Three recent cases offer guidance to health care entities in Pennsylvania and New Jersey regarding the discovery of documents created in connection with peer reviews, quality of care reviews and adverse event investigations under Pennsylvania’s Peer Review Protection Act and the New Jersey Patient Safety Act.

Protection of Peer Reviews Conducted by Hospital Plan Corporations to be Clarified on Appeal: Venosh v. Henzes, Case No. 14 CV 3058 (Lackawanna Ct. Com. Pl. Sept. 4, 2014)

A court in Lackawanna County, Pennsylvania stayed the production of documents related to a “quality of care” review conducted by an insurer in a medical malpractice action pending the outcome of an appeal of an order compelling production of documents that the insurer claims are protected by the Peer Review Protection Act (PRPA), 63 P.S. §§ 425.1-425.4.

At issue in Venosh v. Henzes is whether a “quality of care” review conducted by the medical malpractice plaintiff’s health insurer, regarding the medical treatment she received from the defendant health care providers, is protected from discovery by the PRPA. After Dr. Henzes said in his deposition that he had given a statement to Blue Cross regarding his treatment of the plaintiff, plaintiff served a records subpoena upon third-party Blue Cross seeking the production of its “investigative records” pertaining to the plaintiff’s medical care at issue in the malpractice action. Plaintiff’s health insurer was First Priority Health IPA-HMO. (An IPA-model HMO contracts with an independent practice association for health care services rather than operating health facilities or employing physicians.) First Priority was a subsidiary of Blue Cross, which is a “hospital plan corporation” under Pennsylvania law and operates a nonprofit hospital plan that provides hospitalization and related benefits to its subscribers. At the time of plaintiff’s treatment, Blue Cross had procedures in place regarding initiation and performance of “Quality of Care” reviews of treatment received by its insureds. Under those procedures, if Blue Cross’s Medical Director determined that a peer review was necessary, Blue Cross retained an “external independent third-party review organization” to perform the review and prepare recommendations, which were then reviewed by the medical director for final determination. The procedures also provided that the results of the investigations “shall not be released to anyone but the practitioner/facility involved and the Credentialing Committee.”

In a memorandum and order dated August 8, 2014, Lackawanna County Judge Terrance Nealon held that the PRPA protects from discovery only those peer reviews that are initiated and completed by health care providers, but not those initiated by health insurers. In so holding, the court relied upon the state Supreme Court’s finding in McClellan v. Health Maintenance Organization of Pennsylvania that an IPA model HMO falls outside the protections of the PRPA because it is neither a health care practitioner nor the administrator of a health care facility. The court opined that a “hospital plan corporation or health insurer cannot transform itself into a ‘professional health care provider’ under Section 425.2 of the [PRPA] by simply hiring or utilizing a doctor or nurse to conduct the actual peer review.” Judge Nealon interpreted the text of the PRPA and the McClellan holdings to find that the PRPA protections apply only to peer reviews that are initiated and conducted by organizations and individuals that provide health care services, but not to peer reviews that are performed by health care insurers.

On September 4, 2014, Judge Nealon issued an order staying production of the documents at issue pending Blue Cross’s appeal. The appeal will clarify an issue of first impression in Pennsylvania. While the Supreme Court and Superior Court of Pennsylvania have held that peer reviews that are performed by IPA-model HMOs are not protected by the PRPA and are therefore discoverable, no appellate court has directly addressed whether the PRPA applies to a peer review conducted by a hospital plan corporation, such as the one conducted in this case by Blue Cross.

The appeal will clarify whether peer reviews initiated by insurers regarding the medical care received by their subscribers fall within the protections of the PRPA. Pending the outcome of the appeal, it is unclear whether insurers that are not more closely engaged with direct health care providers such as a staff model HMO or administrators of health care facilities can protect their peer review processes under the PRPA. In his August 8, 2014 ruling denying the privilege to Blue Cross’ “quality of care” review documents, Judge Nealon noted that insurers can protect their peer process under the PRPA by having their quality assurance reviews undertaken by affiliated health care providers. The court provided as an example a health system where the medical centers and clinics in the system are obligated to provide quality assurance reviews of the health plan physicians, including those affiliated and unaffiliated with the health care system. When the review is initiated and conducted by an organization that is approved, licensed or otherwise regulated to practice or operate in the health care field, it would be protected by the PRPA because the review would be commenced and conducted by a “professional health care provider” as per the definition of the phrase in the PRPA.

Peer Review Privilege Protects Only Documents Exclusively Used by Peer Review Committee: Kates v. Doylestown, 2014 BL 244739, No. 2718 EDA 2013 (Pa. Super. Ct. Aug. 22, 2014)

In an opinion dated August 22, 2014, the Pennsylvania Superior Court declared that the PRPA applies only to documents that were generated and used exclusively by a peer review committee. In Kates v. Doylestown Hosp., the Superior Court ordered Doylestown Hospital to produce documents in a medical malpractice case that were reviewed by one of its employees in preparation for her deposition. The documents included emails, minutes and agenda of a hospital committee that performed multiple functions, including both peer review and review of hospital practices and procedures. The court found that the requested documents related to the committee’s establishment of procedures to comply with the accreditation standards of the Joint Commission on Accreditation of Healthcare Organizations and also the hospital’s stroke program procedures. Therefore, the court ruled that they were not protected by the PRPA as they were not properly “peer review.”

In its opinion, the Superior Court noted that the PRPA has two important limitations: 1) it exempts only the proceedings and records of a review committee, and 2) under the “original source exception,” documents that were not derived from nor part of an evaluation or review by a peer review committee and thus available from their “original source” are not privileged. The court found that the committee in question was not a review organization pursuant to the PRPA when it was considering and establishing stroke procedures. During an in camera review of a broader set of disputed documents, the court identified and protected from review portions of the Stroke Committee’s minutes that it found to involve peer review as opposed to policy-making and procedure-setting documents. The court found that merely labeling the committee a “review organization” is not enough; rather, the court must look beyond the form or label to the substance of the committee’s function to determine whether peer review is taking place. Stating that peer review involves evaluating the quality of care provided by the health care professionals or evaluating their qualifications, the court found that the documents at issue were not used or made for the determination of staff privileges or used exclusively for quality assurance purposes by the committee. In finding that the committee was not engaged in peer review as to the records at issue, the court took particular note of the fact that the hospital could not point to a definitive action initiating the peer review process before the time that the documents in question were created.

To protect the proceedings and records of their peer review committees, health care organizations should take care that all peer review activities are undertaken by a properly constituted committee engaged in evaluating the quality of care or the qualifications of medical professionals and avoid combining functions as occurred in Kates.

New Jersey Supreme Court Clarifies the Self-Critical Analysis Privilege under the New Jersey Patient Safety Act: C.A. v. Bentolila, 2014 N.J. LEXIS 921 (N.J. Sept. 29, 2014)

On September 29, 2014, the New Jersey Supreme Court provided clarity to health care providers regarding the application of the New Jersey Patient Safety Act privilege to adverse event documents created by a hospital between October 24, 2004, when the Patient Safety Act was effected, and March 3, 2008, when the act’s implementing regulations became effective for general hospitals. On September 29, 2014, the court issued its decision in C.A. v. Bentolila, 2014 N.J. LEXIS 921 (N.J. 2014), ruling that a 2007 memoranda of an internal review of the underlying events conducted by three hospital administrators is privileged under the Act, despite the fact that the investigation was not conducted in accordance with the implementing regulations established in 2008.

The plaintiff in Bentolila sought production of a memoranda of a June 1, 2007 round-table discussion by hospital staff who were investigating the events that led to the medical malpractice action. The defendant hospital claimed that the document was protected from discovery under the self-critical analysis privilege outlined in section 26:2H-12.25(g) of the New Jersey Patient Safety Act. Under the Act, which went into effect on October 24, 2004, reports and evaluations of adverse medical events are privileged and shielded from discovery provided the information is developed “as part of a process of self-critical analysis,” and conducted pursuant to a patient safety plan.

The trial court held that the hospital substantially complied with the 2004 Act and the memorandum was subject to the Act’s absolute privilege. On appeal, the Appellate Division reversed and held that the 2008 implementing regulations, N.J.A.C. 8:43E-10.1 through 10.11, which were adopted on March 3, 2008, retroactively applied and that the memorandum failed to comply with the regulations’ requirements for privilege with respect to the composition of the investigating panel.

In a 4-3 decision, the Supreme Court held that the document was privileged and could not be used for any purpose in the litigation. The court determined that “[i]n the interim period between the enactment of the Patient Safety Act and the adoption of its implementing regulations, health care facilities were required to follow the Patient Safety Act” and not the later implemented 2008 regulations. Because the hospital satisfied all four components of the patient safety plan under the Patient Safety Act and the memorandum was created as part of a process of self-critical analysis pursuant to the patient safety plan, the Supreme Court held the document was privileged under the Act. As noted by Justice Anne Patterson, who wrote for the majority, the purpose of the statutory privilege is to encourage health care workers to candidly disclose errors because health care professionals and staff are “more likely to effectively assess adverse events in a confidential setting, in which an employee need not fear recrimination for disclosing his or her own medical error.”

In the dissent, the minority said that the privilege should not apply because the hospital failed to comply with the Act, because the investigative panel did not consist of personnel who were “representative of the facility’s various disciplines and have appropriate competencies” as required under N.J. Stat. § 26:2H-12.25(b)(2) and (3). In her majority opinion, Justice Patterson rejected this contention, finding that the round-table discussion included a broad team of hospital staff including nursing managers, nursing educators, and the directors of quality assessment, risk management, and patient safety representatives. The dissent further contended the hospital did not comply with the Act because the round-table discussion was not conducted with the knowledge of the Patient Safety Committee. However, the majority opinion noted that the Act itself does not define the relationship between the Patient Safety Committee, mandated by N.J. Stat. § 26:2H-12.25(b)(1), and the terms mandated by N.J. Stat. § 26:2H-12.25(b)(2) and (3).

This decision is important to health care providers that engage in self-critical analysis, because it makes clear that for documents, materials, and information created between October 24, 2004 and March 3, 2008, the information must be developed “as part of a process of self-critical analysis,” and conducted pursuant to a patient safety plan, which includes the four components listed in N.J. Stat. § 26:2H-12.25(b)(1) – (4). However, for health care providers seeking to protect information that was created after March 3, 2008, those documents must also comply with the additional requirements of the Patient Safety Act’s implementing regulation found in N.J.A.C. 8:43E-10.9 to ensure confidentiality of the information.