I took my daughter to a new doctor in our town not knowing at the time that my daughter's sister-in-law was a nurse that office. She worked / was assigned to another doctor in the practice, not my daughter's doctor, so she had no reason to access my daughter's information. In fact, as we not close at all (met her maybe 2 times and said "Hello"), I never acknowledged her especially since if was her work environment. It seems that she is now divorcing my daughter's brother and my husband was just told by his ex-wife that she (the ex-wife) has known for some time that my child is covered under welfare because the sister-in-law told her husband. She said the sister-in-law told her husband that my daughter's health coverage is paid through welfare (my husband is currently unemployed) and she wished that my daughter would go somewhere else as my daughter's (6 yrs. Old) medical coverage embarressed her (I think because they have the same recognizable last name). The brother then passed this information onto his mother (the ex-wife) who has since then discussed it with others. In fact I have a recording of the ex-wife advising us that she has know about my daughter's coverage for some time. Can I sue ? The daughter-in-law is not assigned to my daughter's doctor and had no medical reason to handle her file.

You are correct that a HIPAA violation has occurred, however, you misunderstand how HIPAA works. You can't sue for this and/or collect any monitary damages.

What you need to do is contact the office manager of this doctor's office and let them know what occurred. This nurse could very easily get fired for this violation.

HIPAA isn't about the patient collecting monies, but rather it is about the governing bodies fining and/or disciplining the facility/practitioner who violated the patient's privacy.

Correct this is a violation, the sister in law may or may not have had a reason to review this ( that you or I do not know about who does billing and more) but even if they were allowed to see the records, they can not discuss them.

But you don't get to sue , you get to report them, and the sister in law may get a warning, they may get fired or required to take additional training.