When Final Isnt Final: Privacy, Internet Regs Face Revision

In the government space, finality isn't all it's cracked up to be.

In the government space, finality isnt all its cracked up to be.

Take the privacy provisions of the Health Insurance Portability and Accountability Act (HIPAA). In December, the Department of Health and Human Services (HHS) published a final rule to set forth standards for protecting the confidentiality of individually identifiable health-care information. Consultants predicted a massive systems overhaul for the health-care sector and a potential stream of work for integrators.

But the final rule may not be final after all. Tommy Thompson, secretary of the Department of Health and Human Services, suspended the final rule and opened the privacy regs to a public comment period, which closed March 30.

Among the groups pressing for change is the America Hospital Association (www.aha.org/hipaa/hipaa_home.asp), which calls the privacy rule "unworkable and excessively costly." AHA argues compliance with just some of the privacy requirements would cost hospitals as much as $22.5 billion over five years.

However, Georgetown Universitys Health Privacy Project (www.healthprivacy.org) says that cost will be offset by the savings generated through HIPAAs electronic transaction standards. HHS is now reviewing the comments and will determine whether changes to the final rule are needed. A decision is expected in June.

The HIPAA rule isnt the only federal decree being revisited. Also under fire is the Childrens Internet Protection Act (CIPA), which was signed into law late last year. CIPA requires schools and libraries to install pornography-blocking software on all federally funded computers with Internet access. The law affects education market integrators, because many of their projects are funded through the federal E-rate technology discount program.

The American Civil Liberties Union (www.aclu.org/features/f032001a.html) last month filed a legal challenge to CIPA, contending that the law forces libraries to censor constitutionally protected speech. The ACLU holds that current filtering technology is incapable of ensuring the flow of protected speech while blocking unprotected speech.

Countering the ACLU is a coalition that asserts the constitutionality of CIPA. Members include Rep. Ernest Istook (R-Okla.) and Rep. James Pickering (R-Miss.), who sponsored CIPA in the House. A press release issued by Istooks office says the group opposes "federally funded peep shows." Both sides agree on one thing: The case is likely to end up before the Supreme Court.

Speaking of the Supreme Court, a nine-year-old decision on the states taxation authority could be turned on its head, according to one lawmaker. The courts decision in Quill v. North Dakota holds that sellers are required to collect sales tax only when they are based in the buyers state or maintain a substantial physical presence in that state. But a bill before Congress would let states compel remote sellers to collect sales tax.

"We are talking about throwing a Supreme Court case out the window," says Sen. Ron Wyden (D-Ore.), who opposes the Internet Tax Moratorium and Equity Act (S. 512).

It could prove quite a year for tossing regs and statutes.