The district court granted the plaintiff’s motion to compel production of an internal investigative report in her qui tam complaint alleging healthcare fraud. The defendants argued the report was prepared by counsel in connection with ongoing litigation and was therefore protected by both attorney-client privilege and the work product doctrine. However, the court found that the work product doctrine did not apply, as the report did not mention the litigation cited by the defendants and the litigation raised issues entirely distinct from those covered by the report. The plaintiff argued that the report was not covered by attorney-client privilege, because counsel was engaged to conduct an internal investigation, not to provide legal advice. The court disagreed, finding that the finding and recommendations of the investigation were clearly intended to provide advice about potential future liability. However, the court also found privilege had been waived when the defendants provided the report to an outside PR firm hired to facilitate communication regarding an investigation by a local newspaper. The court found no connection to ongoing or imminent litigation or any employee-type relationship that would have preserved privilege.
Relator Lisa Wollman moved the court to compel the production of certain documents during discovery in her qui tam action against Massachusetts General Hospital Inc., The Massachusetts General Hospital’s Physician Organization, and Partners Healthcare System Inc.
Wollman alleged that the defendants fraudulently billed Medicare and Medicaid for overlapping and concurrent surgeries that required patients to be under anesthesia at the same time. The complaint alleged that the defendants (1) endangered patients by placing them under unnecessarily prolonged administrations of anesthesia that were not reasonable and necessary and thus not reimbursable; (2) violated informed consent regulations by using a relatively non-descript informed consent form and routinely concealing the practice of concurrent and overlapping surgeries; (3) violated record-keeping regulations because surgeons falsified or failed to keep accurate records to conceal their practices; and (4) caused government payors to pay for work that teaching physicians did not do, either because they were not immediately available, did not designate qualified backup surgeons, were not present for key or critical parts of surgery, or never appeared in the hospital room at all.
The court noted that it was undisputed that no later than 2010, Dr. Dennis Burke, an MGH surgeon, challenged the practice of overlapping surgeries. MGH hired counsel to investigate the doctor’s concerns. The purpose and scope of the investigation were in dispute, as was the identity of the person/entity who initiated the retention of outside counsel to conduct the investigation. The relator moved to compel reduction of the resulting report and related documents. The defendants argued the material was protected by attorney-client and work product privileges.
The relator argued that counsel was hired to conduct an investigation, not provide legal advice, and therefore the report is not privileged. Further, the relator argued that any privilege was waived when the defendants provided a copy of the report to a public relations firm, which it engaged to help respond to an investigation into the hospital’s surgery practice by the Boston Globe, and by providing the report to MGH’s board chairman at her email address as Simmons University, where it was found by university counsel when gathering documents to respond to a subpoena. The defendants provided the court with the report for an in camera review.
The defendants argued that the decision to hire outside counsel for the investigation was made jointly by several members of the management team. The court found it was not inconsistent for outside counsel to be engaged both to assist with fact-finding and to provide legal advice. The defendants noted they were already engaged in litigation that would encompass the issue of overlapping surgeries, but the court found this was not a motivating factor, as there was no evidence the investigation counsel communicated with the litigation counsel. Further, the report never mentioned the litigation and the litigation did not raise the issue of concurrent surgeries.
The attorney’s engagement letter was labeled privileged and confidential, with the identified purpose being the investigation. The letter states counsel was being engaged to represent the partners’ interests in connection with an internal review of surgical practices. The investigation consisted of recorded interviews with staff, who discussed the disputed practices. These documents were labeled confidential, privileged, attorney-client, or work-product. The report recommended operational changes, which the defendants asserted had been implemented and the relator argued did not conform to Medicare or Medicaid requirements or ensure patient safety.
The defendants had declined other requests for the report, first from the Commonwealth of Massachusetts’ Board of Registration in Medicine and the Massachusetts Department of Public Health following two concurring surgeries which had serious adverse consequences, and second from the Boston Globe. In the former case, the defendants described the findings and recommendations. In the latter, the defendants hired Rasky Partners Inc., a public relations firm, for support responding to the journalist investigation. The defendants disclosed the existence of the report to the Globe, but not its contents. However, it was not until the end of the Globe’s investigation that the defendants cited privilege.
The court found it undisputed the defendants emailed the report to Cathy Minehan, chair of the MGH Board of Trustees and Dean of Simmons University School of Management. Minehan regularly used her university email to communicate with MGH leadership about the issues involved in this case.
The attorney for a physician plaintiff in separate litigation stemming from his complaints about concurrent surgeries discovered the existence of the investigation report on the university’s systems during a search for responsive documents and included it on a privilege log at the defendants’ request. The defendants never provided the report during this litigation. The relator filed a motion to compel production of the report, and the courts held that the attorney-client privilege was waived when the defendants provided the report to the outside PR firm. However, the case was settled before the report was produced.
As noted, the defendants maintained that counsel had been retained to provide legal advice in connection with ongoing litigation, and therefore the report was protected under the attorney-client privilege and work product doctrines. However, the court again noted the litigation did not raise the issues covered in the report and the report never mentioned the litigation. The fact the defendants were concerned about possible future litigation was not sufficient to qualify the report for attorney work product protections.
Next, the court considered whether the report was covered by attorney-client privilege. Again, the court noted that the judge in separate litigation filed in connection with the defendants’ practice of concurrent surgery had ruled that the report was not protected by attorney-client privilege. The court reached a different conclusion. The earlier court ruled that the investigation was not conducted in connection with the provision of legal advice, but the court here disagreed, finding that counsel was hired to provide policy and procedural recommendations in the context of the defendants’ legal obligations, both regulatory and common law. The fact that the report might not contain explicit legal advice did not prevent it from being protected, since it was prepared in the context of advising MGH whether any facts discovered during the investigation exposed the defendants to potential legal liability.
The court found the question close, but noted that the employee interviews clarified the issue. According to the court, those interviews established that the investigation was designed to determine the facts, practices and policies relating to concurrent surgeries, which had been challenged by an MGH physician. The court found it significant that the investigation was not led by medical personnel, who would be in a position to make recommendations about medical efficiency and safety.
Next, the court considered whether the privilege had been waived, and concluded that it had when the defendants provided the report to the outside PR firm in response to the Boston Globe investigation.
The defendants argued that the disclosure to Rasky did not waive the attorney-client privilege because Rasky played an integral and strategic role in facilitating communication among the defendants and because Rasky served as functional equivalent of an MGH employee. The defendants relied on the Kovel Doctrine, but the court found this inapplicable.
The Kovel Doctrine states that attorney-client privilege can be preserved when disclosures are made to a third-party employed to assist a lawyer in rendering legal advice. Under this doctrine, the third party’s presence must be necessary or highly useful for the effective consultation between the attorney and clients, and the communication must be made for the purpose of obtaining legal advice from the lawyer. The fact that an attorney’s ability to represent a client may be improved by outside help is not enough to avoid waiver.
The court found the defendants disclosure of the report to the PR firm did not satisfy any of the elements of the Kovel Doctrine. Rasky did not assist in consultations between the client and lawyer, nor was its involvement related to legal advice.
The defendants argued that their retention of Rasky was similar to a situation where counsel will hire a PR firm to manage publicity for litigation. However, the court found that argument inapplicable. The court noted that the report was completed in 2011, while the Globe investigation did not begin until 2014. Therefore, the court found no connection between the PR firm’s work and the attorney’s investigative efforts.
The court was also not persuaded that the PR firm acted as the functional equivalent of an employee. The court noted that the agreement with the firm expressly stated that no such relationship would be considered created by the agreement. The court noted Rasky was hired for specific projects, was a consultant to and not an agent of MGH, worked out of its own offices, and worked for clients other than MGH. Moreover, Rasky was not the only source of information to the Globe, asMGH officers were quoted in the article as responding to Globe inquiries. The court found the defendants presented no evidence that would transform the relationship from a consulting/contractual relationship to an employer/employee relationship. Thus, the defendants waived privilege when they provided the report to Rasky.
Next, the court considered the scope of the waiver. The plaintiff sought the report, as well as all drafts, notes, and communications. However, the court held the waiver was limited to the report itself. The court noted the defendants had not used the report in the litigation to gain an adversarial advantage and that the disclosure to Rasky was for a relatively limited purpose. The parties used the existence of the report itself, rather than its details, to respond to the Globe investigation. Therefore, the court found no need to disclose materials beyond those disclosed to Rasky.
Next, the court considered whether privilege was waived when the report was sent to Minehan at Simmons University. The previous court found waiver based on the fact that Simmons claimed an attorney-client privilege, although there was no attorney client relationship between MGH and Simmons College. The judge also assumed that Simmons’ counsel had read the report before claiming a privilege.
This court disagreed. The court noted the report was sent to Minehan in her role as chair of MGH’s Board and was labeled confidential and privileged. When Simmons received a subpoena in the earlier litigation, the defendants’ counsel contacted counsel for Simmons to discuss privilege, after which Simmons withheld several documents from discovery. While the earlier judge assumed Simmons’ counsel read the report before determining whether it was privileged, this court did not follow suit.
Given that the transmittal email, and presumably the report, were clearly labeled “privileged,” and the fact that MGH’s counsel was working with Simmons’ counsel to prevent the disclosure of confidential information that had been provided to Minehan in her status as Chair of the Board of Trustees of MGH, it was not clear to the court that counsel for Simmons had to review the contents of the report to include it in its privilege log. Absent such a review, the court found no disclosure. Further, even assuming there was such a disclosure, the court held that an inadvertent disclosure did not constitute a waiver of the attorney-client privilege. The court again noted the email was marked confidential and privileged, and found no evidence Minehan inappropriately shared the report.
