When a life settlement is created through the regulated sale of an unwanted or unneeded life insurance policy by the policy owner to a life settlement provider (i.e., the buyer or buyer’s broker), one of the documents signed by the person covered under the policy, (i.e., the insured), is a HIPAA-compliant authorization. This form is designed to comply with the requirements of the Health Insurance Portability and Accountability Act of 1996, HIPAA for short. It may also comply with a particular state’s regulations if these requirements are different from those addressed by federal law.
HIPAA and Life Settlement Transactions
Insured people sign this document as one of the key documents necessary to close the life settlement transaction. The contract signed usually stipulates that from time to time in the future, the insured may be asked to sign a new HIPAA form. By signing the contract to sell a policy, the policy owner and the insured are agreeing to these obligations, and they are bound by the contract to them.
Unfortunately, this obligation is not always honored by the insured, but that’s a topic for another day. In addition, many, many health care providers (HCPs) make matters worse by rejecting HIPAA forms that comply with federal and state requirements. In other words, HCPs decide on their own that they will require things, or in some cases do things, that make life settlement companies’ efforts to update health information much more difficult and, in some cases, impossible. These arbitrary standards and requirements interfere with a key function of the life settlement marketplace, and when they are imposed in a life settlement transaction, can keep policy owners from hundreds of thousands, even millions of dollars.
The HCPs often argue that their rules must be followed, despite the fact, there is no legal basis for them. They also claim they cannot provide anyone with access to the people making up these arbitrary rules, and thus there is no recourse for life settlement companies or consumers but to involve the insured directly in the effort to collect information. This is burdensome to the older age population served by the life settlement industry and the health care industry and unfair in that the information being requested belongs to the consumer, not the HCPs.
Health Care Providers Creating Obstacles for Their Own Patients
If the insured reads and signs a compliant HIPAA authorization form and gives it to the party or parties authorized in the form, they are clearly indicating their consent to release the health care information being requested. HCPs who arbitrarily decide that their opinion and judgment supersedes that of the consumers they serve, despite the fact it is not their information being requested, are placing a burden on their patients and possibly costing them a great deal of money.
To learn more about how ISC Services uses health care data to create accurate life expectancy assessments, contact us today.
