Proposed Patient Safety Rule Raises Thorny Issues For Hospitals And Other Providers

On February 12, 2008, the U. S. Department of Health and Human Services (HHS) issued a proposed rule (Rule) that creates a system for voluntary reporting to Patient Safety Organizations (PSOs) of adverse events, medical errors, or "near misses" by hospitals, doctors, and other health care organizations and practitioners (Providers) on a privileged and confidential basis. The Rule creates a legal quagmire, as discussed below. Written comments on the Rule are due no later than April 14, 2008.

Designed to complement the Patient Safety & Quality Improvement Act of 2005 (Patient Safety Act), the Rule is intended to address current laws that have discouraged Providers from sharing information regarding adverse events, medical errors, or "near misses," which is believed to be essential to improving quality and safety in the health care delivery system. Currently, the state peer review laws constitute the legal framework for protecting information regarding medical errors, adverse events, or "near misses." According to HHS, peer review laws are limited in that they vary between states, apply only to hospitals and other specific health care entities, and largely fail to protect information transmitted outside the protected entity. The Rule seeks to create a forum to allow sharing of this information among facilities by granting privilege and confidentiality to information disclosed to PSOs.

Although well intended, the Rule fails to adequately protect Providers that share information from potential liability. Although the Rule generally protects information disclosed to PSOs, the federal protection is not extended to information other than the precise reports collected for and made to the PSO. The Rule also fails to address the issue of federal pre-emption of state law. This leaves open the question of whether the Provider waives or loses peer review protections for information that it collects through peer review, risk management, or some other function and subsequently reports to a PSO. Furthermore, the Rule provides exceptions to the privilege granted to information disclosed to PSOs, raising the risk that the information could be disclosed subsequently to the detriment of the disclosing Provider. Hospitals and other health care organizations must carefully evaluate whether they risk waiving or losing state peer review protections by participating in this new regulatory scheme.

The Rule sets forth proposed confidentiality and privilege protections...