In this case, a hospital administrator who was present during a peer review meeting, but not as a member of the committee, later reported to the hospital’s physician practice manager her “visual memories of [the Plaintiff’s] behavior, body language, tone of voice and the way things were being said” when the plaintiff, a reviewing physician, verbally attacked his colleague. Other peer review committee members did not agree with the administrator’s characterization of the plaintiff’s actions during the peer review meeting. According to the Court’s decision, the information conveyed by the administrator about the plaintiff’s actions during the peer review meeting directly contributed to his termination.

The primary legal basis for the Court’s decision was the confidentiality mandates in the Review Organization Immunity Act (ROIA), the law regulating peer reviews in New Mexico, including the provisions at Section 41-9-5(A) which state that “[n]o person… shall disclose what transpired at a meeting of a review organization” except for the purposes listed in the statute. According to the Court, this provision creates an implied promise that the plaintiff would not suffer adverse employment action from participating in the peer review process, and that this promise is incorporated into physician-reviewer employment contracts. 

Of course, as noted by the Court, confidentiality in the peer review process is critical. Absent confidentiality, it would be difficult to promote peer review integrity and have candor and objectivity during meetings. Physicians and other medical staff would be reluctant to adhere to those principles for a variety of reasons including fears about loss of referrals, retaliation, damage to personal relationships, lawsuits, and malpractice actions based on records used during the proceedings. On the other hand, decisions like this may leave employers feeling that medical staff participating in the peer review process are immune from actions that transpire during that process. The New Mexico Supreme sought to dispel that notion.  

Our holding limits the use of peer review information for a statutory purpose, see § 41-9-5(A), and only those individuals responsible for furthering the statutory purposes of ROIA can be privy to such information. See § 41-9-5 (noting that no person can utilize peer review information except to carry out the statutorily enumerated purposes of a review organization). Eastern contends that our holding will completely immunize physician-reviewer conduct in peer reviews, “no matter how egregious.” This argument ignores the dual regulatory structure within hospitals. As will be explained, because only medical staff, not hospital administrators, are responsible for peer reviews, medical staff may utilize information concerning peer reviewer conduct to discipline reviewers.

The Court explained that its holding does not conflict with an employer’s contractual provisions enabling termination of employment for cause, it “merely prevents [employers] from using confidential peer review information in making [their] personnel decisions.” Healthcare employers, like the defendant in this case, often regulate employee-physicians both through medical staff bylaws and employment contracts. As the Court noted, those bylaws can provide that disruptive conduct may lead to a loss of privileges. An employment contract provision conditioning continued employment on maintaining privileges would, in turn, support the termination of the physician’s employment. So, the Court concludes, physicians that are disruptive during peer review are not free from discipline, they just cannot be disciplined by hospital administrators who should not be “privy to what transpires during peer review meetings.” Discipline in that case is up to the medical staff.

Hospitals in other states should consider their own processes and the state laws that apply, as many states have laws similar to the ROIA. This includes reviewing medical staff bylaws, employment contracts and long standing practices to ensure they are coordinated, provide appropriate mechanisms to impose discipline and maintain the confidentiality of the peer review process.

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.