In an opinion released Tuesday, the Court of Appeals reinforced the difficulty plaintiffs face when asserting claims against hospitals or other medical providers alleging that the provider was negligent in allowing a physician the privilege of practicing at the hospital. In Estate of Ray v. Forgy (Ray IV), the Court reversed a trial court’s order requiring the hospital defendants to produce hundreds of documents relating to the defendant doctor and its credentialing process, on the ground that those documents are protected by the medical review privilege.

To put the issues in Ray IV in perspective, a bit of background may be useful.  Frequently, a plaintiff in a medical malpractice case can’t hold the hospital liable for the alleged negligence of the physician who treated the plaintiff at the hospital.  That’s because in many cases, the hospital does not employ the physician or have an agency relationship that would give rise to imputed liability.  Indeed, the plaintiff in Ray IV lost its agency-based claim against the hospital for this very reason.  In such cases, it is not uncommon for a plaintiff to instead assert a claim that the hospital was negligent in allowing the physician to have privileges at the hospital in the first place—a “negligent credentialing” or “corporate negligence” claim.

The rub, however, is that the legislature has specifically exempted the proceedings of “medical review committees” (committees formed for the purpose of evaluating quality, cost, or necessity for hospitalization, including medical staff credentialing) and similar committees, including the records and materials they produce and consider, from discovery in civil actions. See N.C. Gen. Stat. §§ 90-21.22A(c), 131E-95(b), and 131E-107.  As the Ray IV opinion noted, the statutes are intended to promote candor and objectivity in peer investigations.  However, this protection can also make it difficult for a plaintiff to prove its case.

The Ray IV opinion was the latest in a protracted history of litigation between the parties related to the death of the plaintiff after treatment by her physician at the defendant hospital.  After the Court of Appeals reversed the trial court’s grant of summary judgment to the hospital defendants on the corporate negligence claim (in Ray II) and the trial court denied a second motion for summary judgment, the plaintiff served discovery on the hospital defendants seeking four categories of documents:

  • The complete file relating to the defendant doctor’s malpractice insurance coverage;
  • All documents relating to the re-credentialing of the doctor at the hospital;
  • All documents relating to the doctor’s malpractice insurance coverage from any source; and
  • Copies of all queries made to and responses from the National Practitioner Database regarding the doctor.

The hospital defendants filed a motion for protective order, claiming privilege under the various statutory provisions discussed above. The hospitals submitted affidavits setting forth in detail the basis for the asserted privileges and included an exhibit filed under seal that contained the entire file relating to the doctor.  Specifically, the affidavits represented that the documents contained materials produced by and considered by a medical review committee.  Additionally, the affidavits included a detailed privilege log of the documents included in the sealed exhibit that included a description of each document, the author or source of the document, the date of the document, and the recipient of the document.

The trial court ordered the hospital defendants to provide all but 54 of the documents in the doctor’s file. Because the order affects a substantial right – the statutory protection afforded for medical review documents – the hospitals were allowed an immediate appeal.  Applying de novo review to the question of whether the documents were privileged, the Court reversed the trial court’s order and held that all of the subject documents were privileged and therefore exempt from discovery.

Two conclusions are central to the Court’s opinion: (1) the hospital defendants had established that the their review committees met the applicable statutory definitions and (2) the affidavits provided enough detail to establish that the privilege applied to each of the 330 documents identified on the privilege log.

As to the former, the hospital defendants’ affidavits included detailed allegations regarding the formation of the committees and their purposes and provided the court with a copy of the medical staff bylaws listing the committees and their intended purposes.

As to the latter, the Court rejected the plaintiffs’ contention that the affidavits were conclusory. The key factors in the Court’s decision appear to have been the statement in the affidavits that the subject documents contained “the records and materials produced by and/or considered by” the medical review committees and the detailed privilege log provided with the affidavit, which also established that the records and materials were produced and/or considered by the medical review committees.

As the courts have long held, the medical review privilege “represents a legislative choice between competing public concerns. It embraces the goal of medical staff candor at the cost of impairing plaintiffs’ access to evidence.” Shelton v. Morehead Mem. Hosp., 318 N.C. 76, 347 S.E.2d 824 (1986).  For hospitals and other corporate providers seeking to establish the medical review privilege, the Court’s decision in Ray IV emphasizes the importance of creating a thorough record.

–Liz Hedrick