In a Final Decision issued Wednesday, the New Jersey State Board of Psychological Examiners (“Board”) suspended the license of a prominent Morris County psychologist for “shatter[ing] the trust of his patients by providing their most sensitive information” to his practice’s debt collection attorneys. Such conduct, the Board held, “constituted a fundamental breach” of the psychologist’s responsibility “to preserve the sanctity of the psychologist-patient relationship and to preserve the confidentiality integral to that relationship.”  The two-year term of suspension is effective September 24, 2018; the psychologist has appealed the Board’s decision.

The case began upon the Attorney General’s (“AG”) filing of a five-count administrative complaint in April 2017.  Most notably, the first count of the Complaint alleged that the psychologist “failed to take reasonable measures to protect confidentiality of clients’ protected health information” by providing to his debt collection attorneys copies of “true bills” containing insurance codes that revealed his patients’ diagnoses and the treatment methods employed.  After a five-day trial before the Office of Administrative Law (“OAL”) in November 2017, the Administrative Law Judge (“ALJ”) found that the AG had proven that the psychologist breached his patients’ confidences and intentionally failed to prepare and maintain required treatment records, as alleged in the first two counts of the complaint, but that the AG did not meet his burden of proof on the remaining counts.  Although she sustained the most serious charges, the ALJ found that the psychologist did not intend to harm any patient and, on this basis, recommended that the Board not impose disciplinary sanctions beyond a minor civil penalty of $10,000 and a small portion of the prosecution’s costs.  The OAL then returned the case to the Board so that the Board may determine whether to adopt, reject, or modify the ALJ’s recommended findings of fact and conclusions of law pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq. Thereafter, all parties filed written exceptions to the ALJ’s findings with the Board; the AG urged the Board to impose a “significant disciplinary sanction” while the psychologist argued that “there should be no finding of a breach of confidentiality where a psychologist relies on private counsel to prosecute collections actions.”

Following a June 2018 hearing, the Board unanimously concluded that the ALJ’s disciplinary recommendation should be modified. Specifically, the Board found that the psychologist’s violations “necessarily compromised the privacy and confidentiality interests of each and every patient whose ‘true bill’ was provided to his collection attorneys.”  Because the “preservation of a patient’s confidentiality interests is a core, non-delegable responsibility of each and every licensee,” the Board rejected the ALJ’s suggestion that the absence of any intention to harm his patients militated against licensure suspension.  In doing so, the Board affirmed that “[i]nformation developed during treatment sessions, to include a specific patient’s diagnosis and/or the methods by which a patient is treated” is among the “most sensitive” of patient information and that disclosure of same, even in the form of DSM and CPT codes, is “tantamount to disclosing information revealed in a treatment session.”  Importantly, the Board found that the psychologist’s “breach of his ethical obligations [] occurred when the ‘true bills’ were provided to [his] attorneys, not when the attorneys publicly disseminated that information” by attaching those bills in Superior Court filings.  The Board noted that, had the psychologist taken steps to preserve the confidentiality of the information on the true bills he provided his lawyers, including telling them that the information must not be disclosed in court filings, then its “conclusions on penalty might well have been in line with” the ALJ’s.  But his “flagrant and egregious” failure to do so is a “fundamental abrogation of his professional responsibilities.”  These findings, along with the psychologist’s failure to maintain accurate treatment records, “fully support—if not dictate—imposition of a period of license suspension.”

The Board’s decision serves as a clarion reminder to all licensed professionals of their paramount ethical obligation to take adequate measures to prevent the disclosure of sensitive and confidential patient health information. The Board’s decision does not mean that licensed professionals may not attempt to collect patient debts through private counsel. But it does show that, when trying to do so, licensees must emphasize to their debt collectors the highly confidential nature of their patients’ health information. Indeed, the Board’s decision suggests that the safest (and most simple) course of action is to redact all protected health information, including insurance codes, when providing documentation in any effort to collect debt. Most importantly, however, as shown by the Board’s absolute rejection of the psychologist’s argument that he should be shielded from liability because he went through his lawyers, the responsibility to protect confidential information is the licensee’s alone.

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