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$120,000 in legal fees against psychologist who gave patient mental health records to firm doing collections for him is upheld

An appellate court in New Jersey upheld, in a May 29 ruling, a suspension and massive legal fees imposed on a psychologist for exposing confidential patient records to a collections firm he used against patients with past-due bills.

Doug Waldron, https://flic.kr/p/2pvb2T

(In re Suspension or Revocation of License of Helfmann)

Doug Waldron, https://flic.kr/p/2pvb2T

The case began when the New Jersey Attorney General’s office filed a complaint alleging that psychologist Barry Helfmann provided full patient bills—including diagnosis and treatment information for mental conditions—to attorneys whom he had hired to collect on delinquent patient accounts.

Over the 25 years Helfmann had been using this firm to collect bills, 81 collection complaints were filed against Helfmann’s patients, all of which contained this confidential information, and all of which became public records.

Following the filing of the Attorney General’s complaint, Helfmann engaged in, as the appellate court termed it, “intensive motion practice,” seeking to have the case dismissed, challenging the board’s subpoena authority, seeking to disqualify the state attorney prosecuting the case, and filing subpoenas on every member of the board and its executive director, among other things.

Eventually, an administrative law judge hearing the case found that Helfmann had unintentionally violated his patients’ confidentiality and recommended a $10,000 penalty and no license restrictions. The board, unhappy with the lack of severity of the administrative judge’s sanctions, increased them, suspending Helfmann’s license for a year plus a second year of probation, and issuing a fine of $10,000 and $120,000 in legal fees and costs.

Helfmann appealed that decision, making two primary arguments. First, he claimed that the board’s sanctions were unreasonably harsh. Second, he main-tained he did not violate any professional rule by providing confidential patient documents to his attorneys. The case went up to the Appellate Division of the Superior Court of New Jersey, which issued a decision in favor of the board.

On the issue of whether Helfmann inappropriately breached his patients’ confidentiality, the court agreed with the board. Citing the New Jersey Rules of Evidence and the state’s professional regulatory code, the court noted that psychologist-patient communications are privileged information and that “Providing confidential information to a collection attorney does not fall within a statutory or other traditional exception to the privilege.”

” . . . Dr. Helfmann’s argument that there is no factual or legal basis for the alleged confidentiality violations is devoid of merit and appears to be based on a fundamental misunderstanding of the statutory and regulatory schemes prohibiting disclosure of confidential information,” the court wrote.

Finally, addressing concerns that the holding would prevent psychologists from sharing necessary information with their attorneys in any context, the court noted that its decision in this case could not be broadly applied.

Key to the case was the fact that the disclosure of patients’ diagnostic and treatment information was not necessary for Helfmann’s attorneys to pursue collection of medical bills, and the psychologist did very little over the years to make sure his attorneys were safeguarding patient information. Presumably, other psychologists could stay within the boundaries of these possible exceptions and not be subject to discipline.

Finally, based on the duration of the practice and the seriousness of exposing patients’ confidential mental health treatment, the court held that the financial penalties imposed on Helfmann were reasonable, and that the legal fees charged by the state were merited, especially given the time state attorneys spent battling his “scorched earth litigation” seeking dismissal of the administrative action.