The Patient Safety Act and Appelgrad Impact on Privilege Protection

by Daniel Esposito

The Patient Safety Act was enacted in 2004 to reduce the incidence of errors in health care facilities. The law requires the facilities to evaluate and report adverse events with the policy goal of lowering recurrence of system failures in the health care facilities. There is an absolute privilege attached to the documents developed in accordance with the act in order to encourage candor of the individual engaged in the process. The information developed during this process is sought after by plaintiffs in malpractice cases that follow the adverse event. The health care facilities claim the documents are privileged and protected by the statute. The Appelgrad case is the first reported case to interpret this statute and the privilege.

Appelgrad is an obstetrical malpractice case resulting from an event that occurred at a hospital in 2007. At issue in the case were documents created by a round table discussion that occurred among hospital staff after the event. The documents were not created by the Patient Safety Committee as the matter did not reach the committee since there was a determination that there the event was not preventable. The trial court determined that although the hospital did not strictly follow the requirements of the statute, it substantially complied with it thus it was protected. The Appellate Division reversed as to one key memorandum holding that the statutory privilege only protects the documents created in the process in accordance with the specified procedures of the act and regulations. Applying the regulations adopted in 2008, the Appellate Panel concluded that the memorandum at issue was not created in full compliance with the processes and procedures of the Act and therefore should be disclosed.

The N.J. Supreme Court granted leave for appeal and heard oral argument twice. In late September the N.J. Supreme Court reversed the Appellate Division regarding the memorandum at issue deeming that the evaluative process conformed to the PSA’s requirements and the memorandum is privileged pursuant to the Act. However, the grounds for the reversal deem it a fairly limited holding. The basis of the N.J. Supreme Court’s reversal was primarily that the regulations cited by the Appellate Division (particularly the “exclusivity rule” regulation) had not been adopted at the time of the creation of the memorandum. As such, the hospital could not have expected to follow a regulation that was not promulgated and the high court deemed the regulation requirements could not be retroactively applied.

However, this argument is only availing to documents created prior to 2008. The high court affirmed that the health care facility must comply with the mandates of the regulations going forward including the exclusivity rule. That rule deems that only documents created exclusively within the patient safety process will have the protection of the statutory privilege. Documents or communications created through other processes of the health care facility [e.g. non-PSA peer review or quality assurance committees] will not have this protection. These processes may still have the benefit of common law self-critical analysis privileges but that is a conditional privilege where aspects of same may still be discoverable.

The takeaway would be that in order to gain the absolute privilege protection offered by the statute, full compliance with the PSA statute and regulations regarding the process must be observed. This includes creating of a Patient Safety Plan, and greater emphasis on the investigation and root cause analysis being performed by the Patient Safety Committee and that committee making the determination of whether there was a serious preventable adverse event occurred which needs to be reported.