Peer review is a critical function for any healthcare provider seeking to ensure the quality of services it provides. Of course, peer review is frequently premised on facts and circumstances for which litigation is pending or imminent and the peer review process may result in evidence that can make or break an enterprising Plaintiff’s case. Iowa’s peer review statute (Iowa Code § 147.135) recognizes this tension and provides, in operative part:
Peer review records are privileged and confidential, are not subject to discovery, subpoena, or other means of legal compulsion for release to a person other than an affected licensee or a peer review committee, and are not admissible in evidence in a judicial or administrative proceeding other than a proceeding involving licensee discipline or a proceeding brought by a licensee who is the subject of a peer review record and whose competence is at issue.
Iowa’s appellate courts have issued several opinions in the past few years interpreting the peer review statute or similar protections set forth in Iowa law. While these opinions affect the practice of healthcare lawyers and trial lawyers, they also have practical impacts for the peer review activities performed by providers.
Recent developments in Iowa case law
The first significant recent opinion issued was Cawthorn v. Catholic Health Initiatives Iowa Corp., 743 N.W.2d 525 (Iowa 2007) (“Cawthorn I”), in which the Iowa Supreme Court was asked to determine if evidence of an Iowa Board of Medical Examiners investigation into the defendant physician’s medical practice was admissible in evidence in support of Plaintiff’s claim for damages against Defendant Mercy Medical Center. Plaintiff claimed the evidence was admissible, in part, as showing Mercy should have been aware through its credentialing process that the physician was unqualified to perform the surgery at issue.
Mercy argued the evidence was confidential under Iowa Code section 272C.6(4) (setting forth a peer review privilege for IBME discipline activity) and inadmissible under Iowa’s peer review statute. The trial court disagreed and permitted evidence of the IBME investigation. The supreme court reversed the trial court on appeal, confirming that IBME investigative materials and information are not admissible in evidence in a judicial or administrative proceeding (other than the licensee disciplinary proceeding) under section 272C.6(4) and further concluding that Mercy had suffered prejudice as a result of the trial court’s ruling, entitling Mercy to a new trial. The court’s ruling under section 272C.6(4) made it unnecessary to reach Mercy’s argument under Iowa’s peer review statute.
Two years later, in Day v. Finley Hospital, 769 N.W. 2d 898 (Iowa Ct. App. 2009), the Iowa Court of Appeals encountered a critical peer review question: does a provider’s hospital credentialing file fall under the protection of the peer review statute? One of Plaintiff’s causes of action in Day was for negligent credentialing against the hospital. During the discovery phase of the case, Plaintiff repeatedly sought to acquire the defendant physician’s credentialing file to prove this claim. The trial court rejected Plaintiff’s attempts, citing Iowa’s peer review statute.
Plaintiff eventually appealed this ruling, but was rebuffed again as the court of appeals concluded the credentialing file was protected under the peer review statute. Notably, in so ruling, the court also rejected two key theories asserted by Plaintiff: (a) that he was at least entitled to discover documents gathered by the hospital as part of the credentialing process, even if documents generated during the process would be off limits and (b) that the existence of a negligent credentialing cause of action logically entitled a plaintiff to discover the key evidence that would support such a claim, the credentialing file. On this latter point, the court noted Plaintiff’s logic failed because the negligent credentialing cause of action has not yet been established by the Iowa legislature.
About one year after Day, in Orgavanyi v. Henry County Health Center, 2010 WL 5394785 (Iowa Ct. App. Dec. 22, 2010), the court of appeals again encountered the peer review statute in ruling on whether the plaintiff in a medical malpractice case was entitled to discover a “patient safety report” prepared by the hospital’s risk manager. The trial court compelled the hospital to disclose the report to Plaintiff, reasoning the hospital had failed to carry its burden to show the report met the definition of “peer review records” because the report was not “in the possession of a peer review committee or an employee of a peer review committee” and thus fell outside the peer review statute.
On appeal, the Iowa Court of Appeals upheld the trial court’s ruling after determining the risk manager never gave the patient safety report to a peer review committee. While acknowledging that many Iowa hospital employees, like the risk manager, must wear “two hats” in serving more than one role for a hospital, the court also observed, “Loss prevention, while certainly laudable, is not the same as peer review and a loss prevention report, under Iowa law, cannot be deemed privileged unless at a minimum it is in the hands of a peer review committee.” Accordingly, based of the way the report was used and maintained by the hospital, no peer review privilege attached.
The Iowa Supreme Court’s newest opinion: Cawthorn II
The three opinions discussed have now been capped by Cawthorn v. Catholic Health Initiatives Iowa Corp. (“Cawthorn II”), an opinion issued by the Iowa Supreme Court last Friday, December 2, 2011.
As noted, in Cawthorn I, the supreme court had concluded evidence of an Iowa Board of Medical Examiners investigation should not have been admitted in evidence at trial and then sent the case back to the trial court for a new trial. Also in Cawthorn I, Defendant Mercy Medical Center had used documents in the physician’s credentialing file to defend itself. In the interim, the court of appeals decided the Day case, determining that the contents of a hospital credentialing file fall under the strict protections of Iowa’s peer review statute.
Before the Cawthorn I case was tried again, Mercy adopted a new strategy based on Day and argued in a motion seeking dismissal of the case that the credentialing file was confidential and inadmissible in evidence. Plaintiff argued the law of the case doctrine – the principle that an issue once decided by a trial court within the confines of a case and not challenged on appeal is deemed established for the case – meant Mercy could not use the file to its advantage in Cawthorn I and then turn around and keep it out of evidence in Cawthorn II. The trial court disagreed, as did the supreme court on appeal, which noted the peer review privilege issue had not been addressed in Cawthorn I and thus was not established law of the case.
Perhaps more importantly, the supreme court went on to consider whether Mercy’s disclosure of certain documents from the physician’s credentialing file at the trial court level in Cawthorn I served as a waiver of the peer review privilege such that the records should be admissible in the new trial. In setting forth its analysis on this point, the court began by reinforcing the “three basic restrictions” created by the peer review statute: that peer review records are (1) “privileged and confidential,”
(2) “not subject to discovery” except to a licensee or peer review committee, and (3) “subject to exceptions not at issue here, . . . ‘not admissible in evidence.’” Accordingly, the court held that while Mercy may have waived the peer review privilege by its prior conduct, it had done nothing to affect the rule against admissibility, which persisted and barred evidence from the credentialing file from being admitted in the new trial. Without the evidence from the hospital credentialing file, the Plaintiff was incapable of proving his case, resulting in a total victory for Mercy Medical Center.
Notably, the Plaintiff in Cawthorn II asked the supreme court to consider whether the court of appeals was correct in Day in determining credentialing files fall under the peer review statute. Despite this invitation, the supreme court declined to reach the issue because it had not been adequately addressed by Plaintiff in his appellate briefing. Thus, the Iowa Supreme Court took a pass on this critically important issue, instead leaving in place the Iowa Court of Appeal’s opinion in Day, which held that credentialing files are confidential peer review records.
Additionally, while all the justices concurred in the decision in Cawthorn II, Justice Wiggins specially concurred, stating that he agreed with the outcome, but disagreed with the analysis of Iowa’s peer review statute “under terms of common law privilege and waiver.” Justice Wiggins argued that when the legislature uses the phrase “privileged and confidential,” as it does in Iowa’s peer review statute (and in at least fifteen other Iowa statues), “the legislature intended that these statutes make the protected material unavailable to any person and that no party or court can waive the protection afforded in these statutes.”
Conclusion
Peer review is essential to guaranteeing quality healthcare. Iowa’s peer review statute is a critical protection for the peer review process. At the same time, the legal standards relating to the peer review statute in Iowa are constantly evolving. As displayed in Orgavanyi in 2010, the consequences of failing to understand and properly implement the peer review process under the statute and related case law can be catastrophic. Therefore, those involved in peer review should take time to carefully implement peer review processes in accordance with the statute. The Iowa Supreme Court’s recent peer review case, Cawthorn II, provides further support for the protection of peer review records, confirming their inadmissibility in court. If you have any questions about the peer review statute and its interpretation or implementation, please feel free to contact us directly.