The Case Before the North Carolina Supreme Court

One of the challenges that healthcare providers face is creating an environment where providers can have candid internal review, open conversations to discuss mistakes, learn from those mistakes, and improve patient safety without worrying that those conversations and new safety measures will be used against them in court. That balance was disrupted this spring when the North Carolina Court of Appeals issued a ruling in McGehee v. Farber that significantly narrowed the scope of federal privilege protection under the Patient Safety and Quality Improvement Act (“Safety Act”) found in 42 U.S.C. §§ 299b-21 et seq. In response, the North Carolina Chamber Legal Institute (CLI), North Carolina Healthcare Association (NCHA), and Alliance for Quality Improvement and Patient Safety (AQIPS) filed an amicus brief urging the North Carolina Supreme Court to hear the case and reverse the narrow reading of the statute. If the Supreme Court declines to intervene, the Court of Appeals’ decision will remain in place, making North Carolina an outlier among other states and potentially deterring candid internal review of adverse medical events, which is the kind of transparency that Congress designed the Safety Act to protect.

The case arises following the unfortunate death of Tony Miller McGehee, a patient treated at UNC Hospitals by vascular and cardiovascular surgeons. Mr. McGehee passed away the day after his discharge. After his death, the hospital created a Safety Awareness for Everyone (SAFE) report documenting the incident. The hospital shared the report with its federally recognized Patient Safety Organization (PSO) and used the report internally to improve patient care protocols. The plaintiff, Mrs. McGehee, filed a malpractice lawsuit against the treating surgeons. The plaintiff subpoenaed the hospital for any incident reports, which included the SAFE report. The trial court ordered disclosure and held that the Safety Act protects documents from discovery only if they are collected for the sole purpose of reporting to a patient-safety organization. The Court of Appeals agreed, holding that the SAFE report is not privileged, thereby adopting a sole-purpose rule for the Safety Act’s application. The physicians named in the malpractice lawsuit petitioned the North Carolina Supreme Court for discretionary review.

The amici present three principal arguments. First, the sole-purpose test adopted by the Court of Appeals contradicts the statute’s plain language. The Safety Act defines “patient safety work product” as materials “assembled or developed by a provider for reporting to a patient safety organization and are reported to a patient safety organization.” The Act separately authorizes use of patient safety work product to carry out “patient safety activities,” which the statute expressly defines to include internal quality improvement efforts, risk management, and promoting a culture of safety. Congress permitted these additional uses, and a document does not lose its privileged status merely because it serves more than one purpose.

Next, the Court of Appeals rejected persuasive authority on this issue without sufficient explanation. In In re BayCare Medical Group, Inc., 101 F.4th 1287 (11th Cir. 2024), the Eleventh Circuit squarely rejected the “sole purpose” test, holding that nothing in the Safety Act requires that privileged information be maintained exclusively for PSO reporting. The Florida District Court of Appeals reached a similar conclusion in Tallahassee Memorial Healthcare, Inc. v. Wiles, 351 So. 3d 141, 150 (Fla. Dist. Ct. App. 2022).

Finally, the Court of Appeals seems to have conflated North Carolina peer review law with the federal Safety Act. North Carolina’s medical peer review privilege under N.C. Gen. Stat. § 131E-95 does require that information must be learned “solely” in the peer review process to be protected. However, the Court of Appeals appears to have applied this stricter state standard to the federal Safety Act, which is a separate and broader statutory framework. The amici’s brief draws an analogy to proximate causation doctrine: just as a plaintiff need not prove a defendant’s negligence was the sole cause of harm, reporting to a PSO need not be the sole reason a safety report is created for that report to qualify as patient safety work product.

Potential Implications for North Carolina Healthcare

The stakes extend beyond this case. Healthcare systems across North Carolina rely on federal patient-safety protections in the Safety Act to identify systemic problems, analyze adverse events, and implement improvements that protect patients. The Court of Appeals’ decision creates uncertainty about whether those efforts can remain confidential if the resulting reports are used for multiple purposes, as Congress intended.  If the Court of Appeals’ decision stands, health systems and providers will face a difficult practical choice. They will either limit their internal use of safety reports, which could undermine quality improvement efforts, or risk losing federal privilege protection for those reports in subsequent litigation. This outcome would push North Carolina back toward the pre-Safety Act environment that Congress sought to eliminate; an environment where the threat of malpractice liability discouraged candid disclosure and sharing medical error information.

The Chamber Legal Institute believes the North Carolina Supreme Court should allow discretionary review and clarify that healthcare providers do not lose federal privilege protections simply because they use patient safety reports both to fulfill their PSO reporting obligations and to improve care. Preserving those protections promotes transparency, strengthens quality improvement efforts, and ultimately benefits patients across the state, resulting in a safer, healthier North Carolina.

The Chamber Legal Institute will continue to monitor this case and advocate for legal frameworks that support both patient safety and a strong healthcare system in North Carolina. Mistakes are inevitable, but the North Carolina Supreme Court can and should intervene to correct this one.