High court’s hands-off action threatens peer review, but effect may be limited
District court order stands for hospital to turn over its peer review files
Peer review protection may be threatened significantly by recent action in the U.S. Supreme Court, but don’t panic just yet. The threat appears to be limited to certain cases in federal courts for now, but the impact could spread to more common venues and make the defense of malpractice lawsuits much more difficult.
Health care professionals reacted immediately to the news from the Supreme Court, fearing it would eliminate the legal protections that make it possible for them to honestly and fully discuss medical matters behind closed doors, without worrying about whether their comments will come back to haunt them in court. Some of that fear appears to be justified, experts say. The Supreme Court action could represent the first major blow to a system that nearly everyone agrees has worked well to improve the practice of medicine.
One risk manager says she fears the court’s action could signal the end of peer review altogether. Jane Bryant, MHSA, FASHRM, director of risk management at Oconee Memorial Hospital in Seneca, SC, says the real impact of the Supreme Court action won’t be known for a while, but she worries that doctors will clam up as soon as they hear about any threat to peer review confidentiality.
"Doctors were the hardest group to pull in and convince to truly take a look at themselves and be critical," she says. "It only worked because we assured them that it would not result in punishment, only the enhancement of care. We’ve told them everything is protected, and I hate to back down on that."
How much you need to back away from that promise is still in question. There is reason to be concerned about the confidentiality of peer review, but the threat seems isolated for the moment to certain cases in federal court and not necessarily every run-of-the-mill malpractice case. The threat is based on action taken by the U.S. Supreme Court in June, when the justices refused to intervene in a California case brought against an emergency room doctor in Clear Lake, CA. On Feb. 25, 1996, Wolfgang Schug, MD, was the only doctor in the emergency room of Redbud Community Hospital when Rhoda Thomas and David Burrows brought in their 11-month-old son, Cody, with vomiting, fever, and diarrhea.
Schug allegedly told the parents to take the baby to another hospital 55 miles away because it had a pediatric specialist on duty. Once there, the baby went into a coma and died of infection and dehydration. Schug was acquitted on state criminal charges in 1998, but the child’s parents sued the doctor and the hospital for damages under the federal Emergency Treatment and Active Labor Act (EMTALA), which prohibits the transfer or refusal of unstable patients, mainly with the intention of preventing hospitals from turning away patients without insurance. Since EMTALA is a federal statute, that put the parents’ case in a federal court instead of the state court where most malpractice cases end up.
That jurisdictional difference plays a key role in the controversy. In 1998, a federal judge in San Francisco ruled that the federal statute requires openness and broad disclosure of information that cannot be hindered by state law that makes peer review information confidential. Though Califor nia, like every other state, has a law that declares peer review information off limits to outsiders including plaintiffs’ attorneys, U.S. District Court Judge Susan Illston said "the state privilege does not apply in federal court." She ordered the hos pital to turn over its peer review files involving Schug.
Many health care organizations came to the hospital’s defense and aided in appealing the decision all the way to the Supreme Court. The California Medical Association, the California Academy of Family Physicians, the California Health Care Association, and the American Medical Association all backed the hospital in challenging the district court’s ruling. In 1998, the U.S. 9th Circuit Court of Appeals refused to review the judge’s order.
On June 7, 1999, the U.S. Supreme Court also refused to review the case. Such a refusal by the Supreme Court often is interpreted as tacit approval, but that is not necessarily the case. The immediate effect, however, is that the district court’s ruling stands, and the hospital must turn over the peer review records. The hospital indicated it would comply with the order.
Only federal cases affected at this point
Any chink in the armor of the peer review process is enough to make most risk managers start worrying, but the Supreme Court action may be only a tiny dent at this point. Another blow directed at that dent may pose a danger, but there still is plenty of protection for peer review, according to Richard Boone, JD, an attorney in Vienna, VA, who specializes in defending medical malpractice lawsuits.
For starters, Boone points out that the district judge’s ruling applies only to federal courts. "The number of lawsuits brought in federal court is a tiny fraction of all the lawsuits brought in a given year," he says. "Just because the court has said that federal law supersedes state law in regard to peer review privacy does not mean that state laws are invalid. This affects only federal cases."
And depending on how judges interpret the court’s action, it could have even less impact. Judges have substantial leeway in how they apply another court’s ruling to cases before them, so Boone says other judges may decide to interpret the ruling very strictly. They could determine, for instance, that the ruling applies only to EMTALA cases in California.
"All we know for sure is that if you have an EMTALA case in the 9th Circuit, they will allow access to peer review material," he says. "It may have some impact on the other 99% of cases, but not nearly as much as plaintiffs’ lawyers are hoping it will."
Sympathy may have moved judge
Though he is not familiar with the details of the California case, Boone speculates that the 9th Circuit judge made the peer review records available because she was sympathetic to the plight of the parents. He says he has seen many situations in which the judge provides an opening to the plaintiff that might not seem justified by the law only because the plaintiff was pitiful and didn’t have much of a chance any other way.
"This ruling establishes that, if you’re a hospital in California and you screw up royally and try to hide that behind peer review shield statutes, somehow the judge is going to find a way around the statutes to give the plaintiff a decent shot at getting the case before a jury," Boone speculates.
If you’re a risk manager in California, you’ve got more to worry about than risk managers elsewhere. Judges across the country are not obligated to apply the ruling, and Boone suggests that most will not want to. Any judge handling malpractice and similar cases will be familiar with the peer review process, and most will see the inherent value in keeping it confidential, he says. They will not want to undermine the peer review process, he says.
"This was clearly a dangerous decision, but I predict that in five years it will be something of a curiosity," Boone says. "It won’t be followed all that stringently because peer review is a good thing, and it doesn’t work if every rumor and groundless charge against a physician is made public. Judges know that."
(See p. 92 for comments from the president of the American Society for Healthcare Risk Management. She partly disagrees with Boone, saying the risk is great even though the decision applies to federal courts.)
Risk managers may see one possible effect of the ruling in malpractice lawsuits. Because the ruling is applicable only in federal court, plaintiffs’ attorneys may grasp at any excuse to file a case in federal court so they can argue for access to the peer review records. They would not be guaranteed success on that issue, of course, but they can’t even make the argument unless they get the case in a federal court.
Generally, there are only two ways a case can end up in a federal court instead of a state court, Boone says. Federal courts may handle a case if the plaintiff and defendant are in different states or if the matter involves a federal law.
Bryant, the South Carolina risk manager, says she is only somewhat placated by assurances that the ruling affects only federal cases. She notes that having peer review information admitted in court would not be completely bad because the information could include facts and opinions that support the defendant. Currently, such positive information cannot be used in court without also making the negative infor mation available.
We have to take every threat seriously’
Nevertheless, she says, she fears that any significant change in the confidentiality provisions may get back to physicians who won’t care so much about the details of how the ruling applies or doesn’t apply to their situations. All they will hear is that this much-ballyhooed peer review process isn’t as confidential as they were prom ised. The most important task for risk managers may be educating physicians to avoid that overreaction, she suggests.
Emphasize that the threat to peer review confidentiality appears low right now, she says, even if you think that might change in the future.
"I’m a big believer in the idea that if you start with a crack in the door, that could lead to much bigger problems," she says. "Peer review is so important to improving health care quality that I think we have to take every threat seriously. It’s good if this doesn’t pose so much of a threat right this minute, but it still makes me worry about what might be next."
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