DOCKET NO. 00-2423


IN THE

United States Court of Appeals

FOR THE FOURTH CIRCUIT


ASHUTOSH RON VIRMANI, M.D.,
Plaintiff-Appellee,

v.

NOVANT HEALTH, INC.,
Defendant-Appellant,


JOINT BRIEF OF NORTH CAROLINA MEDICAL SOCIETY, NORTH CAROLINA HOSPITAL ASSOCIATION, AMERICAN MEDICAL ASSOCIATION, AND AMERICAN HOSPITAL ASSOCIATION AS AMICI CURIAE IN SUPPORT OF APPELLANTS AND SUPPORTING REVERSAL OF THE ORDER OF THE DISTRICT COURT


ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION

 

Julian D. Bobbitt, Jr.
Sean A. Timmons
SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, LLP
2500 First Union Capitol Center
Post Office Box 2611
Raleigh, North Carolina 27602-2611
(919) 821-1220

Counsel for Amici

 


Table of Contents

I.

Introduction

1
II. Identities and Interest of Amici 1
  A. Identities of Amici 1
  B. Interest of Amici 3
III. Question Presented 4
IV. Argument 4
  A. Summary of Argument 4
  B. Effective Peer Review is Essential to Quality Health Care 6
  C. Effective Peer Review Requires Confidentiality 8
  D. The Health and Safety of Patients is a Compelling Public Interest 12
V. Conclusion 15



TABLE OF AUTHORITIES

Cases Page
Bredice v. Doctors Hosp., Inc., 50 F.R.D. 249 (D.D.C. 1970), aff'd., 479 F.2d 920 (D.C. Cir. 1973) ..... 14
Cameron v. New Hanover Mem'l. Hosp., 58 N.C. App. 414, 293 S.E.2d 901 (1982), cert. denied, 307 N.C. 127, 297 S.E.2d 399 (1982)..... 7
Jaffee v. Redmond, 518 U.S. 1, 116 S.Ct. 1923, 135 L.Ed.2d 337 (1996)..... 13
United States v. Harris Methodist Fort Worth, 970 F.2d 94 (5th Cir. 1992)..... 14
Univ. of Pa. v. EEOC, 493 U.S. 182, 110 S.Ct. 577, 107 L.Ed.2d 571 (1990)..... 13
Virmani v. Presbyterian Health Servs. Corp., 350 N.C. 449, 515 S.E.2d 675 (1999), cert. denied sub nom. Knight Pub. Co. v. Presbyterian Health Servs. Corp., 120 S.Ct. 1452, 146 L.Ed.2d 337 (2000)..... 9
Weekoty v. United States, 30 F.Supp.2d 1343 (D.N.M. 1998)..... 9, 14
Statutes  
N.C. Gen. Stat. § 131E-75(b) (1999)..... 7
N.C. Gen. Stat. § 131E-95 (1999)..... 7
Other Authorities  
Fed. R. Evid. 501 ..... 12-13
American Hospital Association, Immunity for Peer Review Participants in Hospitals (1989)..... 6
Charles David Creech, Comment, The Medical Review Privilege: A Jurisdictional Survey, 67 N.C. L. Rev. 179 (1988)..... 9, 10
Jeanne Darricades, Comment, Medical Peer Review: How is it Protected by the Health Care Quality Improvement Act of 1986?, 18 J. of Contemp. L. 263 (1992)..... 6, 9, 10
JCAHO, 2000 Hospital Accreditation Standards (2000)..... 7
Christopher S. Morter, Note, The Health Care Quality Improvement Act of 1986: Will Physicians Find Peer Review More Inviting, 74 Va. L. Rev. 1115 (1988)..... 6, 9, 10
Paul L. Scibetta, Note, Restructuring Hospital Physician Relations: Patient Care Quality Depends on the Health of Hospital Peer Review, 51 U. Pitt L. Rev. 1025 (1990)..... 8, 10, 11

Brief of Amici Curiae

I. Introduction

This brief of amici curiae is filed in support of the appellant, Novant Health, Inc. ("Novant"), and is submitted on behalf of the North Carolina Medical Society, the North Carolina Hospital Association, the American Medical Association and the American Hospital Association (collectively, "Amici"). Amici urge this Court to reverse the District Court's order (i) denying Novant's motion for a protective order barring discovery of peer review materials and confidential medical records as privileged; and (ii) granting, in part, the motion of appellee Ashutosh Ron Virmani, M.D. ("Dr. Virmani") to compel discovery of peer review materials and confidential medical records.

This brief is submitted as an attachment to the motion of Amici for leave to file a brief of amici curiae pursuant to Fed.R.App. P. 29(b).

II. Identities and Interest of Amici

 

A. Identities of Amici



 

The North Carolina Medical Society ("NCMS") is a voluntary membership association of North Carolina physicians and physicians' assistants with more than 11,000 members. NCMS was founded in 1849 and is dedicated to fostering the advancement of medical science, maintaining high ethical standards, and promoting all aspects of the profession with the goal of relieving suffering and improving the health and lives of the citizens of North Carolina.

The North Carolina Hospital Association ("NCHA") is a trade association that represents hospitals throughout North Carolina, with approximately 150 member hospitals. The NCHA's mission is to promote community health status and delivery of quality health care through leadership, information, education, and advocacy in members' interests and for public benefit.

The American Medical Association ("AMA"), an Illinois non-profit corporation, is an association of approximately 300,000 physicians who practice throughout the United States, including in North Carolina. 1 The AMA was founded in 1847 to promote the science and art of medicine and the betterment of public health, and these still remain its core purposes. Its members practice in all fields of medical specialization, and it is the largest medical society in the United States.

The American Hospital Association ("AHA") is the primary national membership organization for hospitals in the United States. The AHA's mission is to promote high quality health care and health services through leadership and assistance to hospitals in meeting the health care needs of their communities. The AHA's membership includes approximately 5,000 hospitals, health systems, networks, and other providers of care, including hospitals and health systems in North Carolina.

 

B. Interest of Amici



 

In its orders compelling discovery of peer review materials and denying a protective order, the District Court dismissed the idea that any public benefit was gained through maintaining the confidentiality of medical review processes.

The members of NCMS, NCHA, AMA and AHA are engaged in peer review activities and in the delivery of health care services to patients on a daily basis. Amici are therefore in a unique position to speak to the important public interest served by maintaining the confidentiality of medical review proceedings. Amici do not dispute that the availability of appropriate evidence in civil cases of all kinds, including §1981 actions, is important. Amici contend that abrogation of the peer review privilege will, however, have an adverse effect on the interest of citizens of North Carolina and the United States in the delivery of safe, quality health care. Amici respectfully maintain that the safety of the public is a sufficiently compelling interest to outweigh, in this context, even the need for probative evidence in a discrimination case.

The interest of Amici in this case is to protect the benefits of peer review for the general public. The participation of Amici in developing the concept of peer review privilege, and the participation of the various members of these organizations on a practical level, give Amici a unique spectrum of experience and a depth of specific knowledge on this issue.

III. Question Presented

In its Order of September 22, 2000, the District Court certified the following question for review:

 

1. Whether a federal district court sitting in North Carolina should recognize a medical review privilege in a discrimination case brought under 42 U.S.C. §1981.

 



 

September 22 Order at 4.

IV. Argument

 

A. Summary of Argument

 



 

Amici argue that the District Court erred by ruling that the interests protected by the medical review privilege are insufficient to outweigh the need for open-ended discovery in this case. Amici further argue that assuring patients in North Carolina and the United States safe and effective medical care compels preservation of the peer review privilege in this case.

Effective peer review is essential to ensuring and improving quality health care for patients. Peer review requires that physicians evaluate the competence of other physicians. The peer review process will only work, however, if physicians are willing to review each other and if the reviewing physicians are in a position to engage in completely frank and candid exchanges with respect to the physician under review.

Unfortunately, there are substantial barriers to the participation of physicians in medical review activities and especially to the candid exchange of ideas necessary to effective medical review. Such barriers include the fear of retribution from the reviewed physician through litigation or through economic pressures such as limiting referrals, and the fear of unwittingly becoming a witness in a medical malpractice case.

A privilege for medical review activities acts as an inducement to physicians to participate in the medical review process. The privilege ensures that the candid and critical discussion during the course of a medical review proceeding cannot be used by any party in connection with litigation or otherwise. Without the protection of a medical review privilege, physicians are unlikely to participate in meaningful peer review, or worse, may participate in a manner that is ineffective in promoting quality and weeding out incompetent practitioners.

The failure to recognize a medical review privilege will hamper efforts to monitor and improve the delivery of healthcare and create a risk to all patients. Protection of the public through encouraging high-quality health care is a significant public purpose. This public purpose merits the Court's deference in deciding this privilege issue.

 

B. Effective Peer Review is Essential to Quality Health Care



 

Medical review, or peer review, is the process by which physician members of a hospital's medical staff can evaluate the quality of care offered by other members of the medical staff and by the hospital as a whole, evaluate the qualifications of applicants for new privileges or for renewal of privileges, and effect disciplinary actions against medical staff members. See Christopher S. Morter, Note, The Health Care Quality Improvement Act of 1986: Will Physicians Find Peer Review More Inviting, 74 Va. L. Rev. 1115, 1117 (1988). Peer review contributes to the

 

enhancement of quality of patient care through effective supervision of health care professionals, elimination from the health care system of those who should not practice, and treatment of those whose abilities are impaired and in need of rehabilitation.

 



 

American Hospital Association, Immunity for Peer Review Participants in Hospitals 9 (1989). In other words, peer review makes the care of patients safer and more effective.

Medical peer review has been "universally accepted as the means by which a hospital and its medical staff scrutinize a physician's credentials and monitor the quality of care that is provided." Jeanne Darricades, Comment, Medical Peer Review: How is it Protected by the Health Care Quality Improvement Act of 1986?, 18 J. of Contemp. L. 263, 263 (1992). This "universal acceptance" is reflected both in state law granting immunity to medical review participants and protecting the confidentiality of medical review proceedings (see, e.g., N.C.Gen.Stat. § 131E-95 (1999)), and in the standards for hospital accreditation published by the Joint Commission on the Accreditation of Healthcare Organizations ("JCAHO"). JCAHO, the leading hospital accreditation body in the United States, requires medical staff committees to participate in efforts to measure outcomes and processes, and to evaluate "individuals with clinical privileges whose performance is questioned as a result of the measurement and assessment activities." JCAHO, 2000 Hospital Accreditation Standards 303 (2000). The policy underlying the JCAHO standards is "to improve the quality of care provided to the public." Id. at ii. Similarly, the policy underlying state statutes protecting peer review activities is to "promote public health, safety and welfare." N.C.Gen.Stat. §131E-75(b) (1999). These policies recognize that physicians are the best evaluators of the care provided by and the qualifications of other physicians.

Courts have also acknowledged the importance of peer review to the protection and improvement of patient care. For example, the North Carolina Court of Appeals noted that where "human lives are at stake … [t]he evaluation of professional proficiency of doctors is best left to the specialized expertise of their peers." Cameron v. New Hanover Mem'l. Hosp., 58 N.C. App. 414, 449, 293 S.E.2d 901, 922 (1982), cert. denied, 307 N.C. 127, 297 S.E. 2d 399 (1982) (citing Sosa v. Board of Managers of Val Verde Mem'l Hosp., 437 F.2d 173 (1977)).

Therefore, as physicians have been recognized as being in the best position to evaluate the quality of medical care provided by physicians to their patients, and as the continual evaluation of that care is necessary to the improvement of medical treatment and the protection of patients, it follows that effective peer review is critical to a quality health care system. One commentator observed, "the effectiveness of [peer review] efforts is critical to the achievement of hospital quality." Paul L. Scibetta, Note, Restructuring Hospital-Physician Relations: Patient Care Quality Depends on the Health of Hospital Peer Review, 51 U.Pitt.L.Rev. 1025, 1032 (1990).

 

C. Effective Peer Review Requires Confidentiality

 



 

Medical review can only be effective, however, where the physicians engaged in the reviewing activities are able to maintain a frank, candid exchange of ideas. Full and fair evaluation of the quality of care of either an individual physician or an institution requires that the reviewing physicians be able freely to discuss and to criticize, if necessary, the actions taken by their colleagues. If committee members fail to engage in a candid evaluation of their fellow physicians' qualifications and actions, poor-quality care will go uncorrected, and incompetent or impaired physicians will be allowed to continue practicing.

State and federal courts recognize that meaningful peer review depends on an honest exchange of opinions and ideas. For example, in a matter involving the facts at bar, the North Carolina Supreme Court recently ruled that "open and honest communication in medical peer review proceedings helps to assure high quality public medical care." Virmani v. Presbyterian Health Servs. Corp., 350 N.C. 449, 478, 515 S.E.2d 675, 694 (1999), cert. denied sub nom. Knight Pub. Co. v. Presbyterian Health Servs. Corp., 120 S.Ct. 1452, 146 L.Ed.2d 337 (2000). For this reason, the court ruled that protection of the privilege served a "compelling public interest." See Id. at 482, 515 S.E.2d at 697. Similarly, the United States District Court for the District of New Mexico noted that

 

the self-critical analysis privilege is particularly pertinent in the medical context as it promotes frank and honest discussions which protect lives and improve patient care.

 



 

Weekoty v. United States, 30 F. Supp. 2d 1343, 1345 (D.N.M. 1998). Unfortunately, "although medical peer review is recognized as essential to providing of quality medical care, physicians are reluctant to actively participate in the process." Darricades, supra, at 270. This reluctance is bred largely out of the fact that "many physicians fear serving on peer review committees." Morter, supra, at 1119. The fear identified by these physicians involves fear of litigation by the reviewed physician; fear that malpractice plaintiffs will obtain peer review materials, thereby making peer reviewers unwitting witnesses; and fear that evaluated physicians will exact retribution outside of litigation through loss of referrals. See, Charles David Creech, Comment, The Medical Review Privilege: A Jurisdictional Survey, 67 N.C. L. Rev. 179, 179 (1988). Further, other than the physicians' sense of their ethical obligations, "there are few pressures on physicians to conduct effective peer review." Darricades, supra, at 271.

Physicians who have participated on peer review committees have found themselves named in defamation, antitrust and discrimination actions. See id. One commentator noted:

 

Physicians who have testified against colleagues in a peer review setting have frequently found themselves defending their actions in defamation suits brought by physicians who were sanctioned or denied privileges because of the testimony.

 



 

Morter, supra, at 1119. As a result, absent a privilege for peer review, "physicians may simply avoid participating in the peer review process out of fear that participation will lead to litigation." Creech, supra, at 198.

In addition to the fears of litigation, many physicians fear economic or other retribution arising from the peer review process. As one commentator put it:

 

physicians within a hospital are heavily interdependent. The professional and financial success of each physician depends upon his or her colleagues…. Physicians who make important but difficult decisions effecting [sic] fellow practitioners may find that others are reluctant or unwilling to refer [patients] to them. While the monetary loss associated with lost referrals is difficult to estimate, such a situation is bound to chill the enthusiasm of potential peer reviewers.

 



 

Scibetta, supra, at 1034-5.

In addition, physicians may be understandably unwilling to contribute candidly to a review involving a colleague, particularly where the proceeding is likely to "engender animosity" from that colleague. Id. at 1035.

If physicians are discouraged from or refuse to participate meaningfully in the peer review process, physicians' performance will no longer be reviewed by other physicians, or the contributions of physicians to the peer review process will lack the critical candor necessary to meaningful review. In either case, reducing and preventing medical errors and improving the overall safety of the delivery of health care will be jeopardized.

Maintaining the confidentiality of peer review proceedings is the best way of encouraging physicians to continue active participation in the peer review process. By keeping such proceedings confidential, physicians' concerns over protracted litigation and retribution from disgruntled peers can be partially assuaged. In addition, the assurance that peer review activities remain confidential can diminish physicians' reluctance to speak out where the testimony may cause professional harm to a colleague.

In some cases, confidentiality of peer review can be a benefit to the physician being evaluated. For example, where unfounded allegations of incompetence are made against a practitioner, but the allegations are convincing enough to merit further investigation, a medical review committee is obligated by its duty to patients to engage in an inquiry. Even where such allegations are shown to be groundless, the disclosure of the review committee proceeding could conceivably be blown out of proportion, rendering the physician subject to damage to his reputation and standing in the community.

The situation of temporarily impaired physicians should be noted, as well. Part of the function of peer review committees is to assist in the rehabilitation of temporarily impaired physicians, "temporarily impaired physicians" meaning those practitioners whose abilities and skills are not forever lost, but who are, for the time being, unable to practice effectively. In that instance, inappropriate disclosure of such an individual's temporary impairment could be needlessly ruinous to the practitioner's reputation and standing, resulting in the loss of a valuable asset to the community.

 

D. The Health and Safety of Patients is a Compelling Public Interest

 



 

In its Order of June 27, 2000 granting Dr. Virmani's motion to compel production and denying Novant's motion for a protective order relating to confidential medical review materials, the District Court applied Federal Rule of Evidence 501 to the privilege claimed by Novant. June 27 Order at 4. Rule 501 provides, in relevant part:

 

Except as otherwise required by the Constitution of the United States or provided by Act of Congress or the rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of a witness, [or] person…shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience.

 



 

Fed. R. Evid. 501.

In applying state statutory privileges to federal question cases in federal court, "the light of reason and experience" is determined by balancing the interests protected by the privilege against the public's need for evidence in civil actions. The privilege is recognized only where it "promotes sufficiently important interests to outweigh the need for probative evidence." Univ. of Pa. v. EEOC, 493 U.S. 182, 189, 110 S.Ct. 577, 582, 107 L.Ed. 2d 571, 582 (1990) (citing Trammel v. United States, 445 U.S. 40, 51, 100 S.Ct. 906, 912, 63 L.Ed. 2d 186, 195 (1980)). An exception from the general rule disfavoring testimonial privileges is justified by a "public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth." Jaffee v. Redmond, 518 U.S. 1, 9, 116 S.Ct. 1923, 1928, 135 L.Ed. 2d 337, 344 (1996) (citing Trammel, 445 U.S., at 50, 100 S.Ct., at 912, 63 L.Ed. 2d at 195).

The health and safety of citizens of the United States has been recognized as a compelling public interest. In Jaffee, the Court upheld a psychotherapist-patient privilege. "The mental health of our citizenry, no less than its physical health, is a public good of transcendent importance" (emphasis added). Jaffee, Id., at 11, 116 S.Ct. at 1929, 135 L.Ed. 2d, at 345-6. The Court upheld the privilege against the competing interest of the need for open discovery in a criminal case. The concern for public health underlying the recognition of the psychotherapist-patient privilege also supports recognition of a medical review privilege.

Other federal courts have also recognized that protecting patients and improving health care are important public interests. See, e.g., Bredice v. Doctors Hosp., Inc., 50 F.R.D. 249 (D.D.C. 1970), aff'd, 479 F.2d 920 (D.C. Cir. 1973) ("[Peer review] meetings are essential to the continued improvement in the care and treatment of patients…. There is an overwhelming public interest in having those staff meetings held on a confidential basis." Id. at 250-251); Laws v. Georgetown Univ. Hosp., 656 F. Supp. 824 (D.D.C. 1987) ("This court recognizes an overwhelming public interest in promoting improvement in health care through the mechanism of staff peer review." Id. at 826); United States v. Harris Methodist Fort Worth, 970 F.2d 94 (5th Cir. 1992) ("Peer review materials are sensitive and inherently confidential, and protecting that confidentiality serves an important public interest." Id. at 103); Weekoty, supra ("Clearly the public good - saving lives and correcting life threatening errors by physicians resulting from preserving the confidentiality of [peer review] morbidity and mortality conferences - outweighs the general preference for open discovery." Id. at 1348).

V. Conclusion

Amici urge this Court to recognize the important public benefit provided by the candid and critical review of the medical practice of individual physicians by their peers, and to declare it a compelling public purpose. Therefore, Amici respectfully urge the Court to reverse the order of the District Court.

 

Respectfully submitted,

 


____________________________
Julian D. Bobbitt, Jr.
N.C. Bar No. 9658

 


____________________________
Sean A. Timmons
N.C. Bar No. 25030



 

450744v1
(File No. 2043-35)


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The AMA files this brief on behalf of the American Medical Association/State Medical Society Litigation Center ("Litigation Center"). The Litigation Center was formed in 1995 as a coalition of the AMA and private, voluntary, nonprofit state medical societies to represent the views of organized medicine in the courts.

 

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