The deadline for compliance with the privacy rule of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) was April 14, 2003. Understandably, many psychiatrists and other mental health providers have been focusing on compliance. This brief report discusses the negative impact of efforts to implement HIPAA on patient care in a community-based mental health system. Three cases highlight several issues: fear of violating HIPAA, failure to understand HIPAA's privacy regulations, and ethical concerns. The authors discuss the key issues and address implications for practice. Several recommendations are offered for maintaining excellent patient care while complying with HIPAA.