Kentucky Supreme Court Rules Nursing Home’s Independent Nurse Consultant Reviewer’s Critical Analysis of Resident’s Care is Shielded by Federal Quality Assurance Privilege

Jacqueline McGuire was a resident of Henderson County Healthcare Corporation’s Redbanks Skilled Nursing Facility in Henderson Kentucky.  After McGuire suffered bedsores and multiple injuries while at Redbanks, McGuire was transferred to another nursing home facility where she ultimately died.  McGuire’s brother, as administrator of her estate, filed a nursing home negligence lawsuit with various claims against Redbanks arising out of the alleged neglect.

During the prosecution of the lawsuit, Redbanks refused to respond to discovery requests seeking documents Redbanks claimed were protected by the Federal Quality Assurance Privilege (FQAP) pursuant to 42 U.S.C. § 1396r(b)(1)(B) and 42 U.S.C. § 1395i-3(b)(1)(B).  The FQAP is a subsection of the Federal Nursing Home Reform Act (FNHRA) passed in 1987.  To ensure quality care of nursing home residents, the FQAP requires skilled nursing facilities and nursing facilities to establish a quality assessment and assurance committee.  The FQAP protects the records of the committee from disclosure.

At times relevant to McGuire’s care, Redbanks had a Quality Assurance Performance Improvement (QAPI) committee, which then contracted with an independent contractor, Wells Health Systems (“Wells”), to consult and evaluate and provide guidance to Redbanks on the facility’s quality of care.  Nurse consultants employed by Wells performed site visits monthly wherein they examined residents’ medical charts, observed Redbanks staff perform their duties, and reviewed various statistical data.  These chart audits, compliance rounds, and statistics reviews were then compiled in reports provided to Redbanks QAPI.  The nurse consultants were neither Redbanks’ employees, nor members of the QAPI.

The Henderson Circuit Court ruled that because the nurse consultant reports were not created by the QAPI committee, they were not QAPI records and ordered the records be produced.  The Court of Appeals agreed and Redbanks appealed.

The Kentucky Supreme Court noted that privileges must be strictly construed because they counter the general principle that the “public has a right to every man’s evidence.”  It further explained that it had never ruled on the merits of a FQAP records discovery dispute and that few jurisdictions had.  Noting there were two separate approaches, a narrow or “the Missouri Rule” and a broad or the “New York Rule,” the Court then analyzed both.

In examining Missouri’s approach, the Court noted that Missouri has taken the position that the FQAP privilege only protects the FQAP committee’s “own records—its minutes or internal working papers or statement of conclusion.”  It noted that a Tennessee district court had followed Missouri’s lead and that the Third Circuit Court of Appeals had taken a similar position, both suggesting the records must be created by the FQAP committee, even though the statute’s use of the phrase “generated by” was undefined in the statute.  The Court noted that the Third Circuit had left open the possibility that it might interpret the FQAP more broadly under a different set of facts.

In examining New York’s approach, the Court noted that New York does not protect duplicated records or clinical files.  However, “compilations, studies or comparisons of clinical data” arising out of or relating to the request of an FQAP committee are entitled to protection under the law as interpreted by New York courts.  The Court noted this approach dovetails with various courts’ approaches to the attorney-client privilege and the long-established United State Supreme Court Upjohn rule: documents created by a third-party consultant employed by an attorney to assist a lawyer in providing legal services are similarly protected.

Turning to the question of whether the Wells nurse consultant reports contracted by Redbanks were protected as FQAP committee records, the Kentucky Supreme Court found they were in spite of the narrow scope of legal privileges.  Although potentially highly relevant to complaints by an injured, neglected or abused nursing home patient, their family, or estate, the Court believed maintaining a broader privilege was necessary to further “self-critical analysis” and, thereby, promote the improvement of safety conditions, procedures, and outcomes which furthers the purpose of the FNHRA.  Consequently, the Court opined that a case-by-case approach to documents was appropriate that would allow the “trial court to determine how a document was generated, why it was generated, and by whom it was generated before determining if the FQAP applies.”

The Court provided guidelines as well.  Significantly, the Court emphasized that a QAPI committee cannot shield otherwise discoverable documents by funneling them through the QAPI committee, even if those documents were relied upon in creating the privileged QA documents.  No documents kept in the facility’s ordinary course of business were entitled to protection from discovery.  And, if the documents were required to be generated pursuant to other legal requirements, they are not entitled to the privilege.  However, documents generated, created by, or at the behest of a QAPI committee would likely fall within the FQAP privilege.  This is the case, even if generated by an outside source.

The Court concluded by noting that Wells “was effectively an ‘agent’ of the QAPI committee.  The nurse consultant reports were being used to improve care at the facility, were for quality assurance purposes, and, therefore, were protected by the FQAP.

The Redbanks decision can be found here.