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MEDICAL SOCIETY OF NEW JERSEY v. MOTTOLA

June 8, 2004.

MEDICAL SOCIETY OF NEW JERSEY, Plaintiff,
v.
MARY LOU MOTTOLA, Executive Director of the Medical Practitioner Review Panel, and RENI ERDOS, Director of the Division of Consumer Affairs, Defendant(s), and NORTH JERSEY MEDIA GROUP, INC. d/b/a THE RECORD, Intervener-Defendant



The opinion of the court was delivered by: WILLIAM BASSLER, District Judge

OPINION

This matter comes before the Court on the motion of plaintiff Medical Society of New Jersey ("MSNJ" or "Plaintiff") for an order enjoining Mary Lou Mottola, Executive Director of the Medical Practitioner Review Panel, and Reni Erdos, Director of the Division of Consumer Affairs, both sued in their official capacities (collectively "Defendants"), from publishing information regarding settlement agreements of malpractice claims entered into by New Jersey doctors. Specifically, Plaintiff's motion seeks two forms of relief from this Court. First, Plaintiff seeks to enjoin Defendants from enforcing the New Jersey Health Care Consumer Information Act, N.J.S.A. § 45:9-22.21, et seq. ("NJHCCIA"), which was enacted by the New Jersey Legislature on June 23, 2003 and is scheduled to become effective June 23, 2004. Second, Plaintiff seeks to enjoin Defendants from disclosing to North Jersey Media Group, Inc., d/b/a The Record ("The Record") certain information contained on medical malpractice payment notices submitted to the State of New Jersey ("the State" or "New Jersey") pursuant to N.J.S.A. § 17:30D-17.

Defendants oppose the motion for preliminary injunction and cross-move to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(1) & (6).

  The Record, a daily newspaper with circulation in northern New Jersey, moved to intervene in this action and filed opposition to Plaintiff's request for injunctive relief.

  This Court properly exercises jurisdiction over Plaintiff's federal claims pursuant to 28 U.S.C. § 1331. Venue is proper pursuant to 28 U.S.C. § 1391(b).

  This Court held oral argument on June 7, 2004 and issued an oral Opinion from the bench as well as a written Order. This Opinion supercedes the Court's oral Opinion on June 7th.

  For the reasons stated below, Plaintiff's motion for preliminary injunctive relief is denied. Defendants' motion to dismiss pursuant to Rule 12(b)(1) is denied, and the motion pursuant to Rule 12(b)(6) is granted.

  BACKGROUND

  MSNJ was founded in 1766 and is the nation's oldest state society of physicians. Approximately 8,000 physicians hold individual memberships in MSNJ, and MSNJ is one of New Jersey's leading voices representing doctors in the health care field.

  MSNJ moves for a preliminary injunction on two distinct grounds. First, MSNJ seeks to enjoin Defendants from enforcing the NJHCCIA, in particular the section mandating that medical malpractice data be made available to the public through the Internet and a toll-free consumer phone line. Second, MSNJ seeks to enjoin Defendants from complying with a March 9, 2004 Order of the Honorable Sybil R. Moses, Assignment Judge, Superior Court of New Jersey, Bergen County, which ordered Defendants to disclose to The Record certain information contained on medical malpractice payment notices submitted to the State Board of Medical Examiners pursuant to New Jersey law.

  I. STATUTORY FRAMEWORK

  A. Federal Law

  In 1986, Congress passed the Health Care Quality Improvement Act of 1986 ("HCQIA"), 42 U.S.C. § 11101, et seq. The HCQIA requires that certain information regarding malpractice payments, sanctions, and professional review actions taken with respect to medical professionals be reported to the federal government. 42 U.S.C. § 11131-7 (Subchapter II). Specifically, the HCQIA requires that "[e]ach entity (including an insurance company) which makes payment under a policy of insurance, self-insurance, or otherwise in settlement (or partial settlement) of, or in satisfaction of a judgment in, a medical malpractice action or claim shall report . . . information respecting the payment and circumstances thereof." 42 U.S.C. § 11131(a). The information reported pursuant to the HCQIA includes:
(1) the name of any physician or licensed health care practitioner for whose benefit the payment is made,
(2) the amount of the payment,
(3) the name (if known) of any hospital with which the physician or practitioner is affiliated or associated,
(4) a description of the acts or omissions and injuries or illnesses upon which the action or claim was based, and
(5) such other information as the Secretary determines is required for appropriate interpretation of information reported under this section.
Id. § 11131(b).

  The regulations promulgated pursuant to the HCQIA established the National Practitioner Data Bank ("Data Bank") to collect and organize the reported information as required by the HCQIA. 45 C.F.R. § 60.1. The Data Bank created a centralized clearinghouse for state licensing boards, hospitals and other healthcare entities to obtain relevant background information about physicians. An insurer must, within 30 days of payment, directly report to the Data Bank all medical malpractice payments, including settlements and partial settlements, made with respect to each insured physician. 45 C.F.R. § 60.7.

  Hospitals are required to request information from the Data Bank with respect to each physician or health care practitioner who applies for staff membership or clinical privileges. 42 U.S.C. § 11135. Insurance carriers are required not only to make reports to the Data Bank but also to the appropriate state licensing board. 42 U.S.C. § 11134(c); 45 C.F.R. § 60.7. Moreover, the Data Bank makes the information it collects available "to State licensing boards, to hospitals, and to other health care entities (including health maintenance organizations) that have entered (or may be entering) into an employment or affiliation relationship with the physician or practitioner or to which the physician or practitioner has applied for clinical privileges or appointment to the medical staff." 42 U.S.C. § 11137(a).

  Section 11137 outlines the confidentiality provisions applicable to the information collected pursuant to the HCQIA. Specifically, the HCQIA mandates:
Information reported under this subchapter is considered confidential and shall not be disclosed (other than to the physician or practitioner involved) except with respect to professional review activity . . . or in accordance with regulations of the Secretary promulgated pursuant to subsection (a) of this section. Nothing in this subsection shall prevent the disclosure of such information by a party which is otherwise authorized, under applicable State law, to make such disclosure. Information reported under this subchapter that is in a form that does not permit the identification of any particular health care entity, physician, other health care practitioner, or patient shall not be considered confidential.
42 U.S.C. § 11137(b)(1) (emphasis added). Accordingly, unless otherwise provided by state law, all information collected by the Data Bank and "reported under this subchapter" is presumed confidential and is released only as specifically mandated by the HCQIA.

  B. New Jersey Reporting Requirements and the Medical Practitioner Review Panel

  The Division of Consumer Affairs is a division of the Department of Law and Public Safety of the State of New Jersey. The Medical Practitioner Review Panel ("the Panel") is a component of the Division of Consumer Affairs.*fn1

  In 1983, three years before Congress passed the HCQIA, the New Jersey Legislature enacted N.J.S.A. § 17:30-D17, which created reporting requirements similar to those in what would become the HCQIA. The original version of N.J.S.A. § 17:30-D17 required notice of malpractice settlements over $25,000 to be sent to the State Board of Medical Examiners within seven (7) days of settlement. N.J.S.A. § 17:30D-17 (Historical and statutory notes).

  In 1989, N.J.S.A. § 17:30D-17 was amended and other notable changes were made to the statutory framework. First and foremost, the Panel was created pursuant to N.J.S.A. § 45:9-19.8. The Panel is authorized and required to receive notices from health care facilities or health maintenance organizations detailing actions those entities may take against practitioners, as well as notices "from an insurer or insurance association or a practitioner, . . . regarding a medical malpractice claim settlement, judgment or arbitration award or a termination or denial of, or surcharge on, the medical malpractice liability insurance coverage of a practitioner. . . ." N.J.S.A. §§ 45:9-19.9(a)(1)-(2). The Panel is empowered to investigate all notices and complaints received and to recommend appropriate action to the State Board of Medical Examiners. Id. at 45:9-19.9(c).

  The 1989 amendments also changed the reporting requirements outlined in N.J.S.A. § 17:30D-17, which requires insurance companies and individual practitioners to report to the Panel any malpractice claim settlement, judgment or award.

 
Any insurer or insurance association authorized to issue medical malpractice liability insurance in the State shall notify the Medical Practitioner Review Panel established pursuant to section 8 of P.L. 1989, c.300 (C.45:9-19.8) in writing of any medical malpractice claim settlement, judgment or arbitration award involving any practitioner licensed by the State Board of Medical Examiners and insured by the insurer or insurance association. Any practitioner licensed by the board who is not covered by medical malpractice liability insurance issued in this State, who has coverage through a self-insured health care facility or health maintenance organization, or has medical malpractice liability insurance which has been issued by an insurer or insurance association from outside the State shall notify the review panel in writing of any medical malpractice claim settlement, judgment or arbitration award to which the practitioner is a party.
N.J.S.A. § 17:30D-17.

  In addition to these reporting requirements, New Jersey law requires that the Panel maintain records of all such notices. N.J.S.A. § 45:9-19.10(a) ("The review panel shall maintain records of all notices and complaints it receives and all actions taken with respect to the notices and complaints."). Currently, these records are protected by certain privacy provisions, namely N.J.S.A. §§ 45:9-19.3 & 45:9-19.10(c).*fn2

  A main point of disagreement between the parties in this action is how the HCQIA interacts, if at all, with the State reporting requirements. The parties agree that the information at issue, namely data regarding malpractice claim settlements and the amount of those settlements, is reported to the federal government pursuant to the HCQIA and to the State pursuant to its statutory framework. Therefore, the HCQIA requires insurers to provide to the federal government the very same information that N.J.S.A. § 17:30D-17 requires that they submit to the State. In practice, insurance companies routinely comply with their State law reporting obligation by providing the Panel with a paper copy of the report that the insurance carrier submits to the Data Bank, pursuant to the HCQIA. (Mottola Cert. ¶ 4.)

  Although the parties agree that the data collected by both the HCQIA and N.J.S.A. § 17:30D-17, with regards to medical malpractice information, is identical, the parties' respective interpretations of the interplay between the two statutory frameworks is significantly different. Plaintiff contends that the HCQIA amounts to a federal protection of privacy that supercedes rights afforded under the State statute, while Defendants and The Record argue that the two statutes set forth obligations that are separate and distinct.

  C. New Jersey Health Care Consumer Information Act

  In this action Plaintiff also challenges the constitutionality of the NJHCCIA, N.J.S.A. § 45:9-22.21, et seq., which was enacted into law on June 23, 2003, to be effective upon the 365th day following enactment.*fn3 The NJHCCIA requires the Division of Consumer Affairs to create profiles for all licensed physicians and podiatrists in New Jersey and to make these profiles available to the public, both by electronic and other means. Id. § 45:9-22.22(a). The profiles will include, inter alia, the medical school education and post-graduate medical training of each practitioner, the year of initial licensure in New Jersey or elsewhere, the location of office practice sites, and certain information concerning criminal convictions, board disciplinary actions, and hospital privilege actions. Id. § 45:9-22.23.

  In addition, the NJHCCIA provides for the disclosure of medical malpractice judgments and settlements as part of each practitioner's profile. The NJHCCIA mandates the publication of:
All medical malpractice court judgments and all medical malpractice arbitration awards reported to the board, in which a payment has been awarded to the complaining party during the most recent five years, and all settlements of medical malpractice claims reported to the board, in which a payment is made to the complaining party within the most recent five years. . . .
Id. § 45:9-22.23(a)(10).

  The NJHCCIA provides that pending medical malpractice claims shall not be included in the practitioner profiles, and information about these pending claims will not be disclosed to the public. Id. § 45:9-22.23(a)(10)(a). In addition, the profiles will identify those judgments that are being appealed. Id. § 45:9-22.23(a)(10)(b). Each profile shall place the number of judgments, arbitration awards and settlements against each physician or podiatrist into one of three graduated categories: average, above average and below average number of judgements, settlements and awards. Id. § 45:9-22.23(a)(10)(c). "These groupings shall be arrived at by comparing the number of an individual physician's or podiatrist's medical malpractice judgments, arbitration awards and settlements to the experience of other physicians or podiatrists within the same speciality." Id.

  Finally, the NJHCCIA provides that each profile shall include the a statement instructing consumers not to make negative inferences from the information published in the profile:
The following statement shall be included with the information concerning medical malpractice judgments, arbitration awards and settlements: "Settlement of a claim and, in particular, the dollar amount of the settlement may occur for a variety of reasons, which do not necessarily reflect negatively on the professional competence or conduct of the physician (or podiatrist). A payment in settlement of a medical malpractice action or claim should not be construed as creating a presumption that medical malpractice has occurred."
Id. § 45:9-22.23(a)(10)(d).

  The very purpose behind the NJHCCIA is to make certain information about physicians more accessible to members of the public.*fn4 As a result, the privacy provisions outlined in N.J.S.A. §§ 45:9-19.3 & 45:9-19.10(c), which currently provide limited confidentiality protection to information released to the Panel pursuant to N.J.S.A. § 17:30D-17, are not applicable to the information included in the practitioner profiles under the NJHCCIA. Moreover, on the date the NJHCCIA becomes operative, the following language will be added to N.J.S.A. §§ 45:9-19.3 & 45:9-19.10(c) to provide an exception for information included in the profiles: "The provisions in this section shall not apply to information that the division, or its designated agent, is required to include in a physician's or podiatrist's profile pursuant to P.L. 2003, c. 96."

  The NJHCCIA provides that the Director of the Division of Consumer Affairs, "in consultation with the State Board of Medical Examiners, shall adopt regulations pursuant to the `Administrative Procedure Act,' P.L. 1968, c. 410 (C.52:14B-1, et seq.) necessary to effectuate the purposes of this act." N.J.S.A. § 45:9-22.25. Practitioners were advised in writing of the manner in which information concerning malpractice histories shall be set forth in the profiles. In a letter dated April 26, 2004 the Director of the Division of Consumer Affairs, defendant Reni Erdos, advised licensed physicians and podiatrists in New Jersey as to the impending effective date of the NJHCCIA. (Kornett Decl., Ex. C.) The letter also included information regarding the database of practitioner profiles that will be available to consumers both over the Internet at www.njdoctorlist.com or by writing or calling the Division of Consumer Affairs' Profile Call Center.*fn5 (Id.) The April 26th letter encouraged practitioners to update their personal and professional information in order to ensure the most accurate profiles possible.

  II. PRIOR STATE COURT ACTION

  The Record is a daily newspaper with circulation in northern New Jersey, specifically the City of Hackensack as well as Bergen and Passiac Counties. In March 2003, The Record began gathering information regarding medical malpractice payments made by or on behalf of medical practitioners licensed in New Jersey. During this process, The Record learned of the existence of the Panel and the requirements under N.J.S.A. § 17:30D-17 that notices of any medial malpractice claim settlement, judgment or arbitration award involving any practitioner licensed by the State Board of Medical Examiners be submitted to the Panel. (Lesser Decl. ¶ 3.)

  On April 11, 2003, a specialty writer with The Record submitted a written request pursuant to the New Jersey Open Public Records Act, N.J.S.A. § 47:1A-1, et seq. ("OPRA"), to the Division of Consumer Affairs for, inter alia, every notice submitted pursuant to N.J.S.A. § 17:30D-17 by malpractice insurers or any other responsible body to the Panel notifying the Panel of malpractice payments. (Sforza Decl., Ex. C., 1/23/04 Tr. at 13 ("J. Moses Op."); Lesser Decl. ¶ 5, Ex. A.) The Record's OPRA request was denied by the Division of Consumer Affairs on April 23, 2003 based in part on the fact that the confidentiality provisions contained in N.J.S.A. §§ 45:9-19.3 & 45:9-19.10(c) allegedly exempted the notices from disclosure under OPRA. (J. Moses Op. at 13; Lesser Decl. ¶ 6.)

  In August 2003, The Record brought an action, by way of order to show cause, in the Superior Court of New Jersey, Law Division, Bergen County, against the State of New Jersey, Division of Consumer Affairs and Medical Practitioner Review Panel (collectively "State Defendants").*fn6 The State action was captioned North Jersey Media Group, Inc. v. State of New Jersey, Division of Consumer Affairs and the Medical Practitioner Review Panel, Docket No. BER-L-5771-03.

  In its complaint, The Record sought to compel the disclosure of the payment notices submitted by malpractice insurers or any other responsible body to the Panel notifying the panel of malpractice payments. The Record sought the disclosure of this information both pursuant to OPRA and to the common law right to access.

  In September 2003, State Defendants submitted opposition to The Record's application, and The Record learned, for the first time, that State Defendants maintained the information sought in a computer database. (Lesser Decl. ¶ 5.) Thus, concerns about the costs that State Defendants would bear in turning over the information to The Record were all but obviated. Additionally, at that time The Record amended its request to limit the information sought from the payment notices to the following four components: (1) name of physician; (2) license number; (3) date of payment; and (4) amount of payment.

  The parties appeared before the Honorable Sybil R. Moses on October 14, 2003. During the course of the conference, the parties agreed that certain notices were exempt from disclosure under OPRA because they were protected by the confidentiality provision contained in N.J.S.A. §§ 45:9-19.3 & 45:9-19.10(c). (J. Moses Op. at 14-15.) The Record, seeking disclosure of all the payment notices during the previous five years, proceeded with its common law claim for access, and State Defendants submitted opposition to that claim. On January 23, 2004, Judge Moses, in a ruling from the bench, granted The Record's request for common law access to the payment notices. (Id. at 47-48.) In her oral opinion, Judge Moses made several key points. First, Judge Moses found that since insurers are required to submit the payment notices to the Panel pursuant to N.J.S.A. § 17:30D-17, the notices are, as a matter of law, common law public records. (Id. at 32-33.) Second, the court found that The Record had the requisite interest in the payment notices. (Id. at 33-34.) Finally, Judge Moses held that the public interest in disclosing the payment notices outweighed any interest in confidentiality. (Id. at 34-48.) Judge Moses based her determination of the public interest in part on the New Jersey Legislature's passage of the NJHCCIA, which mandates that the payment notices be made public. (Id. at 47.) ("The Health Care Consumer Information Act sets forth the Legislature's current intent with respect to the confidentiality of medical malpractice payment records.")

  On March 9, 2004, Judge Moses entered an Order granting access to the payment notices. (Kornett Decl., Ex. B.) Pursuant to the March 9th Order, State Defendants were ordered to send to all affected practitioners copies of the information contained in State Defendants' files regarding all medical malpractice payments made on the practitioner's behalf from March 15, 1999 through March 15, 2004, "for the purpose of permitting the practitioner to review the accuracy of the information therein." (Id., Ex. B, ¶ 2.) The March 9th Order gave practitioners until May 10, 2004 to dispute any claimed inaccuracy in the records collected by State Defendants. Judge Moses ordered the release to The Record of all undisputed notices and those notices for which a dispute had been resolved by May 11, 2004. For those notices for which a dispute had yet to be resolved, Judge Moses ordered State Defendants to resolve any outstanding issues and release those notices to The Record by June 10, 2004. If the practitioner requested an extension to submit supporting information disputing the accuracy of the information in a disputed notice, the deadline for State Defendants to release that notice was June 25, 2004.

  MSNJ did not take part in the State ...


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