The names, logos, and slogans of products and services in the healthcare industry are valuable assets, representing the established goodwill of a hospital, pharmaceutical company, health insurer, or even a local family practice.  In South Jersey, such well-known names as Virtua®, Cooper®, and Jefferson®, have secured their names and logos through the federal trademark registration process.

While trademarks frequently have little initial value, upon establishing goodwill for the business and/or creating a popular product or service, the value of a trademark can exponentially increase.  For instance, Forbes estimated the value of the trademark for Google® at over $40 billion dollars, or more than one-quarter of the company’s overall value.  And unlike copyrights or patents, trademarks can last in perpetuity, such as Levi Strauss & Co.®, whose trademark has been registered since 1873.  In light of the potential significant value and perpetual existence of a trademark, businesses should ensure that their brand is carefully groomed and protected through federal trademark registration.

More basically, a trademark is a brand name. A trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services.  For instance the words Humana® and Microsoft® are both trademarked, as is Apple Computers’ partially bitten apple logo, as are both McDonalds’s golden arches and its slogan “I’m loving’ it.”

Because trademarks serve as an indicator of the mark owner’s goodwill, federal trademark law was established to protect the unsuspecting public from confusing products/services and to prevent against attempts by unscrupulous competitors to deceive the public.

Federal trademark rights may be established by either being the first to use a mark in interstate commerce (a Section 1(a) filing), or a prospective mark may be reserved prior to use by filing an intent-to-use application (a Section 1(b) filing).

Although the law generally provides that the first user of the mark is entitled to legal protection, with or without a federal trademark registration, federal registration provides significant additional value as it allows for the ability to recover profits, damages, and costs against infringers, national notice of ownership of the mark, the presumption of the validity of the mark, access to federal courts, as well as incontestability status for the mark after five years of federal registration.

In light of the significant benefits of federally registering trademarks (names, logos, and slogans), and given the ever-increasingly competitive healthcare industry, stakeholders should look closely at the options to protect their brand and should certainly consider federal trademark protection among those options.

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On July 18, 2015, Governor Chris Christie signed Senate Bill 1998/2119 (A3062) into law.  The law, which unanimously passed the New Jersey Legislature, revises the New Jersey Prescription Monitoring Program (PMP), to provide preventative measures against increased misuse and diversion of prescription pain medications.  Among other provisions, the law requires that pharmacists must submit to the PMP identifying information for any individual, other than the patient for whom the prescription was written, who picks up a prescription if the pharmacist has reasonable belief that the person may be seeking a controlled danger substance (CDS) for any reason other than delivering it for medical treatment.   Likewise, the bill adds a provision requiring the Division of Consumer Affairs to evaluate whether any person is obtaining a prescription in a manner indicative of misuse, abuse, or diversion of a CDS. If there is indication that a person is obtaining a prescription for the same or similar drug from multiple practitioners or pharmacists during the same time period, the Division of Consumer Affairs may provide prescription monitoring information about that person to practitioners and pharmacists and the Division of Consumer Affairs is obligated to evaluate whether any violation of law or regulations, or a breach of a standard of practice by any person may have occurred, including possible diversion of controlled dangerous substances. If the Division of Consumer Affairs determines that such a violation or breach may have occurred, it is required to notify the appropriate law enforcement agency or professional licensing board and provide relevant information for an investigation.  The bill also revises current provisions concerning access to the PMP to automatically register pharmacists and practitioners to participate in the prescription monitoring program as part of their registration to prescribe, dispense, or administer CDS.  Under the bill, a practitioner, or another person who is authorized thereby to access PMP information, pursuant to the bill’s provisions, will be required to consult the PMP when they prescribe a controlled dangerous substance to a patient for acute or chronic pain, and quarterly thereafter if the patient continues to receive prescriptions for controlled dangerous substances for acute or chronic pain.  Most of the aforementioned provisions take effect on November 1, 2015.  Given the increasingly burdensome administrative requirements, pharmacists and providers should ensure that their practices of prescribing or disbursing controlled dangerous substances are in line with the strictures of the new law.

In late June, Senate Bill 2876 (A4476) passed both chambers of the New Jersey Legislature.  The bill, if ultimately signed into law, would permit certain surgical practices and ambulatory care facilities to be exempt from a moratorium on the development of new ambulatory surgery facilities. Specifically, the exemption would allow ambulatory surgery facilities that are jointly owned by a hospital and one or more parties and to ambulatory surgery facilities that are owned by a hospital or a medical school. The law does not explicitly require these hospitals or medical schools to be located in the State, and the Department of Health (DOH) recently concluded that, for the purposes of the exemption, the term “licensed hospital” applies to hospitals licensed in State as well as out of State. As amended, the bill requires that, for the exemption from the moratorium to apply, the ambulatory surgery facility will be required to be owned by a hospital or medical school licensed in New Jersey, or owned by any hospital that is approved to provide ambulatory surgery services at another facility in the State. Because certain hospitals and medical schools located out of the State have already received approval to operate ambulatory surgery facilities under the current law, or have planned facilities that have received DOH approval, the bill will allow these facilities to continuing operation under the moratorium exemption, provided the approval or application for the facility was received by DOH as of March 1, 2015.  While critics of the bill argue that competition is stifled as out-of-state hospitals are effectively retroactively forbidden from owning ambulatory surgery centers in New Jersey, the bill has the support of the New Jersey Hospital Association, and may ultimately lift the freeze on new surgical centers and ambulatory surgical centers.

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In a case that examines the confluence of contract law, agency, and a common healthcare industry practice during patient intake, which may ultimately have repercussions outside of Florida, a panel of the Court of Appeal of Florida, in Fi-Evergreen Woods, LLC v. Estate of Robinson, 2015 Fla. App. LEXIS 11195 (Fla. Dist. Ct. App. 5th Dist. July 24, 2015), held that that a nursing home patient was bound by general principles of contract and agency law to arbitrate her dispute with a nursing home after her husband signed her admission documents, which included a mandatory arbitration agreement.

Although the husband was unable to accurately recall the admissions process, the nursing home’s admissions director testified that when she entered the patient’s room, the patient was alert, lying on the bed, and with her husband standing nearby. The admissions director told the patient that she was there with the admissions documents, which needed to be signed. The patient responded that she wanted her husband to review and sign the documents. The husband proceeded to sign the documents, which included an arbitration agreement, in the presence of both his wife and the admissions director.

Relying on Stalley v. Transitional Hospitals Corporation of Tampa, 44 So. 3d 627 (Fla. 2d DCA 2010), the trial court found that the husband was not authorized to sign the arbitration agreement on these facts.  The panel of the Court of Appeal disagreed, find that in Stalley, there was no apparent agency because the patient/principal, never represented that the person who signed the arbitration agreement was authorized to do so.  However, in Robinson, the Court of Appeal found that “the patient/principal . . . expressly told the nursing home’s admissions director that she wanted her husband to handle the documents on her behalf — a clear representation, at least by implication, that she authorized him to do so.”  Robinson, 2015 Fla. App. LEXIS 11195

In light of such representation and because the nursing home “relied on the [patient/]principal’s representation that her husband was authorized to sign the admission documents for her, and changed its position by accepting the husband’s signature as binding, we find that the patient was bound by her husband’s signature under ordinary principles of contract law and agency.”

The Court of Appeal in Robinson, further rejected the trial court’s determination that the patient’s agent was only authorized to sign contracts or other agreements that were “necessary” for admissions to the facility, of which an arbitration agreement was not necessary.  The appellate court rather held that “an agent can bind a principal to an arbitration agreement just like any other contract.”

Additionally, the court stated that “because dispute resolution documentation has become a regular part of medical facility admissions, we believe that it was reasonable for the nursing home to take the patient’s representation that her husband was authorized to review and sign all of the admissions-related documents, without limitation, as including the arbitration agreement.”

On its face, Robinson is merely a case about the obscure legal relationships of authority between principals and agents, however, its context within the healthcare realm examines the practical reality that friends and families of patients frequently enter into binding agreements on patients’ behalves, oftentimes without a written living will or power of attorney in place.  Moreover, Robinson opens the doors for healthcare providers to include ancillary agreements in its admissions packet which are necessary for admission.  While Robinson suggests that anyone can sign for a patient with the patient’s knowing, oral consent, healthcare providers should nevertheless closely consider the laws relating to living wills, contracts, and principal/agency in the jurisdictions in which they operate to ensure that the person who signs on behalf of a patient possesses the requisite, and binding, authority.

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In a decision sure to raise the eyebrows of health care system CFOs all the way down to the accountants of sole practitioners, the United States District Court for the District of Washington D.C. recently upheld the Department of Health and Human Services’ (HHS) interpretation of 42 C.F.R. 413.89(e), as preventing providers from claiming a debt is “worthless” and “uncollectible,” and thus subject to Medicare reimbursement, if said debt has been referred to an outside collection agency and remains active.^[1]

Notably, the court determined that HHS’ position was not violative of the statutory “Medicare Bad Debt Moratorium,” which precluded HHS from making changes to its bad-debt reimbursement policies in effect as of August 1, 1987. The court explicated that the bad-debt moratorium was not intended to bar HHS from prohibiting bad-debt reimbursements to the extent that the claim denials were consistent with the policies in place at the time the moratorium took effect.

Generally in order to obtain reimbursement for bad debts, a provider must demonstrate certain criteria under 42 C.F.R. 413.89(e), including making “reasonable collection efforts,” showing that the “debt was actually uncollectible when claimed as worthless,” and demonstrating “sound business judgment established there was no likelihood of recovery at any time in the future.”  In any event, a “presumption of noncollectibility” is assumed for debts that remain unpaid after more than 120 days from the initial bill.

With regard to the case at hand, the plaintiff health system claimed bad-debt reimbursements for several of its hospitals totaling over $16 million, of which all amounts were past due by more than 120 days and had been sent to outside collection agencies for recovery.

After being denied at the agency level, the health system filed a lawsuit, alleging the agency decision was not in line with the applicable regulatory provisions (as well as other statutory provisions governing HHS’ regulation-making process) and violated the bad-debt moratorium.

The District Court disagreed, stating that “[t]hus, the agency’s interpretation of the regulation to mean that sending a debt to a collection agency disqualifies that debt from reimbursement so long as the provider persists in that referral, is reasonable and, until all collection efforts have ceased, the debt is not ‘worthless’ under 42 C.F.R. 413.89(e)(3).”^[2]

Given the District Court’s decision, providers of all sizes, and their accounting departments, should be cognizant that although a presumption of bad debt exists for debts outstanding for 120 days, so long as the debt has been referred to a third party for collection – and remains active – the success of a claim for bad-debt reimbursement is unlikely.

[1] Cmty. Health Sys. v. Burwell, 2015 U.S. Dist. LEXIS 87510 (D.D.C. July 7, 2015).

[2] The District Court likewise determined the presumption of noncollectibility after 120 days is rebuttable, stating that same “is a discretionary presumption and does not foreclose the possibility that a debt may still be deemed collectible after 120 days.” Cmty. Health Sys. v. Burwell, 2015 U.S. Dist. LEXIS 87510, at *26 (D.D.C. July 7, 2015).

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Since 2014, over one-third of states have enacted legislation, commonly known as “Right to Try” laws, in an effort to increase access to drugs which have yet to be approved by the Food and Drug Administration, for use by the terminally ill who have exhausted their treatment options.  Under the traditional FDA regulatory scheme, drugs are subject to pre-market testing, and clinical trials were normally the only way patients could obtain access to drugs before FDA approval.  Given the lengthy FDA timelines for approving drugs and the significant difficulty patients had in obtaining drugs prior to approval, more than a dozen states have enacted their own, state-level legislation, in an attempt to expand access to drugs which have yet to received their  FDA approval.

The so-called “Right to Try” legislation enacted by 18 states share several important provisions. Generally, eligibility under these statutes require that the patient a) have a diagnosed terminal illness, b) have considered all existing treatment options approved by the FDA, yet determined that the risk from the unapproved drug is not greater than the risk from the disease, c) obtain a prescription from his/her physician, and d) provide informed consent.  Additionally, the statutes permit, but do not mandate, that drug manufacturers make the unapproved drugs available, and allow, but do not mandate, health insurers to cover the same.  Further, the statutes significantly limit the civil liability, or medical board disciplinary action, of a physician, based solely on his/her prescription of the unapproved drug.

Notwithstanding individual states’ enactment of Right to Try legislation, their effects remain uncertain, as neither manufacturers nor insurers are required to provide or insure, respectively, products which have not received FDA approval.  More importantly, federal statutes and regulations limiting the use of unapproved drugs are still likely to preempt states Right to Try laws, raising issues of liability under federal law for both manufacturers and providers.

To date, neither Pennsylvania nor New Jersey have enacted Right to Try laws, however, such laws are pending in both legislatures.[1]  In light of the rapid passage in many states, and introduction of bills in almost all states, of Right to Try laws, and the dearth of precedent for such expansive state legislation, drug manufacturers who make non FDA-approved drugs available to patients, and the physicians who prescribe these drugs under Right to Try laws must remain cautious as it remains yet to be seen how Right to Try laws will affect manufacturers’ and providers’ federal and state liability.

[1] An Act providing for the use of investigational drugs, biological products and devices by terminally ill patients, Pennsylvania House Bill 1104, available at http://www.legis.state.pa.us/cfdocs/billInfo/BillInfo.cfm?syear=2015&sind=0&body=H&type=B&bn=1104 (Introduced and referred to Health committee as of May 2015); “Right to Try Act” permitting terminally ill patients to access investigational drugs and treatment. Health, Human Services and Senior Citizens, New Jersey S.2186 / A.3474, available at http://www.njleg.state.nj.us/2014/Bills/A3500/3474_I1.PDF (referred to Assembly/Senate Health and Senior Services Committees as of June 2014).

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In a June 9, 2015 Fraud Alert issued by the Office of Inspector General of the United States Department of Health and Human Services (the “OIG”) entitled “Physician Compensation Arrangements May Result in Significant Liability” the OIG reiterated its longstanding position that physicians who enter into “compensation arrangements . . . must ensure that those arrangements reflect fair market value for bona fide services the physicians actually provide.” (emphasis added).

The Fraud Alert makes it clear that the Department of Justice and OIG continue to focus not only on the large healthcare institutions, but that federal investigators are scrutinizing individual physicians’ compensation arrangements.  The Fraud Alert follows twelve recent settlements between the OIG and physicians, involving medical director and office staff arrangements, in which the OIG alleged that compensation paid to the physician under the medical directorship arrangements constituted improper remuneration under the anti-kickback statute for a number of reasons, including:

1. The compensation took into account the physicians’ volume or value of referrals;
2. The compensation did not reflect fair market value for the services performed;
3. The physicians did not actually provide the contracted services; and
4. An affiliated health care entity paid the salaries of the physicians’ front office staff thereby relieving the physicians of a financial burden they otherwise would have incurred.

With regard to the twelve settlements, the OIG determined that the physicians involved were an integral part of the scheme and subject to liability under the Civil Monetary Penalties Law.

The OIG noted that although many compensation arrangements are legitimate, a compensation arrangement may violate the anti-kickback statute if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals of Federal health care program business.

Again, and importantly, the intended audience of the Fraud Alert are individual physicians and small practice groups[1] which the OIG encourages “to carefully consider the terms and conditions of medical directorships and other compensation arrangements before entering into them.”

Ultimately, the June 9th Fraud Alert emphasizes the need for healthcare institutions to continually ensure that their physician compensation arrangements reflect the fair market value for bona fide services that the physicians actually provide and that the vigilance required of larger healthcare institutions likewise applies to small practices and individual physicians.

[1] The OIG likewise provides links to guides it publishes entitled “Compliance Program Guidance for Individual and Small Group Physician Practices” and “A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse,” further underscoring that the instant alert was intended for individual physicians and small practices.

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Late last week, the Office of the Inspector General of the United States Health and Human Services Administration (OIG) issued an auspicious advisory opinion concerning “a nonprofit, tax-exempt, charitable organization’s proposal to provide financial assistance to individuals with chronic diseases, including cancer, to assist with the costs of health insurance and drug and device therapies.”  After determining that the charity and patients would be adequately insulated from the influence of the charity’s donors, the OIG determined that said arrangement would not result in liability under the Federal anti-kickback statute.

By way of background, the requestor of the advisory opinion was a 501(c)(3) charitable entity that sought to establish a “patient assistance program to provide financial assistance to individuals with cost-sharing obligations for prescription drugs or devices, health insurance premiums, incidental expenses (e.g., travel expenses, ongoing testing), or a combination thereof, associated with the treatment of various chronic diseases.”  Patients would learn about said program through a variety of sources, which included their treating physicians, dispensing pharmacies, medical equipment distributors, patient support groups, as well as product manufacturers.  The opinion provided, however, that before applying for assistance under the program, the patient must have selected their health care provider, practitioner, or supplier, and have a treatment regimen in place and while receiving assistance, the patient would remain free to change providers, practitioners, suppliers, drug or device therapies, or insurance plans.

Funding for the assistance program would be derived from donations solicited from a variety of sources, including pharmaceutical and device companies, specialty pharmacies, distributors, individuals, and corporations and all donations would be in the form of cash or cash equivalents. Donors may earmark their contributions to funds for patients suffering from a specific disease, but the donations would otherwise be unrestricted.

Given the potential for prohibited referrals, remuneration, and influence from donors, the OIG specifically noted several factors in which it relied in coming to its conclusion:

1) As the patient had previously selected their provider, practitioner, or supplier, the charity would not “refer patients to, recommend, or arrange for the use of any particular practitioner, provider, supplier, drug, device, or plan and that patients would have complete freedom of choice in such matters.”

2) The charity’s discretion to use the donations would be “absolute, independent, and autonomous” and “no donor, or affiliate of a donor, would exert any direct or indirect influence over the charity or charity’s patient assistance program” as a board fully independent from the donors would govern the charity.

3) The charity would not provide donors with any individual patient information (and patients would not be provided with donor information) or any data related to the identity, amount, or nature of drugs, devices, or services subsidized by the assistance program and reports to donors would not contain any information that would enable a donor to correlate the amount or frequency of its donations with the number or medical condition of patients who use its products or services or the volume of those products or services.

4) The charity “would define its disease funds in accordance with broadly defined disease states based on widely recognized clinical standards; and (ii) except to the extent that [charity] limits certain disease funds to the metastatic stage of certain cancers, its disease funds would not be defined by reference to specific symptoms, severity of symptoms, the method of administration of drugs, stages of a particular disease, type of drug or device treatment, or any other way of narrowing the definition of widely recognized disease states.”

In light of the insulation of the charity from donors, the OIG ultimately determined that the contributions donors would make to the charity would not reasonably be construed as payments to the charity to arrange for referrals.

The OIG additionally concluded that financial assistance provided by the charity to federal health care program beneficiaries presented a low abuse risk and was unlikely to influence any beneficiary’s selection of a particular provider, supplier, etc. as “eligibility determinations would be made in a consistent, uniform manner and would not be based, in whole or in part, on whether a patient’s provider, practitioner, or supplier has made contributions to [charity’s]’s patient assistance program.”

Ultimately, the OIG found that aforementioned payment assistance program, conducted by independent charities, should not raise anti-kickback concerns, even if the charities receive charitable contributions from donors whose products are supported by the subsidies provided in the program.  The instant opinion by the OIG is an important recognition of the need for, and tacit support, of the endeavors by charities as well as their corporate donors — and both charities and donors alike must be cognizant that such patient assistance programs are viable — so long as the charity and patients remain insulated from the donors.

Questions regarding this article may be sent to Publications@Capehart.com. 

This spring, the Department of Justice (DOJ) has gone on the offensive in a series of public speeches before bar associations concerning the DOJ’s emboldened and proactive approach to the investigation and prosecution of healthcare fraud against both individuals and corporations.  Given that the DOJ is ramping up its efforts to combat healthcare fraud, seeking hefty prison sentences, and actively prosecuting not only individual doctors but corporate health systems, practitioners and providers of all sizes must take the opportunity to ensure that they are in compliance with the multitude of federal fraud-related healthcare statutes, including the False Claims Act, the Stark Law, and the Anti-Kickback Statute.

In remarks given at the American Bar Association’s 25^th Annual National Institute on Health Care Fraud last month, Assistant Attorney General Leslie R. Caldwell, head of the DOJ Criminal Division, provided insight into the ever-evolving landscape of healthcare fraud prosecutions.  More specifically, Ms. Caldwell stated that the DOJ has come “a long way” since the days where prosecuting healthcare-related crimes were reactive and wherein the Centers for Medicare and Medicaid Services (CMS) maintained control of the health care billing and other data and prosecutors were forced to wait for CMS to refer cases to the DOJ.

Ms. Caldwell noted that in 2007, the Medicare Fraud Strike Force was created, placing prosecutors and federal law enforcement at the forefront of investigating and prosecuting, and striking a proactive stance against, healthcare fraud.  Ms. Caldwell suggested that the biggest precipitator of the DOJ’s move to proactively combatting healthcare fraud is that now, rather than relying on CMS data, the DOJ has near-real-time access to the data.  Such access to data allows the DOJ to bring cases more quickly, but, perhaps more importantly, allows the DOJ to identify fraud schemes as they emerge as well as to identify previously-unknown types of fraud schemes.

Nevertheless, Ms. Caldwell lamented that despite recent successes, “Medicare fraud remains a serious drain on our health care system.  In fiscal year 2014, the Justice Department recovered over $3 billion of fraudulent Medicare billings through civil, criminal and administrative actions.”

Ms. Caldwell suggested that in the past, billing Medicare for services which were not provided was the primary healthcare fraud scheme being perpetrated.  However, she describes the latest “frontiers” in fraud “in areas including Medicare Part D, laboratory services, hospital-based services and hospice care.”

More importantly, Ms. Caldwell stated that the DOJ will continue to focus on prosecuting fraud perpetrated by individual physicians, home health care providers, pharmacy owners and medical supply company executives, but emphasized the DOJ’s apparently newly-discovered interest in investigating and prosecuting fraud in “corporate boardrooms and executive suites.”  She stated that in 2014, the DOJ had only a few open corporate investigations, however, as of late last month, there are a dozen active corporate investigations and the “DOJ is steering additional prosecutorial resources to this area.”

Notwithstanding, Ms. Caldwell suggested that the DOJ, in applying the Principles of Federal Prosecution of Business Organizations (the FILIP factors) which are applied in general corporate prosecution matters, will still be applied in corporate healthcare fraud prosecutions, and in particular, that corporations may minimize the effects of a prosecution if they fully cooperate with the DOJ.  Ms. Caldwell noted, however, that simply producing documents in response to a grand jury subpoena will not result in the DOJ agreeing to credit for corporate cooperation, rather “companies seeking credit for cooperation must conduct a thorough internal investigation and turn over all available evidence of wrongdoing to our prosecutors in a timely and complete way. And that evidence must include information about the individuals who committed the crimes, no matter how high those individuals might have been on the corporate ladder.”  More generally, she stated that “[c]ooperation means that a corporation has made an affirmative effort to investigate potential wrongdoing, and that it has turned over the facts uncovered during that investigation in a timely way to our prosecutors.”

Ultimately, healthcare providers of all sizes must be aware that given the DOJ’s, and its federal law enforcement partners’, real-time access to CMS data, and apparent mandate from the White House, federal prosecutors are stepping up the investigation and prosecution of healthcare fraud.  As made clear in Ms. Caldwell’s speech, executives and the corporations they manage are subject to the DOJ’s anti-fraud push, and are presently a prime target for the DOJ.  While the DOJ has indicated that cooperation may serve to minimize certain penalties against a corporation, the DOJ has made clear that cooperation involves thoroughly assisting the DOJ’s prosecution as well as ensuring that all wrongdoers are held accountable – not only those low on the corporate ladder.  Again, given the DOJ’s public pronouncements of its intent to proactively investigate and prosecute all manners of healthcare fraud, all healthcare providers must review and ensure their compliance with applicable federal healthcare statutes.

Questions regarding this article may be sent to Publications@Capehart.com. 

Peer review is the essential process by which physicians critique the medical services provided by their colleagues for the purposes of decreasing occurrences of medical malpractice and increasing the quality of health care, while simultaneously serving as a primary method of evaluating the quality of patient care. Currently, almost all states have enacted peer review privilege statutes to protect the work of medical peer review committees, however, recent cases at the state and federal levels have chipped away at the once-impenetrable privilege that peer review committees had from disclosure during medical malpractice litigation.

Earlier this month, the U.S. District Court in the Southern District of Illinois, in Hall v. Flannery, No. 3:13-cv-914-SMY-DGW (S.D. Ill. May 1, 2015) held that the state’s peer review privilege did not protect from disclosure the so-called “audit trail” of who viewed a patient’s electronic medical record (EMR) and when same was viewed.

The plaintiff in a medical malpractice lawsuit sought the audit trail and metadata associated with the patient’s medical record in discovery to support a legal theory that the patient’s medical records were improperly altered by the defendant hospital. The audit trail and metadata included the date, time, the name of the person who accessed the record, their user ID, and the items that they viewed.

The defendants vociferously contended the peer review privilege protected this information from disclosure. The defendants argued that the audit trail would reveal the names of the individuals, including peer review committee members, who viewed the medical record, and what items in the chart peer review committee members viewed.

The court disagreed with the defendants and explained that the privilege “protects the discussions, comments, and conclusions made during the peer review process, in order to facilitate frank discussion without the fear of legal or professional reprisal in an effort to improve patient outcome, but would not protect subsequent decisions or recommendations that would result from the peer review discussions or information generated prior to the peer review process.” (emphasis added).

More specifically, the court noted that as the medical record itself was discoverable and as the audit trail and metadata were incorporated in those records, the audit trail and metadata were consequently not subject to the peer review privilege.  Moreover, the court found the peer review committee did not generate the data at issue to further its evaluation of the patient’s medical care, but that rather, the audit trail was created “in the ordinary course of a hospital’s medical business . . . [and] is not privileged even if later used by a committee in the peer-review process.”

Ultimately, the court’s recent decision is yet another blow to the peer review privilege, and is consistent with the nationwide trend to limit the privilege.  However, given the court’s sweeping limitation of the privilege to only “discussions, comments, and conclusions made during the peer review process,” hospitals and providers must be ever cognizant that data created prior to and subsequent to the peer review are not necessary protected from disclosure and that presumably all metadata automatically created by the hospital’s computer system, with respect to a patient’s medical record, are discoverable.

Questions regarding this article may be sent to Publications@Capehart.com.