Month: July, 2018

BRUGALETTA V. GARCIA: NEW JERSEY SUPREME COURT ISSUES OPINION ON THE PATIENT SAFETY ACT

I.  INTRODUCTION

In Brugaletta v. Garcia, (A-66-16) (079056) (July 25, 2018), the New Jersey Supreme Court, in a 6-1 decision, decided several matters of first impression under the New Jersey Patient Safety Act (“PSA”), N.J.S.A. 26:2H-12.23 to 12.25(c).  A close reading of the opinion is a necessity for any medical malpractice practitioner and especially for hospital defense counsel.

II.  FACTS

On January 12, 2013, plaintiff Janell Brugaletta went to the emergency room of Chilton Memorial Hospital (“CMH”) suffering from a week’s fever together with abdominal and body pains.  After being admitted to the hospital, she was diagnosed with a pelvic abscess due to a perforated appendix.  The abscess was drained, relieving the patient from abdominal pain, but her leg pain worsened.

A diagnosis of developing necrotizing fasciitis in her lower body led to several more surgeries.  During this time, her physician discovered that the plaintiff had missed dosages of an antibiotic he had ordered.  While the omission was noted in her medical record, the patient was never told of the missed antibiotic.

After a three week admission, the plaintiff’s abscess and abdominal pain had resolved, but she claimed to be suffering from residual pain and permanent injuries in her lower body.  Two years after her admission, she brought suit against her treating physician and CMH.  There was no allegation concerning the missed antibiotic doses.

III.  LOWER COURT PROCEEDINGS

        A.  Trial Court

During the course of discovery, plaintiff served interrogatories on CMH seeking the details and substance of any statement “regarding this lawsuit.”  CMH identified two reports, but claimed privilege based on the PSA.  Plaintiff filed a motion to compel, and CMH countered with a motion for a protective order.  The trial court heard arguments on the motions and conducted an in-camera review of the documents.

The court ultimately ordered the production of one of the reports, marked DCP-1.  The trial court found that the report was created pursuant to the PSA.  The court determined, however, that contrary to the conclusion of the hospital’s patient safety committee, the patient had suffered a Serious Preventable Adverse Event (“SPAE”) which triggered certain reporting obligations to the New Jersey Department of Health (“NJDOH”) that CMH had failed to meet.  Plaintiff contended, among other things, that the failure to report pierced the applicability of any privilege under the PSA. The trial court fashioned a remedy requiring that the hospital produce a redacted version of DCP-1, removing any self-critical analysis, but leaving factual statements, and ordering that the hospital report the SPAE to the DOH.  The court stayed the order while the parties pursued appeals.

        B.  Appellate Division

The Appellate Division reversed the trial court’s order. The Appellate Division held that the only condition to establishing privilege under the PSA is that the hospital performs the self-critical analysis in compliance with the PSA and its implementing regulations.

The Appellate Division further ruled that the trial court had erroneously concluded that an SPAE had occurred and, therefore, erred in ordering the hospital to report to the DOH.  To find that an SPAE had occurred, a supporting expert opinion, lacking in this instance, was essential.  The New Jersey Supreme Court granted plaintiff’s motion for leave to appeal.

IV.  THE NEW JERSEY SUPREME COURT’S RULING

On appeal, the Supreme Court upheld the Appellate Division’s decision that “the only precondition to the application of the PSA’s privilege is whether the hospital performed its self-critical analysis in procedural compliance with [the PSA] and its implementing regulations.”  So long as “procedural compliance is present”, the statute’s “broad” privilege protections apply.    This “broad” protection shields from discovery the process of self-critical analysis, beginning to end, “including its outcome.” Commenting that the PSA created “an absolute privilege,” the Supreme Court held that a trial court is prohibited from ordering the disclosure of documents prepared during the process of self-analysis, even in a redacted form.  The privilege encompasses any SPAE report to the DOH.

The Supreme Court set forth the procedure which must be followed when a privilege is asserted.  A party who claims privilege over a requested document may withhold the document by asserting the privilege and describing the nature of the information withheld.  On a motion to compel, the trial court must conduct an in-camera review of the document over which the privilege is claimed and make specific rulings as to the applicability of this privilege.  The court must determine that the privilege was properly invoked and that it bars disclosure of the information sought.

Furthermore, the Supreme Court held that both the trial court and Appellate Division erred in determining whether the hospital committee was mistaken in determining that no SPAE had occurred. It is the responsibility of the DOH to oversee hospitals in this regard, and it is empowered to impose civil monetary penalties for certain violations of the statute.    According to the Court, “[t]he Legislature inserted no role for a trial court to play in reviewing the SPAE determination …”  Therefore, the trial court erred in endeavoring to determine that a SPAE occurred, in ordering that a redacted version of the privileged document be disclosed by the hospital to its litigation adversary and by ordering the hospital to report the SPAE to the DOH.

At the same time, the Court reiterated, “[T]he PSA did not abrogate existing health care law and does not immunize from discovery information that would otherwise be discoverable.”    Although the PSA privilege protects certain documents containing self-critical analysis from discovery, it does not prohibit discovery of “the raw underlying factual material” found in medical records.  In fact, the hospital produced over 4500 pages of records, but the key information lay within 9 pages buried therein.

Addressing the rules of discovery and the mere production of documents in response to an interrogatory, the Supreme Court observed that the trial court should have ordered the defendant hospital to create “a narrative that specifies for the requesting party where the responsive information may be found.” While the Supreme Court is not suggesting that such a narrative “be routinely provided,” one may be warranted where the responsive information is located somewhere throughout voluminous records of the responding party and the burden of providing the specification is less on the responding party than on the requesting party to mine the records for the information.

V.  ANALYSIS

In Brugaletta, the Supreme Court established the breadth of the PSA privilege.  Assuming compliance with the strictures of the PSA, the privilege envelops the entire self-critical analytical process.  The privilege “unconditionally protects the process of self-critical analysis, the analysis’s results and any resulting reports,” including SPAE reports made to the DOH in compliance with the PSA. A provider’s failure to report a SPAE does not vitiate the privilege.

In order to claim the privilege, it must be asserted with specificity, and the nature of the information must be described.  Upon a motion to compel, it is incumbent upon the trial court to review the allegedly privileged documents in camera in order to determine that the privilege was properly asserted and covers the subject document.  The trial court is then obligated to rule upon the privilege claim with specificity.

The Supreme Court reiterated that underlying factual information related to an incident available from other sources remains fully discoverable.  The Supreme Court endorsed a remedy requiring a responding party to create a narrative for the requesting party describing where responsive information can be found in voluminous records.

In Brugaletta, the Supreme Court clarified that the state privilege envelops the entire self-critical process.  This is similar to the federal privilege under the Patient Safety and Quality Improvement Act of 2005 (“PSQIA”) pursuant to which deliberations and analysis conducted within a provider’s patient safety evaluation system are privileged.  At the same time, the PSA offers protection to mandated SPAEs which the PSQIA likely would not.  Under the PSQIA, state-mandated reporting requirements cannot be satisfied with privileged material.

The Continuing Viability of the Obamacare Medicaid Expansion

Resilient if nothing else, the Patient Protection and Affordability Care Act (“ACA”) continues in force. On June 29, 2018, Judge James E. Boasberg of the United States District Court for the District of Columbia rejected the attempt by the United States Department of Health and Human Services (“HHS”) to defend the grant of a waiver of Medicaid standards to the State of Kentucky for a demonstration program that would have required recipients to work or participate in other qualifying activities for at least 80 hours a month in order to be eligible for coverage.  In Stewart v. Azar, 2018 WL 3203384 (D.D.C. 2018), Judge Boasberg denied the defendants’ motion for summary judgment and granted the plaintiffs’ cross-motion for summary judgment to vacate the Secretary of HHS’ approval of the entire program that had been presented by Kentucky.  This ruling is likely to impact other states, including Arkansas, New Hampshire, Michigan, Alabama, and Indiana, which have received waivers to include work requirements of various sorts.

The United States Supreme Court had upheld the constitutionality of the requirement in the ACA that all Americans have affordable health insurance coverage in National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012). While seven justices had at first declared the mandatory Medicaid eligibility expansion unconstitutional, Chief Justice John Roberts in a portion of the opinion supported by five justices prevented the outright elimination of the expansion by fashioning a remedy that simply limited the federal government’s enforcement powers over its provisions and allowed states not to proceed with expanding Medicaid without losing all of their federal Medicaid funding.  Before the ACA, the Medicaid program was designed to cover medical services for four particular categories of the needy: the disabled, the blind, the elderly, and needy families with dependent children. With the enactment of the ACA, Medicaid became a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level.  Judge Boasberg described the Medicaid expansion as “a central component of that statute” which, as was noted in the NFIB opinion of the Chief Justice, allowed states to provide “‘health care to all citizens whose income falls below a certain threshold.’”  With the enactment of the ACA, Medicaid was “transformed” and was “no longer a program to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage.”

Whether or not to adopt the Medicaid expansion has continued to be a matter of dispute across the country. Since the 2010 enactment of the ACA, according to the Kaiser Family Foundation, as of July 2018, expansion programs were adopted in 32 states, including New Jersey.

Kentucky adopted the Medicaid expansion by executive order of the governor issued in 2014. This had the effect of reducing the uninsured rate from 17% in 2013 to just under 7% in 2015 and providing for a number of preventive services.  However, with the change in presidential administrations, the then Secretary of HHS and the Administrator of the Centers for Medicare and Medicaid Services encouraged states to submit applications for waiver from some of the Medicaid program’s coverage requirements, especially with regard to the expansion populations and the implementation of work requirements for beneficiaries. Section 1115 of the Social Security Act had long permitted the Secretary to approve “experimental, pilot, or demonstration programs” that would otherwise be outside of the requirements of Medicaid.  In July 2017, Kentucky submitted an experimental plan that included “Kentucky HEALTH” which imposed the 80-hour monthly work requirement on the expansion population as well as an increase in premiums to be paid, reporting requirements, and penalties for non-emergency use of emergency department facilities.

The plaintiffs in Stewart were 15 Kentucky residents enrolled in the state Medicaid program.  They filed a class action complaint challenging many aspects of the program.  The evidential record before the court estimated that 95,000 people in Kentucky would lose their Medicaid coverage under the program.

In analyzing the claims for relief, Judge Boasberg emphasized that pursuant to 42 U.S.C. § 1315(a), the Secretary could only approve those demonstration projects that were “likely to assist in promoting the objectives of [Medicaid].” The court addressed the standard of review to be employed.  While acknowledging that the Secretary’s judgment concerning waivers was entitled to deference, Judge Boasberg demonstrated that use of the “arbitrary and capricious” standard could be a deft and exacting analytical tool.  He emphasized that agency action could be characterized as “arbitrary and capricious” if the agency failed to examine relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.  “Courts, accordingly, ‘do not defer to the agency’s conclusory or unsupported suppositions.’”   And no deference is due to an agency’s post hoc rationalizations advanced as a litigation position.

The court noted that one of the primary objectives of the Medicaid program was “providing medical assistance.” It continued: “The Medicaid statute ‘defines “medical assistance” as “payment of part or all of the cost” of medical “care and services” for a defined set of individuals.’” Using that definition, it found a congressional intent to enable each state, as far as practicable, to provide “payment of part or all of the cost of medical care and services.”   With the enactment of the ACA in 2010, Congress expanded the Medicaid program to provide medical assistance for a new population:  low-income adults under 65 who would not otherwise qualify.

But the Secretary did not address these factors. Rather, the supposed justifications were that the project “would improve health outcomes, promote increased upward mobility and improved quality of life, increase individual engagements in health decisions, and prepare individuals who transition to commercial health insurance coverage to be successful in this transition.”  Accepting that those might be “worthy goals,” Judge Boasberg commented that there was “a notable omission from the list.”  Namely, whether the program “would help provide health coverage for Medicaid beneficiaries.”   Furthermore, the Secretary had failed to analyze whether the program would cause recipients to lose coverage or whether it would promote coverage.  Judge Boasberg found the congressional intent in these circumstances to be self-evident:

Here, the Medicaid statute — taken as a whole — confirms that Congress intended to provide medical assistance to the expansion population. The ACA amended Section 1396a(a)(10)’s mandatory population to include all individuals whose income fell below prescribed levels. In so doing, it placed this group on equal footing with other “vulnerable” populations, requiring that states afford them “full benefits.” … Under this regime, states must provide “medical assistance for all services covered under the State plan under this subchapter that is not less in amount, duration, or scope, or is determined by the Secretary to be substantially equivalent, to the medical assistance available for [other individuals]” covered under the Act. … Regardless of whether the Secretary can ultimately waive that requirement, he must start with the presumption that the expansion group is on par with other protected populations.

At the end of the day, even if the Secretary could properly consider other factors — such as health, cost, or self-sufficiency — his “failure to address” a “salient factor” in the Act — i.e., furnishing medical assistance — renders his approval arbitrary and capricious.

The court determined that the appropriate remedy was to vacate the Secretary’s approval of the program with its work requirement and other provisions and to remand the matter to the agency.

The adequacy of the modest reimbursement from the Medicaid program continues to be a matter of controversy. But the positive impact of the Medicaid expansion is well documented.  With the increased access to medical care, there are better health outcomes as a result of primary and preventive care services. The amount of uncompensated and charity care provided by hospitals has been reduced.  R. Rudowitz & L. Antonisse, Implications of the ACA Medicaid Expansion: A Look at the Data and Evidence (May 2018). Hospitals in states that have adopted the Medicaid expansion are less likely to close for financial reasons because of the revenue flow. See generally R.C. Lindrooth, M.C. Perraillon, R.Y. Hardy & G.J. Tung, Understanding the Relationship Between Medicaid Expansions And Hospital Closures, 37 Health Affairs 111 (2018).