Patient medical records may have value independent of a medical practice as a stand-alone asset and in the highly nuanced area of healthcare valuation, appraisers consider several factors to make that determination.
State laws and federal statutes. To derive a value for medical records, appraisers consider state laws and federal HIPAA statutes for patients’ rights to records, as well as the limits on what a medical practice can charge for these records. Appraisers also factor in provider agreements with health insurers that may contain specific clauses addressing a patient’s and/or subsequent provider’s right to medical record data. For example, Vermont State statute requires that hospitals retain medical records for a minimum of ten years. There is, however, no specific statutory provision for physicians, but longer periods of time are usually recommended. Therefore, a physician who sells a practice, retires or relocates should provide patients with the opportunity to obtain a copy of their record or to retrieve that record in the future if the patient does not get a copy at the time the physician leaves the practice. This creates a significant storage and retrieval obligation or liability that appraisers measure in addition to any possible asset value.
Maximum fee charge. Another consideration in valuing patient records is the maximum fee charge. Again using Vermont as an example, a physician’s office can charge no more than a flat $5.00 fee or $0.50 per page, whichever is greater. No charge is allowed in certain cases where the request is connected to a claim for public benefits. The federal HIPAA statute allows a “reasonable charge” but specifically bars charges for searching for or reviewing the record. In Pennsylvania, 42 Pa.C.S. §§ 6152 and 6155 govern the fees that a physician can charge a patient for medical record. Any conflict between HIPAA and a state law is resolved in favor of the federal statute, of course.
Keep track of HIPAA privacy rules. Georgetown University maintains a website that offers a state-by-state summary of patients’ rights to medical records, located at http://medicalrecordrights.georgetown.edu/records.html. Individual state medical societies and hospital websites often have more detail.