Recently, the Michigan Court of Appeals upheld a sanction of almost $54,000 imposed against a hospital and its defense attorney in a surgical Bovie burn case. In Harrison v Munson, the trial court imposed the sanction (which was the amount plaintiff incurred in prosecuting the action) after it reviewed an incident report in camera and decided the defense presented by the hospital was inconsistent with “facts” contained in the incident report. The ensuing maelstrom was caused by a single phrase used by a nurse drafting the incident report: “During procedure Bovie was laid on drape, in a fold.” Although the trial court determined the incident report was protected from disclosure by the peer review privilege, it still used its own interpretation of the incident report facts to assess the validity of the defense presented. The trial court concluded the defense violated certain ethical rules, and imposed the sanctions as punishment.
The Court of Appeals disagreed with the trial court’s determination that the entire incident report was privileged. After holding that any challenge to the assertion of a hospital’s peer review privilege requires an in camera review, the Court made a differentiation between “records, data, and knowledge” gathered to permit review of professional practices and “factual information objectively reporting contemporaneous observations or findings.” The latter, according to Court of Appeals, is not protected by the peer review privilege. The Court extended protection to the reviewer’s conclusions, but held that the peer review privilege did not apply to the nurse’s narrative of contemporaneous observations.
The Court of Appeals next determined that risk management should consult peer review documents for factual information, despite the privilege. Although the Court of Appeals never explained how or why the Hospital could be held to the factual interpretation of an employee, it nonetheless upheld the sanction award imposed for purportedly presenting a defense inconsistent with “known facts.”
The opinion raises significant questions: Does your hospital have sufficient procedural documentation to support assertion of peer review privilege with respect to incident reports? Should risk managers draft incident reports as opposed to staff or employees? Must a hospital (and its attorney) take as true an employee’s recollection of events as stated in an incident report? Should or must a hospital disclose incident reports to its attorney in a medical malpractice case? How can employees be trained to limit reports to actual facts, and not conclusions or opinions?
These considerations demonstrate the predicament in which the Harrison opinion places risk managers. On the one hand, a key role of the risk manager is to oversee a process that includes obtaining witnesses’ interpretations of events (i.e., the “facts”) to assist with determining whether policies and procedures were violated and/or need to be modified or improved. This ruling would seem to suggest that the risk manager is now placed in a position of having to anticipate, if not carefully shepherd, the later use of these documents in litigation. Ironically, this dilemma is exactly what was sought to be avoided by enacting the statutory peer review privileges and pursuing a public policy that encourages fact-based improvements in patient safety.
Hopefully, the Michigan Supreme Court will reverse the Court of Appeals’ decision and reaffirm the importance of candid and protected peer review proceedings. In the meantime, however, we can expect an increase in incident report requests by plaintiffs, evidentiary hearings and in camera reviews. So how can risk management fulfill its responsibility to improve patient safety while at the same time guarding against detrimental incident report use in future litigation? Here are some suggestions:
If you would like a copy of the opinion or would like to discuss further, please feel free to contact us.