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The New Electronic Discovery Rules: What they mean for healthcare providers

Wisconsin Society for Healthcare Risk Management
March 24, 2008

With so many health care providers now converting to electronic medical record systems, and with the increased use of email, cellular phones and personal digital assistants by members of their organizations, health care providers are finding that electronic communications are playing a central role in lawsuits. In particular, the production of electronic data, or in legal terms, the “discovery” of electronic data, can easily become the focal point for health care providers during the early stages of a lawsuit.

In recognition of the increasing use of electronic communications in all businesses across all industries, including health care, the rules governing federal court litigation, the Federal Rules of Civil Procedure, were revised effective December 1, 2006. Previously, the discovery of electronic data was a murky process that was fraught with uncertainty and traps for the unwary. These new rules attempt to clarify this process. More importantly, however, the new rules provide a guidepost for health care providers in developing and amending document retention policies and procedures so they are not caught unaware in a lawsuit discovery request.

What is Discovery?

Discovery is the process by which one party to a lawsuit exchanges information with the other party. This exchange of information is vital to proving the claim or defense of the parties. Information is usually exchanged through document requests, interrogatories, requests to admit and depositions.

Traditionally, the discovery of records and documents involved the disclosure of information maintained in paper form. With the increasing use of electronic communications, discovery has now expanded to include data created or maintained in electronic form. The discovery of electronic data is about more than printing off copies of email messages – it is the entire process of accessing, using and preserving information, data, and records created or maintained in electronic form.

For a health care provider, discovery of electronic data could involve the process of identifying and validating the identity of every user of a patient’s electronic medical record. It can also involve searching and analyzing the data behind the data, known as “metadata.” For example, the discovery of “metadata” would include identifying the dates and times that entries were made in a patient’s electronic medical record.

As these examples illustrate, the discovery of electronically stored information can be exponentially greater in volume than hard-copy documents. As will be explained below, failure to establish a document retention process covering all types of records can lead to significant financial and legal penalties.

Overview of the New Discovery Rules

Discovery Process
The new discovery rules address nearly every aspect of electronic discovery, beginning with pre-trial conference. For example, under the new discovery rules, pre-trial scheduling orders may include provisions for electronic discovery and outline the process by which such discovery will occur.[1] Therefore, the parties must address discovery issues early in the litigation process. What this rule means for health care providers is that they must work with their attorney prior to pre-trial conferences to discuss the electronic information available for discovery and identify the need for added protections for sensitive records, such as mental health records, if any.

Document Retention Policies
Under the new discovery rules, electronically stored documents and information are as discoverable as paper documents and must be produced, unless the request clearly indicates that the party is only seeking traditional documents. The rule applies to documents that are stored by healthcare providers in the “usual course of business”.[2] What this rule means for health care providers is that they must establish policies and procedures for retention, storage, destruction and production of electronic data in order to show that documents produced were kept “in the usual course of business”. Similarly, if documents were not produced, health care providers must be able to demonstrate that they were not kept “in the usual course of business,” i.e., they were destroyed consistent with established destruction policies.

Document Destruction Policies
In addition, the new discovery rules describe if, and what, sanctions will be imposed for failing to provide the documents agreed upon by the parties.[3] This rule provides a safe harbor for failing to provide electronically stored information that was lost as a result of “routine, good faith operation of an electronic information system”. What is meant by “routine, good faith operation of an electronic information system”? It generally includes the distinctive features of computer operations and the routine alteration and deletion of information that is consistent with the health care provider’s established policies.

Litigation Holds
Once a health care provider is aware of a potential claim, or has been sued, a health care provider is subject to a “litigation hold,” which means that the health care provider is under a legal duty to preserve information. In many instances, a health care provider must modify or suspend its normal practice or disposition, including destruction, of paper and electronic records to prevent loss or destruction of information. It is important that health care providers address litigation hold procedures in their document retention and destruction policies.

Electronic Data Not Reasonably Accessible
Finally, there is an exception that would relieve a party from having to disclose electronically stored information that is not “reasonably accessible,” that is, information that would be costly and burdensome to produce.[4] This exception addresses the issues raised by difficulties in locating, retrieving, and providing discovery of some electronically stored information. This is an important exception, but it is only available if health care providers are able to explain why certain data is not reasonably accessible and then document the true cost and burdens of producing the data being requested. The key to providing such an explanation is to have a thorough understanding of how data is maintained and retrieved in the health care providers’ electronic information systems.

Recommended Strategies

Document the organization’s information storage systems. Health care providers should document, through written policies, the way its organization stores information, internally and externally in order to show that information was retained in the “usual course of business” or that information was destroyed as a result of “routine, good faith operation of an electronic information system.” The written policies should include computers (desktops and laptops), cell phones, personal digital assistants, mp3 players, flash drives and other electronic media storage devices. Legal counsel should be consulted as part of the process for development of appropriate policies.

Revise or update record retention policies to include electronically stored information
. Health care providers should make sure their record retention policies include electronically stored information, including the storage, maintenance and destruction of such information.

Engage legal counsel early in a lawsuit. Health care providers should engage legal counsel early in the lawsuit, particularly during pre-trial conferences when an order for the discovery of electronic information is usually negotiated and agreed to by the parties.

Establish a protocol for responding to discovery requests. Health care providers should establish a protocol for responding to discovery requests so that members of their organizations understand their duties and obligations with respect to providing and preserving information, particularly if a “litigation hold” has been activated.

If your organization is currently involved in litigation, consult your legal counsel before beginning any of the following.

The goal of the new electronic discovery rules is to clarify the discovery process for electronically stored information. To avoid unpleasant and costly surprises, health care providers should be well underway in development or revision of appropriate document retention and destruction policies. Waiting until a lawsuit is commenced will be too late, and may put the health care provider at a significant risk and liability disadvantage.

1. See Federal Rule of Civil Procedure 16.
2. See Federal Rule of Civil Procedure 34.
3. See Federal Rule of Civil Procedure 37(f).
4. See Federal Rule of Civil Procedure 26(b)(2)(B).

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