HHS withdraws appeal in online tracking lawsuit

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UPDATE: Aug. 30, 2024: The HHS is ending its plans to overturn a lawsuit that found the agency’s guidance on online tracking technologies had overstepped its authority, according to a filing in the Fifth Circuit Court of Appeals.  

Federal regulators filed a notice of appeal last week, but the HHS voluntarily dismissed its plan Thursday. 

The plaintiffs, which included hospitals and groups like the American Hospital Association, indicated they consented to the dismissal, according to the filing. Both sides will bear their own costs. 

The move to end the appeals process marks a win for providers, who argued the guidance on online trackers would limit their ability to share health information with their patients.

Dive Brief:

• Federal regulators plan to appeal a judge’s decision that largely sided with providers in a case over guidance from the government limiting the use of third-party online tracking technologies, according to a court filing last week.
• In June, a federal judge ruled in favor of provider plaintiffs like the American Hospital Association, arguing the HHS’ guidance limiting tracking technology on providers’ websites exceeded its authority under the HIPAA health privacy law. 
• The notice of appeal doesn’t detail the government’s arguments, which will likely come within the next few months, according to a brief by law firm McDermott, Will and Emery, which does not represent the plaintiffs. The appeal is unlikely to be resolved until sometime in 2025. 

Dive Insight: 

The appeal notice doesn’t immediately affect the ruling earlier this summer, unless the government seeks and secures a stay of that decision, according to the bulletin by McDermott, Will and Emery. The agency’s arguments in the Fifth Circuit Court of Appeals will likely fall within the scope of what they argued in district court, including that the court lacked jurisdiction because the guidance wasn’t a final agency action.

The case centers on guidance issued in 2022, and then updated again this spring, from the HHS’ Office for Civil Rights — the agency that administers HIPAA — which limited providers’ use of online trackers.

Online trackers, or technology embedded in a website or app that gathers information about user behavior, are very common on hospital websites, but federal regulators have raised red flags about providers’ and telehealth companies’ use of the tools, arguing they risk exposing consumers’ personal health data to third parties like marketing vendors or social media companies. 

An investigation by news sites Stat and the Markup in 2022 found one tracker, the Meta Pixel, sent data to Facebook on a third of top hospital websites when a user tried to schedule an appointment online. Information shared with the social media giant included sensitive data about health conditions, according to the report.

Hospitals cried foul after the HHS released its guidance, arguing analytics and location tools help them publicize important medical information, determine where patients have trouble navigating their websites and help users find healthcare services. A group of hospital lobbies and groups filed suit in November, and a judge largely ruled in their favor in June. 

The notice kickstarts the appeals process, which includes specific time standards and rules, David Gacioch, an author on the McDermott report, told Healthcare Dive over email.

Although, the HHS could decide to voluntarily dismiss the appeal at some point or ask the Fifth Circuit for additional time before the briefing is due, Gacioch added the appeal “is not just a placeholder.”

The OCR declined to comment on the litigation.