Using PHI to Defend Your Practice in a Legal Action Brought by a Patient (45 CFR § 164.508(a)(2)(i)(C))

HIPAA generally prohibits using or disclosing Protected Health Information (PHI) without patient authorization. However, 45 CFR § 164.508(a)(2)(i)(C) creates an important exception: a covered entity may use PHI to defend itself in a legal action initiated by the patient. This article explains the conditions under which this exception applies, the limits that practices must observe, and how to prepare defensible disclosures. For small healthcare providers, understanding this narrow but powerful exception is crucial when facing lawsuits, malpractice claims, or patient complaints.

When a patient sues your practice, you have the right to defend yourself. But how do you do that without violating HIPAA?

Fortunately, HIPAA anticipates this scenario. Under § 164.508(a)(2)(i)(C), if a patient brings legal action against your practice, you may use their PHI, but only as necessary to protect your legal interests.

Still, this isn't a blanket permission. There are strict conditions and limitations, and if your disclosures go beyond what’s permitted, you risk turning a lawsuit into a HIPAA violation.

This guide will walk you through how to invoke this exception properly and safely.

What the Rule Allows

When Does the Exception Apply?

The PHI use/disclosure is permitted when:

• The patient initiates a legal action or brings a complaint involving your practice

• The PHI is used in defense of the practice

• The disclosure is limited to what is necessary

• The PHI is used or disclosed in a legal proceeding or related context
  

What You Can Do

• Share PHI with your legal counsel

• Disclose PHI in a formal court filing, affidavit, or deposition

• Respond to official discovery requests or subpoenas

• Use PHI to rebut the patient’s allegations in writing or testimony

What You Cannot Do

• Share PHI with media, friends, or unrelated parties

• Use PHI preemptively if the patient hasn’t taken legal action

• Disclose more PHI than is necessary for the defense

• Post PHI on social media or review sites in response to criticism
  

What counts as a “Legal Action”?

Legal actions include:

• Civil lawsuits (e.g., malpractice)

• Licensing board complaints

• Claims filed with OCR or state agencies

• Arbitration or mediation initiated by the patient

Note: A negative online review is not a legal action. Responding publicly with PHI is not allowed.

A dental office found itself facing a malpractice lawsuit after a patient expressed dissatisfaction with treatment outcomes. In response, the practice posted a public reply on Facebook addressing the patient’s negative Yelp review. Unfortunately, the response included sensitive protected health information (PHI), such as specific treatment details and appointment history.

While HIPAA does allow providers to use and disclose PHI for legal defense purposes, this allowance is strictly limited to formal legal proceedings or necessary internal activities related to the defense. Publicly sharing PHI on social media platforms falls outside these bounds.

OCR Findings

• The disclosure was not necessary for the legal defense. Posting detailed PHI online did not contribute to the actual legal process and exposed private information to the general public.

• The use was outside of a formal legal forum. HIPAA’s legal defense exception applies to court cases, arbitration, or other legal contexts, not to public relations or social media.

• The dental office violated the minimum necessary rule. More information than necessary was disclosed publicly, increasing the scope of the privacy breach.

Consequences

The Office for Civil Rights (OCR) imposed a $50,000 penalty on the dental office and mandated corrective actions, including:

• Retraining staff on appropriate use and disclosure of PHI in legal contexts

• Revising policies to restrict PHI disclosures to formal legal settings only

• Implementing stronger controls on social media and public communications

Lesson Learned

HIPAA’s legal defense exception is not a loophole for airing grievances or disputing patient complaints online. Any use of PHI for legal defense must be carefully controlled, documented, and limited to appropriate venues.

Healthcare providers must remember that patient privacy rights extend beyond the courtroom and that breaches of confidentiality can occur even when defending a lawsuit.

Can I use PHI to consult a lawyer before the case is filed?

Yes, if you reasonably anticipate litigation. However, be cautious with how broadly PHI is shared and always label documents as “Confidential – Attorney-Client Privileged.”

Does this exception let me disclose PHI to my liability insurer?

Yes, but only the PHI necessary to process or defend the claim. Your insurer may also be your business associate, requiring a BAA in place.

Can I counter a patient’s false statement on social media using their PHI?

No. Online comments, even if inaccurate, do not trigger the HIPAA legal defense exception. Do not disclose PHI online, even to defend your reputation.

What happens if I accidentally share PHI outside the scope of this rule?

You may be subject to HIPAA enforcement, OCR investigations, and patient lawsuits, even if you were being sued first. Always consult legal counsel before disclosing.

• 45 CFR § 164.508(a)(2)(i)(C)

• HHS FAQ on Legal Disclosures

• OCR HIPAA Enforcement Highlights
  

Defending your practice when a patient initiates legal action is absolutely your right. However, misusing protected health information (PHI) during your defense can backfire, exposing your practice to additional legal consequences and OCR penalties.

How to Stay Compliant When Using PHI for Legal Defense

• Use PHI only after legal action has formally begun. PHI disclosures for legal defense are permitted only once a lawsuit, arbitration, or similar formal proceeding is underway. Premature disclosures can be viewed as unnecessary or retaliatory.

• Limit disclosures to the minimum necessary information. Share only the PHI that is essential to mounting your defense. Avoid broad or excessive sharing that could deepen privacy violations.

• Coordinate closely with your legal counsel. Your attorney will guide you on what information to disclose, when, and through which channels. This ensures you comply with HIPAA and other legal standards.

• Never respond to negative reviews or public criticism with PHI. Public forums and social media are not appropriate places to disclose any patient information, even if the patient has filed a complaint.

• Keep thorough documentation of all disclosures. Maintain records detailing what was disclosed, to whom, when, and under what legal authority. This documentation can protect you during audits or investigations.

Final Thoughts

In the context of legal disputes, HIPAA is a powerful tool that both protects patient privacy and provides a framework for lawful defense. Using the legal defense exception wisely safeguards your practice, preserves patient trust, and minimizes your risk of incurring additional penalties.

To further strengthen your compliance posture, consider using a HIPAA compliance regulatory tool. These platforms help track and manage requirements, provide ongoing risk assessments, and keep you audit-ready by identifying vulnerabilities before they become liabilities, demonstrating a proactive approach to regulators, payers, and patients alike.