On November 3, 2020, a Massachusetts Federal District Court issued a notable decision on the applicability of the state’s medical peer review privilege in a federal proceeding, determining that the privilege does not apply to documents requested in discovery as part of a qui tam False Claims Act (FCA) case. In United States ex rel. Wollman v. Massachusetts General Hospital, Inc. et al., Case Number 1:15-cv-11890-ADB, the court reviewed the purpose of the peer review privilege and precedent addressing the applicability of state privileges under the Federal Rules of Evidence, and concluded that the privilege should not apply because the “goal of the peer review privilege would not be thwarted if it was not applied” in a case predicated on alleged billing fraud. The court’s decision is instructive for health care providers and whistleblowers in connection with discovery and the applicability of medical peer review privileges to FCA cases.
The case arises from a whistleblower suit filed by a former anesthesiologist at the defendant hospital who alleged fraudulent billing of federal health care programs in connection with concurrent surgical procedures performed at the hospital. At issue in this decision was the production of documents that had been withheld in discovery by the defendant on the basis of a peer review privilege. Massachusetts has two separate (but related) statutory peer review privileges, M.G.L. c. 111 §§ 204 and 205, § 204 relating to confidentiality of medical peer review committee proceedings, reports and records, and § 205 relating to information and records necessary to comply with risk management and quality assurance programs. The parties did not dispute that the materials at issue would be privileged under § 204 in a state court proceeding; rather the issue before the court was whether it would apply a peer review privilege in this federal case.
The court first analyzed the historical purpose of the peer review privilege, which it characterized based on prior cases as promoting quality health care and being intended to promote candor and confidentiality in response to a perceived medical malpractice crisis. The court then noted that because there is no peer review privilege under the Federal Rules of Evidence, but one exists under Massachusetts law, the court needed to determine whether the privilege is “intrinsically meritorious” based on a four-factor test established by the U.S. Court of Appeals for the First Circuit. The court determined that three of the factors favored applicability of the privilege. But the final factor – whether the harm of disclosure of communications outweighs the benefit gained for disposal of the litigation – was ultimately dispositive and prevented the court from recognizing the privilege in the instant case. The court explained that “the important federal interest in prosecuting health care billing fraud weighs strongly in favor of disclosure.” The court based its determination on the nature of the federal claim at issue, observing that other federal courts have applied medical peer review privileges to cases arising from alleged malpractice and patient care decisions because states have a stronger interest in application of the peer review privilege to malpractice cases as necessary to improve quality of care. The court also found that other courts have consistently refused to recognize a medical peer review privilege in cases involving allegations of health care billing fraud.
This case presented a close question for the court, because the whistleblower had argued that claims of billing violations related to concurrent surgeries were motivated by concerns about patient safety (which concerns could support applicability of the privilege claimed by the defendant), whereas the defendant had presented the case as a “billing dispute,” unrelated to the quality of care (which arguably undermines the claim of peer review privilege in a federal proceeding). The court concluded that the case is “sufficiently far removed from the purpose of the peer review privilege” and therefore the privilege is not applicable.
The court also reviewed potentially applicable federal laws – the Health Care Quality and Improvement Act and the Patient Safety and Quality Improvement Act – and determined that those laws do not reach the documents at issue in this case, and their purpose would not be “advanced by recognizing the medical peer review privilege” here.
Practice Points for Providers and Defense Counsel
The court’s analysis of the applicability of a state medical peer privilege to a federal False Claims Act proceeding appears to have turned on the fact that the underlying case primarily concerns alleged medical billing improprieties, and not medical malpractice. This framing is important for defendants in federal cases to keep in mind when considering counterarguments and the potential applicability of the medical peer review privilege to documents in discovery. Parties may need to weigh the risks of tying claims to allegations of malpractice and quality of care against the potential benefit of an increased likelihood that a court could recognize a state peer review privilege in a federal proceeding. That said, and as the court in the Massachusetts case observed, federal courts to date have not recognized state medical peer review privileges in FCA cases, so it may be difficult for defendants to assert a state medical peer review privilege in an FCA proceeding unless there is a stronger tie to quality of care issues than the court found in this case. In any event, this case is a reminder to health care providers and facilities of the limits of state medical peer review privileges in federal courts, and institutions would therefore be well-advised to keep such limits in mind when implementing and updating peer review processes.