I'd go a little farther than my colleagues - ask the university if they have any written policy regarding a student such as you resuming your studies. I wouldn't stand still for someone just telling you what they want. So long as you were a student in good standing when you were hospitalized, they'd have to have a clear-cut reason to deny you re-admittance, and that can't be on an ad hoc basis. The rules may entitle you to a hearing, or otherwise provide for protection of your rights.
I think you should consult with an attorney - preferably one familiar with education law - about this.
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Ask the school in writing the basis why they want you complete medical records.
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I'm only guessing but if you were hospitalized for psychological issues, the university apparently has concerns relating to your safety and/or mental well-being (whether justified or not at this point). I agree with the prior attorney's answer: get a written explanation from the school why it needs your complete medical record and why you need to meet with the school psychologist and an outside therapist.