Mom's doctor "announced" to her IL that she needed 24/7 support. Doesn't have to put that on paper and deliver it to us?

While arrangements and details getting taken care of; please, get additional help for your sister during this time! Apparently your Mom's health is failing and one person doing 24/7 care is physically and emotionally draining.

Was the IL arrangement part of a continuing care community?? We used CCC for Mom and MIL. The MD at MIL's CCC was constantly recommending 24/7 in the assisted portion. The MDs get a bonus on those who make the move! That went on for 3 years before we felt it WAS time for such a move. Guess what, we chose a different AL than the one in the CCC. So, it is possible there are other factors at play for recommendations.

As to the HIPPA, well if it was a CCC part of the sign in process may have given permission for MD to make this suggestion. At any rate, since ALs are half the cost of skilled nursing, you might start there. They will let you know if your loved one isn't a candidate for their facility. And each place has its own criteria, so look into several. If memory is an issue, check out some of the Memory Care only places.

If you need ideas for continuing care facilities in the northern Virginia area there is a website retirement-living which also covers the Washington DC side of Maryland. Lot of really nice places :)

Since you are doubting the Drs prognosis, then I'd say second opinion as for medical condition is not a bad idea... if a 2nd doctor thinks she needs 24/7 care, then you'll feel more assured and will have a better idea of what direction you all need to go in. Plus you'll have this 2nd opinion when presenting the case for more comprehensive care to your mom.

Does anyone here have POA for your mom? If not, that should be done.

Something is left untold here. There had to be an episode at the IL that triggered a referral to the MD. IL communities are little more than hotels, they have no aides, nurses or therapists. Sounds like mom needs more than that.
If she can walk to meals and behaves appropriately and hold her bowel, she could go to Assisted Living. If the MD wants 24/7 NURSING care, then she needs a nursing home. If the sister is burned out from caregiving, there are serious and immediate needs that are more than one person can handle. I strongly suggest YOU get up there ASAP.

I can never understand why the headline question doesn't really go with the circumstances. Oh well. Who really cares if mom's doctor really did possibly violate some HIPAA rule if it got things moving for mom? Why would he have to put that in writing and deliver that to you? Picky. Sister with the POA is overwhelmed. You and your wife are stepping in to help, but now you may be disagreeing about mom's prognosis. The ones previously most involved with mom ( doctor and sister) probably know best. Perhaps you should just step up as needed now even though it will be a lot of work to find a place and assure the funding. You might think about showing some kindness towards your beleaguered sister. She probably needs it too.