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(C) Proposed Sec. 3.108(c)--Voluntary Relinquishment

The statute recognizes the right of an entity to relinquish voluntarily its status as a PSO, in which case the Secretary will remove the entity from the list of PSOs. See section 924(d) of the Public Health Service Act, 42 U.S.C. 299b-24(d).

We stress that, if the Secretary determines that an entity has relinquished voluntarily its status as a PSO and removes the entity from listing, the confidentiality and privilege protections that applied to patient safety work product while the former PSO was listed continue to apply after the entity is removed from listing.

(1) Proposed Sec. 3.108(c)(1)--Circumstances Constituting Voluntary Relinquishment

Proposed Sec. 3.108(c)(1) provides that an entity would be considered to have relinquished voluntarily its status as a PSO under two circumstances: when a PSO advises the Secretary in writing that it no longer wishes to be a PSO, and when a PSO permits its three-year period of listing to expire without timely submission of the required certification to the Secretary for continued listing. To ensure that such a lapse is not inadvertent, we provide in proposed Sec. 3.104(e)(2) that the Secretary would send a notice of imminent expiration to any PSO from which the Secretary has not received a certification for continued listing by the date that is 45 calendar days before the expiration of its current period of listing. This notice is intended to ensure that the PSO has sufficient time to submit a certification for continued listing if it chooses to do so and that, if a lapse occurs, it is not inadvertent.

(2) Proposed Sec. 3.108(c)(2)--Notification of Voluntary Relinquishment

Proposed Sec. 3.108(c)(2) would require an entity that seeks to relinquish voluntarily its status as a PSO to include attestations in its notice to the Secretary that it has made all reasonable efforts to provide for the orderly termination of the PSO. First, the PSO must attest that it has made--or will have made within 15 calendar days of the date of this notification to the Secretary--all reasonable efforts to notify organizations or individuals who have submitted data to the PSO of its intent to cease operation and to alert providers that they should cease reporting or submitting any further information as quickly as possible.

We preliminarily conclude that, when a PSO voluntarily relinquishes its status, data submitted by providers to the entity after the date on which the Secretary removes it from listing is not patient safety work product. The statutory provision, incorporated in the proposed rule at Sec. 3.108(b)(2), that permits providers to submit data to an entity for an additional 30 days after the date of its removal from listing applies only to PSOs for which the Secretary has revoked acceptance of its certification for cause. It does not apply to a PSO that voluntarily relinquishes its status. We welcome comment on our interpretation.

Second, the PSO would be required to attest that, in consultation with the organizations or individuals who submitted the patient safety work product in its possession, it has established--or will have made all reasonable efforts within 15 calendar days of the date of this notification to establish--a plan for the appropriate disposition of such work product, consistent to the extent possible with the statutory requirements incorporated in proposed Sec. 3.108(b)(3). Finally, the individual submitting the notification of voluntary relinquishment would provide appropriate contact information for further communications that the Secretary deems necessary.

We caution any PSO considering voluntary relinquishment that its status remains in effect until the Secretary removes the entity from listing. The PSO's responsibilities, including those related to the confidentiality and security of the patient safety work product or data in its possession, are not discharged by the decision of a PSO to cease operations. Accordingly, we urge PSOs that are experiencing financial distress or other circumstances that may lead to voluntary relinquishment, to contact AHRQ program staff as early as possible so that the PSO's obligations can be appropriately discharged.

(3) Proposed Sec. 3.108(c)(3)--Response to Notification of Voluntary Relinquishment

In response to the submission of a notification of voluntary relinquishment, proposed Sec. 3.108(c)(3) provides that the Secretary would respond in writing and indicate whether the proposed voluntary relinquishment is accepted. We anticipate that the Secretary would normally approve such requests but the text provides the Secretary with discretion to accept or reject such a request from a PSO that seeks voluntary relinquishment during or immediately after revocation proceedings. Our proposal is intended to recognize that, in certain circumstances, for example, when the deficiencies of the PSO are significant or reflect a pattern of non-compliance with the Patient Safety Act or the proposed rule, the Secretary may decide that giving precedence to the revocation process may be more appropriate.

(4) Proposed Sec. 3.108(c)(4)--Implied Voluntary Relinquishment

Proposed Sec. 3.108(c)(4) enables the Secretary to determine that implied voluntary relinquishment has taken place if a PSO permits its period of listing to expire without receipt and acceptance by the Secretary of a certification for continued listing. In our view, the statute does not permit an entity to function as a PSO beyond its 3- year period of listing unless it has submitted, and the Secretary has accepted, a certification for a 3-year period of continued listing. To ensure that such a lapse is not inadvertent, we propose a requirement in Sec. 3.104(e)(2) that the Secretary would send a notice of imminent expiration to any PSO from which the Secretary has not received the required certification for continued listing by the date that is 45 calendar days prior to the last date of the PSOs current period of listing. Accordingly, we propose that the Secretary would determine that a PSO under these circumstances has relinquished voluntarily its status at midnight on the last day of its current period of listing, remove the entity from the list of PSOs at midnight on that day, make reasonable efforts to notify the entity in writing of the action taken, and promptly provide public notice in accordance with proposed Sec. 3.108(d).

Under the proposed rule, the notice of delisting would request that the entity make reasonable efforts to comply with the requirements of proposed Sec. 3.108(c)(2). Compliance with these requirements in this circumstance would mean that the former PSO would be required to notify individuals and organizations that routinely reported data to the entity during its period of listing that it has voluntarily relinquished its status as a PSO and that they should no longer report or submit data, and make reasonable efforts to provide for the disposition of patient safety work product or data in consultation with the sources from which such information was received in compliance with the statutory requirements incorporated in proposed Sec. 3.108(b)(3)(i)-(iii). The former PSO would also be expected to provide appropriate contact information for further communications from the Secretary.

We are aware that, if a PSO does not give appropriate notice to providers from which it receives data, that it does not intend to seek continued listing, this could jeopardize protections for data that these providers continue to report. To address this issue, we are seeking comment in proposed Sec. 3.104(e) on a proposal that would ensure that providers have advance notice that a PSO is approaching the end of its period of listing but has not yet sought continued listing.

(5) Proposed Sec. 3.108(c)(5)--Non-Applicability of Certain Procedures and Requirements

Proposed Sec. 3.108(c)(5) provides that neither a decision by a PSO to notify the Secretary that it wishes to relinquish voluntarily its status as a PSO, nor a situation in which a PSO lets its period of listing lapse, constitutes a deficiency as referenced in the discussion regarding proposed Sec. 3.108(a). As a result, neither the procedures and requirements that apply to the Secretary or a PSO subject to the revocation process outlined in that proposed subsection, nor the requirements that apply to the Secretary or a PSO following action by the Secretary pursuant to proposed Sec. 3.108(b)(1), would apply in cases of voluntary relinquishment. Adoption of this proposal would mean that a PSO has no basis for appealing decisions of the Secretary in response to a request for voluntary relinquishment or challenging its removal from listing if its period of listing lapses and the Secretary determines that implied voluntary relinquishment has occurred. We specifically welcome comment on this proposal.

(D) Proposed Sec. 3.108(d)--Public Notice of Delisting Regarding Removal From Listing

Proposed Sec. 3.108(d) incorporates in the proposed rule the statutory requirement that the Secretary must publish a notice in the Federal Register regarding the revocation of acceptance of certification of a PSO and its removal from listing pursuant to proposed Sec. 3.108(b)(1) (see section 924(e)(3) of the Public Health Service Act, 42 U.S.C. 299b-24(e)(3)). This proposal also would require the Secretary to publish such a notice if delisting results from a determination of voluntary relinquishment pursuant to proposed Sec. 3.108(c)(3) or (c)(4). The Secretary would specify the effective date and time of the actions in these notices.

5. Proposed Sec. 3.110--Assessment of PSO Compliance

Proposed Sec. 3.110 provides that the Secretary may request information or conduct spot-checks (reviews or site visits to PSOs that may be unannounced) to assess or verify PSO compliance with the requirements of the statute and this proposed subpart. We anticipate that such spot checks will involve no more than 5-10% of PSOs in any year. The legislative history of patient safety legislation in the 108th and 109th Congress suggests that the Senate Health, Education, Labor and Pensions (HELP) Committee assumed that the Secretary had the inherent authority to undertake inspections as necessary to ensure that PSOs were meeting their obligations under the statute. In fact, in reporting legislation in 2004, the Senate HELP Committee justified its proposal for an expedited process for listing PSOs--that is substantially the same as the one incorporated in the Patient Safety Act that was enacted in 2005 and is incorporated in this proposed rule--on the basis that the Secretary could and would be able to conduct such inspections.

The ability of the Secretary to "examine any organization at any time to see whether it in fact is performing those required activities" the Senate HELP Committee wrote, enables the Committee to "strike the right balance" in adopting an expedited process for the listing of PSOs by the Secretary (Senate Report 108-196). Accordingly, we tentatively conclude that this proposed authority for undertaking inspections on a spot-check basis is consistent with Congressional intent and the overall approach of the proposed rule of using regulatory authority sparingly.

While patient safety work product would not be a focus of inspections conducted under this proposed authority, we recognize that it may not be possible to assess a PSO's compliance with required patient safety activities without access to all of a PSO's records, including some patient safety work product. This proposed section references the broader authority of the Department to access patient safety work product as part of its proposed implementation and enforcement of the Patient Safety Act.

We also note that the inspection authority of this proposed subpart is limited to PSOs and does not extend to providers.

6. Proposed Sec. 3.112--Submissions and Forms

Paragraphs (a) and (b) of proposed Sec. 3.112 explain how to obtain forms and how to submit applications and other information under the proposed regulations. Also, to help ensure the timely resolution of incomplete submissions, proposed paragraph (c) of this section would provide for requests for additional information if a submission is incomplete or additional information is needed to enable the Secretary to make a determination on the submission.

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C. Subpart C--Confidentiality and Privilege Protections of Patient Safety Work Product

Proposed Subpart C would establish the general confidentiality protections for patient safety work product, the permitted disclosures, and the conditions under which the specific protections no longer apply. The proposed Subpart also establishes the conditions under which a provider, PSO, or responsible person must disclose patient safety work product to the Secretary in the course of compliance activities, and what the Secretary may do with such information. Finally, proposed Subpart C establishes the standards for nonidentifiable patient safety work product.

The privilege and confidentiality protections set forth in this proposed Subpart apply to the PSO framework established by the Patient Safety Act and this proposed Part, which will involve providers, PSOs, and responsible persons who possess patient safety work product. The Patient Safety Act and this proposed Subpart seek to balance key objectives. First, it seeks to address provider concerns about the potential for damage from unauthorized release of such information, including the potential for the information to serve as a roadmap for provider liability from negative patient outcomes. Second, it seeks to promote the sharing of information about adverse patient safety events among providers and PSOs for the purpose of learning from those events to improve patient safety and creating a culture of safety. To address these objectives, the Patient Safety Act established that patient safety work product would be confidential and privileged, with certain exceptions. Thus, the Patient Safety Act allows sharing of patient safety work product for certain purposes, including for patient safety activities, but simultaneously attaches strict confidentiality and privilege protections for that patient safety work product. To further strengthen the confidentiality protections, the Patient Safety Act imposes significant monetary penalties for violation of the confidentiality provisions, as set forth in proposed Subpart D.

Moreover, patient safety work product that is disclosed generally continues to be privileged and confidential, that is, it may only be permissibly disclosed by the receiving entity or person for a purpose permitted by the Patient Safety Act and this proposed Subpart. The only way that patient safety work product is no longer confidential is if the patient safety work product disclosed is nonidentifiable or when an exception to continued confidentiality exists. See section 922(d)(2)(B) of the Public Health Service Act, 42 U.S.C. 299b-22(d)(2)(B). A person disclosing such work product outside of these statutory permissions in violation of the Patient Safety Act and this proposed Subpart may be subject to civil money penalties.

Proposed Sec. 3.204, among other provisions, provides that patient safety work product is privileged and generally shall not be admitted as evidence in Federal, State, local, or Tribal civil, criminal or administrative proceedings and shall not be subject to a subpoena or order, unless an exception to the privilege applies; the exceptions are discussed in proposed Sec. 3.204(b). Proposed Sec. 3.206 provides that patient safety work product is confidential and shall not be disclosed except as permitted in accordance with the disclosures described in proposed Sec. Sec. 3.206(b)-(e), 3.208 and 3.210. Under proposed Sec. 3.208, patient safety work product continues to be privileged and confidential after disclosure with certain exceptions. Under proposed Sec. 3.210, providers, PSOs, and responsible persons must disclose to the Secretary such patient safety work product as required by the Secretary for the purposes of investigating or determining compliance with this proposed Part, enforcing the confidentiality provisions, or making determinations on certifying and listing PSOs. Proposed Sec. 3.210 also provides for disclosure to the Secretary. Proposed Sec. 3.212 describes the standard for determining that patient safety work product is nonidentifiable.

Throughout the proposed rule, the term patient safety work product means both identifiable patient safety work product and nonidentifiable patient safety work product, unless otherwise specified. In addition, if a disclosure is made by or to a workforce member of an entity, it will be considered a disclosure by or to the entity itself.

Finally, throughout our discussion we note the relationship between the Patient Safety Act and the HIPAA Privacy Rule. Several provisions of the Patient Safety Act recognize that the patient safety regulatory scheme will exist alongside other requirements for the use and disclosure of protected health information under the HIPAA Privacy Rule. For example, the Patient Safety Act establishes that PSOs will be business associates of providers, incorporates individually identifiable health information under the HIPAA Privacy Rule as an element of identifiable patient safety work product, and adopts a rule of construction that states the intention not to alter or affect any HIPAA Privacy Rule implementation provision (see section 922(g)(3) of the Public Health Service Act, 42 U.S.C. 299b-22(g)(3)). We anticipate that most providers reporting to PSOs will be HIPAA covered entities under the HIPAA Privacy Rule, and as such, will be required to recognize when requirements of the HIPAA Privacy Rule apply. Because this proposed rule focuses on disclosures of identifiable patient safety work product which may include protected health information, we discuss where appropriate the overlaps between the proposed Patient Safety Act permitted disclosures and the existing HIPAA Privacy Rule use and disclosure permissions.

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1. Proposed Sec. 3.204--Privilege of Patient Safety Work Product

Proposed Sec. 3.204 describes the privilege protections of patient safety work product and when the privilege protections do not apply. The Patient Safety Act does not give authority to the Secretary to enforce breaches of privilege protections. Rather, we anticipate that the tribunals, agencies or professional disciplinary bodies before whom these proceedings take place will adjudicate the application of privilege as set forth in section 922(a)(1)-(5) of the Public Health Service Act, 42 U.S.C. 299b- 22(a)(1)-(5). Even though the privilege protections will be enforced through the court systems, and not by the Secretary, we repeat the statutory privilege provisions and exceptions for convenience. We note, however, that the same exceptions are repeated in the confidentiality context, which the Secretary does enforce; so these are repeated at proposed Sec. 3.206 and such impermissible disclosure may be penalized under proposed Subpart D.

To determine the permissible scope of disclosures under the Patient Safety Act, it is important to understand the application of the privilege protection and its exceptions described in conjunction with the related proposed confidentiality disclosures. The admission of patient safety work product as evidence in a proceeding or through a subpoena, court order or any other exception to privilege, whether permissibly or not, amounts to a disclosure of that patient safety work product to all parties receiving or with access to the patient safety work product admitted. Thus, we use the term disclosure to describe the transfer of patient safety work product pursuant to an exception to privilege, as well as to an exception to confidentiality. In addition, although the Secretary does not have authority to impose civil money penalties for violations of the privilege protection, a violation of privilege may also be a violation of the confidentiality provisions. For these reasons, we include the privilege language in the proposed implementing regulations.

Finally, as discussed in proposed Sec. 3.204(c), we include a regulatory exception to privilege for disclosures to the Secretary for the purpose of enforcing the confidentiality provisions and for making or supporting PSO certification or listing decisions.

(A) Proposed Sec. 3.204(a)--Privilege

Proposed Sec. 3.204(a) would repeat the statutory language at section 922(a) of the Public Health Service Act, 42 U.S.C. 299b-22(a), establishing the general principle that patient safety work product is privileged and is not subject to Federal, State or local civil, criminal or administrative proceedings or orders; is not subject to disclosure under the Freedom of Information Act or similar Federal, State or local laws; and may not be admitted into evidence in any Federal, State or local civil, criminal or administrative proceeding or the proceedings of a disciplinary body established or specifically authorized under State law. In addition, we have clarified that patient safety work product shall be privileged and not subject to use in Tribal courts or administrative proceedings. Because the Patient Safety Act is a statute of general applicability, it applies to Indian Tribes. In addition, the application of the Federal privilege to Tribal proceedings implements the strong privilege protections intended under section 922 of the Public Health Service Act, 42 U.S.C. 299b-22. (See section 922(g)(1)-(2) of the Public Health Service Act, 42 U.S.C. 299b- 22(g)(1)-(2), preserving more stringent Federal, State, and local confidentiality laws).

(B) Proposed Sec. 3.204(b)--Exceptions to Privilege

Proposed Sec. 3.204(b) describes the exceptions to the privilege protection at proposed Sec. 3.204(a) that are established in section 922(c) of the Public Health Service Act, 42 U.S.C. 299b-22(c), as added by the Patient Safety Act. When the conditions set forth in proposed Sec. 3.204(b) are met, then privilege does not apply and would not prevent the patient safety work product from, for example, being entered into evidence in a proceeding or subject to discovery. In all cases, the exceptions from privilege are also exceptions from confidentiality. For proposed Sec. 3.204(b)(1)-(4) and Sec. 3.204(c), we discuss the scope of the applicable confidentiality protection in proposed Sec. 3.206(b) and Sec. 3.206(d).

(1) Proposed Sec. 3.204(b)(1)--Criminal Proceedings

Proposed Sec. 3.204(b)(1) would permit disclosure of identifiable patient safety work product for use in a criminal proceeding, as provided in section 922(c)(1)(A) of the Public Health Service Act, 42 U.S.C. 299b-22(c)(1)(A). Such patient safety work product is not subject to the privilege prohibitions described in proposed Sec. 3.204(a) or the confidentiality protection described in proposed Sec. 3.206(a). See proposed Sec. 3.206(b)(1). Prior to a court determining that an exception to privilege applies pursuant to this provision, a court must make an in camera determination that the identifiable patient safety work product sought for disclosure contains evidence of a criminal act, is material to the proceeding, and is not reasonably available from other sources. See section 922(c)(1)(A) of the Public Health Service Act, 42 U.S.C. 299b-22(c)(1)(A). We discuss in full the requirements of this disclosure under the confidentiality disclosure discussion below.

(2) Proposed Sec. 3.204(b)(2)--Equitable Relief for Reporters

Proposed Sec. 3.204(b)(2) permits the disclosure of identifiable patient safety work product to the extent required to carry out the securing and provision of specified equitable relief as provided for under section 922(f)(4)(A) of the Public Health Service Act, 42 U.S.C. 299b-22(f)(4)(A). This exception is based on section 922(c)(1)(B) of the Public Health Service Act, 42 U.S.C. 299b-22(c)(1)(B). The Patient Safety Act permits this disclosure as an exception to privilege and confidentiality to effectuate the provision that authorizes equitable relief for an employee who has been subjected to an adverse employment action for good faith reporting of information to a PSO directly or to a provider for the intended report to a PSO. We discuss in full the requirements of this disclosure under the confidentiality disclosure discussion below.

(3) Proposed Sec. 3.204(b)(3)--Authorized by Identified Providers

Proposed Sec. 3.204(b)(3) describes when identifiable patient safety work product may be excepted from privilege when each of the providers identified in the patient safety work product authorizes the disclosure. This provision is based on section 922(c)(1)(C) of the Public Health Service Act, 42 U.S.C. 299b-22(c)(1)(C). Such patient safety work product is also not subject to the confidentiality protections described in proposed Sec. 3.206(a). We discuss in full the requirements of this disclosure under the confidentiality disclosure discussion below.

(4) Proposed Sec. 3.2049(b)(4)--Nonidentifiable Patient Safety Work Product

Proposed Sec. 3.204(b)(4) permits patient safety work product to be excepted from privilege when disclosed in nonidentifiable form. This provision is based on section 922(c)(3) of the Public Health Service Act, 42 U.S.C. 299b-22(c)(3). As with other privilege protections, we expect the tribunals for which the information is sought to adjudicate the application of this exception. We discuss in full the requirements of this disclosure in the confidentiality disclosure discussion below.

(C) Proposed Sec. 3.204(c)--Implementation and Enforcement of the Patient Safety Act

Proposed Sec. 3.204(c) excepts from privilege disclosures of relevant patient safety work product to or by the Secretary as needed for investigation or determining compliance with this Part or for enforcement of the confidentiality provisions, or for making or supporting PSO certification or listing decisions, under the Patient Safety Act. We propose that the Secretary may use and disclose patient safety work product when pursuing civil money penalties for impermissible disclosures. This is a privilege exception in the same manner as exceptions listed in proposed Sec. 3.204(b), but we state it separately to provide specific emphasis for the inclusion of this exception to privilege by the Secretary for enforcement activities. This information is also a permissible disclosure under proposed Sec. 3.206(d), discussed below.

The Patient Safety Act provides for broad privilege and confidentiality protections, as well as the authority for the Secretary to impose civil money penalties on persons who knowingly or recklessly disclose identifiable patient safety work product in violation of those protections. However, in order to perform investigations and compliance reviews to determine whether a violation has occurred, the Secretary may need to have access to privileged and confidential patient safety work product.

We believe that Congress could not have intended that the privilege and confidentiality protections afforded to patient safety work product operate to frustrate the sole enforcement mechanism Congress provided for the punishment of impermissible disclosures and to preclude the imposition of civil money penalties. As a matter of public policy, the creation of a confidentiality protection is meaningless without the capacity to enforce a breach of those protections. For these reasons, we propose a privilege exception narrowly drawn to permit the Secretary to perform the enforcement and operational duties required by the Patient Safety Act, which include the submission of patient safety work product to administrative law judges (ALJs), the Departmental Appeals Board (Board), and the courts.

This proposed provision would permit the disclosure of patient safety work product to the Secretary or disclosure by the Secretary so long as such disclosure is for the purpose of implementation and enforcement of these proposed regulations. Such disclosure would include the introduction of patient safety work product into proceedings before ALJs or the Board under proposed Subpart D by the Secretary, as well as the disclosure during investigations by OCR or activities in reviewing PSO certifications by AHRQ. Moreover, disclosures of patient safety work product made to the Board or other parts of the Department that are received by workforce members, such as contractors operating electronic web portals or mail sorting and paper scanning services, would be permitted as a disclosure to the Secretary under this proposed provision. This provision would also permit the Board to disclose any patient safety work product in order to properly review determinations or to provide records for court review.

Patient safety work product disclosed under this exception remains protected by both privilege and confidentiality protections as proposed in Sec. 3.208. This exception does not limit the ability of the Secretary to disclose patient safety work product in accordance with the exceptions under proposed Sec. 3.206(b) or this Part. Rather, this proposed section provides a specific permission by which patient safety work product may be disclosed to the Secretary and the Secretary may further disclose such patient safety work product for compliance and enforcement purposes.

We believe strongly in the protection of patient safety work product as provided in the Patient Safety Act and the proposed regulation, and seek to minimize the risk of improper disclosure of patient safety work product by using and disclosing patient safety work product only in limited and necessary circumstances. We intend that any disclosure made pursuant to this proposed provision be limited in the amount of patient safety work product disclosed to accomplish the purpose of implementation, compliance, and enforcement. Proposed Sec. 3.312 discusses the limitations on what the Secretary may do with any patient safety work product obtained pursuant to an investigation or compliance review under proposed Subpart D. As discussed in the preamble to proposed Sec. 3.312, section 922(g)(3) of the Public Health Service Act, 42 U.S.C. 299b-22(g)(3), provides that the Patient Safety Act does not affect the implementation of the HIPAA confidentiality regulations. Accordingly, the privilege provisions in the Patient Safety Act would not bar the Secretary from introducing patient safety work product in a HIPAA enforcement proceeding.

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