That is the Privacy Act and only applies to releasing information to agencies or individuals outside of the FAA. That is not the same as doctor / patient confidentiality.
Here is the pertinent info from your same source:
[ QUOTE ]
1. LEGAL RESPONSIBILITIES OF DESIGNATED AVIATION MEDICAL EXAMINERS
<snip>....If the examination is cursory and the Examiner fails to find a disqualifying defect that should have been discovered in the course of a thorough and careful examination, a safety hazard may be created and the Examiner may bear the responsibility for the results of such action.
Of equal concern is the situation in which an Examiner deliberately fails to report a disqualifying condition either observed in the course of the examination or otherwise known to exist. In this situation, both the applicant and the Examiner in completing the application and medical report form, may be found to have committed a violation of Federal criminal law which...<snip>
In view of the pressures sometimes placed on Examiners by their regular patients to ignore a disqualifying physical defect that the physician knows to exist, it is important that all Examiners be aware of possible consequences of such conduct.
[/ QUOTE ]
Bottom line is that the AME is required to disclose to the FAA any disqualifying condition "...either observered in the course of the examination or otherwise known to exist."
Here is the pertinent info from your same source:
[ QUOTE ]
1. LEGAL RESPONSIBILITIES OF DESIGNATED AVIATION MEDICAL EXAMINERS
<snip>....If the examination is cursory and the Examiner fails to find a disqualifying defect that should have been discovered in the course of a thorough and careful examination, a safety hazard may be created and the Examiner may bear the responsibility for the results of such action.
Of equal concern is the situation in which an Examiner deliberately fails to report a disqualifying condition either observed in the course of the examination or otherwise known to exist. In this situation, both the applicant and the Examiner in completing the application and medical report form, may be found to have committed a violation of Federal criminal law which...<snip>
In view of the pressures sometimes placed on Examiners by their regular patients to ignore a disqualifying physical defect that the physician knows to exist, it is important that all Examiners be aware of possible consequences of such conduct.
[/ QUOTE ]
Bottom line is that the AME is required to disclose to the FAA any disqualifying condition "...either observered in the course of the examination or otherwise known to exist."