United States ex rel. Roberts v. QHG of Ind., Inc.

Full title: UNITED STATES OF AMERICA ex rel. STEPHANIE ROBERTS and LAURA LEAMING…

Court: United States District Court, N.D. Indiana, Fort Wayne Division

Date published: Oct 8, 1998

Cause No. 1:97-CV-174 (N.D. Ind. Oct. 8, 1998)

Opinion

Cause No. 1:97-CV-174.

October 8, 1998

MEMORANDUM OF DECISION AND ORDER

ROGER COSBEY, Magistrate Judge

I. INTRODUCTION

This matter is before the Court on the Motion for Protective Order filed on August 6, 1998, by Defendants QHC of Indiana, Inc., and IOM Health Systems, L.P. (collectively "QHC"). Defendants Tai-Min Chen, M.D. ("Dr. Chen") and Neonotalogy Services, P.C. (collectively "Chen") filed a motion to join in QHC's motion on August 6, 1998, which the Court granted on September 10, 1998. Plaintiffs, Stephanie Roberts and Laura Leaming, ("the Relators") filed responses to Chen's motion and QHC's motion on August 17 and August 18, 1998, respectively. QHC and Chen filed their replies on August 31, 1998, oral argument was held on the motions on September 22, 1998, and the motions are ripe for review. For the reasons hereinafter provided, the motions will be DENIED, although the Court will nevertheless place some limits on the discovery sought by the Relators.

II. BACKGROUND ¹

1 The activities alleged in the complaint implicate the care Dr. Chen provided to infants during his employment in Lutheran Hospital's Neonatal Intensive Care Unit ("NICU"). In the interests of clarity, the Court shall refer to "the hospital" or "Lutheran" rather than the various named corporate defendants in discussing the background facts.

The Relators, as private citizens on behalf of the United States, have brought this action pursuant to the qui tam ² provision of the False Claims Act, 31 U.S.C. § 3729 et seq. To vastly oversimplify, the Relators allege that Dr. Chen intentionally treated infants in such a manner to cause the infants to remain in the NICU longer than necessary, so as to enable him and the hospital to bill third party insurers, including Medicaid, for greater amounts than they would have they would have billed had Dr. Chen provided the infants with proper care. Put another way, the Relators allege that the Defendants intentionally mistreated infants for the purpose of defrauding the United States government.

2 "Qui tam" is short for "qui tam pro domino rege quam pro se imposo sequitur," which in English means "who brings the action as well for the king as for himself." United States ex rel. Hall v. Tribal Development Corp., 49 F.3d 1208, 1210 n. 2 (7th Cir. 1994) (citations omitted).

The Defendants' motion for a protective order is directed at certain discovery sought by the Relators, including, inter alia: billing records from the NICU for the last ten years; the complete medical records of infants treated by the NICU from 1991 to the present; complaints received by the hospital regarding Dr. Chen; the minutes from meetings of various hospital committees; and information pertaining to all infants treated by Dr. Chen during his employ at Lutheran. In essence, the discovery objected to by the Defendants falls into two categories: materials that arguably inquire into Lutheran's process of evaluating and monitoring the qualifications and skills of Dr. Chen (i.e., materials relating to the complaints pertaining to Dr. Chen); and materials that consist of the medical records of non-parties. The Defendants contend that the former are not discoverable because they are privileged under the principles embodied in Indiana's "Peer Review Statute," Ind. Code. § 34-30-15-1 et seq, ³ and that the latter are not discoverable under both Indiana substantive law and a constitutional right to privacy in medical records.

3 Peer review is the process of evaluation and monitoring of qualifications and skills of physicians by their colleagues with whom they practice in a particular health care facility. See generally Walton v. Jennings Community Hospital, Inc., 875 F.2d 1317, 1322 (7th Cir. 1989); Marrese v. Interqual, Inc., 748 F.2d 373, 387 (7th Cir. 1984); Jeanne Darricades, Comment, Medical Peer Review: How is it Protected By the Health Care Quality Improvement Act of 1986?, 18 J. CONTEMP. L. 263, 270 (1992). The process is designed to guarantee that peer review committees have access to full and frank assessments of applicants for positions on medical staffs so as to monitor the quality, appropriateness, and necessity of the medical care given to patients. The Indiana Peer Review Statute is a comprehensive statute designed to create an atmosphere amenable to effective peer review, and thus foster an effective review of (and presumably improvements to) the state's health care, by ensuring the confidentiality of peer review materials. See Mulder v. Vankersen, 637 N.E.2d 1335, 1338 (Ind.Ct.App. 1994).
As noted by QHG, the Indiana Peer Review Statute was recently amended and recodified. Given the Court's disposition of the privilege issue, we need not determine which version of the statute is applicable in this case, and we shall refer to the statute in its present codification, Ind. Code § 34-30-15 et seq. (1998).

III. DISCUSSION A. Peer Review Materials

The Defendants correctly assert that Indiana's Peer Review Statute intends that peer review material be kept confidential, and that disclosure of such information be prohibited. See Ind. Code § 34-30-15-10. Indeed, the Defendants contend that "[t]he statute is clear and unambiguous in its prohibition against the disclosure of the content of communications to, or the determination of, a peer review committee." QHC Br. is Supp. at 7. However, the Relators' complaint asserts federal claims under the False Claims Act, and therefore Fed.R.Evid. 501, and not state statutory law, supplies the framework for addressing the Defendants' claim of privilege as to the peer review materials. See Patterson v. Caterpillar, Inc., 70 F.3d 503, 506 (7th Cir. 1995) (citation omitted); Memorial Hospital for McHenry County v. Shadur, 664 F.2d 1058, 1061 (7th Cir. 1981). Fed.R.Evid. 501 provides in pertinent part:

Except as otherwise required by the Constitution of the United States or provided by Act of Congress or in rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of a witness, person, government, State, or political subdivision thereof, shall be governed by the principles of common law as they may be interpreted by the courts of the United States in the light of reason and experience.

Nevertheless, federal courts should, as a matter of comity, consider the law of the state in which the case arises, and recognize that state's evidentiary privileges "where this can be accomplished at not substantial cost to federal substantive and procedural policy." Memorial Hospital, 664 F.3d at 1061 (citation omitted). Stated somewhat differently, a federal court should incorporate a state privilege only to the extent that privilege is consistent with the federal policies at issue in a case. See Syposs v. United States, 179 F.R.D. 406, 408 (W.D.N.Y. 1998 (citing Wei v. Bodner, 127 F.R.D. 91, 94-95 (D.N.J. 1989)); Pagano v. Oroville Hospital, 145 F.R.D. 683, 688 (E.D. Cal. 1993) ("The initial determination is whether application of the state law would be inconsistent with federal law."). Therefore, we shall proceed with the relevant inquiry: whether the medical peer review privilege principles established by the Indiana Legislature are inconsistent with federal law. According to the Hospital, Indiana's peer review privilege is consistent with past decisions of this Court, as well as federal statute. We disagree.

1. Federal Common Law

"A determination on whether to recognize an evidentiary privilege requires a balancing of competing policies." EEOC v. University of Notre Dame Du Lac, 715 F.2d 331, 335 (7th Cir. 1983). "First, because evidentiary privileges operate to exclude relevant evidence and thereby block the judicial fact-finding function, they are not favored and, where recognized, must be narrowly construed." Memorial Hospital, 664 F.2d at 1061 (citing United States v. Nixon, 418 U.S. 683, 710, 94 S.Ct. 3090, 3108 (1974)). Accord Jaffee v. Redmond, 518 U.S. 1, 9, 116 S.Ct. 1923, 1928 (1996); University of Pennsylvania v. EEOC, 493 U.S. 182, 189, 110 S.Ct. 577, 582 (1990). "Second, in deciding whether the privilege asserted should be recognized, it is important to take into account the particular factual circumstances of the case in which the issue arises." Memorial Hospital, 664 F.2d at 1061. "The court should 'weigh the need for truth against the importance of the relationship or policy sought to be furthered by the privilege, and the likelihood that recognition of the privilege will in fact protect that relationship in the factual setting of the case.'" Id. at 1061-62 (quoting Ryan v. Commissioner of Internal Revenue, 568 F.2d 531, 543 (7th Cir. 1977), cert. denied, 439 U.S. 820, 99 S.Ct. 84 (1978)).

Applying these principles to the facts of the instant case, it is clear that the need for full disclosure of the relevant evidence to the trier of fact is particularly substantial in this case. As mentioned supra, the Relators allege that Dr. Chen and the hospital knowingly defrauded the federal government. The underlying purpose of False Claims Act, including Congress' efforts to strengthen the Act's qui tam provisions in 1986, is to provide a mechanism to combat fraud against the federal government, which has been estimated to cost the taxpayers tens to hundreds of billions of dollars per year. See S. REP. No. 99-345, at 2-3 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, at 5267-68. Therefore, if successful, the Relators would vindicate the strong public policy embodied in the False Claims Act. See Memorial Hospital, 664 F.2d at 1062 (need for full disclosure is substantial when the evidence would support the vindication of a strong public policy interest).

Moreover, the information contained in the peer review materials sought by the Relators appears to represent the only source of evidence from which the Relators can establish actual knowledge on the part of the Defendants, an element of proof required by the False Claims Act. See 31 U.S.C. §§ 3729(a), (b). In other words, if the Relators were unable to access this information, they may very well be prevented from proving their False Claims Act fraud claims. Such an outcome would, for all intents and purposes, effectively grant immunity to these Defendants and all similarly situated health care providers who become subject to fraud allegations brought pursuant to the False Claims Act.

The Seventh Circuit found this circumstance dispositive in Memorial Hospital, where it distinguished the plaintiff's need there to prove a restraint of trade from what the plaintiff was seeking to prove in Bredice v. Doctor's Hospital, 50 F.R.D. 249 (D.D.C. 1970), aff'd 479 F.2d 920 (D.C. Cir. 1973), a medical malpractice claim. The Seventh Circuit explained that the critical issue in a medical malpractice claim is the degree of care employed by the physician, and agreed with the Bredice court that subsequent peer review comments are not relevant to that determination, but even more importantly, the court recognized that medical malpractice claimants remain able to prove their cases using other evidence. Memorial Hospital, 664 F.2d at 1062. In contradistinction, in Memorial Hospital the Seventh Circuit noted that the plaintiff's restraint of trade claim arose out of the peer review proceedings themselves, and not some event independent of those proceedings. Id. at 1062-63. Furthermore, the Seventh Circuit pointed out that such restraint of trade evidence, if it existed, would likely be found in the peer review materials. Id. at 1063; see also University of Pennsylvania, 493 U.S. at 193, 110 S.Ct. at 584 ("Indeed, if there is a 'smoking gun' to be found. . . . it is likely to be in the peer review files."). Therefore, the Seventh Circuit held that the need for discovery of information going to the heart of the issues in the case required disclosure. Id. Memorial Hospital is in line with the vast majority of federal courts which have not only addressed this issue, but which have consistently refused to recognize an absolute medical peer review privilege in the face of a plaintiff's critical need for discovery of information involving the potential vindication of a strong federal interests, particularly in cases involving enforcement of the anti-trust and anti-discrimination laws. See Holland v. Muscatine General Hospital, 971 F. Supp. 385 (S.D. Iowa 1997) (disclosure required because the plaintiff's need to prove that the hospital knew or should have known of a Title VII hostile environment, and that this placed the adequacy of the peer review investigation itself in issue) (citing Memorial Hospital, 664 F.2d at 1062-63); Price v. Howard County General Hospital, 950 F. Supp. 141, 144 n. 3 (D. Md. 1996) (recognizing that in the anti-trust context, allegations of misconduct in the medical peer review process could only be discovered through access to the peer review materials); Johnson v. Nyack Hospital, 169 F.R.D. 550, 558 n. 12 (S.D.N.Y. 1996) (collecting cases in which the federal interests in discovery in federal question cases outweighed the need for confidentiality of peer review records); Pagano, 145 F.R.D. at 690-92 (disclosure of peer review materials was required when the peer review itself is under attack) (anti-trust case); Dorsten v. Lapeer County General Hospital, 88 F.R.D. 583, 596 (E.D. Mich. 1980) ("it is difficult to perceive how any Plaintiff can be expected to argue and prove [an anti-trust and sex discrimination] case without access to the [peer review materials]"); Robinson v. Magovern, 83 F.R.D. 79, 89 (W.D. Pa. 1979) (disclosure of peer review information required because it went to the heart of the issues in the plaintiff's anti-trust claims). At bottom, the importance of the federal interest at issue in this case, combined with the important, if not penultimate, role the peer review evidence plays in proving the Relators' claims, weighs heavily on the side of full disclosure, an interest which is inconsistent with the Hospital's claim of privilege under state law.

Nevertheless, the Hospital argues that this Court, in interpreting Memorial Hospital, has recognized the privilege created by Indiana's Peer Review Statute. Specifically, the Hospital argues that this Court ruled in its previous decisions of Doe v. St. Joeseph's Hospital of Fort Wayne, 113 F.R.D. 677 (N.D. Ind. 1987), and Schafer v. Parkview Memorial Hospital, Inc., 593 F. Supp. 61 (N.D. Ind. 1984), that when peer review materials are sought "qua" peer review, that is, for the purpose of obtaining information as to the quality of a physician's care, they are protected from disclosure by the Indiana Peer Review Statute. According to the Hospital, the Relators seek peer review information relating to Chen qua peer review, and therefore the state statute prevents this discovery.

However, the Hospital's purported "peer review qua peer review" rule appears to be merely another way of articulating the general holding of Memorial Hospital, that a balance must be struck between a plaintiff's needs for disclosure and the defendant's need to protect confidentiality, and that where a plaintiff's claim arises out of the peer review proceeding itself, and has a significant impact upon the plaintiff's ability to present his case, the same is discoverable. Schafer, 593 F. Supp. at 64 (citing Memorial Hospital, 664 F.2d at 1062).⁴

4 This Court's decision in Doe v. St. Joeseph's Hospital, a Title VII case, is not to the contrary. Judge Sharp recognized the general rule that "the need for truth in cases which allege that the communications to, records of or determinations of the peer review committee illustrate discrimination outweighs the right to an absolute privilege," id. at 680, but nevertheless upheld the Defendant hospital's peer review privilege defense to a motion to compel discovery because the plaintiff had failed to allege facts from which even an inference of workplace discrimination could arise. Id.; cf. Brem v. Decarlo, Lyon, Hearn Pazourek, P.A., 162 F.R.D. 94, 102 (D. Md. 1995) (upholding peer review privilege in defamation case, in part because the requested information could be obtained through means other than the peer review materials). In contradistinction, the Relators competently allege facts sufficient to support their False Claims Act claims, and furthermore contend, without serious objection by the Defendants, that the peer review materials represent the only evidence which could illustrate the Defendants' intent to defraud the federal government.

As demonstrated by the cases cited supra, this rule has been applied with rather bright-line results. The privilege appears to survive in medical malpractice cases, where the critical issue is not what occurred during the peer review meetings, and where the plaintiff has other means of obtaining evidence demonstrating that the defendant physician was negligent. E.g., Bredice, 50 F.R.D. at 250. On the other hand, disclosure is consistently required in discrimination and anti-trust cases, where the substance of the peer review meetings, and not a physician's standard of care, is at issue. E.g., Memorial Hospital, 664 F.2d at 1062-63. Neither the parties nor the Court have located a case where the medical peer review privilege has been applied under the False Claims Act, thus making this a question of first impression.⁵

5 The Court's research has uncovered one case in which the "self-critical analysis" privilege, which is analogous to the peer review privilege, was invoked to preclude discovery in a qui tam False Claims Act case. In United States ex rel. Falsetti v. Southern Bell Telephone and Telegraph Co., 915 F. Supp. 308 (N.D. Fla. 1996), the district court, relying upon the Supreme Court's admonition in University of Pennsylvania that federal courts should be reluctant to recognize a privilege "in an area where it appears that Congress has considered the relevant competing concerns but has not provided the privilege itself," University of Pennsylvania, 493 U.S. at 189, 110 S.Ct. at 582 (citation omitted), reviewed the text and associated legislative history of the 1986 amendments to the False Claims Act, and concluded that Congress created only a safe-haven exception for those persons who uncovered past fraud violations, but that this was not a self-critical analysis exception to liability. Falsetti, 915 F. Supp. at 311-13 (citing 31 U.S.C. §§ 3729(a)(1-7) (A-C)). Therefore, the district court found that because Congress had considered the relevant competing interests, and had not created an explicit self-critical analysis privilege, such a privilege did not exist in a qui tam action under the False Claims Act. Id. at 313. While not on all fours with this case, Falsetti supports our final conclusion that there is not a peer review privilege.

The Relators' claims appear to be a hybrid of these two paradigms, combining elements of both of the typical cases in which the peer review privilege is raised. First, the Relators must show that Dr. Chen's care was substandard, as in a traditional medical malpractice case. Then, the Relators must prove that Dr. Chen, in concert with the Hospital, knew that Dr. Chen's care led to a fraudulent overbilling of Medicaid which was condoned or supported. Evidence on this latter point really pertains to the substance of the peer review meetings, rather than Dr. Chen's standard of care, and may only be found, as in a discrimination or anti-trust case, in the peer review materials. Tellingly, the Relators' complaint specifically states that this action is not being brought as a medical malpractice case, but as an action to uncover fraud under the False Claims Act. See Third Amend. Compl. Rhet. ¶ 1. Therefore, while the degree of care employed by Dr. Chen will certainly be one facet of the Relators' case-in-chief, the gravamen of the Relators' case focuses on the intentional and knowing actions taken by the Defendants to defraud the federal government. More importantly, the evidence supporting the Relators' claims, if any is discovered, will presumably only appear in the peer review materials. Therefore, the unique facts of this case, when analyzed using the federal common law rule established in Memorial Hospital, leads to the conclusion that there is no peer review privilege, and that these materials must be disclosed.

This conclusion is bolstered by the Supreme Court's rejection of the peer review privilege under the common law in its University of Pennsylvania decision, which post-dates Memorial Hospital, Schafer, and Doe. ⁶ In that case, the EEOC subpoenaed the tenure review files of a woman denied tenure who had sued the university under Title VII. The university argued that the tenure review materials were confidential peer review materials, and thus protected by common law privilege. The Supreme Court rejected this argument, first noting that Congress had considered, and rejected, such a privilege when it enacted Title VII. University of Pennsylvania, 493 U.S. at 189-193, 110 S.Ct. at 582-84; see note 5 supra. The Court further held that such a peer review privilege had no historical or statutory basis, University of Pennsylvania, 493 U.S. at 195, 110 S.Ct. at 585, and found it significant that the peer review materials would be necessary to determine the ultimate question raised in the case: whether illegal discrimination had taken place. Id. at 193, 110 S.Ct. at 584.

6 Although University of Pennsylvania dealt with academic, rather than medical, peer review materials, there seems to be no reason why this Court should not apply the Supreme Court's holding to this case. See Syposs, 179 F.R.D. at 411-12 (finding University of Pennsylvania persuasive authority in assessing a claim for a medical peer review privilege); Johnson, 169 F.R.D. at 559-60 (same); Robertson v. Neuromedical Center, 169 F.R.D. 80, 83 (M.D. La. 1996) (same). Curiously, this apparently relevant precedent was not cited by any party in their briefs.

Clearly, then, University of Pennsylvania reaffirms the Seventh Circuit's holding in Memorial Hospital that the peer review privilege is not grounded in the common law. Indeed, later decisions have relied upon both University of Pennsylvania and Memorial Hospital in finding that when the adequacy of the peer review investigation itself gives rise to a federal claim, and if recognizing the peer review privilege would impede the vindication of an important federal substantive right, the Rule 501 balancing test weighs in favor of disclosure. See Holland, 971 F. Supp. at 390; Johnson, 169 F.R.D. at 558 n. 12, 559; Pagano, 145 F.R.D. at 690-92; Teasdale v. Marin General Hospital, 138 F.R.D. 696, 698-99 (N.D. Cal. 1991).

Against this rather involved backdrop, the Hospital acknowledges that Memorial Hospital controls this motion, and accepts the general rule that state privileges do not prevent disclosure when the information at issue is necessary to a plaintiff's federal case. However, the Hospital contends that the Relators' unique posture as qui tam plaintiffs should lead the Court to conclude that the Rule 501 balancing inquiry weighs against full disclosure and in favor of recognizing Indiana's peer review privilege. Specifically, the Defendants contend that the Relators have suffered no redressable injury under the False Claims Act, and that the federal government and the neonatal infants themselves have remedies to compensate for any wrongdoing by the Defendants, all of which leads to the conclusion that the Relator's need for the peer review materials is not outweighed by the peer review privilege. This argument verges on a non sequitur, and miscomprehends both the nature of qui tam suits in general, as well as the specific claims advanced by the Relators.

First, the fact that the Relators have not suffered an injury-in-fact is irrelevant to their efforts to prove the merits of their case. As the Seventh Circuit has explained:

Qui tam suits by definition involve suits brought by private parties to assist the executive branch in its enforcement of the law, the violation of which affects the interest of the government, not the individual relator, whose only motivation in bringing suit is to recover a piece of the action given by the statute. So when a legislative body enacts provisions enabling qui tam actions, that act carries with it an understanding that in such suits it is the government, not the individual relator, who has suffered the injury resulting from the violation of the underlying law and is therefore the real plaintiff in the action.

United States ex re. Hall v. Tribal Development Corp., 49 F.3d 1208, 1212 (7th Cir. 1995). The court continued:

In [usual governmental lawsuits] no one would question whether the Assistant United States Attorney prosecuting the government's case has suffered an injury-in-fact . . . That Congress should enlist a private party, instead of one of the government's more common representatives, to champion the government's case should not change the outcome. Nor, for that matter, should it be necessary for the private qui tam relator to demonstrate a "personal stake" in the outcome of the dispute any more than it would be necessary for an Assistant United States Attorney to prove that he has a personal stake in the outcome of the case . . . Requiring an additional showing of injury on the part of the qui tam relator would be an analytical redundancy.

Id. at 1213-14; see also United States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 749 (9th Cir. 1993) (False Claims Act case); United States ex rel. Fallon v. Accudyne Corp., 921 F. Supp. 611, 622-63 (W.D. Wisc. 1995) (same). Therefore, the Hospital's contention that the Relators have not suffered an injury-in-fact has nothing to do with need or ability of the Relators to obtain discovery so as to prosecute this case.

This point dovetails into the Hospital's second argument, that the Relators do not have a compelling interest in the peer review materials because at this point in the litigation the government retains the power to later intervene in the case, or to proceed administratively. See 31 U.S.C. § 3730(c)(2). This argument is untenable, however, because it fails to take into account the fact that Congress establishes qui tam provisions for the very purpose of "enlisting private parties . . . to champion the government's case." Hall, 49 F.3d at 1213; see also Hughes Aircraft Co. v. United States ex rel. Schumer, ___ U.S. ___, ___, 117 S.Ct. 1871, 1874 (1997) ("The qui tam provision of the False Claims Act . . ., 31 U.S.C. § 3730(b), permits, in certain circumstances, suits by private parties on behalf of the United States against anyone submitting a false claim to the Government."); 31 U.S.C. § 3730(c)(3) ("If the Government elects not to proceed with the action, the person who initiated the action shall have the right to conduct the action."). Accepting the Hospital's argument would seriously weaken the qui tam provision of the False Claims Act because no relator would be able to maintain a private lawsuit, much less "champion the government's case," if he or she were denied access to crucial discovery merely because the government might later intervene in the action. That is, the Relators should not be stripped of the power to fully prosecute this lawsuit merely because Congress has also allowed the government certain powers over qui tam suits.

Finally, the Hospital argues that the Relators do not have a compelling interest in the peer review materials because the neonates who were allegedly harmed by Dr. Chen's conduct have other remedies for redressing such alleged wrongs, namely, medical malpractice actions. This contention is misplaced, however, because the neonates are not parties to this litigation. Indeed, the Third Amended Complaint emphasizes that this is not a medical malpractice action at all, but rather one to recover for fraud under the False Claims Act. See Third Amended Compl. Rhet. ¶ 1. In sum, the Defendants' attempts to distinguish this case based upon its unique qui tam status are unavailing. Moreover, Indiana's peer review statute is inconsistent with federal common law, in that the Relator's need for the peer review materials to prove their case, and thus vindicate an important federal interest, clearly outweighs the Hospital's claim of privilege under Rule 501.

2. Health Care Quality Improvement Act of 1986

The Hospital also argues that the principles embodied in Indiana's medical peer review privilege are "clearly aligned with federal concerns," because Congress federalized the concept of a medical peer review privilege with the Health Care Quality Improvement Act of 1986, 42 U.S.C. § 1101 et seq. ("HCQIA").⁷ However, a close comparison of the Indiana Peer Review Statute and the HCQIA reveals that the statutes in fact take totally distinct approaches to the peer review privilege. As noted supra, the Indiana Peer Review Statute creates a complete and unambiguous evidentiary privilege. See Ind. Code § 34-30-35-9, -10 (1998). In contrast, the HCQIA does not establish such a broad based peer review privilege. Indeed, courts which have analyzed the question have uniformly found that Congress, in enacting the HCQIA:

7 As detailed in Pagano:

The HCQIA is set forth as Chapter 117 of the Public Health and Welfare Code, entitled "Encouraging Good Faith Professional Review Activities." It is based, inter alia, on Congressional findings that a nationwide medical malpractice problem can be remedied through concerted professional peer review activities aimed at "restrict[ing] the ability of incompetent physicians to move from State to State." 42 U.S.C. § 11101. The Act establishes a national clearinghouse of reports of professional review actions which adversely affect the clinical privileges or status of physicians ( Id., § 11133), reports of sanctions taken by boards of medical examiners (§ 11132), and reports of medical malpractice payments (§ 11131). Hospitals have a duty to obtain this information on a regular basis concerning any physician or licensed health care practitioner for whom they have granted clinical privileges (§ 11135), and such information is also available to other health care entities and licensing boards. In order to "provide incentive and protection for physicians engaging in effective professional peer review," (§ 11101) the Act accords limited liability immunity to professional review bodies, their members and staff. (§§ 11101, 11111).

Pagano, 145 F.R.D. at 693.

not only considered the importance of maintaining the confidentiality of the peer review process, but took the action it believed would best balance protecting confidentiality with other important interests. Congress spoke loudly with its silence in not including a privilege against discovery of peer review materials in the HCQIA.

Johnson, 169 F.R.D. at 560 (quoting Teasdale v. Marin General Hospital, 138 F.R.D. 691, 694 (N.D. Cal. 1991)); see also Syposs, 179 F.R.D. at 410 (citing Robertson, 169 F.R.D. at 84); Pagano, 145 F.R.D. at 694. Moreover, we must keep in mind the Supreme Court's admonition that courts should be "especially reluctant to recognize a privilege in an area where it appears that Congress has considered the relevant competing concerns but has not provided the privilege itself," University of Pennsylvania, 493 U.S. at 189, 110 S.Ct. at 582, which, given the fact that Congress enacted the HCQIA without a broad peer review provision, compels the conclusion that this Court is not free to recognize such a privilege in that statute. See Johnson, 169 F.R.D. at 561; Robertson, 169 F.R.D. at 84 ("The absence of such a [peer review] privilege in [the HCQIA] is evidence that Congress did not intend these records to have the level of confidentiality and protection advanced by the hospitals and provided by the state statute."); Pagano, 145 F.R.D. at 695. At bottom, then, the medical peer review privilege contained in the Indiana Peer Review Statute is inconsistent with federal common law, and is quite dissimilar from the HCQIA. Therefore, the authority of University of Pennsylvania and Memorial Hospital dictates that the Hospital's motion for a protective order must be denied as to the medical peer review materials.

B. Access to Third Party Medical Records

All of the Defendants argue that the Relators are not entitled to obtain the medical records of other children treated by Dr. Chen under the "Indiana Access to Medical Records Act," Ind. Code 16-39 et seq., the physician-patient privilege, and because production of the records would intrude on a right to privacy under the United States Constitution.⁸ The state statutory argument need not detain us long, for the Supremacy Clause of the United States Constitution renders the Indiana Access to Medical Records Act "void and of no effect" to the extent that it can be construed to exclude evidence relevant to a claim based on federal law brought in federal court. Memorial Hospital, 664 F.2d at 1063; U.S. CONST. Art. VI, cl. 2 (federal law "shall be the supreme Law of the Land"). The Defendants' reliance upon the physician-patient privilege is similarly misplaced, since federal courts do not recognize a physician-patient privilege. See Whalen v. Roe, 429 U.S. 589, 602 n. 28, 97 S.Ct. 869, 877 n. 28 (1977) ("The physician-patient evidentiary privilege is unknown to the common law."); Patterson, 70 F.3d at 506-07 ("federal common law does not recognize a physician-patient privilege"); Mann v. University of Cincinnati, 152 F.R.D. 119, 120 n. 1 (S.D. Ohio 1993), aff'd in relevant part, 114 F.3d 1188, **3-**4 (6th Cir. 1997) (Table) ("We note our disagreement with the Magistrate Judge's interpretation of the law in this circuit with respect to the Doctor-Patient privilege.").⁹

8 The Relators appear to concede that the Defendants have standing to raise the constitutional right to privacy of the patients. See Pesce v. J. Sterling Morton High School, District 201, Cook County, Ill., 830 F.2d 789, 797 (7th Cir. 1987) (collecting cases).

9 All Defendants appear to have relied upon Magistrate Judge Steinberg's opinion in Mann v. University of Cincinnati, 824 F. Supp. 1190 (S.D. Ohio 1993), to support two propositions: first, that the third party medical records are protected by the physician-patient privilege, and second, that a constitutional right to privacy precludes disclosure of those records. However, no party favored the Court, in their briefs or at oral argument, with District Judge Spiegel's opinion reversing the Magistrate Judge's ruling on the privilege issue, as cited above, or with the Sixth Circuit's opinion reversing the Magistrate Judge and District Judge on the constitutional privacy right issue, which we shall discuss infra. See 116 F.3d 118 at **3 (Table) (holding that the Sixth Circuit has consistently rejected claims that medical records are of such a private and personal nature that they enjoy constitutional protection); Id. at **4 ("federal courts do not recognize a federal physician-patient privilege") (citing, inter alia, Patterson, 70 F.3d at 506-07).

Turning to the constitutional inquiry, the Supreme Court has recognized that there is a constitutionally protected zone of privacy in avoiding disclosure of personal matters. Whalen, 429 U.S. at 599-600, 97 S.Ct. at 876. However, this right is a limited one, subject it appears, to a balancing test comparing the individual's interest in confidentiality to the public's interest in disclosure. See generally Pesce, 830 F.2d at 795-97 n. 5 (7th Cir. 1987); see also In Re August 1992 Regular Grand Jury, 854 F. Supp. 1380, 1388-89 (S.D. Ind. 1994) (constitutional right to privacy under Whalen is a limited one); Pagano, 145 F.R.D. at 696 ("The Supreme Court has recognized only a limited privacy interest in the confidentiality of one's medical records.") (citing Whalen); Morgenstern v. Wilson, 133 F.R.D. 139, 142 (D. Neb. 1990); Wei, 127 F.R.D. at 97-98; Schachar v. American Academy of Opthalmology, Inc., 106 F.R.D. 187, 189-90 (N.D. Ill. 1985). However, as the cases have recognized, the privacy interests of a patient in his or her medical records is tied to identity information contained in the records. See Wei, 127 F.R.D. at 98 ("Most people do not object solely to the disclosure of personal information. Rather it is the combination of the personal information with identifying information to which people object."). Once the identifying information is removed from the record, the patient's privacy interest is essentially eliminated. See Pagano, 145 F.R.D. at 699 ("the requested disclosure is permissible provided that the identities of the patients and physicians are protected"); Wei, 127 F.R.D. at 98 ("once the identifying information is redacted, the majority of the privacy concerns are eliminated") (citing Schachar, 106 F.R.D. at 190). Therefore, the third party medical records will be ordered produced, with the names and all other identifying information redacted.

However, the Relators have shown an understandable need to correlate each patient's documents so as to show the pattern of care that Dr. Chen provided to each particular infant. See Wei, 127 F.R.D. at 98. So as to allow the Relators this information, while at the same time ensuring that the patients' privacy interests remain protected, a number or letter code corresponding to each individual patient is to be substituted in place of the name of each patient so as to allow the Relators a complete picture of the care afforded to each particular infant. Id.; see also Pagano, 145 F.R.D. at 699. A master list containing the code and corresponding patient names is to be filed under seal with the Court.

C. Scope of Discovery

The Defendants also argue that the Relators' discovery requests are overbroad, burdensome, and oppressive, and must be limited. The Relators' discovery requests are governed by Fed.R.Civ.P. 26(b)(1), which states in pertinent part:

Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action . . . The information sought need not be admissible at trial if the information appears to be reasonably calculated to lead to the discovery of admissible evidence.

Courts are to construe this language liberally "to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case." Momah v. Albert Einstein Medical Center, 164 F.R.D. 412, 417 (E.D. Pa. 1996) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351, 98 S.Ct. 2380, 2389 (1978)).

Furthermore, it is well settled that the party objecting to the discovery must state the grounds for the objection "with specificity"; the mere recitation that a document discovery request is "overly broad, burdensome, oppressive, and irrelevant" will not suffice. See Coker v. Duke Co., Inc., 177 F.R.D. 682, 686 (M.D. Ala. 1998); Momah, 164 F.R.D. at 417 (citations omitted); Fed.R.Civ.P. 33(b)(4). When a discovery objection has been properly articulated, the party seeking discovery must demonstrate that the request lies within the bounds of Rule 26. If this showing is made, the party opposing discovery has the burden of showing that the discovery should not be had. Momah, 164 F.R.D. at 417 (citing Amcast Indus. Corp. v. Detrex Corp., 138 F.R.D. 115, 118-19 (N.D. Ind. 1991)).

The Relators seek a significant amount of discovery, including the medical and billing records of Dr. Chen dating back to 1988, a date corresponding to when he first came to Lutheran. The Defendants first argue that the discovery request should be limited to only a six year period, the length of the applicable statute of limitations, and not the ten years sought by the Relators. See 31 U.S.C. § 3731(b) (six year statute of limitations for False Claims Act). This argument is not supported by Rule 26(b)(1), which is phrased in terms of "relevance," rather than time. Indeed, as a leading commentator has stated, "[t]he fact that matters with respect to which discovery is sought may be time-barred by the applicable statute of limitations does not foreclose discovery," particularly because an act "beyond the period of limitations may constitute relevant background evidence in a proceeding in which a current practice is at issue." 6 JAMES WM. MOORE, ET AL., MOORE'S FEDERAL PRACTICE § 26.41[7] at 26-105 — 26-106 (3d ed. 1998). Moreover, as the Relators explained at oral argument, the history of Dr. Chen's billing practices during his time at Lutheran might demonstrate a pattern of fraudulent billing, a point that convincingly allows this broad scope of discovery given that it appears reasonably calculated to lead to the discovery of admissible evidence.

Next, the Defendants take issue with the fact that the Relators seek discovery as to the billing records of all children who have been given care in the NICU, whether those children paid for services through private insurance or through Medicare. According to the Defendants, this exceeds the scope of the Relators' claims, which of course assert that the Defendants submitted fraudulent claims only for those children covered by Medicare. Again, the Defendants' argument takes an unduly narrow view of Rule 26. At oral argument the Relators explained that their claims may be proved (or disproved) by comparing Dr. Chen's pattern of care and billing of infants covered by private insurance with Dr. Chen's pattern of care and billing of infants covered by Medicare. This comparison appears to be reasonably calculated to lead to the discovery of admissible evidence, and therefore the Relators' discovery requests shall not be limited to only those infants covered by federally-funded health care programs.

The Defendants also make a rather general argument that the Relators' discovery requests are unduly burdensome and oppressive. However, since the burden of demonstrating that the request is oppressive and overbroad lies with the Defendants, "[g]enerally, a party seeking to avoid discovery on a burdensome argument must substantiate that position with detailed affidavits or other evidence establishing an undue burden."¹⁰ Coker, 177 F.R.D. at 686; see also EEOC v. Quad/Graphics, Inc., 63 F.3d 642, 645 (7th Cir. 1995) (compliance with a subpoena would be "excessively burdensome" if "compliance would threaten the normal operation of a respondent's business.") (citation omitted). Here, while the Defendants have made a general attempt at showing the anticipated cost of complying with this discovery, their "burdensome" argument is largely conclusory, and insufficient to sustain their objection. See Coker, 177 F.R.D. at 686 (collecting cases); see also Schachar, 106 F.R.D. at 190 ("Plaintiffs have made no showing that discovery here is any more burdensome than is typical in responding to discovery requests in complex cases."). In sum, the Defendants' objections to the scope of discovery are not well taken.

10 At oral argument it was revealed that at least some, if not most, of the medical records have been duplicated and stored in microfiche format. If so, the production of the medical records should be greatly facilitated.

IV. CONCLUSION

For the reasons herein provided, the Defendants' motions for a protective order are DENIED. However, the Court is not unmindful of the logistical difficulties that will be associated with completing discovery in this case, and therefore provides the following directives as to how this discovery is to proceed. See Fed.R.Evid. 26(b)(2) (district court has broad discretion to control discovery).

First, counsel for the Relators are to be granted an initial opportunity to determine the nature and extent of the documents, by description, they seek from the medical files. Accordingly, counsel for the Relators are to be provided with a randomly selected specimen sample of twenty (20) patient files, redacted as to name and identifying information, so that they may identify the kinds of records needed from each file. Once counsel for the Relators have identified by description the documents needed from every file, then these documents should be provided to them, appropriately redacted as discussed supra.

The ultimate cost of producing and redacting the documents will be determined by the Court at a later time, subject to the outcome of the case and the Court's consideration of these costs under Fed.R.Civ.P. 54. However, given the rather broad reach of the Relators' discovery requests, the Court will exercise its considerable discretion under Rule 26(b)(2) and require that the Relators bear the initial costs for these discovery requests.¹¹ Finally, given the confidential nature of the discovery sought, a mutually agreeable protective order should be prepared to control access to the documents following their discovery production. Counsel are to submit such a protective order within twenty (20) days.

11 These initial costs, which concern discovery in a federal court case asserting federal claims, are not controlled or set by any state statute. Rather, these costs should reflect the reasonable costs associated with the production and redaction of the documents.

SO ORDERED.