IRS is Accused of Abusing it Power in the Seizure of Medical Records

An unnamed insurance provider has filed a class-action suit against the IRS in the Superior Court of The State of California for San Diego for illegally seizing the medial records of millions of Americans.

IRSRepublicans on the House Energy and Commerce Committee sent a letter to the IRS asking for an explanation of the Agency’s procedures for seizing documents. The plaintiff says that the IRS abused its power during a raid of “John Doe Company.” The following is a summary of the plaintiff’s complaint.

The search warrant authorized the IRS to seize the financial records of of one former employee; it did not authorize the IRS to seize any medical records — least of all third parties completely unrelated to the matter.

And yet, IRS agents confiscated more than 60 million medical records of more than 10 million Americans, including at least 1 million Californians. The seizure may have included intimate medical records on every state judge in California, every state court employee, leading and politically controversial members of the Screen Actors Guild and the Directors Guild, and prominent citizens in the world of entertainment, business, and government, from all walks of life.

Before executing the warrant, IRS agents were notified that John Doe Company had a HIPPA secure facility. When IRS agents came to the facility, they were warned again, by company officials, that the private medical records were HIPPA-protected and were for people who were not related to the search warrant. The IRS agents threatened to rip the servers, containing the medical data, out of the building if IT personnel did not hand them over.

IRS agents also seized personal mobile phones without attempting to protect private and privileged information on the phones, all of which was completely unapproved by the search warrant. To add insult to injury, the 15 IRS agents enjoyed soda and pizza from a pizza delivery while watching a basketball game on the company’s media system. Defendants are asking that the IRS to be prohibited from sharing the records with anyone. They also want the records to be returned as well as any copies of the records.

Tough Questions About Navigators
The National Association of Professional Insurance Agents (PIA) is thanking Rep. Duncan Hunter (R-Calif.) for raising significant concerns about healthcare navigators. In a June 7 letter to HHS Secretary Kathleen Sebelius, Rep. Hunter and 32 other Members of Congress focused on the need for appropriate oversight and the fact that navigators are not required to be licensed or carry liability insurance to protect consumers against errors or omissions (as are professional insurance agents ).

The letter notes that HHS’s proposed rule governing navigators and non-navigator assisters does not ensure that clients will get information on the plan that may best suit their needs, whether that plan is available in the marketplaces or through the traditional market. The letter also notes that navigators will not be allowed to help consumers determine the appropriate plan. PIA says that, while it is appropriate that unlicensed navigators or assisters to not be permitted to make plan recommendations, this puts the consumer in the position of lacking needed information.

The letter states that the complexities of these plans is best handled by licensed insurance agents or brokers who are trained and state-certified to sell such products. Also, insurance agents and brokers carry errors and omission (E&O) insurance to protect themselves and consumers from accidental wrongdoing. If an error occurs, consumers have recourse to recoup any losses that they may have endured. “It is our understanding that your Department will not recommend E&O coverage for navigators, resulting in possible large gaps in consumer protections,” the letter states.

The lawmakers also note that the ACA preserves state regulatory authority of insurance and that many state legislatures have passed legislation to strengthen consumer protections, such as further defining the role of a navigator.

The letter prompts HHS to provide the Department’s perspective on key areas of consumer protection, including inquiries into background checks, training, and oversight. For more information,

Last Updated 05/25/2022

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