1 See 42 U.S.C. §§ 1395-1395 xx (1982) and 42 U.S.C. §§ 1396-1396p (1982), respectively.

2 Medicare is a federally-administered program for the elderly, while Medicaid, which provides health services for the indigent, is funded by the federal and state governments. See White-Collar Crime: Medicare-Medicaid Fraud, 18 AM. CRIM. L. REV. 169, 287 n.997 (1980)Google Scholar; White-Collar Crime: Second Annual Survey of Law, 19 AM. CRIM. L. REV. 173, 377 (1981)Google Scholar.

3 Social Security Amendments of 1965, Pub. L. No. 89-97, 79 Stat. 286, 286-423 (1965). (Codified as amended in scattered sections of 42 U.S.C.). The Medicare and Medicaid Amendments established three new health care programs: a hospital insurance program for the elderly; a voluntary supplementary health benefits plan for the provision of physicians’ and other supplementary health services for the aged; and an expanded medical program to aid the aged, blind, disabled and families with dependents.

Additionally, these amendments expanded the scope of services offered for maternal and child health care, provided for increased benefits under the federal old-age, survivors, and disability insurance program, and improved the federal-state public assistance programs. Id.

4 Under current predictions, the federal government will spend approximately $25.9 billion and state governments approximately $21.3 billion in 1987 to provide health care for 23.6 million Medicaid beneficiaries. BUDGET OF THE UNITED STATES GOVERNMENT, FISCAL YEAR 1987, ANNUAL REPORT 5-101 (1986). The estimated cost of Medicare current services outlays for 1987 to finance health care for approximately 31 million beneficiaries is $70.2 billion (after accounting for savings from regulatory changes and legislative proposals). Id. at 5-108.

5 Kusserow, , Civil Money Penalties Law of 1981: A New Effort to Confront Fraud and Abuse in Federal Health Care Programs, 58 NOTRE DAME L. REV. 985, 986 (1983)Google Scholar. Investigations and studies by congressional committees, the General Accounting Office, and other federal and state agencies illustrate the existence of a “disturbing degree [of] fraudulent and abusive practices associated with the provision of health services financed by the medicare and medicaid programs.” H.R. REP. NO. 393 (II) 95th Cong., 1st Sess. 44, reprinted in 1977 U.S. CODE CONG. & AD. NEWS 3039, 3046-47 [hereinafter H.R. REP.]. These reports indicate that the problem of fraud is pervasive and occurs in various medical settings Id. H.R. REP. NO. 393 (II), 95th Cong., 1st Sess. 44, reprinted in 1977 U.S. CODE CONG. & AD. NEWS 3047.

6 See In re Zuniga, 714 F.2d 632 (6th Cir.), cert, denied, 464 U.S. 983 (1983); In re Pebsworth 705 F.2d 261 (7th Cir. 1983); Hawaii Psychiatric Soc'y v. Ariyoshi, 481 F. Supp. 1028 (D. Hawaii 1979); Commonwealth v. Kobrin, 395 Mass. 284, 479 N.E.2d 674 (1985); Camperlengo v. Blum, 56 N.Y.2d 251, 426 N.E.2d 1299 (1982); In re Grand Jury Investigation, 441 A.2d 525 (R.I. 1982); State Dep't of Social & Health Servs. v. Latta, 92 Wash. 2d 812, 601 P.2d 520 (1979).

7 Notes and Comments, Evidence: Privileged Communications, 16 IND. L.J. 592, 593 (1941)Google Scholar, cited in Goldberg, , The Physician-Patient Privilege—An Impediment to Public Health, 16 PAC. L.J. 787, 797 (1985)Google Scholar.

8 See Ariyoshi, 481 F. Supp. at 1028 and Commonwealth v. Kobrin, 395 Mass. 284, 479 N.E.2d 674.

9 See Camperlengo, 56 N.Y.2d at 251, 436 N.E.2d at 1299; In re Grand Jury Investigation, 441 A.2d at 525; Latta, 92 Wash. 2d at 812, 601 P.2d at 520.

10 H.R. REP. supra note 5. The owners of such mills are primarily real estate operators with sufficient finances to purchase land, office space, and equipment. The average medical practitioner will spend a substantial portion of his other income on rent, leaving approximately twenty-five to thirty percent of his other original gross income. Due to the presence of such a large financial drain on the medical practitioner, he or she has a great incentive to commit fraudulent acts. Id. at 45, reprinted in 1977 U.S. CODE CONG. & AD. NEWS at 3047.

11 Id. at 47, reprinted in 1977 U.S. CODE CONG. & AD. NEWS at 3049-50.

12 Id. Furthermore, the Ways and Means Committee of the House Report accompanying H.R. 3 received testimony indicating that excessive delay in payment of Medicaid claims is one reason for the increase in factoring arrangements, a practice outlawed by the Social Security Act of 1972. Id. at 49, reprinted in 1977 U.S. CODE CONG. & AD. NEWS at 3052. (factoring is defined as the sale of accounts receivable from a business to a factor who assumes the risk of loss in exchange for an agreed discount. BLACK's LAW DICTIONARY 306 (abridged 5th ed. 1983).

Additionally, the Medicare and Medicaid programs reimburse physicians on a cost or cost-plus basis. Pies, , Control of Fraud and Abuse in Medicare and Medicaid, 3 AM. J.L. & MED. 323, 326 (1977)Google Scholar. This policy discourages the economic delivery of services, so that institutions will have no incentive to economize, as long as they can provide a reasonable justification for the higher cost of the patient's treatment. Id. at 326 n.8.

13 H.R. REP., supra note 5, at 47, reprinted in 1977 U.S. CODE CONG. & AD. NEWS at 3050.

14 Kusserow, supra note 5, at 987 (citing GENERAL ACCOUNTING OFFICE REPORT TO THE CONGRESS OF THE UNITED STATES BY THE COMPTROLLER GENERAL OF THE UNITED STATES 9 (1978)). According to estimates, one to ten percent of federal funds in Medicaid, foodstamps, and Defense Department spending is mislaid through fraud. N.Y. Times, May 17, 1982, at 11, col. 2. (fraud in benefit programs amounts to $2.5 to $25 billion per year.).

15 Kusserow, supra note 5, at 986.

16 Comment, Physician Fraud—in the Medicare-Medicaid Programs—Kickbacks, Bribes, and Remunerations, 10 MEM. ST. U.L. REV. 684, 685 (1980)Google Scholar (citing 123 CONG. REC. 16011 (1977) (remarks of Sen. Dole)).

17 Comment, supra note 16, at 685.

18 One such case was State v. Fellman, 187 Neb. 767, 193 N.W.2d (1972), cited in Comment, supra note 16, at 685. A dentist who had participated in the Medicaid program was charged with acquiring money from the state under false pretenses. The Supreme Court of Nebraska reversed the conviction because the prosecution failed to prove that the defendant had a specific intent to cheat or defraud.

19 In United States v. Mejkian, 505 F.2d 1320 (5th Cir. 1975), cited in Comment, supra note 16, at 686, the government was required to prove beyond a reasonable doubt that violations of 18 U.S.C. § 1001 (1970), which criminalized falsifications and concealment of material facts to the government, were committed “knowingly and willfully.”

Attempts to increase the number of offenses prosecuted are thwarted by the fear that the excessive costs of stringent enforcement may lead to reduced government funding and may also cause providers to refuse to provide services under the programs. Pies, supra note 12, at 331, cited in White-Collar Crime: Medicare-Medicaid Fraud, supra note 2, at 288.

Other problems include: the focus of state and local prosecutors on curbing street crime rather than on enforcing of Medicaid-related law; insufficient state resources to train antifraud auditors, investigators, and lawyers; and the government's failure to allocate more human resources to the detection and prosecution of Medicare and Medicaid-related crimes of fraud and abuse. The federal government's failure may be due in part to a lack of sufficient evidence and to disagreement regarding medical matters. Pies, supra note 12, at 327.

20 Comment, supra note 16, at 685. These included false claims provisions as well as provisions regarding conspiracies to defraud the government. Id.

21 See infra notes 22-48 and accompanying text.

22 In United States v. Porter, 591 F.2d 1048, 1054 (5th Cir. 1979), cited in Comment, supra note 16, at 685 n.7, the Fifth Circuit held that a criminal statute must be construed narrowly in favor of the defendant. Porter, 591 F.2d at 1054. The court then interpreted the term “kickback” to represent “the secret return to an earlier possessor” of part of a sum received, thereby construing the word “kickback” narrowly and finding for the defendants. Id.

23 H.R. REP. Supra note 5, at 44, reprinted in 1977 U.S. CODE CONG. & AD. NEWS at 3047.

24 Id.

25 Id.

26 Id.

27 Id.

28 Social Security Amendments of 1972, Pub. L. No. 92-603, 86 Stat. 1329 (1972) (codified at 42 U.S.C. §§ 1395nn(b)(1), 1396h(b)(1) (Supp. III 1985)). The existing penalty provisions of the Social Security Act originally provided only for punishment of fraudulent misrepresentations by a fine of “not more than $1000, or imprisonment for not more than one year, or both.” 42 U.S.C. §§ 1395nn(b)(1), 1396h(b)(1) (Supp. I 1977)cited in Comment,supra note 16, at 686. The 1972 amendments extended these provisions to the “soliciting, offering or acceptance of any ‘kickback or bribe.’ “ 42 U.S.C. § 1395nn(b)(1) (amending the Social Security Act of 1935, 53 Stat. 1398), cited in Comment, supra note 16, at 686. In addition, they increased the penalty for violations to a fine of $10,000 or less and/or imprisonment of one year or less. Id.

29 Lee, , Fraud and Abuse in Medicare and Medicaid, 30 ADMIN. L. REV. 1, 8 (1978)Google Scholar.

30 STAFF OF HOUSE SUBCOMM. ON HEALTH, COMM. ON WAYS AND MEANS, 95TH CONG., 1ST SESS., FRAUD AND ABUSE IN THE MEDICARE AND MEDICAID PROGRAMS 1 (Comm. Print 1977), cited in Lee, supra note 29, at 8.

As stated in Harvey Pies’ article, one problem inherent in the prevention of fraud and abuse is the ambiguous nature of these terms. This ambiguity causes difficulty in the identification, as well as the prevention, of fraud and abuse, resulting in many undetected cases. Pies, supra note 12, at 325.

31 31 U.S.C. §§ 3729-3731 (Supp. 1987).

32 United States ex rel. State of Wisconsin v. Dean, 729 F.2d 1100 (7th Cir. 1984).

33 Id. at 1105 (quoting Pettis ex rel. United States v. Morrison-Knudsen Co., 577 F.2d 668, 674 (9th Cir. 1978)). To exercise a private right of action, the plaintiff is required to provide the United States Attorney General with a copy of the complaint and “a disclosure in writing of substantially all evidence and information in his possession material to the effective prosecution of such suit.” ex rel. State of Wis., 729 F.2d at 1102 (quoting 31 U.S.C. § 232(C) (1976)). Once the United States is notified of the action, it has sixty days “in which to enter appearance in such suit.” Id.

34 In ex rel State of Wis., id., the court's holding reveals the extent of this jurisdictional bar. The State of Wisconsin filed a quitam action in federal district court under the Federal False Claims Act against the defendant, who had made fraudulent claims for medicaid reimbursements in her medical practice. Id. at 1102 (a quitam action is a suit brought by a plaintiff for himself, and on behalf of the government to recover a penalty under a statute providing that part of the penalty is given to the party bringing the action and the remainder is given to the government. Id. at 1102 n.l.).

After the United States declined to join the action, the district court held that “the information upon which the instant case is based was sufficiently in the possession of the United States to enable the federal government to adequately investigate the case and make a decision whether to prosecute.” Id. at 1103. The district court, however, denied the defendant's motion to dismiss for lack of subject matter jurisdiction, and it certified an interlocutory appeal. Id.

The Seventh Circuit noted that, as the district court had stated, U.S.C. § 232(c) provides a jurisdictional bar whenever the government has knowledge of the “essential information upon which the suit is predicated before the suit is filed, even when the plaintiff is the source of that knowledge.” Id. (quoting United States ex rel. Weinberger v. Florida, 615 F.2d 1370, 1371 (5th. Cir. 1980)). Reversing the decision, the court held that the district court had no jurisdiction of the state's quitam action brought under the Federal False Claims Act when the suit is based on evidence in the possession of the United States at the time the suit is filed, even when the state had been required to provide the federal government with this evidence as part of its participation in the Medicare reimbursement program. Id. at 1101.

35 Id. (quoting 89 CONG. REC. 10846 (1943) (statement of Rep. Walter)).

36 Pies, supra note 12, at 328. The legislation creating this office was enacted as 42 U.S.C. §§ 3521-3527 (1982). Kusserow, supra note 5, at 985 n.6. Note, however, that the Department of Health, Education, and Welfare is now entitled the Department of Health and Human Services (HHS). This change occurred in 1979. LEGAL ASPECTS OF HEALTH POLICY 39 (Roemer, R. & McKray, G. eds. 1980)Google Scholar. For the sake of clarity and historical accuracy, references to HEW or HHS will be based on the source used. Therefore, when the term HEW appears, it refers to the Department prior to 1979, the date of the change in title. When the term HHS appears, it refers to the Department after 1979.

37 Pies, supra note 12, at 329.

38 Id.

39 Id. at 328 (citing S. REP. NO. 1324, 94th Cong., 2d Sess. 3-14 (1976)).

40 Id. The Inspector General is responsible for recommending methods to combat fraud, abuse, and deficiencies, and for filing reports with the secretary of HEW and with Congress regarding the implementation of such methods. Pies, supra note 12, at 328.

41 Medicare-Medicaid Antifraud and Abuse Amendments of 1977, Pub. L. No. 95-142, 91 Stat. 1175 (codified at 42 U.S.C. §§ 1395nn(b)(1), 1396h(b)(1) (1982)).

42 Some such fraudulent acts are: knowingly and willingly making false representations and soliciting, receiving, offering or paying any remuneration. Penalties were raised to a maximum fine of $25,000, and/or up to five years imprisonment. Medicare-Medicaid Antifraud and Abuse Amendments of 1977, Pub. L. No. 95-142, 91 Stat. 1175 (codified at 42 U.S.C. §§ 1395nn(b)(1), 1396h(b)(1) (1982)).

43 Pies, supra note 12 at 329. There are provisions within the amendments which provide for the full disclosure of information concerning the ownership and business transactions of particular organizations which receive funds from Medicare and Medicaid. Id. Other provisions enhance the ability of Professional Standards Review Organizations (PSRO's) to review the necessity and appropriateness of services to prevent fraud and abuse. Id. at 330. Furthermore, administrative reforms are included which provide for such measures as ensuring the states’ timely payment of claims, and encouraging the establishment of state Medicaid fraud control units, which were designed to investigate provider-based fraud. Additional provisions were established, including one which would eliminate the use of factoring arrangements by a power of attorney. These arrangements permitted institutions providing Medicare-Medicaid reimbursable services to sell their accounts receivable to factoring agencies, who would collect from the government in return for a discount. The provision was added to prevent the use of such schemes, which were found to be a primary cause of inflated and fraudulent claims. Id.

44 42 U.S.C. § 1320a-7a (1982).

45 Volk, , Medicare/Medicaid Fraud and Abuse in the Reimbursement System, 6 WHITTIER L. REV. 857, 859 (1984)Google Scholar. Penalties of up to $2000 plus twice the amount falsely claimed may be charged for each fraudulent claim, not only where the health provider intentionally submitted a false claim, but also where he or she should have known that he or she was doing so. Id. at 859-60. This provision applies to all claims for an item or service that was not provided as claimed or for which reimbursement is proscribed. Kusserow, supra note 5, at 990. Reimbursement is proscribed in instances where the person was excluded or suspended from participating in the program, or because he or she had charged amounts or rendered services in excess of the statutory standards. Id.

46 42 C.F.R. §§ 431.107, 431.300, 431.302(d), 455.21 (a)(2)(iii)(1982).

47 42 C.F.R. § 431.107.

48 42 C.F.R. § 455.21(a)(2)(iii).

49 42 C.F.R. §§ 431.300, 431.302(d).

50 The court determined that a defendant lacked the requisite intent in State v. Fellman, 187 Neb. 767, 193 N.W.2d 775 (1972). Leon E. Fellman, a dentist, participated in the Medicaid program and allegedly acquired money from the state under false pretenses. Id. at 776. Dr. Fellman's secretary, Irene Richter, performed clerical work, which included preparing claim forms for indigent patients’ dental services paid by the state. She placed the claim forms on Dr. Fellman's desk for his signature, although she was aware that some of the claims were for unperformed dental services. Dr. Fellman testified that although he did sign the claim forms, he was not sure whether he realized at the time of signing them that certain services had not yet been provided. Id. at 776-77. The Supreme Court of Nebraska, concluding that Dr. Fellman never intended to cheat or defraud the state, reversed the conviction of the district court. Id. at 777. The case was remanded for a new trial because the district court had admitted inadmissible evidence. Id.

51 “More than a century of experience with the statutes has demonstrated that the privilege in the main operates not as the shield of privacy but as the protector of fraud… .” Lora v. Board of Educ. of N.Y., 74 F.R.D. 565, 574 (1977) (quoting MCCORMICK ON EVIDENCE § 105, at 228 (Cleary 2d ed. 1972) (footnote omitted)).

52 See Hawaii Psychiatric Soc'y v. Ariyoshi, 481 F. Supp. 1028 (D. Hawaii 1979); Commonwealth v. Kobrin, 395 Mass. 284, 479 N.E.2d 674 (1985).

53 New York enacted the first statutory physician-patient privilege in 1828. MCCORMICK, supra note 51 § 98, at 243-44 (3d ed. 1984).

54 Id. § 98, at 244; see Comment, Privacy in Medical Information: A Diagnosis, 33 U. FLA. L. REV. 394, 396 (1981)Google Scholar (citing C, DEWITT, PRIVILEGED COMMUNICATIONS BETWEEN PHYSICIAN AND PATIENT 13 (1958)Google Scholar).

55 Comment, Public Health Protection and the Privacy of Medical Records, 16 HARV. C.R.-C.L. L. REV. 265, 266 (1981)Google Scholar. Common law survives in England, though a physician may request the court to keep his or her professional secrets confidential. E. HAYT, MEDICOLEGAL ASPECTS OF HOSPITAL RECORDS 79-80 (2d ed. 1977). The physician, however, does not violate medical ethics if the law or the courts compel disclosure of a patient's confidential communications. Id. at 80. As stated by Lord Mansfield:

MCCORMICK ON EVIDENCE § 98, at 243 n.l (Cleary 3d ed. 1984) (quoting The Duchess of Kingston's Trial, 20 How. St. Trials (1776)) [hereinafter MCCORMICK].

56 Those states are: Florida, Illinois, Maryland, Massachusetts, Rhode Island and South Carolina. In Texas, the physician-patient privilege appears to be available only in civil proceedings. TEX. R. EVID. 509 (1984); TEX. R. CRIM. EVID. 509 (1986).

57 Thirty-four states and the District of Columbia have enacted such statutes. These statutes vary in scope and application and many contain significant exceptions. Most state physician-patient privilege statutes, however, require that three elements be satisfied in order for information to constitute privileged communication. Aranoff, & Hirsh, , Confidential Communications Between Physician and Patient in Judicial and Administrative Proceedings, 29 MED. TRIAL TECH. Q. 331, 333 (1983)Google Scholar. These elements are: (1) a physician-patient relationship, (2) information acquired as a result of the relationship; and (3) the need and propriety of the information to enable the physician to properly treat the patient. Id. at 333-34; E., HAYT, MEDICOLEGAL ASPECTS OF HOSPITAL RECORDS 82 (2d ed. 1977)Google Scholar.

For example, where a physician examines and acquires information from a patient who believes treatment will be provided, the information will be privileged even if no treatment is ever given. Id. at 334. If the physician acquires information during an examination of the patient that is not necessary for treatment, the information is not privileged. Furthermore, information about a patient which any layperson could observe is not privileged. Id.

58 UNITED STATES PRIVACY PROTECTION STUDY COMMISSION, PERSONAL PRIVACY IN AN INFORMATION SOCIETY 282 (1977), quoted in Comment, supra note 55, at 266. Some examples of administrative process include Internal Revenue Service investigations and actions taken by boards responsible for monitoring patient care. Arnoff & Hirsh, supra note 58, at 331-32 (citing R. SLOVENKO, PSYCHOTHERAPY, CONFIDENTIALITY, AND PRIVILEGED COMMUNICATIONS, 255-77 (1978).

59 Comment, supra note 55, at 266.

60 Id. ALA. CODE § § 15-23-11, 34-26-2 (1975); ALASKA STAT. § 08.86.200 (1987); ARK. R. EVID. 503 (1987); CAL. EVID CODE §§ 990-1007 (West 1988); COLO. REV. STAT. § 13-90-107(l)(d)(1987); D.C CODE ANN. § 14-307 (1987) HAW. R. EVID. 504 (1985); IDAHO CODE § 9-203 (Supp. 1987); IND. CODE § 34-1-14-5 (1986); IOWA CODE ANN. § 622.10 (West Supp. 1988); KAN. STAT. ANN. § 60-427 (1983); LA. REV. STAT. ANN. § 13:3734 (West Supp. 1988); ME. R. EVID. 503 (1987); MICH. COMP. LAWS ANN. § 600.2157 (1986); MINN. STAT. § 595.02 (Supp. 1988); MISS. CODE ANN. § 13-1-21 (Supp. 1987); Mo. REV. STAT. § 491.060 (Supp. 1988); MONT. CODE ANN. § 26-1-805 (1987); NEB. REV. STAT. § 27-504 (1985); NEV. REV. STAT. § 49.215 (1986); N.H. REV. STAT. ANN. § 329:26 (Supp. 1987); N.Y. Civ. PRAC. L. & R. § 4504 (McKinney Supp. 1987); N.C. GEN. STAT. § 8-53 (1986); N.D. R. EVID. 503 (Supp. 1987); OHIO REV. CODE ANN. § 2317.02 (Anderson Supp. 1987); OKLA. STAT. tit. 12 § 2503 (Supp. 1988); OR. REV. STAT. § 40.235 (1987); PA. STAT. ANN. tit. 42 § 5929 (1982); S.D. CODIFIED LAWS ANN. § 19-13-6 to 19-13-11 (1987); UTAH CODE ANN. § 78-24-8 (1987); VA. CODE ANN. § 8.01-399 (1989); Wis. STAT. § 905.04 (Supp. 1987);. WYO. STAT. § 1-12-101 (1977).

61 Id. Comment, supra note 55, at 266, 272.

62 Confidentiality of Patient Health Information, 56 J.A.M.A. 4 (Dec. 1985)Google Scholar (a position statement of the American Medical Record Association); see also MCCORMICK, supra note 55 § 98 at 244.

63 Id.

64 Id. See Comment, supra note 55, at 274-76.

65 MCCORMICK, supra note 55 § 98, at 244; see Comment, supra note 58, at 274.

66 Morgan, , Foreword to MODEL CODE OF EVIDENCE 28 (1942)Google Scholar, quoted in MCCORMICK, supra note 56 § 98, at 244 n.4.

67 MCCORMICK, supra note 55 § 98, at 244. Note, however, that the argument that a patient would fully disclose to a physician all details concerning his or her health even if his or her medical records were not confidential relies to some extent on the assumption that the public lacks knowledge about the frequency of disclosure. Comment, supra note 55, at 274 n.54. The evidence admitted in Roe v. Ingraham, 403 F. Supp. 931, 934-35 (S.D.N.Y. 1975), rev'd sub mm. Whalen v. Roe, 429 U.S. 589 (1977), is also significant, as it indicated that patients . discontinued necessary treatment upon discovering that New York state kept a record of their prescriptions. Id..

68 Comment, supra note 55, at 266.

69 542 F.2d 1064 (9th Cir. 1976) (acknowledging a nonabsolute constitutional right of privacy with respect to psychotherapist-patient communications cited in MCCORMICK, supra note 55 § 98, at 244; Hawaii Psychiatric Soc'y v. Ariyoshi, 481 F. Supp. 1028, 1039 (D. Hawaii 1979) (upholding a constitutionally protected right of privacy extending “to an individual's liberty to make decisions regarding psychiatric care without unjustified governmental interference“); United States ex rel. Edney v. Smith, 425 F. Supp. 1038 (E.D.N.Y. 1976) (implying its acceptance of the constitutional status of the psychotherapist-patient privilege), affd sub nom. Edney v. Smith, 556 F.2d 556 (2nd Cir.), cert denied, 431 U.S. 958 (1977); In re “B,” 482 Pa. 471, 394 A.2d 419 (1978) (plurality opinion) (recognizing a constitutional right of privacy protecting psychotherapist-patient records); In re Lifschutz, 2 Cal. 3d 415, 467 P.2d 557, 85 Cal. Rpts. 829 (1970) (recognizing that psychotherapist-patient communications are included within the constitutional right of privacy, but that this protection is not absolute).

70 MCCORMICK, supra note 55 § 98 at 244 (citing Lora v. Board of Educ. of N.Y., 74 F.R.D. 565 (E.D.N.Y. 1977)).

71 Goldberg, supra note 7, at 794. In New York, the privilege has “been the object of nearly unaminous scholarly criticism.” Lora, 74 F.R.D. 565, 574 (E.D.N.Y. 1977), quoted in MCCORMICK, supra note 55 § 98, at 244 n.4.

72 Goldberg, supra note 7, at 803.

73 Although there is no evidence indicating that the medical treatment provided by physicians has been less effective in states which have not adopted the physician-patient privilege, the lack of such evidence does justify the refusal of courts and legislatures to recognize the privilege. Id. at 801. Some physicians believe that the absence of the privilege will not affect the doctor: “the physician being called upon with comparative infrequency to make disclosures, would not be consciously affected in his relation with the patient.” Comment, Privileged Communications, 197 J.A.M.A. 257, 258 (1966)CrossRefGoogle Scholar, quoted in MCCORMICK, supra note 55 § 98, at 244 n.4.

74 In re Zuniga, 714 F.2d 632 (6th Cir.), cert, denied, 464 U.S. 983 (1983); In re Pebsworth, 705 F.2d 261 (7th Cir. 1983); Commonwealth v. Kobrin, 295 Mass. 284, 479 N.E.2d 674 (1985); Camperlengo v. Blum, 56 N.Y.2d 251, 426 N.E.2d 1299 (1982); In re Grand Jury Investigation, 441 A.2d 525 (R.I. 1982); see State Dep't of Social and Health Servs v. Latta, 92 Wash. 2d 812, 601 P.2d 520 (1979).

75 See Zuniga, 714 F.2d at 632, cert, denied, 464 U.S. at 983; Pebsworth, 705 F.2d at 261 Kobrin, 295 Mass. at 284, 479 N.E.2d at 674; Camperlengo, 56 N.Y.2d at 251, 426 N.E.2d at 1299; In re Grand Jury Investigation, 441 A.2d at 525; Latta, 92 Wash. 2d at 812, 601 P.2d at 520.

76 See supra note 69 and accompanying text.

77 See id.

78 See Zuniga, 714 F.2d at 632, cert, denied, 464 U.S. at at 983; Hawaii Psychiatric Soc'y v. Ariyoshi, 481 F. Supp. 1028; (D. Hawaii 1979); Chidester v. Needles, 353 N.W.2d 849 (Iowa 1984); Kobrin, 395 Mass. at 284,479 N.E.2d at 674; Camperlengo, 46 N.Y.2d at 251,436 N.E.2d at 1299 (1982); Schaubman v. Blum, 49 N.Y.2d 375, 402 N.E.2d 1133 (1980); In re Albemarle Mental Health Center, 42 N.C. App. 292, 256 S.E.2d 818 (1979); In re Grand Jury Investigation, 441 A.2d at 525.

79 Ariyoshi, 481 F. Supp. at 1028; Schaubman, 49 N.Y.2d at 375, 402 N.E.2d at 1133.

80 Ariyoshi, 481 F. Supp. at 1041 (“compelling interest“); Kobrin, 395 Mass. at 290, 479 N.E.2d at 378; People v. Doe, 107 Misc. 2d 605, 607, 435 N.Y.S.2d 656, 658 (1981) (“overriding public interest“); In re Application to Quash, Etc., 452 N.Y.S.2d 361, 364, 437 N.E.2d 1118, 1121 (1982) (“overriding public interest“); Schaubman, 49 N.Y.2d at 380, 402 N.E.2d at 1135 (“important public interest“).

81 49 N.Y.2d at 375, 402 N.E.2d at 1133. The pharmacist, in filling a prescription for a Medicaid patient, had substituted the generic equivalent of a brand name medication and submitted to Medicaid a false invoice requesting reimbursement for the price of the brand name medication. Id. at 1134. He unlawfully obtained $3.39. Id.

82 Id. at 377-78, 402 N.E.2d at 1134.

83 Id. at 379, 402 N.E.2d at 1135.

84 Id.

85 Id. at 379-80, 402 N.E.2d at 1135.

86 Id. at 380, 402 N.E.2d at 1136.

87 See Camperlengo v. Blum, 56 N.Y.2d 251, 436 N.E.2d 1299 (1982); Schaubman v. Blum, 49 N.Y.2d at 375, 402 N.E.2d at 1133; In re Grand Jury Investigation, 441 A.2d 525 (R.I. 1982).

88 116 Misc. 2d 626, 455 N.Y.S.2d 945 (1982).

89 Id. at 627, 455 N.Y.S.2d 946.

90 Id. at 630, 455 N.Y.S.2d at 948. The court furnished additional support to its holding by applying two principles. First, the court stated that the grand jury must be given the broadest discretion possible in exercising its powers to investigate possible criminal activities, a principle which was also applied in Schaubman. Id. at 632, 455 N.Y.S.2d at 949. Second, the court applied the principle established in People v. Lay, 254 A.D. 372, 5 N.Y.S.2d 325 (1938), physician-patient privilege is to protect the patient and not to shield the criminal, and that the nondisclosure of a patient's medical records “should be limited to its purpose, so as not to afford a means of protecting [a] criminal from just punishment.” (citing People v. Lay, 254 A.D. at 373, 5 N.Y.S.2d at 327 (citing Civil Practice Act, § 352; Code Crim. Proc. § 392)); People v. Doe, 116 Misc. 2d at 633, 455 N.Y.S.2d at 950.

91 People v. Doe, 116 Misc. 2d at 629-30, 455 N.Y.S.2d at 947.

92 Id. at 629-30, 455 N.Y.S.2d at 947-48. The court cited Public Health Law 2803-c and the Codes, Rules and Regulations of the State of New York, Title 10, Section 405.25. The relevant portions of these statutes are reproduced below.

Public Health Law 2803-c, paragraph (a) states:

“Every patient's civil and religious liberties, including the right to independent personal decisions and knowledge of available choices, shall not be infringed and the facility shall encourage and assist in the fullest possible exercise of these rights.”

Paragraph (f) states:

“Every patient shall have the right to privacy in treatment and in caring for personal needs, confidentiality in the treatment of personal and medical records… .” Paragraph (e), Subdivision 3 states the exceptions:

• 3(a) Any report or information furnished to the education department in accordance with the provisions of this section shall be deemed a confidential communication and shall not be subject to inspection or disclosure in any manner except upon formal written request by a duly authorized public agency or pursuant to a judicial subpoena issued in a pending action or proceeding. (Emphasis added)

• (b) Any person, facility, or corporation which makes a report pursuant to this section in good faith and without malice shall have immunity from any liability, civil or criminal, for having made such a report. For the purpose of any proceeding, civil or criminal, the good faith of any person required to make a report shall be presumed.

cited in People v. Doe, N.Y. PUB. HEALTH LAW § 2803-c(3)(a),(3)(f) 116 Misc. 2d at 629-30,455 N.Y.S.2d at 947-48.The Codes, Rules and Regulations of the State of New York, Title 10, Section 405.25, subdivision (a) states:

“The hospital shall establish written policies regarding the rights of patients … . These rights, policies and procedures shall afford patients the right to: …

8. privacy and confidentiality of all records pertaining to patient's treatment, except as otherwise provided by law … .” N.Y. ADMIN. CODE tit. 10, § 405.25(a) cited in People v. Doe, 116 Misc. 2d at 629-30, 455 N.Y.S.2d at 947-48.

93 People v. Doe, 116 Misc. 2d at 629-30, 455 N.Y.S.2d at 947-48.

94 People v. Doe, 116 Misc. 2d at 633, 455 N.Y.S.2d at 950.

85 As stated in In re Application to Quash, etc., 56, N.Y.S.2d 361, 364, 437 N.E.2d 1118, 1121 (1982), because the grand jury operates in secret, “the prospect that it might examine the files of a hospital in connection with allegations of crimes committed against the hospital's patients is unlikely to inhibit these patients from making candid disclosures to their physicians or social workers for the purpose of securing beneficial and necessary treatment.“.

96 People v. Doe, 116 Misc. 2d at 633, 455 N.Y.S.2d at 950.

97 See Camperlengo v. Blum, 56 N.Y.2d 251, 436 N.E.2d 1299 (1982); In re Grand Jury Investigation, 441 A.2d 525 (R.I. 1982); State Dep't of Social & Health Servs v. Latta, 92 Wash. 2d 812, 601 P.2d 520 (1979).

98 See Camperlengo, 56 N.Y.2d at 251, 436 N.E.2d at 1299; In re Grand Jury Investigation, 441 A.2d at 525; Latta, 92 Wash. 2d at 812, 601 P.2d at 520.

99 Latta, 92 Wash. 2d at 821, 601 P.2d at 526.

100 Id. at 821, 601 P.2d at 525-26.

101 Id. at 812, 601 P.2dat 520.

102 Id. at 821, 601 P.2d at 526.

103 Id. at 821, 601 P.2d at 525-26.

104 441 A.2d 525(R.I. 1982).

105 Id. at 526 (citing R.I. GEN LAWS §§ 5-37.3-6, 27-18.1-1 (1968); Social Security Act, §§ 1901, 1902(a)(1), 42 U.S.C. §§ 1396, 1396a(a)(l) (West 1974).

106 Id. at 529.

107 Id. at 530 (citing 42 C.F.R. § 431.302).

108 56 N.Y.2d 251, 436 N.E.2d 1299 (1982).

109 Id. at 255-56, 436 N.E.2d at 1301.

110 The court in Camperlengo never clearly denned the meaning of the phrase “to the extent necessary to [assure] that Medicaid funds are properly applied.” 56 N.Y.2d at 255-56, 436 N.E.2d at 1301. Note, however, that in In re Grand Jury Subpoena Duces Tecum, 113 A.D.2d 49, 495 N.Y.S.2d 365 (1985), the court interpreted the meaning of this statement in Camperlengo to inquire that the agency requesting the production of such privileged information show a clear need for the information before disclosure can be compelled. Id. at 51, 495 N.Y.S.2d at 368-69.

111 In re Grand Jury Investigation, 441 A.2d at 526; Camperlengo, 56 N.Y.2d at 255-56, 436 N.E.2d at 1301.

112 92 Wash. 2d at 821, 601 P.2d at 525-26.

113 See, e.g., People v. Doe, 107 Misc. 2d 605, 435 N.Y.S.2d 656, (1981).

114 Id.

115 Id. at 607-09, 435 N.Y.S.2d at 658-59. The charges alleged that the hospital had overbilled Medicaid for in-patient medical care rendered after the patients were discharged and that the hospital had billed Medicaid for services which others had already paid. Id. at 605-06, 435 N.Y.S.2d at 657.

116 The rationales stated for overriding the privilege were: (1) the prohibition against using the privilege to conceal evidence of a crime; (2) the grand jury's paramount interest in investigating allegations of criminal activity; (3) the limitation of disclosure to only Medicaid patients’ records; and (4) the patients’ consent to examination of their records by third party insurance companies. People v. Doe, 107 Misc. 2d at 607-09, 435 N.Y.S.2d at 658-59.

117 Several states have incorporated the psychotherapist-patient privilege into their rules of evidence: ARK. R. EVID. 503, DEL. R. EVID. 503, ME. R. EVID. 503, N.D. R. EVID. 503.

118 Forty-three states and the District of Columbia have enacted some type of psychotherapist-patient privilege:

119 Arena v. Saphier, 201 N.J. Super. 79, 86, 492 A.2d 1020, 1024 App. Div. (1985).; see also In re Zuniga, 714 F.2d at 639. These statutes vary in scope and application and many contain significant exceptions. Id.

120 Taylor v. United States, 222 F.2d 398, 401 (D.C. Cir. 1955), quoted in Arena v. Saphier, 201 N.J. Super. 79, 86, 492 A.2d 1020, 1024 (1985). The process of psychoanalysis involves prying into a personality to disclose matters previously unknown to the patient's conscious mind. Slovenko, , Psychiatry and a Second Look at the Medical Privilege, 6 WAYNE L. REV. 175, 185 (1960)Google Scholar (citing Guttmacher, & Weihofen, , Privileged Communications between Psychiatrist and Patient, 28 IND. L.J. 32 (1952)Google Scholar). Thus, as the Group For the Advancement of Psychiatry has stated, “[t]herapeutic effectiveness necessitates going beyond a patient's awareness, and, in order to do this, it must be possible to communicate freely. A threat to secrecy blocks succesful treatment.” REPORT NO. 45, GROUP FOR THE ADVANCEMENT OF PSYCHIATRY 92 (1960), quoted in Advisory Committee's Notes to Proposed Rule 504, 56 F.R.D. 183, 242 (1973), and in In re Zuniga, 714 F.2d 632, 638 (6th Cir.), cert, denied, 464 U.S. 983 (1983).

121 Id.

122 See supra notes 64-66 and accompanying text.

123 In re “B.”, 482 Pa. 471, 484, 394 A.2d 419, 425 (1978), cited in Recent Developments, 26 VILL. L. REV. 499, 509 (1980-81). In that case, the court distinguished psychotherapist-patient communications from physician-patient communications, stating that a patient's interest in preventing the disclosure of psychotherapist-patient communications “has deeper roots than the Pennsylvania doctor-patient privilege statute … . “ In re “B.”, id. at. 484, 394 A.2d at 425. The court indicated that the psychotherapist-patient relationship would be given greater constitutional protection than the physician-patient relationship. Id.

124 United States ex rel. Edney v. Smith, 425 F. Supp. 1038, 1043 (E.D.N.Y. 1976), aff'd, 556 F.2d 556 (2d Cir. 1977), cited in Recent Developments, supra note 125 at 508 n.50.

125 Report No. 45, Group For the Advancement of Psychiatry, supra note 124, at 92.

126 Comment, Evidence—The Psychotherapist-Patient Privilege—The Sixth Circuit Does the Decent Thing: In re Zuniga, 33 U. KAN. L. REV. 385, 401 (1985)Google Scholar.

127 Id. at 392.

128 Sloan, & Hall, , Confidentiality of Psychotherapeutic Records, 5 J. LEGAL MED. 435, 458 (1984)CrossRefGoogle Scholar.

129 See Hawaii Psychiatric Soc'y v. Ariyoshi, 481 F. Supp. 1028 (D. Hawaii 1979). An example of a less intrusive means to achieve the state's compelling interest is a system where fraud investigators audit only those portions of a patient's record which relate to nonconfidential matters. Id. at 1042; see also infra notes 191-98 and accompanying text.

130 Foreman, Court Limits State Access to Psychiatrists’ Records in Fraud Investigation, Boston Globe, July 3, 1985, at 20, Col. 324; Ariyoshi, 481 F. Supp. at 1028.

131 481 F. Supp. 102.

132 Id. at 1039.

133 Id. at 1032.

134 Kobrin, 395 Mass. at 294, 479 N.E.2d at 681.

135 Id. For examples of less restrictive means to achieve the state's compelling interest, see infra notes 191-98 and accompanying text.

136 Ariyoshi, 481 F. Supp. at 1039.

137 Id. at 1041-42.

138 Id. The court determined that other less intrusive means were available to achieve the state's compelling interest; therefore, it held that the statute was too broad to permit the state's compliance with it. Id.

139 395 Mass. 284, 479 N.E.2d 674 (1985).

140 Id. at 284-85, 479 N.E.2d at 676.

141 Id. at 285, 479 N.E.2d at 676.

142 Id. at 288, 479 N.E.2d at 678.

143 Id. at 290, 479 N.E.2d at 679 (quoting Ariyoshi, 481 F. Supp. at 1041).

144 Id. (quoting Commonwealth v. Lamb, 365 Mass. 265, 268 (1974)). For some examples of objective indicia of emotional disturbance, see infra notes 189-90 and accompanying text.

145 481 F. Supp. 1028 (D. Hawaii 1979).

146 Kobrin, 395 Mass. at 293,479 N.E.2d at 680 (quotingAriyoshi, 481 F. Supp. at 1041-42.

147 Kobrin, 395 Mass. at 294, 479 N.E.2d at 681.

148 Id.

149 Id.

150 Supra note 130; see also Ariyoshi, 481 F. Supp. at 1028. Note that when analyzing the issue of the applicability of the physician-patient or psychotherapist-patient privilege in investigation of Medicare or Medicaid fraud, at least two courts have referred to the court's decision in Kobrin.

In In re Grand Jury Subpoenas Duces Tecum, 638 F. Supp. 794 (D. Me. 1986), a psychiatrist charged with submitting inflated Medicaid and Medicare billings sought to quash a subpoena duces tecum issued to him. The District Court of Maine cited Kobrin in its recitation of which information in a patient's record is confidential and which may be disclosed. Id. at 797-98.

Furthermore, in In re Grand Jury Subpoena Duces Tecum, 113 A.D. 49, 50,495 N.Y.S.2d 365 (1985), where two psychiatrists charged with submitting fraudulent Medicaid bills sought to quash the subpoenas issued to them, id. at 49, 495 N.Y.S. 2d at 365, the court stated that Kobrin was a decision which “carefully and thoughtfully analyzed in an analogous context essentially the same issue that is here presented.” Id. at 55, 495 N.Y.S.2d at 368.

151 It is critical that confidentiality is maintained as to the communications made in psychotherapeutic treatment as well with respect to the fact of treatment itself. Slovenko, supra note 120, at 188. Due to the stigma which society attaches to those receiving mental health services, an individual may be concerned that his other visits to a psychotherapist may become public knowledge. Sloan & Hall, supra note 128, at 436. Therefore, an individual may be wary of seeing a psychiatrist for fear that he or she will be “set apart” from others as strange or different. Slovenko, supra; Hoffman, , Privileged Communication and Court Disclosure: A Psychiatrist's Perspective, 2 HEALTH L. CAN. 29 (1981)Google Scholar. This stigma could cause difficulty for the individual in finding employment opportunities and may affect his other choice of a career. Sloan & Hall, supra note 128, at 436. For example, due to the public reaction to discovery that Thomas Eagleton had received treatment for depression, George McGovern sought another vice presidential candidate. See N.Y. Times, Aug. 1, 1972,_at 1, col. 8, cited in Sloan & Hall, supra note 128, at 436 n.6. Furthermore, being labelled a psychiatric patient can also affect one's social relationships and reputation. Hoffman, supra.

152 705 F.2d 261 (7th Cir. 1983).

153 Id. at 261-62.

154 Id..

155 Id. at 263.

156 Id. at 264 (Gray, J., concurring).

157 Id.

158 Id. Unlike the Pebsworth majority, the court in State ex rel. Gonzenbach v. Eberwein, 655 S.W.2d 794 (Mo. App. 1983) (a case similar to In re Pebsworth, but based on the physicianpatient relationship), held that a patient does not waive the physician-patient privilege when he or she gives the physician or hospital authorization to release medical information to the patient's insurers. Id. at 796. The court explained that a patient who must provide his or her insurer with privileged medical information to secure reimbursement of medical expenses might choose to limit the information disclosed or decide not to consult a physician if a third party could acquire the records from the insurer. Id. Such a result would, as the court reasoned, discourage proper medical treatment, undermining the purpose of the statute, which is to promote health care. The court concluded that if the physician-patient privilege were held to be implicitly waived every time a patient allowed his or her records to be released to his medical insurer, the privilege would be futile, as most patients receiving medical treatment rely on insurance to pay for at least some of the cost. Id.

159 714 F.2d 632 (6th Cir.), cert, denied, 464 U.S. 983 (1983).

160 Id. at 634.

161 Id. at 635.

162 Id. at 640.

163 Id.

164 Id. at 640.

165 Id. at 641.

166 See In re Pebsworth, 705 F.2d 261, 264 (7th Cir. 1983) (Gray, J., concurring). Other cases in which the court so substantially limited the psychotherapist-patient privilege that it did not apply include Chidester v. Needles, 353 N.W.2d 849 (Iowa 1984), and In re Albemarle Mental Health Center, 42 N.C. App. 292, 256 S.E.2d 818 (1979).

Chidester involved a contempt proceeding arising out of a medical records custodian's refusal to comply with a subpoena requiring production of records of Medicaid patients and copies of their Medicaid billings. 353 N.W.2d at 850-51. The Supreme Court of Iowa applied a very narrow construction of the statute which defined “giving testimony” regarding communications within the psychotherapist-patient privilege, and held that the statute only prevented disclosure of oral testimony but afforded no protection to written records. Id. at 851-52. Such a result seems completely anomalous and irreconcilable with the purpose of the privilege, which is to protect all confidential communications between a patient and his psychotherapist. Thus, this court's reasoning was inadequate to justify its holding. The form of the testimony given at trial should not be considered relevant when the information sought clearly derives from confidential psychotherapist-patient communications.

In Albemarle Health Center, the Court of Appeals of North Carolina adopted an unnecessarily broad standard under which the psychologist-patient privilege was held not to apply. In that case, the state sought confidential information in its investigation of an alleged homicide. Although the court recognized the existence of a statutory psychologist-patient privilege, it determined that the privilege must be withdrawn “in all situations where necessary to a proper administration of justice.” In re Albemarle Mental Health Center, 42 N.C. App. at 300, 256 S.E.2d at 823.

This holding gives a great amount of discretion to the trial judge. Such an approach is not warranted where North Carolina law favors a policy of nondisclosure of information which falls within the psychiatrist-patient privilege. Flora v. Hamilton, 81 F.R.D. 576 (1978). Courts following this approach may require the production of records without applying the standard balancing test, increasing the possibility of unjust results.

167 714 F.2d 632, 640 (6th Cir.), cert, denied, 464 U.S. 983 (1983).

168 Id.

169 Id.

170 Id. at 642.

171 Id.

172 Id.

173 Id. at 640.

174 Id. at 642.

175 Id.

176 See supra note 151 and accompanying text.

177 ee infra notes 191-98 and accompanying text.

178 E. HAYT, MEDICOLEGAL ASPECTS OF HOSPITAL RECORDS 172 (2d ed. 1977). Another troublesome issue is the use of medical records as evidence. Although medical records have been shown to be reliable and trustworthy, courts are divided as to their admissibility as trial evidence. Some states exclude the entire record as “hearsay,” while others admit it, either in whole or in part, as business records or official documents. Id. at 172. In others, absent a statute requiring that the hospital keep records or characterizing them as admissible evidence, the information will be inadmissible under common law. Id. at 172-73.

179 Sloan & Hall, supra note 128, at 467.

180 See, e.g., Commonwealth v. Kobrin, 395 Mass. 284, 479 N.E.2d 674 (1985).

181 The court in In re Zuniga, 714 F.2d 632, cert, denied, 464 U.S. 983 (1983), stated this proposition as follows:

Id. at 639-40.

182 Hoffman, supra note 151.

183 The court's standards, applied in the psychotherapeutic context, should also apply in the medical context as outlined below.

184 Kobrin, 395 Mass. at 294, 479 N.E.2d at 681. Somatic therapies consist of physical treatments, including the prescription of medication or electroconvulsive therapy. Id. at 294 n.16, 479 N.E.2d at 681 n.16.

185 Id. at 295, 479 N.E.2d at 681.

186 Id. at 295 n.18, 479 N.E.2d at 681 n.18.

187 Id.

188 Id.

189 Id. at 294, 479 N.E.2d at 681 (quoting Ward v. Peabody, 380 Mass. 805, 820, 405 N.E.2d 973, 982 (1980)).

190 Slovenko, supra note 120 at 188.

191 481 F. Supp. 1028, 1042 (D. Hawaii 1979).

192 Id. Apparently, such information consists of the actual communications between the patient and his or her psychotherapist. See id.

193 Id.

194 Id.

195 Id.

196 lovenko, supra note 120, at 188.

197 Id. at 189.

198 The court in Commonwealth v. Kobrin, 395 Mass. 284, 294 n.17, 479 N.E.2d 674, 681 n.17 (1985), suggested the use of such a system.

199 See supra note 151 and accompanying text.

200 Comment, supra note 55, at 303.

201 Id.

202 Id. at 304.