Federal PSQIA Privilege Preempts State Peer-Review Privilege

In an area where there is “a dearth of case law,” the New Mexico USDC has ruled that the peer-review privilege contained in the federal Patient Safety and Quality Improvement Act preempts any state peer-review privilege. The preemption is limited to “patient safety work product” submitted to a certified Patient Safety Organization that a state peer-review privilege does not otherwise protect.  Quimbey v. Cmty. Health Sys. Prof’l Servs. Corp., 2016 WL 8716224 (D.N.M. Oct. 20, 2016).  You may read the decision here.

PSQIA

The Patient Safety and Quality Improvement Act, “a federal overlay to state peer-review statutes,” creates a voluntary reporting system for healthcare providers to share information on adverse medical events to a certified Patient Safety Organization (PSO).  The goal, of course, is to improve the quality of patient care.

The Act, codified at 42 U.S.C. §§ 299b–21 to 299b–26 and available here, creates an evidentiary privilege for “patient safety work product,” which is information that a provider develops for and reports to a PSO.  42 U.S.C. § 299b–21(7)(A).  The privilege prevents disclosure of patient safety work product in any federal, state, or administrative proceeding.  Id. § 299b–22.

Background

In this medical negligence case, brought under New Mexico law but in federal court under diversity jurisdiction, the plaintiff sought various hospital documents such as medication occurrence logs and incident reports.  The plaintiff argued that, because federal courts sitting in diversity jurisdiction must apply state privilege law, the court should analyze any peer-review protection under New Mexico’s peer-review statute.  N.M. Stat. Ann. §§ 41–9–1 to 41–9–7.

N.M.’s peer-review privilege is not absolute, and courts may force healthcare providers to produce peer-review information if the information “constitutes evidence which is critical to the cause of action.”  To avoid this “criticality analysis,” the hospital argued that the PSQIA peer-review privilege preempts the state peer-review privilege.

Preemption

The federal court agreed with the hospital’s preemption argument, holding that the PSQIA expressly and impliedly preempts state peer-review privileges.  The PSQIA expressly preempts state peer-review privilege because the statute declares that patient safety work product “shall be privileged” “notwithstanding any other provision of Federal, State, or local law.”

There are two categories of implied preemption: field preemption and conflict preemption. The court found that conflict preemption existed because the hospital would have to produce the peer-review information under the “criticality analysis,” but the PSQIA precludes production in its entirety.

The preemption, however, is limited.  The PSQIA only trumps a state peer-review privilege to the extent that a state peer-review privilege “fails to protect information qualifying as patient safety work product.”  The key, therefore, is for healthcare providers to prove that the putatively privileged information falls within the definition of “patient safety work product.”

Here, the hospital satisfied its patient-safety-work-product burden.  The materials the court held protected contained a stamp with this language: “CHS PSO, LLC Confidential patient safety work product.”  The CHS PSO, LLC is one of 85 approved PSOs, and you may review the full list here.

PoP Analysis

In federal-question cases, federal courts will apply federal privilege law; however, there is no federal common-law peer review privilege.  So, state peer-review privileges that would normally protect a healthcare provider’s peer-review materials offer no protection when federal-question jurisdiction exists.

Using an approved PSO, however, could alter this landscape.  By using a PSO for peer-review analyses, healthcare providers have a greater chance of securing the PSQIA peer-review privilege when federal law supplies the rule of decision.

And now the Quimbey decision provides authority for healthcare providers to secure the PSQIA privilege protection even when state law provides the rule of decision in diversity cases.  The key remains that the healthcare provider prove that the putatively privileged information falls within the patient-safety-work-product definition.