"Reading the confidentiality provision in paragraph (b) of Section 11137 of the Health Care Quality Improvement Act in conjunction with the Code of Federal Regulations, we believe it is clear that information reported to the NPDB, though confidential, is not privileged from discovery in stances where, as here, a lawsuit has been filed against the hospital and the hospital's knowledge of information regarding the physician's competence is at issue." Implication and Recommendations 1. Credentials File Versus Quality File Most hospitals have a credentials file and a quality file for each medical staff member that separates the application materials, which generally are not protected, from peer review and other quality information, which usually are privileged from discovery under state and/or federal law. In this case, it appears that there was only one combined file. Had the data bank information been separated out and placed in the quality file, there may have been a different outcome. Hospitals should carefully review their files to make sure they are correctly divided between nonprivileged versus privileged materials. 2.

Need to Review State Laws and Applicable Case Law In light of the dichotomy between information which is "privileged" versus "confidential," hospitals should review applicable state statutes and applicable case law to determine what actual information is and is not privileged from discovery and/or admissibility into evidence in state and/or federal proceedings. The outcome of this review may affect the kinds of questions asked in the appointment/reappointment application and the information requested to determine what language is referenced. Interestingly, the actual data bank reports were not requested by the plaintiff and not provided by the defendant. 3. Protected Peer Review Deliberations There may be a need to argue that information is being used for protected peer review deliberations and, therefore, is not discoverable.

Depending on your statutory language this argument may or may not succeed. 4. Application Collections Consider collecting application information and assessments in the hospital’s patient safety evaluation system for reporting to a patient safety organization. Under the Patient Safety and Quality Improvement Act of 2005, information, reports, analyses and data collected within a hospital’s identified patient safety evaluation system for reporting to an Agency for Healthcare Research and Quality-certified patient safety organization is privileged and not subject to discovery in any federal or state proceeding.

Nonpublic information, such as a data bank report or information contained in the report is confidential and clearly utilized as a basis of making appointments and reappointments. Because peer review analyses designed to determine whether a physician is qualified for membership and clinical privileges can be considered a protected patient safety activity, a hospital can argue that the Klaine decision is clearly distinguishable because unlike the credentials act, the data bank information in question is privileged because of how it is collected and used to further patient safety and reduce risk. —By Michael R. Callahan, Katten Muchin Rosenman LLP Michael Callahan is a partner in Katten's Chicago office.

He was recently appointed as chairman of the medical staff credentialing and peer review practice group of the American Health Lawyers Association. The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. KATTEN MUCHIN ROSENMAN LLP .