Suits filed over Aurora’s use of medical data in bankruptcy casesDebtors file suit over release of medical information during bankruptcy proceedings
By: By Bruce Vielmetti, Milwaukee Journal Sentinel, Superior Telegram
Susan Dandridge knew that when she sought protection in bankruptcy court last year, information about her debts and income would go into a public court file.
“It’s old bills and stuff from my earlier life I’m trying to clean up,” said the 53-year-old admissions adviser at Herzing University, a for-profit college with a campus in Kenosha. “I can deal with that.”
But what she couldn’t deal with was learning that some of those bills, from Aurora Health Care Inc., included specific details about the kind of treatment she got there and why.
“I never thought in a million years” that Chapter 13 would “take my personal life and make it an open book,” she said recently. Now she’s one of several Aurora patients in bankruptcy who have filed class-action lawsuits against Aurora over the way it submits claims in bankruptcy.
The suits, in federal and state court, claim Aurora violated Wisconsin’s privacy law when it routinely filed proofs of claim against debtors that include patients’ specific medical information as part of the billing records. The suits seek $25,000 in exemplary damages for each person whose private medical information was revealed.
The suits also seek to have such information taken out of thousands of other debtors’ existing files.
In the case of the named class-action plaintiffs such as Dandridge, the information has already been sealed, according to court records. She estimated it was in her file for months before that happened. Other plaintiffs declined to talk about their cases.
The suits claim Aurora intentionally and recklessly disclosed the information, and that, as a consequence, the affected patients/debtors have suffered emotional embarrassment and been exposed to “medical identity theft.”
A lawyer defending Aurora referred questions to a company spokesman.
“Aurora is protecting its rights in bankruptcy as a creditor has the right to do. The information disclosed as part of our filings in this case are legal and proper,” said Michael Brophy, a spokesman for Aurora.
Michael Watton represents Dandridge and the others in Chapter 13 bankruptcy and the two class actions. He won’t characterize the medical information that was made public about his clients, but said, based on inspecting dozens of bankruptcy files, many such proofs of claim include reference to the kinds of health issues that would be “universally embarrassing.”
Watton said, however, that even something as benign-appearing as treatment for a bad back, while perhaps not personally embarrassing, could affect someone’s potential employment.
The complaints suggest that Aurora could have filed limited, summary information to protect its creditors’ claims in bankruptcy court. Such an approach would meet the restrictions of state and federal medical privacy laws, according to the suits.
The Wisconsin Hospital Association filed notice that it objected to Watton’s interpretation of the state privacy law, noting that there has been a “bright line exception” that allows disclosure of patient records when needed for billing, or payment or collection of claims.
Watton said Aurora’s practice came to light after a trustee in a Chapter 7 proceeding noticed the degree of medical detail in some Aurora claims and brought an action against Aurora that ended in a settlement. Soon, word got around the courthouse that Aurora claims had information most people wouldn’t expect to find in them.
In truth, few people but the lawyers, trustees and judges read most bankruptcy files. The class-action lawsuits don’t allege that anyone actually learned of the plaintiffs’ conditions from the files, or used the information for any purpose. But just knowing the information was exposed – and might still be, via commercial services that copy electronic bankruptcy records – is harm, Watton said.
Dandridge, who lives in Milwaukee, said just knowing that someone else might have read her private medical information continues to haunt her.
“It’s always in the back of my mind, ‘Do they know?’ “ she said.
To someone who might question whether anyone else would even care enough to go digging around that kind of information, Dandridge would say this:
“The big deal is, I’m a private person and it matters to me.”
– Copyright (c) 2010, Milwaukee Journal Sentinel/Distributed by McClatchy-Tribune Information Services.