(Nadia Borowski Scott)

A quality-of-care review conducted by a plaintiff’s health insurance carrier to evaluate an orthopedic surgeon in a medical malpractice action will not be barred from discovery under the Peer Review Protection Act, a trial court judge has ruled.

In an apparent issue of first impression, Lackawanna County Court of Common Pleas Judge Terrence R. Nealon ruled in Venosh v. Henzes that because Blue Cross is not a direct health care practitioner and does not operate a health care facility, it failed to establish that its “quality of care” reviews and peer reviews are protected from discovery pursuant to 63 P.S. Section 425.4. Nealon said that, as written, the act does not apply to health insurance companies or hospital plan corporations.
”The act’s peer review provisions may be extended to health insurance companies or hospital plan corporations only by legislative amendment of that statute,” he said.

According to Nealon, plaintiff Ann Marie Venosh sued orthopedic surgeon Dr. Jack Henzes and others, alleging injuries related to a total knee replacement surgery that Henzes performed at Moses Taylor Hospital in June 2009. Venosh’s health insurance company at the time was First Priority Health IPA-HMO, which is a subsidiary of Blue Cross Northeastern Pennsylvania.

Nealon said Blue Cross performs quality-of-care reviews to investigate the treatment furnished to insureds. The reviews, which are conducted by a quality-management nurse analyst, can be initiated by requests from the insured, practitioners, health care facilities or by the insurance carrier itself, according to Nealon.

During discovery depositions, Henzes said he had given a statement to Blue Cross regarding his treatment of Venosh, but Henzes’ attorney said the statement was protected by peer review, Nealon said.

Venosh’s counsel issued a subpoena to Blue Cross for the statement, but Blue Cross contended that it was privileged under the peer review process. The company contended that the review was performed solely on behalf of the health plan, and not on behalf of any insuring entities, including First Priority Health, or any other health maintenance organization.

A special trial master assigned to the case denied Blue Cross’ motion to quash Venosh’s subpoena and directed the company to produce the records. However, the special master vacated the order about a month later, and granted the motion to quash.

Before the trial court, Venosh contended that the analysis was done by First Priority, not Blue Cross, and therefore the review was not protected under the PRPA. She also argued that the review was conducted for the insurance section’s business purposes, and not for “improving the quality of medical care,” as required under the act. By withholding the review, Venosh further argued, the insurer was breaching its fiduciary duty.

Venosh pointed to Blue Cross’ response to her subpoena, which requested it be addressed to First Priority, as evidence establishing that the insurance subsidy conducted the investigation.

Blue Cross contended that Venosh conflated the company with First Priority.

The company maintained that the review process was conducted solely by Blue Cross nurses and physicians on behalf of Blue Cross. The company further argued that it is not an IPA-HMO, but is a hospital plan corporation.

According to Nealon, Blue Cross said “the stakes in this appeal are extremely high,” and argued that if it is required to produce its “investigatory materials, then insurance companies throughout the state of Pennsylvania will be hesitant to avail themselves of the peer review process, and the quality of medical care in this state will accordingly suffer.”

Under the precedent set in the state Supreme Court’s 1996 ruling in McClellan v. Health Maintenance Organization of PA, quality-of-care reviews performed by IPA model HMOs are not insulated from discovery under the act, Nealon said.

“Assuming arguendo that the ‘quality of care’ review was conducted by First Priority, it is clearly not protected from discovery by the PRPA,” Nealon said.

Nealon noted that Blue Cross’ medical director said the company also hired a third-party orthopedic surgeon to conduct the initial evaluation, and that a summary of the surgeon’s report was provided to Venosh’s health care providers. However, he held that the peer review protections only extend to health care providers.

“A hospital plan corporation or health insurer cannot transform itself into a ‘professional health care provider’ under Section 425.2 of the act by simply hiring or utilizing a doctor or nurse to conduct the actual peer review,” he said. “While it is laudable that Blue Cross conducts peer reviews of the quality and efficiency of the treatment that health care professionals and facilities provide to its subscribers, only those peer reviews which are undertaken by a ‘professional health care provider’ are immune from discovery under the act.”

Over the past year, trial courts have issued a number of rulings on the applicability of the PRPA.

A decision in September from Allegheny County Court of Common Pleas Judge R. Stanton Wettick Jr. held that documents, including a chronology of events and a staff re-education plan resulting from the report, created by two registered nurses, were not discoverable. The plaintiff in Scrima v. UPMC Mercy had argued that the documents are relevant hospital records, created by hospital staff, and, therefore, they are subject to discovery. However, Wettick found that the documents were created for peer review purposes, and were therefore confidential.

“Under the Superior Court’s most recent interpretation of the scope of the Peer Review Protection Act, the purpose underlying the creation of the documents is the most relevant consideration,” Wettick said.

In July 2013, Nealon denied a discovery appeal by Moses Taylor Hospital regarding the hospital’s event reports, finding they were not immune from discovery under the act.

“The hospital’s ‘Event Reporting’ policy that was in effect at the time that the two event reports were prepared, and the language of the hospital’s ‘Event Report’ form that was utilized, do not indicate that those reports were generated by or for a peer-review committee as part of a quality assurance assessment, and as such, they do not qualify for peer-review protection,” Nealon said in his July 17 opinion.

That decision, also in the Venosh case, was upheld by the state Superior Court last month.

Attorney Carol A. Shelly of Shelly Law Offices in Doylestown, Pa., said incident reports have been discoverable for several years, but attorneys have started making claims that are now being hashed out at the trial court level based on new language in the Medical Care Availability and Reduction of Error Act regarding patient safety officers.

Shelly said she was unfamiliar with the kind of quality-of-care reviews used in the Venosh case, but she agreed with Nealon’s analysis.

Peer review is important, but “a lot of times it is used as a shield,” Shelly said. “You really need to fight to get the peer review materials in those cases.”

Plaintiffs attorney Gary Solomon of Kornblau & Kornblau said that while a lot of cases involve peer review issues, courts have not largely examined reviews done by insurance carriers.

“It’s a good decision for Pennsylvania law,” he said.

Neither Henzes’ attorney, Eugene P. Feeney of Weber Gallagher Simpson Stapleton Fires & Newby, nor Blue Cross’ counsel, Matthew L. Bleich of Cozen O’Connor, returned a call for comment.

Max Mitchell can be contacted at 215-557-2354 or mmitchell@alm.com. Follow him on Twitter @MMitchellTLI.

(Copies of the 25-page opinion in Venosh v. Henzes, PICS No. 14-1272, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information. Account holders can order with our online order form.) •