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Health Insurance Quality Reviews Not Privileged Under Peer Review Protection Act

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In an issue of first impression, the Lackawanna County trial court recently declined to extend the Peer Review Protection Act to quality-of-care reviews conducted by health insurance companies, regardless of who the company hired to conduct the peer review.

In Venosh v. Henzes, M.D., et al., the plaintiff sued an orthopedic surgeon for injuries related to a total knee replacement surgery.  The plaintiff was insured by First Priority Health IPA-HMO, a subsidiary of Blue Cross Northeastern Pennsylvania.  Blue Cross performs quality-of-care reviews to investigate treatment rendered to its insureds by healthcare professionals and facilities.  The reviews, which are typically conducted by nurse analysts, can be done at the request of insureds, healthcare providers, and facilities, or the insurance company itself.  

During discovery, the plaintiff learned that the surgeon provided a statement to Blue Cross regarding the treatment she received; however, the surgeon’s attorney maintained that the statement was protected by the Peer Review Protection Act (“PRPA”).  Plaintiff subpoenaed Blue Cross for the statement but encountered a similar position that the review was privileged peer review material.  Blue Cross additionally filed a Motion to Quash, which a special trial master initially denied, but the decision was reversed and the master granted the motion.

During arguments, plaintiff argued that First Priority conducted the review, not the parent company, and thus the PRPA did not apply.  She further contended that the review’s main purpose was for the insurer’s business as opposed to improving the quality of medical care, which is at the heart of the PRPA.  Blue Cross asserted that it conducted the review and that it is not an IPA-HMO, but rather a hospital plan corporation.  It further disputed that, if its reviews were discoverable, insurance companies will be reluctant to conduct quality-of-care reviews, which in turn could effect the quality of medical care in Pennsylvania

Judge Terrence R. Nealon examined the PRPA language and held that, because Blue Cross is neither a healthcare practitioner nor operates a healthcare facility, its quality-of-care reviews are not privileged.  Whether the reviews were conducted by Blue Cross or First Priority did not matter.  Judge Nealon cited the 1996 Pennsylvania Supreme Court decision in McClellan v. Health Maintenance Organization of PA, which also examined these reviews conducted by HMOs and ruled that they were discoverable.  He further held that the peer review privilege could be extended “to health insurance companies or hospital plan corporations only by legislative amendment.” 

Judge Nealon’s decision was also not affected by Blue Cross’ retention of a third-party orthopedic surgeon to evaluate the defendant surgeon’s conduct and that the third-party surgeon’s report that was shared with the plaintiff’s providers.  Hiring a third-party physician did not transform Blue Cross into a provider for the purposes of the PRPA.  Rather, Judge Nealon stated that, “while it is laudable that Blue Cross conducts peer reviews of the quality and efficiency of the treatment that health care professional 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.” 

This decision was not the only blow to the defendants’ peer review arguments in the Venosh matter.  Prior to plaintiff's discovery appeal, the defendant hospital also argued that its event reports were privileged under the PRPA, but Judge Nealon disagreed.  In writing an opinion to the hospital’s discovery appeal, Judge Nealon found that the reports were discoverable because the hospital’s reporting policy and the language contained in the event report forms indicated that the reports were not intended to be part of a quality assurance assessment and were not generated for peer review committees.  The Superior Court upheld Judge Nealon’s decision in July 2014.  

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