Supreme Court Evaluates Scope of Hospital “Peer Review Privilege”

Feb 06, 2015

Saurbier

On January 13, 2015, the Michigan Supreme Court heard oral argument in Estate of Krusac v. Covenant Medical Center, a case that could reshape the scope of the peer-review privilege in Michigan.

The peer review statutes, MCL 333.20175 and MCL 333.21515, state that data and knowledge collected for or by hospital committees assigned a review function “shall not” be available for court subpoena. The “peer review privilege” is designed to promote candid, thorough peer-review assessments of hospital practices, free from the specter of intrusive public involvement or litigation. Feyz v. Mercy Mem’l Hosp., 475 Mich 663 (2006).

In the Estate of Krusac v. Covenant Medical Center, Mrs. Krusac began falling off the examination table after a cardiac procedure. According to the hospital, the staff intercepted Mrs. Krusac and cradled her to the ground. Mrs. Krusac’s estate, however, contends that she fell off the table and directly onto the floor.

Immediately after the event, one of the attending nurses completed an incident report stating that Mrs. Krusac “rolled off table to floor,” and gave it to her nursing supervisor, whereas the procedure note documented that plaintiff “fell,” without any further detail.

After the incident, Mrs. Krusac allegedly developed neurogenic pulmonary edema, which purportedly worsened her cardiac condition. About four weeks after the incident, she experienced acute respiratory arrest and died, and her estate sued the hospital for medical malpractice.

The estate sought production of the incident report through discovery, but the hospital claimed the report was prepared for peer review purposes and was thus privileged. The trial court reviewed the incident report in chambers and found that the first page was a factual recitation of the fall, whereas the remainder of the report was analytical in nature. Based largely on the recent decision of the Michigan Court of Appeals in Harrison v. Munson Health Care, Inc., 304 Mich App 1 (2014), the trial court ordered the production of the first page of the incident report, finding that the first page contained “objective facts gathered contemporaneously with an event” and, thus, was not covered by the peer review privilege.

The Michigan Court of Appeals declined the hospital’s initial appeal. However, the hospital then appealed to the Michigan Supreme Court, which accepted review and requested briefing on the following issues: 1) whether the trial court correctly held that “objective facts gathered contemporaneously with an event do not fall within the definition of peer review privilege,” and 2) whether the Michigan Court of Appeals in Harrison v. Munson Healthcare correctly ruled that the factual background portion of a hospital’s peer review report was discoverable. Amicus briefing was submitted on behalf of both the appellant and the appellee from a wide range of organizations, including the Michigan Health and Hospital Association, Michigan Defense Trial Counsel, Michigan Society of Healthcare and Risk Management, and Michigan Association for Justice, among others.

Attorney Mark Granzotto argued for the plaintiff, asserting that medical information is being “hidden” in incident reports, that hospitals have a statutory obligation to keep a complete record of observations made and treatment provided, and that hospitals should not be able to pick and choose whether to include information in the medical chart or only in peer review materials, thereby making it inaccessible. He argued that MCL § 333.20175(8), which creates the peer review privilege, and MCL § 333.20175(1), which states that a hospital “shall keep and maintain a full and complete record of tests and examinations performed, observations made, [and], treatments provided,” must be read together, and that subsection 1 would be rendered meaningless if a hospital is permitted to withhold “observations made” by placing them in a peer-review document.

Attorney Thomas Hall argued for the hospital and asked the Supreme Court to reverse the rulings in Krusac and Harrison, emphasizing the sanctity of the peer review privilege, which is designed to “enhance and encourage the thorough, honest and effective communication among all involved, if there is…[an]…untoward event that happens for any reason.” He asserted that MCL § 333.20175(1) and MCL § 333.20175(8) create independent, as opposed to interdependent, duties.

Some of the highlights of the session include the following:

Justice Bridget McCormack inquired whether a hospital can simply stamp “peer review” on documents and make them undiscoverable. Hall responded by explaining that trial judges need to examine the process by which the materials were gathered: “A plan has to be in place from an administrative standpoint … so that a report is prepared.”

Justice Robert Young asserted that there is no textual basis for arguing a factual exception to the peer review privilege, and that MCL § 333.20175(1) and MCL § 333.20175(8) create independent duties: MCL § 333.20175(1) is “an obligation of a hospital to document treatment of patients. It doesn’t create a litigation remedy…It doesn’t strike me as being related to an independent obligation on the hospital to investigate activities that threaten health.”

Relying on MCL § 333.20175(1), Granzotto argued: “[t]he facts have to be accessible to the individual patient. If you have a record of an observation, can the hospital put that observation into a document they are going to ascribe as peer review and not allow any accessibility?”

When asked what recourse a plaintiff would have if a hospital failed to document observations in the medical record, Hall asserted that the “statute, such as it is, enacted by the legislature, is not written to accommodate plaintiffs in medical malpractice or civil litigation. It is written in accordance with our legislature’s chosen public policy to try to protect the sanctity of healthcare and advance it.”

Justice Stephen Markman expressed concern that some of the material provided to the peer review committee was not also part of the medical record: “Should we care about the absence of information from the medical report, even if it properly belonged there?”

Justice Mary Beth Kelly asserted that the medical records of a hospital should include details about patient care, and noted: “It’s passing strange in this case that the only notation of the [plaintiff’s] fall is that the ‘patient fell off table,’” and “[y]et in the peer review report, we have a nurse’s contemporaneous statement.”

The justices raised an interesting question of whether a hospital waives the privilege by using a peer review document for another purpose—for instance, by providing it to a defense attorney for litigation purposes.

Near the end of the session, Justices Viviano and Young questioned whether, if adopted, Granzotto’s position would require trial judges to conduct in-camera reviews of peer review documents in nearly every case and disclose any factual observations contained therein. After being pressed on this point, Granzotto ultimately acknowledged that it would.

It is anticipated that the Michigan Supreme Court will issue a decision in the coming months, and regardless of the outcome, the opinion should provide some much needed clarity regarding the scope of the peer review privilege. Based on the tenor of the session, it appears that the Court may ultimately uphold Harrison or possibly tailor the scope of the privilege in some other manner.

Please give us call if you would like to further explore this issue. We would be more than happy to discuss litigation strategies in light of the prevailing uncertainties.

A video of the proceedings can be accessed at:

http://www.michbar.org/courts/virtualcourt.cfm

An audio recording of the proceedings can be accessed at:

http://courts.mi.gov/Courts/MichiganSupremeCourt/oral-arguments/2014-2015/Pages/149270.aspx