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Kentucky High Court Disregards Tibbs Decision, Confirms Federal Privilege for Documents Residing in Provider’s PSES, so long as External Requirements Otherwise Met

September 29, 2016

On September 22, 2016, The Supreme Court of Kentucky issued a noteworthy opinion in Baptist Health Richmond, Inc. v. Agee1 that provides progressive support for healthcare providers currently participating, or contemplating participation, with a Patient Safety Organization (PSO) asserting federal privilege for documents residing within their Patient Safety Evaluation System (PSES). The decision rejects the same Court’s unfavorable and prior decision in Tibbs v. Bunnell,2 issued in August 2014, which held that information subject to dual recordkeeping or reporting requirements under state law could not become protected Patient Safety Work Product (PSWP). The impact of Agee encourages reporting to a PSO and confirms that as long as external reporting obligations have been met, there is no reason for a trial court to interfere with a provider’s documents that have been properly collected and submitted to a PSO.

Background

The Kentucky Supreme Court’s Tibbs decision in 2014 was unfavorable for not only Kentucky providers contracting with PSOs, but also for providers nationwide watching the development of PSO litigation. Tibbs involved a plaintiff’s discovery request for an incident report, which prompted the provider’s objection that the report was properly collected within the provider’s PSES and was therefore privileged from production pursuant to the Patient Safety and Quality Improvement Act of 2005 (PSQIA) and its attendant regulations. Other relevant Kentucky law required that certain administrative reports be established and maintained by the provider, including incident investigation reports. The Hospital relied on the plain language of the PSQIA that provides protection “[n]otwithstanding any other provision of Federal, State, or local law”3 as part of its privilege argument. The Kentucky Supreme Court ruled that the report was not protected by the PSQIA because the collection and maintenance of incident reports was mandated by state law and, therefore, information “normally contained” in an incident report was not privileged under the PSQIA. The Tibbs decision, and its appeal to the United States Supreme Court, was the subject of national attention and multiple amicus briefs were filed by many national stakeholders, including the Joint Commission and the American Hospital Association. The Supreme Court of the United States denied the Tibbs petition for writ of certiorari in June 2016.

Agee involved similar background facts. Plaintiff propounded discovery requesting “incident reports, investigation reports, root cause analysis reports, Joint Commission reports, Medicare reports, Medicaid reports, peer review reports, and reports of any nature” relating to the plaintiff’s decedent. The Hospital identified responsive documents, but declined to produce some documents on the basis that they were PSWP, and therefore privileged by the PSQIA. The trial court granted plaintiff’s motion to compel, holding that only documents that were collected, maintained or developed for the “sole purpose” of submitting to a PSO were privileged by the PSQIA. The Hospital petitioned the Kentucky Court of Appeals for a writ of prohibition to keep the trial court from enforcing its order to produce the documents at issue. The appellate court denied that petition, affirming that the “sole purpose” test was consistent with Tibbs. The Hospital appealed from that denial to the Kentucky Supreme Court.

Ruling and Analysis

The Kentucky Supreme Court vacated the trial court’s order to produce and abandoned some of the Court’s prior reasoning and analysis in Tibbs. Agee confirms while a provider may not use the privilege of the PSQIA to circumvent state and regulatory reporting requirements, it may collect information within the PSES that simultaneously complies with the PSQIA and regulatory requirements. It is only when external reporting obligations are not met that a Kentucky court can access a provider’s PSES. Agee does not adopt the “sole purpose” standard mentioned in the lower court’s opinion.

Agee distinguished its reasoning and analysis from Tibbs. The plurality opinion in Tibbs explained that information in an incident report, even if relevant to the Hospital’s endeavors under the Act, could not be patient safety work product since Kentucky law mandated the collection of incident reports. Tibbs directed the trial court to separate the information “normally contained in an incident report” from material “properly privileged” under the Act and allow discovery of the non-privileged information. On the other hand, the dissenting judges in Tibbs contended that allowing judges to sift through federally protected PSWP would frustrate the intent of the PSQIA and its strict prohibitions on unauthorized disclosures of PSWP. Agee appreciated the Tibbs’ court’s dissenting observation that Hospitals have little incentive to collect and report patient safety information if the information could later be compelled in discovery, and that the PSQIA encourages participation partly by promising protection of reported information. In the dissent’s view, if the information was within the PSES, as long as it had not been removed or otherwise existing separately outside the PSES, it was privileged from discovery.

Agee states it intends to provide a middle ground from the differing views in Tibbs, primarily holding that if a provider fulfills its statutory and regulatory reporting requirements, there is no need for a court to interfere with the provider’s PSES. Agee does not condone the practice ordered by Tibbs for a trial court judge to sort through a provider’s PSES in camera as a part of every discovery dispute to determine what information would normally be on a state report. Agee agrees that this practice would discourage provider participation.

Implication

Agee and its new privilege analysis respects the confidentiality and privilege protections promised to providers participating in a PSO who have otherwise completed their state regulatory reporting requirements. This is particularly a positive step for those providers who have created a system where reports required by external statutory or regulatory requirements are collected and maintained separately from the PSES, allowing the documents to be readily available for reporting where necessary, separate from the PSO and not eligible for PSWP labeling. Importantly, Agee appears to support the practice of allowing a provider to collect information within its PSES, even if the “collection” or required activity is also required by state law, as long as the provider is otherwise fulfilling its regulatory reporting requirements. It is when a provider fails to comply with its reporting obligations that documents within its PSES become vulnerable to the trial court’s review. Agee orders that a provider bear the burden to prove that external statutory and regulatory requirements have been met. If the provider fails to meet this burden, the party seeking the information bears the burden of establishing that the information is contained in a state-mandated report. Agee is not binding on courts outside of Kentucky, but could prove persuasive on other pending PSO decisions, including Southern Baptist Hosp. of Fla., Inc. v. Charles,4 currently pending before the Florida Supreme Court on similar issues.

If you have questions relating to recent PSO litigation, or any other aspects of PSO development, strategy, implementation, and policies, please contact a member of HDJN’s Patient Safety & PSOs Team.

1. Baptist Health Richmond, Inc. v. Agee, 2016 Ky. LEXIS 430 (Ky. Sept. 22, 2016).
2. Tibbs v. Bunnell, 448 S.W.3d 796 (Ky. 2014).
3. 42 U.S.C.S. § 299(b)-22(a).
4. Southern Baptist Hosp. of Fla., Inc. v. Charles, 178 So. 3d 102 (Fla. Dist. Ct. App. 1st Dist. 2015).

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