the absence of adequate consideration of the impacts on citizens, providers, consultants and public and private health plan administrators.
