J-A12006-15

                             2015 PA Super 169

ANNE MARIE VENOSH,                            IN THE SUPERIOR COURT OF
                                                    PENNSYLVANIA
                        Appellee

                   v.

JACK HENZES M.D., CINDY ANDERSON,
PA-C; SCRANTON ORTHOPEDIE
SPECIALISTS, P.C. AND MOSES TAYLOR
HOSPITAL,

APPEAL OF: BLUE CROSS OF
NORTHEASTERN PENNSYLVANIA AND
FIRST PRIORITY HEALTH,

                        Appellants                 No. 1393 MDA 2014


               Appeal from the Order Entered August 8, 2014
           In the Court of Common Pleas of Lackawanna County
                    Civil Division at No(s): 11 CV 3058


BEFORE: BOWES, DONOHUE AND ALLEN, JJ.

OPINION BY BOWES, J.:                            FILED AUGUST 07, 2015

     Blue Cross of Northeastern Pennsylvania (“Blue Cross”) and its affiliate

First Priority Health (“First Priority”) appeal from the August 8, 2014

discovery order requiring Blue Cross to produce information concerning a

quality-of-care review that it conducted regarding the incident at issue in

this medical malpractice case.       The trial court rejected Blue Cross’s
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invocation of the privilege established by the Pennsylvania Peer Review

Protection Act, 63 P.S. § 425.1, et seq. (the “Act”).1 We affirm.

       On May 13, 2011, Ann Marie Venosh (“plaintiff”) instituted this lawsuit

by filing a complaint against Dr. Jack Henzes, Cindy S. Anderson, Scranton

Orthopedic Specialists P.C., and Moses Taylor Hospital (“Taylor”) (collectively

the “defendants”).         She averred the following.         Dr. Henzes was an

orthopedic surgeon and Ms. Anderson was a physician’s assistant engaged in

the practice of orthopedic medicine.           Scranton Orthopedic Specialists P.C.

employed them both.          On June 11, 2009, Dr. Henzes and Ms. Anderson

performed total knee replacement surgery on plaintiff’s left knee at Taylor.

During that surgery, Dr. Henzes caused an occlusion of the left popliteal

artery, which a vascular surgeon immediately repaired.                Due to the

occlusion, the plaintiff suffered from left foot drop, peroneal neuropathy, and

left-leg numbness, weakness, muscle spasm, swelling, pain, nerve damage,

cramping induced by exercise, and functional limitations.

       After the pleadings were closed, the parties began to conduct

discovery.     On August 13, 2013, the plaintiff served Blue Cross with a

subpoena seeking records relating to her surgical treatment, including any

____________________________________________


1
    Since the order compelled Blue Cross to produce materials that it
contended were privileged, the order is immediately appealable as a
collateral order. Yocabet v. UPMC Presbyterian, 2015 WL 3533851, n.1
(Pa.Super. 2015).



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investigative records.       Following a request by Blue Cross, the plaintiff

disseminated the same subpoena to First Priority.            Blue Cross withheld

materials relating to a quality-of-care review that it conducted of the medical

providers and the incident at issue. It moved to quash the subpoena as to

any documents related to that review. The discovery matter was referred to

a special master, who concluded that the Act’s privilege applied.            The

plaintiff appealed to the court of common pleas, which reversed the special

master and ordered Blue Cross to produce the investigative materials. Blue

Cross and First Priority filed the present appeal, and the trial court agreed to

stay its order pending resolution of this appeal.         Appellants present this

issue:

         Did the trial court err as a matter of law in holding that

               Pennsylvania's Peer Review Protection Act, which expressly
         applies to "hospital plan corporation review committees and to
         "health insurance review committees," 63 P.S. § 425.2, can
         never apply to peer reviews initiated by and performed for a
         hospital plan corporation (or any other health insurance
         company that is not itself a professional health care provider),
         even where the individuals who actually serve on the committee
         meet the Act's definition of "professional health care provider”?

Appellant’s brief at 7.

         In this appeal, we must determine whether the Act’s confidentiality

provision protects from discovery the materials from the review process

conducted by Blue Cross. Interpretation of a statute is “a question of law;

thus, our standard of review is de novo, and the scope of our review is



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plenary.”    Yocabet v. UPMC Presbyterian, 2015 WL 3533851, 3

(Pa.Super. 2015).

       The facts are not contested. First Priority was the plaintiff’s medical

insurer at the time of the surgery and is an independent practice type of

health maintenance organization (IPA-HMO). First Priority is a subsidiary of

Blue Cross, which sells health insurance.         Blue Cross has procedures

whereby it can conduct review of the medical treatment delivered by the

health care providers with which it contracts. The primary purpose of that

review process is to ensure that Blue Cross’s insureds are receiving the

appropriate level of medical care from the health care providers.

       The medical director of Blue Cross, after a recommendation from a

nurse analyst, implemented that review procedure with respect to the

surgery involving the plaintiff.    The medical director, a nurse, and an

orthopedic surgeon conducted the examination of the medical care given to

the plaintiff. Blue Cross claims that the Act’s confidentiality provision applies

to any materials relating to its review of the medical care provided to the

plaintiff.

       We observe first that the purpose of that Act is to “to facilitate self-

policing in the health care industry.” Dodson v. DeLeo, 872 A.2d 1237,

1242 (Pa.Super. 2005) (emphases added).          We have noted that, the Act

itself expresses the legislature’s conclusion that the “medical profession

itself is in the best position to police its own activities.” Id. (emphasis

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added); Sanderson v. Frank S. Bryan, M.D., Ltd., 522 A.2d 1138, 1139

(Pa.Super. 1987) (“The medical profession exercises self-regulation. The

most common form of such regulation in the health care industry is the peer

review organization.”).

      The Act provides that the “proceedings and records of a review

committee shall be held in confidence[.]” 63 P.S. § 425.4.          A review

committee is identified in the Act as “any committee engaging in peer

review[.]”   63 P.S. § 425.2.   Peer review is defined as “a procedure for

evaluation by professional health care providers” of the quality and

efficiency of services ordered or performed by other “professional health

care providers.” 63 P.S. § 425.2 (emphasis added). Accordingly, under the

express terms of the Act, “peer review occurs only when one professional

health care provider is evaluating another professional health care provider.”

Yocabet, supra.

      In the present appeal, Appellants admit that they are not professional

health care providers as defined in the Act. Indeed, McClellan v. Health

Maintenance Organization, 660 A.2d 97 (Pa.Super. 1995), aff'd by an

equally divided court, 686 A.2d 801 (Pa. 1996), is controlling.    That case

involved a medical malpractice lawsuit brought against a doctor and an IPA-

HMO. It was alleged that the doctor delivered substandard medical care and

that the IPA-HMO committed corporate negligence due to its failure to retain

competent doctors and to review the quality of health care services delivered

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by its doctors.    The plaintiffs filed a request for production of documents,

and the HMO-defendant invoked the confidentiality provision of the Act as to

the materials.

      The McClellan panel unanimously concluded that the privilege did not

apply because the HMO in question was not a professional health care

provider as defined in the Peer Review Act. We noted therein that an IPA-

HMO “contracts for delivery of services with a partnership, corporation, or

association whose major objective is to enter into contractual arrangements

with health professionals for the delivery of such health services.”   Id. at

101 (citation omitted).        An IPA-HMO is not a professional health care

provider as defined in the Act. This Court concluded that an IPA-HMO could

not be considered a professional health care provider because it does not

deliver any type of medical services. The McClellan court refused to read

into the Act's definition of professional health care provider any “medical

institutions or groups . . . that are not specifically identified by the

legislature.”    Id. at 102.    Accord Yocabet, supra (review of a kidney

transplant conducted by the State Department of Health on behalf of the

federal government was not peer review because it was not review

conducted by a health care provider.).

      Likewise, herein, Blue Cross does not provide health care services; it

sells health insurance.     It admittedly is not a professional health care

provider as defined by the Act or the case law interpreting the Act. Hence,

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J-A12006-15



its quality-of-care review of medical services delivered by one of its

contracting physicians did not constitute peer review as defined in the Act.

Blue Cross was not a member of the medical care profession involved in self-

policing.   It was an organization deciding whether its affiliate IPA-HMO

should continue to contract with the health care providers in question. The

privilege is both facially inapplicable and the intent behind the Act is not

fulfilled by a finding that Blue Cross’s decision to examine the care provided

constituted peer review.

      Appellants present the following positions.   First, they contend that,

even though Blue Cross and First Priority admittedly are not health care

providers, the review process that Blue Cross initiated constituted peer

review because the definition of a review committee includes hospital plan

corporation review committees and health insurance review committees. 63

P.S. § 425.2. The pertinent provision relied upon by Appellant is as follows:

             “Review organization” means any committee engaging in
      peer review, including a hospital utilization review committee, a
      hospital tissue committee, a health insurance review
      committee, a hospital plan corporation review committee,
      a professional health service plan review committee, a dental
      review committee, a physicians' advisory committee, a
      veterinary review committee, a nursing advisory committee, any
      committee established pursuant to the medical assistance
      program, and any committee established by one or more State
      or local professional societies, to gather and review information
      relating to the care and treatment of patients for the purposes of
      (i) evaluating and improving the quality of health care rendered;
      (ii) reducing morbidity or mortality; or (iii) establishing and
      enforcing guidelines designed to keep within reasonable bounds
      the cost of health care. It shall also mean any hospital board,

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J-A12006-15



      committee or individual reviewing the professional qualifications
      or activities of its medical staff or applicants for admission
      thereto. It shall also mean a committee of an association of
      professional health care providers reviewing the operation of
      hospitals, nursing homes, convalescent homes or other health
      care facilities.

63 P.S. § 425.2. (emphases added).          Blue Cross is a hospital plan

corporation and contends that the committee that it formed to conduct the

quality-of-care review thus constituted a review organization.

      Appellants omit a step in their construction of the statute in question.

As McClellan and Yocabet clearly provide, the definition of peer review

requires that it be initiated by a professional health care provider. A review

committee is a committee that conducts peer review. A review committee

cannot be conducting peer review unless that review is being performed by a

professional health care provider. We specifically observed in Yocabet that

a professional health care provider could appoint or retain an external

committee to conduct peer review and that review would still constitute peer

review.

      Thus, a professional health care provider could ask a hospital plan

corporation or health insurance provider to perform review of medical

services.   That committee would be a review committee, and its review

process would be confidential under the Act.     For example, if Taylor had

asked Blue Cross to review the surgery in question, that review would

constitute peer review.   Taylor, a hospital, falls within the definition of a



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J-A12006-15



professional health care provider. A committee that is initiated at its request

to review health care would be a peer review committee even though review

was performed by a committee appointed by a health insurance company or

a hospital plan corporation.       Herein, the medical director of Blue Cross

initiated the review process in question. Under McClellan, that process is

not peer review because it was not conducted by a professional health care

provider.

      Additionally, a review committee is operating as such only when its

goal is “to gather and review information relating to the care and treatment

of patients for the purposes of (i) evaluating and improving the quality of

health   care   rendered;   (ii)   reducing   morbidity   or   mortality;   or   (iii)

establishing and enforcing guidelines designed to keep within reasonable

bounds the cost of health care.” 63 P.S. § 425.2 Herein, Blue Cross was

deciding whether to keep Dr. Henzes and Ms. Anderson as contracting health

care service providers. None of the above stated purposes was present in its

quality-of-care review.

      Appellants also note that the review in question was actually

conducted by health care providers consisting of Blue Cross’s medical

director, a nurse, and an orthopedic surgeon. This contention was directly

addressed in Yocabet, supra.          Therein, we noted that the fact that an

entity that is not a professional health care provider, as outlined in the Act,

hires health care providers, as defined in the Act, does not convert a review

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J-A12006-15



process into peer review. We noted that peer review can be initiated only by

a professional health care provider so the question of who the professional

medical provider appoints or hires to conduct the review is irrelevant. For

example, a person who is not a health care provider can be involved in the

process and it remains peer review.           Piroli v. Lodico, 909 A.2d 846

(Pa.Super. 2006) (fact that billing manager was present during a peer

review proceeding conducted by a professional health care provider did not

render the Act’s confidentiality provision inapplicable).

      Appellants finally maintain that McClellan is not precedential.       In

citing McClellan, they continually reference the non-precedential Supreme

Court decision wherein the Superior Court was affirmed by an equally

divided Court. However, the Superior Court panel decision was unanimous

and published, and Appellants’ arguments that the Supreme Court decision

in question is not precedential does not confront the fact that the Superior

Court decision remains precedential .

      Furthermore, McClellan is directly on point and holds that a

corporation that provides health insurance and not medical care is not a

professional health care provider. That decision further states that unless an

entity is a professional health care provider, it does not conduct peer review,

and any review conducted by such an organization is not confidential under

the Act.




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J-A12006-15



     Order affirmed.


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 8/7/2015




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