McClellan v. Health Maintenance Organization of Pennsylvania

Decision Date12 December 1996
Citation546 Pa. 463,686 A.2d 801
PartiesRonald McCLELLAN and Harold Shotel, Co-Executors of the Estate of Marilyn M. McClellan, Deceased, Appellees v. HEALTH MAINTENANCE ORGANIZATION OF PA a/k/a HMO PA Foundation and United States Healthcare OF PA, Inc., d/b/a HMO PA, Appellants.
CourtPennsylvania Supreme Court

Flaherty, C.J., concurred in the result.

Zappala, J., filed opinion in support of reversal in which Castille, J., joined.

Nigro, J., filed opinion in support of reversal.

Kenwyn M. Dougherty, J. Michael Doyle, Philadelphia, for HMO PA.

Joseph L. Messa, Jr., Thomas W. Sheridan, Brian D. Rosenthal, Philadelphia, for McClellan.



The Court being evenly divided, the Order of the Superior Court is hereby affirmed.

NIX, Former C.J., did not participate in the consideration or decision of this case.

FLAHERTY, C.J., concurs in the result.

NEWMAN, J., files an opinion in support of affirmance.

ZAPPALA, J., files an opinion in support of reversal in which CASTILLE, J., joins.

NIGRO, J., files an opinion in support of reversal.



NEWMAN, Justice.

Appellant Health Maintenance Organization of Pennsylvania, a.k.a. HMO PA Foundation and United States Healthcare of PA, doing business as HMO PA, Inc. (HMO PA), appeals from the June 2, 1995 Order of the Superior Court that reversed and remanded the decision of the Court of Common Pleas of Delaware County (trial court) denying HMO PA's motion to compel the production of records. We affirm the decision of the Superior Court.

I. Facts and Procedural History

HMO PA administers a health maintenance organization (HMO) under the Individual Practice Association (IPA) structural model pursuant to Chapter 9 of the Pa.Code 1 and the Health Maintenance Organization Act. 2 On February 13, 1984, decedent Marilyn M. McClellan signed a group enrollment application provided by her employer, the School District of Philadelphia, to enroll in the HMO program administered by HMO PA. Under the Group Master Contract between the School District and HMO PA, decedent's choice of primary care doctors was restricted to a limited list of participating physicians selected by HMO PA.

In October 1985, decedent consulted Joseph Hempsey, D.O., her primary care doctor chosen under the HMO plan, for treatment of a mole on her back that she alleged had markedly changed in color and size. After removing the mole in his office, Dr. Hempsey discarded the excised tissue, failing to send it to the pathology laboratory for a biopsy, and he also failed to order further testing. Decedent subsequently developed metastic malignant melanoma from which she died on January 1, 1988 at forty-two years of age.

Decedent filed a negligence action against Dr. Hempsey, alleging that had he sent the removed tissue for a histologic examination, the malignancy would have been detected and they could have undertaken one or more procedures to prevent the spread of the disease. Upon decedent's death, Appellees Ronald M. McClellan and Harold Shotel (collectively, McClellan), co-executors of the decedent's estate, continued to prosecute her action against Dr. Hempsey. In addition, on September 25, 1989, McClellan initiated a separate action against HMO PA asserting, inter alia, a claim in corporate negligence for HMO PA's alleged failure to retain competent physicians and to screen and review the qualifications of selected physicians to assure their continued competence. Specifically, McClellan alleged that: (1) under contracts theory, HMO PA breached its subscriber agreement by misrepresenting the competence of its participating physicians; and (2) under a theory of ostensible corporate liability, HMO PA's failure to adequately select, retain, and review Dr. Hempsey's qualifications amounted to negligence causing decedent's death. The trial court consolidated McClellan's actions against HMO PA and the doctor.

Before trial, HMO PA filed Preliminary Objections asserting McClellan's failure to state a cause of action in corporate negligence underThompson v. Nason Hospital, 527 Pa. 330, 591 A.2d 703 (1991). 3 The trial court granted HMO PA's preliminary objections and dismissed the complaint. On appeal, however, the Superior Court reversed the trial court's ruling in McClellan v. Health Maintenance Organization of Pennsylvania, 413 Pa.Super. 128, 604 A.2d 1053, allocatur denied, 532 Pa. 664, 616 A.2d 985 (1992) ( McClellan I ). In McClellan I, the court held that only two of the four duties assigned to hospitals by this Court in Thompson could apply to IPA model HMOs, namely the duties to "select and retain only competent physicians," and the duty to "formulate, adopt and enforce adequate rules and policies" to ensure quality care for its subscribers. McClellan I, 413 Pa.Super. 128, 139, 604 A.2d 1053, 1059. The McClellan I court concluded that the breach and resulting injuries alleged in McClellan's complaint were sufficient to state a cause of action. Accordingly, the Superior Court remanded the case to the trial court for litigation.

During the course of discovery, McClellan served three requests for the production of documents related to Dr. Hempsey's application for admission to HMO PA and later investigations of his care of patients. 4 HMO PA objected to several of McClellan's document requests, citing the confidentiality provisions of the Peer Review Protection Act (the Act). 5 The Act's confidentiality provision, Section 425.4, protects a "professional health care provider" from compelled disclosure of proceedings and records of a peer review committee during discovery in a civil action. 6

The trial court agreed with HMO PA that the Act prohibited the documents at issue from compelled disclosure during discovery. However, on McClellan's motion, the trial court certified the issue for appeal to the Superior Court, and the Superior Court granted McClellan's petition for permission to appeal. The Superior Court reversed the trial court decision, holding that an IPA model HMO such as HMO PA is not a "health care provider" within the meaning assigned to that phrase by the Act and is not, therefore, entitled to the protection of its confidentiality provision. McClellan v. Health Maintenance Organization of Pennsylvania, 442 Pa.Super. 504, 660 A.2d 97 (1995) (McClellan II ). 7

We are asked to decide if the Superior Court erred in reversing the trial court's decision, which held that the documents requested by plaintiffs are privileged and non-discoverable pursuant to the provisions of the Act. HMO PA argues that its form of organization meets the Act's description of a "professional health care provider" and, therefore, records regarding any internal peer review should be excluded from discovery under the Act's confidentiality provision. McClellan insists that IPA model HMOs are not health care providers, but merely insurers whose function is to coordinate the delivery of medical care and, consequently, their business records should remain open to discovery.

II. Statutory Interpretation

The resolution of this question is determined by our interpretation of the terms of the Act. Section 425.2 of the Act defines "professional health care provider" as follows:

'Professional health care provider' means individuals or organizations who are approved, licensed, or otherwise regulated to practice or operate in the health care field under the law of the Commonwealth, including, but not limited to, the following individuals or organizations:

(1) A physician.

(2) A dentist.

(3) A podiatrist.

(4) A chiropractor.

(5) An optometrist.

(6) A psychologist.

(7) A pharmacist.

(8) A registered or practical nurse.

(9) A physical therapist.

(10) An administrator of a hospital, a nursing or convalescent home, or other health care facility.

(11) A corporation or other organization operating a hospital, a nursing or convalescent home or other health care facility.

63 P.S. § 425.2 (emphasis added). Confidentiality under the Act is extended only in civil actions brought against "a professional health care provider." 63 P.S. § 425.4. Therefore, HMO PA will enjoy protection from discovery in this instance only if it falls within the Act's definition of that term.

It is axiomatic that a statute must be interpreted according to its terms as enacted. See Commonwealth ex rel. Varronne v. Cunningham, 365 Pa. 68, 73 A.2d 705 (1950). In interpreting a statute, we must at all times seek to ascertain and effectuate the legislative intent underlying its enactment. 1 Pa.C.S. § 1921(a); Pennsylvania Financial Responsibility Assigned Claims Plan v. English, 541 Pa. 424, 664 A.2d 84 (1995). When construing a statute, we must follow the letter of the statute if its words are unambiguous, but when its words are not explicit, we must ascertain the General Assembly's intent by looking to the Statutory Construction Act, 1 Pa.C.S. § 1901 et seq. DeLellis v. Borough of Verona, 541 Pa. 3, 660 A.2d 25 (1995).

While the definition of "professional health care provider" set forth in the Act does not specifically include IPA model HMOs, its terms are broad enough that we may or may not read the Act as explicitly excluding such organizations. The words of the Act defining "health care provider," then, are ambiguous. Section 1921(c) of the Statutory Construction Act therefore requires us to ascertain the intention of the General Assembly. 1 Pa.C.S. § 1921(c).

A. Purpose of the Act and Intention of the Legislature

Regarding the Act's purpose, our courts have held that:

[t]he Act was promulgated to serve the legitimate purpose of maintaining high professional standards in the medical practice for the protection of patients and the general public. The Act represents a determination by the Legislature that, because of the expertise and level of skill required in the practice of...

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