Paring Peer Review

Implications of the Tennessee Supreme Court's Decision in Lee Medical Inc. v. Beecher

A divided Tennessee Supreme Court recently ruled that the scope of the privilege in the Tennessee Peer Review Law of 1967, Tenn. Code Ann.  § 63-6-219 (TPRL), is narrowly limited to the review of "a physician's professional conduct, competence or ability to practice medicine."[1] This holding in Lee Medical Inc. v. Beecher marks a victory for advocates of broad discovery in civil cases. Hospitals and other health care providers, however, are fearful that the holding will impede their efforts to engage in candid and comprehensive quality assurance review.

Background

"Peer review" is the process by which the medical profession performs critical self-evaluations of services as a means to improve the quality of health care.[2] Some consider it to be "one of medicine's most effective risk management and quality improvement tools [that] provides a safe forum in which medical professionals can review the quality of health care and work to reduce medical errors."[3] To be accredited by the Joint Commission on Accreditation of Hospitals, a hospital must have peer review mechanisms in place.[4]

Historically, however, hospitals and other providers were reluctant to participate in the performance of the peer review process because of the risk of litigation and potential liability related to the proceedings.[5] Therefore, to encourage good faith peer review and promote "open, candid evaluation" that is integral to the peer review process, every state has enacted peer statutes designed to protect the interests of those involved.[6] In addition to granting immunity to those involved in the process, these statutes also provide varying degrees of confidentiality for records related to peer review proceedings. Such confidentially typically includes declaring that documents related to such proceedings are privileged from discovery in typical court proceedings.[7]

The TPRL has been described by one court as "not a shining example of legislative drafting."[8] Since its enactment in 1967, the statute has been amended 11 times and its current text bears little resemblance to the original act. The TPRL has four substantive subsections. Subsection (b) articulates the policy underlying the statute's enactment. It expresses the state's policy "to encourage committees made up of Tennessee's licensed physicians to candidly, conscientiously, and objectively evaluate and review their peers' professional conduct, competence, and ability to practice medicine." It also recognizes the importance of "confidentiality" of the process and immunity from liability for participants in the process.

Subsection (c) broadly defines the terms "medical review committee" and "peer review committee" synonymously in what may be one of the longest sentences in the entire Tennessee Code. Such committees include those with the function of "evaluat[ing] and improv[ing] the quality of health care," and/or determining whether health care was rendered appropriately and in compliance with the standard of care. Subsection (d) grants immunity to participants in the peer review process.

Subsection (e) of the TPRL sets forth the parameters of the peer review privilege:

All information, interviews, incident or other reports, statements, memoranda or other data furnished to any committee as defined in this section, and any findings, conclusions or recommendations resulting from the proceedings of such committee are declared to be privileged. All such information, in any form whatsoever, so furnished to, or generated by, a medical peer review committee, shall be privileged. The records and proceedings of any such committees are confidential and shall be used by such committee, and the members thereof only in the exercise of the proper functions of the committee, and shall not be public records nor be available for court subpoena or for discovery proceedings. One (1) proper function of such committees shall include advocacy for physicians before other medical peer review committees, peer review organizations, health care entities, private and governmental insurance carriers, national or local accreditation bodies, and the state board of medical examiners of this or any other state. The disclosure of confidential, privileged peer review committee information to such entities during advocacy, or as a report to the board of medical examiners under  § 63-6-214(d), or to the affected physician under review, does not constitute either a waiver of confidentiality or privilege. Nothing contained in this subsection (e) applies to records made in the regular course of business by a hospital or other provider of health care and information, documents or records otherwise available from original sources are not to be construed as immune from discovery or use in any civil proceedings merely because they were presented during proceedings of such committee.

Before May 2010, many hospitals and other providers apparently assumed that the privilege set forth in subsection (e) of the TPRL applied broadly to the activities of any of the peer review/medical review committees defined in subsection (c). For example, after an adverse patient event takes place, hospitals commonly perform a multidisciplinary "root cause analysis" to determine what may have caused the outcome. On a broader level, many hospitals have also routinely engaged in systematic quality control monitoring, such as tracking certain disease rates and/or readmission rates within the facility with the stated purpose of improving patient care. Many hospitals took for granted that records relating to such investigations or monitoring activities would be immune from discovery.

Before Lee Medical, Tennessee appellate courts had not directly addressed in a reported decision the scope of the peer review privilege set forth in subsection (e), including whether it applied to the review of activities of non-physicians. In an unpublished 1989 decision, however, the Court of Appeals found that a hospital's infection control committee's post-incident investigation of a radiology technician's job performance was privileged under the TPRL.[9]

Over approximately the last 20 years, most of the legal battles relating to the TPRL privilege have focused on other issues. For instance, in Eyring v. Fort Sanders Parkwest Med. Ctr., the Tennessee Supreme Court allowed a physician whose staff privileges had been revoked to take discovery "for the limited purpose of investigating the [peer review] committee members' good faith, malice, and reasonable knowledge or belief, but prohibit[ed] any inquiry into the peer review process itself."[10] On other instances, Tennessee courts have narrowly construed the scope of the "original source" and "regular course of business" exceptions set forth in subsection (e).[11]

'Lee Medical' Decision

The facts in the court's landmark decision in Lee Medical Inc. v. Beecher are fairly complex but not particularly critical to the court's ruling. In essence the court considered whether certain documents relating to a decision to terminate a contract for vascular services were protected from discovery under the TPRL.

The plaintiff in Lee Medical argued that many of the documents requested in discovery were privileged under the TPRL because they involved review of quality of care. The Tennessee Supreme Court rejected this argument and concluded that documents possessed by a peer review or medical review committee are privileged only if they pertain to the review of  a physician's conduct, competence or abilities. Otherwise, the committee's records are not privileged and are subject to discovery in a civil lawsuit.[12]

In the majority opinion, written by Justice William Koch, the court considered the privilege set forth in the TPRL in the backdrop of general principles favoring the discovery of information. According to the court, "Tennessee's discovery and evidentiary rules reflect a broad policy favoring discovery of all relevant, non-privileged information."[13] Underlying this policy is the notion that courts should promote the search for the truth. In that respect, the court reasoned that evidentiary privileges should be construed narrowly.[14]

With that in mind, the court turned to the TPRL's privilege provision set forth in subsection (e) of the statute.

The court struggled with what it considered to be a tension between the first two sentences of subsection (e) and the last sentence. On one hand, the first two sentences could reasonably be interpreted as deeming privileged all documents submitted to any peer review/ medical review committee defined in subsection (c). On the other hand, the court stated that it is also reasonable to interpret the last sentence as declaring that any document made in the regular course of business of such a committee is not privileged. In the court's view, it was very difficult, if not impossible, to reconcile these two interpretations.[15]

To address this perceived ambiguity, the court turned to other portions of the TPRL and the statute's legislative history. The court noted that in 1992, the legislature changed the name of the statute to incorporate the term "peer review."[16] Observing that the traditional meaning of "peer" connotes "a person of equal civil standing or rank, a contemporary, or a member of the same age-group or social set," the court stressed that the General Assembly stated in subsection (b) that the purpose of the privilege was to "encourage committees made up of Tennessee's licensed physicians to candidly, conscientiously, and objectively evaluate and review their peers' professional conduct, competence, and ability to practice medicine" (emphasis added).[17]

The court acknowledged that the General Assembly broadened the definition of "peer review committee" in subsection (c) through six different amendments. The court, however, found that this did not necessarily mean that the legislature also intended to broaden the privilege in subsection (e).[18]

Finding that the text of subsection (e) was ambiguous, the court deemed it prudent to consider aspects beyond the parameters of the TPRL. The court observed that the TPRL is contained in Chapter 6 of Title 63 of the Tennessee Code, which only concerns the practice of medicine and surgery.[19] Moreover, the court noted that the General Assembly enacted separate provisions encompassing peer review for other professions, including chiropractors, nurses, osteopaths, pharmacists, psychologists, dentists, and veterinarians.[20] Therefore, the court reasoned that this provided additional support for the notion that the legislature intended for the privilege in the TPRL to be confined to physician activity.

The court also cited legislative debates relating to the 1967 enactment of the TPRL and its amendments. The court referenced statements suggesting that certain legislators contemplated that the TPRL applied only to physicians.[21]

Moreover, the court found that "the history of the use of 'peer review' in the field of health care demonstrates that its focus has consistently been on physicians."[22] The court traced peer review back to 1918, when the American College of Surgeons established a peer review program as part of the minimum standard for the profession.[23] The court set forth an historical discussion of the development of peer review, including referencing elements of peer review recognized by Congress in its creation of Medicare and Medicaid and its enactment of the Health Care Quality Improvement Act of 1986 and the Patient Safety and Quality Improvement Act of 2005.[24]

Finally, the court stated that a survey of case law from other jurisdictions revealed that the focus on other states' peer review statutes has been on the competence and conduct of physicians. Acknowledging that the peer review statutes in other states differ from the TPRL, the court stated that it did not find any case law addressing "the application of the privilege to a hospital's business decision that affects the quality and cost of patient care."[25]

Under these circumstances, the Supreme Court concluded that the peer review privilege set forth in subsection (e) of the TPRL is limited to records relating to a "peer review proceeding," which the court narrowly defined to be a "proceeding involving a physician's professional conduct, competence, or ability to practice medicine."[26] In so doing, the court essentially limited the privilege to the wording set forth in the preamble in subsection (b) and thereby created a "bright line of demarcation between records relating to peer review proceedings involving physicians that are privileged and other records made in the regular course of the hospital's business that are not privileged."[27] Applying this law to the facts, the court determined that the documents at issue sought in discovery were not protected by the peer review privilege.[28]

Dissent

In a dissenting opinion joined by then-Chief Justice Janice Holder, Justice Gary Wade took issue with the majority's determination that the TPRL's privilege provision is ambiguous. He opined that "subsection (e) contemplates at least two mutually exclusive types of activities by a hospital: first, those that take place in the regular course of business, and second, those that take place under the mantle of one of the committees defined in subsection (c)[;] [t]he latter activity is privileged, while the former is not."[29] According to Justice Wade, the definition of "peer review committee" in subsection (c) and the scope of the peer review privilege in subsection (e) have been "inextricably intertwined," such that the broadening of the definition of "peer review committee" through statutory amendment over the years has increased the scope of the privilege.[30] Noting that the majority's use of the term "peer review proceeding" appears nowhere in the text of the TPRL, Justice Wade stated that he viewed the subsection (b) preamble referencing physician activities as "merely a statement of policy, prefatory in nature, which does not supercede the plain language of subsections (c) and (e)."[31]

Justice Wade also addressed a concern by the majority that an expansive interpretation of the peer review privilege could "shield essentially every decision made by a hospital from appropriately managed discovery in a civil case."[32] Noting that "[v]irtually all decisions made by hospital committees affect the cost or quality of health care either directly or indirectly," the majority found that "no reasonable bounds" to the scope of the privilege would exist if it applied to all activities of the committees defined in subsection (c).[33] Justice Wade responded that any such problem would be within the province of the legislature to address and that, as it stands, it is reasonable to conclude that the legislature intended to limit the scope of the privilege to the committees' specific functions enumerated in subsection (c).[34]

Aftermath

To the extent that the TPRL's privilege provision may have been ambiguous, the Supreme Court appears to have successfully drawn a "bright line of demarcation" between records that are privileged and those that are not. However, the decision has opened the door to discovery of many sensitive records that the health care community has previously assumed were privileged. For instance, hospitals that routinely conduct post-incident investigations of the conduct of nurses, nurse practitioners, physician assistants, technicians, therapists, anesthetists and other non-physicians may no longer avail themselves of the peer review privilege.

A review of the statutes in the other states reveals that the scope of Tennessee's peer review law " in the wake of the Lee Medical decision " is among the most narrow in the country. In fact, at least based on the face of the respective statutes, no other state appears to confine the protections of its peer review privilege to physicians. Statutes in approximately 28 states are worded so broadly that seemingly any activities relating to the "evaluation and improvement of healthcare," or words to that effect, are privileged.[35] Of the remaining jurisdictions, the statutes of 18 states include other language that appears to make clear that the peer review privilege applies to quality assurance deliberations concerning the activities of all health care providers " not just physicians.[36] The three remaining states, Florida, New York and New Jersey, have quirky statutes but do not differentiate between physicians and non-physicians.[37]

Therefore, it appears that Tennessee stands alone in not affording any peer review protection whatsoever to hospital committees performing quality assurance review that relates to the activities of nurses and other non-physicians.[38] Critics of the Lee Medical decision argue that the quality of patient care will be compromised as a result of the ruling. They argue that providers may choose not to perform quality assurance investigations for fear that the results will be used against them. Or, providers that continue to perform investigations will choose to be less thorough and be less than candid in their conclusions. Ultimately, patient care is sacrificed because hospitals will not implement satisfactory corrective action to rectify potential problems. Critics also argue that health care costs may increase because providers now have a disincentive to utilize the services of nurse practitioners, physician assistants and others whose fees for service are less costly than physicians.

Proponents of the Lee Medical decision downplay these concerns. They also argue that public policy justifications support the Supreme Court's interpretation of the TPRL. In particular, proponents contend that litigants should not be inhibited in their quest for the truth. They also maintain that, under a contrary interpretation, hospitals could manipulate the system and avail themselves of the privilege by using peer review/medical review committees to perform functions that only tangentially relate to quality assurance.

In the wake of Lee Medical, many hospitals have questioned whether they should perform a root cause analysis after an incident takes place. Other hospitals are seeking shelter under federal law. For instance, under the Patient Safety and Quality Improvement Act of 2005, Congress has determined that the records of an authorized patient safety organization designed to improve quality of care and patient safety through the compilation and analysis of medical data are privileged.[39] Providers, therefore, may create such organizations as a means to keep their quality review activities confidential and privileged. In the meantime, time will tell the implications of the Supreme Court's decision in Tennessee.  

Notes

  1. 312 S.W.3d 515 (Tenn. 2010).
  2. See, e.g., Kenneth R. Kohlberg, "The Medical Peer Review Privilege: A Linchpin for Patient Safety Measures," 86 Mass L.Rev. 157, 157 (2002) (citations omitted).
  3. Lisa M. Nijm, "Pitfalls of Peer Review," 24 J. Legal Med. 541, 541 (2003). See also Bryan v. James E. Holmes Reg'l Med. Ctr., 33 F.3d 1318, 1321 (11th Cir. 1994) (finding that peer review is an "integral component of the health care system in the United States); Rechsteiner v. Hazelden, 753 N.W.2d 496, 505 (Wis. 2008) (identifying peer review as the "principal method of evaluating the quality of patient care").
  4. See, e.g., The Joint Commission Comprehensive Accreditation Manual for Hospitals,  § § MS 08-01-01 & MS 08-01-03 (Jan. 2010). Moreover, under the Hospital Conditions of Participation for Medicare, a hospital "must develop, implement, and maintain an effective, ongoing, hospital-wide, data-driven quality assessment and performance improvement program." 42 C.F.R.  § 482.21 (2009).
  5. Charles David Creech, "The Medical Review Committee Privilege: A Jurisdictional Survey," 67 N.C. L. Rev. 179, 179 (1988).
  6. Rechsteiner, 753 N.W.2d at 505.
  7. Id.
  8. Smith v. Pratt, 2009 WL 1086953, *2 (Tenn. Ct. App. Apr. 22, 2009).
  9. Groller v. Methodist Med. Ctr. of Oak Ridge, 1989 WL 151498, *16-17 (Tenn. Ct. App. Dec. 13, 1989) (no Tenn. R. App. P. 11 app. filed). See also Wilmouth v. Durfey, 1988 WL 136391, *5 (Tenn. Ct. App. Dec. 21, 1988) (no Tenn. R. App. P. 11 app. filed) (finding that the review of a nurse anesthetist's activities may be privileged under the TPRL).
  10. 991 S.W.2d 230, 239 (Tenn. 1999). Under Tenn. Code Ann.  § 63-6-291(d)(1), peer review participants are only immune from liability if they act "in good faith and without malice and on the basis of facts reasonably known or reasonably believed to exist."
  11. See, e.g., Powell v. Community Health Systems Inc., 312 S.W.3d 496, 510 (Tenn. 2010) ("We have determined that persons acting on behalf of or at the request or direction of a peer review committee performing its peer review functions are not 'original sources' from whom the information prepared for the committee's use can be discovered"); Stratienko v. Chattanooga-Hamilton County Hosp. Auth., 226 S.W.3d 280,286 (Tenn. 2007) (finding that records available from original sources are discoverable "but only to the extent that they are not requested from the peer review committee and are not otherwise privileged"); Roy v. City of Harriman, 279 S.W.3d 296 (Tenn. Ct. App. 2009) (finding same and also interpreting the "regular course of business" exception as "referring to documents prepared in the 'regular course of business' independent of peer review processes") (emphasis in original).
  12. Lee Medical, 312 S.W.3d at 536.
  13. Id. at 525.
  14. Id.
  15. Id. at 529-30.
  16. Id. at 530.
  17. Id. (citing 11 Oxford English Dictionary 435 (2d ed. 1983); Tenn. Code Ann.  § 63-6-219(b)(1)).
  18. Id. at 531-32.
  19. Id. at 532.
  20. See id. at 532, & n. 47. Under Tenn. Code Ann.  § 63-4-118, chiropractors serving on peer review committees are immune from liability. Under  § 63-7-115(c)(3), members of board of nursing screening panels are afforded immunity and their deliberations are privileged. Under  § 63-9-114, the protections under the TPRL are extend to osteopathic physicians. Comprehensive peer review provisions are applicable to pharmacists under  § § 63-10-401 to -405. Under  § 63-5-131, 63-11-220 and  § 63-12-138, peer review proceedings relating to psychologists, dentists and veterinarians are privileged and members of peer review committees are immune from liability.
  21. Id. at 532-33 (quoting remarks made by Representatives Mary Ann Eckles and J. Stanley Rogers).
  22. Id. at 533.
  23. Id.
  24. See Id. at 534-35 (citing 42 U.S.C.  § § 11101 et seq.; Pub. L. No. 109-41, 119 Stat. 424-34).
  25. Id. at 535.
  26. Id. at 536.
  27. Id.
  28. Id. at 537-38.
  29. Id. at 544 (Wade, J., dissenting).
  30. Id. at 543 (Wade, J., dissenting).
  31. Id. at 544-45 (Wade, J., dissenting).
  32. Id. at 544 (Wade, J., dissenting).
  33. Id. at 536 (Wade, J., dissenting).
  34. Id. at 544 (Wade, J., dissenting).
  35. See Alaska Stat.  § § 18.23.030, -.070; Ark. Code Ann.  § § 16-46-105, 20-9-501, 20-9-503; Ariz. Rev. Stat. Ann.  § § 36-445, -445.01; Cal. Evid. Code  § § 1156-57, 1157.7, and Cal. Bus. & Prof. Code  § 805; Conn. Gen. Stat. Ann.  § § 19a-17b(a)(2), -(4), 19a-17b(d); De. Code Ann. tit. 24,  § 1768; Ga. Code Ann.  § § 31-7-130 et seq., 31-7-140 et seq.; Haw. Rev. Stat.  § 624-25.5; Idaho Code Ann.  § § 39-1392B, 39-1392(A)(11); 735 Ill. Comp. Stat.  § § 5/8-2101, -2102; Kan. Stat. Ann.  § 65-4915; Mass. Gen. Laws ch. 111,  § 204; Minn. Stat.  § § 145.61, -.64; Nev. Rev. Stat.  § 49.265; N.H. Rev. Stat. Ann.  § 151:13-a; N.M. Stat.  § 41-9-5; N.C. Gen. Stat.  § § 131(e)-76, -95(b); N.D. Cent. Code  § 23-34-03; Or. Rev. Stat.  § 41.675; 63 Pa. Stat. Ann.  § § 425.2, 425.4; R.I. Gen. Laws  § § 5-37-1, 23-17-25; S.D. Codified Laws  § § 36-4-26.1, -43; Utah Code Ann.  § § 25-25-1, -3; Vt. Stat. Ann. tit. 26,  § 1443; Va. Code Ann.  § § 8.01-581.16, -581.17.B; Wash. Rev. Code  § § 70.41.230(1)(a), - (3), -(5); W. Va. Code  § § 30-3C-1, -3; Wyo. Stat. Ann.  § 35-17-101, -105.
  36. See Ala. Code  § § 6-5-333, 22-21-8, 34-24-58; Colo. Rev. Stat.  § § 12-36.5-102, -103, -104; Ind. Code  § § 34-30-15, 34-6-2-99(a); Iowa Code  § § 147.1(4), 147.135; Ky. Rev. Stat. Ann.  § 311.377; La. Rev. Stat. Ann.  § § 13:3715.3, 40:2205; Me. Rev. Stat. Ann. tit. 32,  § 2599; Md. Code Ann., Health Occ.  § 1-401; Mich. Comp. Laws  § § 333.21513, -.21515; Miss. Code Ann.  § § 41-63-9, -23; Mo. Rev. Stat.  § § 537.035.1, -.4; Mont. Code Ann.  § 37-2-201; Neb. Rev. Stat.  § § 71-2046, -2048; Ohio Rev. Code Ann.  § § 2305.25, -.252; Okla. Stat. tit. 63,  § 1-1709.1; S.C. Code Ann.  § § 40-71-10, -20; Tex. Occ. Code Ann.  § § 151.002, 160.007(e), 161.032(f); Wis. Stat.  § 146.38(2).
  37. Under Florida law, for instance, the peer review protection does not apply to requests made by affected patients. Fla. Const. art. X,  § 25. See also Fla. Stat. Ann.  § § 395.0193, 395.0197, 766.101 (setting forth other exceptions). Although New York has a broad privilege for records of committees "with the responsibility to review the services rendered in the hospital in order to improve the quality of medical . . . care of patients and to prevent medical . . . malpractice," the privilege does not apply when a provider is a defendant in the lawsuit and the peer review concerns that individual's conduct. See, e.g., D'Angelis v. Buffalo Gen. Hosp., 2 A.D.3d 1477 (2003); Bernholc v. Kitain, 186 Misc.2d 697 (N.Y. Sup. Ct. 2000). New Jersey's peer review privilege applies only to records of utilization review committees, as required under the Social Security Act. See N.J. Stat. Ann.  § 2A:84A-22.8; Young v. King, 344 A.2d 792, 794 (N.J. Super. 1975).
  38. The only exceptions would be if the review relates to the activities of those that the legislature has otherwise created a privilege. See n. 20, supra.
  39. P.L. 109-41 (2005) (amending 42 U.S.C.  § §299 et seq.).

David L. Johnson DAVID L. JOHNSON is a member in the Nashville office of Miller & Martin PLLC. Johnson has extensive experience in appellate practice and represented the Tennessee Hospital Association in filing an amicus curiae brief in the Lee Medical case. Johnson received his law degree in 1997 from the Vanderbilt School of Law, where he served on the Vanderbilt Law Review. Johnson is a former clerk on the Tennessee Supreme Court and Court of Appeals.

 

 

Ellis Lord M. ELLIS LORD is an associate in the Chattanooga office of Miller & Martin PLLC. Lord concentrates his practice in the area of civil litigation with an emphasis on health care litigation, including physician credentialing and peer review issues. Lord received his law degree in 2007 from the University of Tennessee College of Law. Lord is also a certified public accountant.