On Monday, July 1, 2019, Colorado’s Candor Act will go into effect, making it one of four states in the U.S. to adopt such a law. The Candor Act establishes a process for keeping communications between a patient and health care provider or health facility privileged following an adverse health care incident. Described as an “Open Discussion,” this process allows health care providers or health facilities to communicate with patients and families about a patient’s physical injury or death, conduct an investigation into a health care incident, and if appropriate, provide an offer of compensation because of the physical injury or death. If the statute’s steps are followed, the communications, investigation, and offer of compensation are privileged, confidential, not subject to discovery or subpoena, and are inadmissible at trial, an arbitration hearing, or certain administrative proceedings.

To achieve this protection, requirements of the statute must be fulfilled. For instance, the health care provider or health facility must notify the patient or her family of the intention to engage in an Open Discussion within 180 days after the provider knew about the incident. The patient must be advised of her rights to receive medical records, to have legal counsel if she chooses during the Open Discussion process, and to be notified of applicable limitation periods, among other requirements. If the patient agrees to participate in the Open Discussion, she must provide her agreement in writing.

As a condition of an offer of compensation, the provider or facility may require the patient to execute a release to resolve the health care incident. If the process is initiated properly by the provider, upon successful resolution and receipt of compensation, the event is not likely considered subject to certain reporting required by the Colorado Medical Board, Colorado Board of Nursing, other Colorado licensing boards, or the National Practitioner Data Bank. The law specifies that “candor compensation” is not considered a payment resulting from a written claim or demand for payment, a claim for purposes of reporting to a licensing board or insurance commissioner, or a payment resulting from a settlement, final judgment, administrative action or arbitration award.

Providers and facilities should be cautioned that the protections of the statute do not include certain materials not prepared specifically for an Open Discussion. When proceeding under this process, consult your legal counsel with expertise in the subject in order to ensure compliance with the nuances in the law and be advised of other risks. Providers and facilities should require all involved parties to sign documents as a condition of any compensation paid.