In re Columbia/HCA Healthcare Corp. Billing Practices Litigation

Brief Fact Summary.

When the district court held that Columbia/HCA (Defendant) had waived any attorney-client privilege associated with documents that it had voluntarily disclosed to the Department of Justice during an investigation, Columbia/HCA (Defendant) argued that it had only selectively waived its privilege and had not waived the privilege as to third parties

Synopsis of Rule of Law.

The attorney-client privilege is waived completely by voluntary disclosure of private communications by a person or corporation to third parties and by other conduct that implies a waiver of the privilege or consent to disclosure

Facts.

During a Department of Justice (DOJ) investigation of Columbia/HCA (Defendant) for possible Medicare and Medicaid fraud, Defendant, either in response to the investigation or in anticipation of it, conducted several internal audits that examined various billing codes assigned to patients to determine any possible miscoding, deliberate or otherwise, of the patient.  Following negotiations with the DOJ regarding the fraud investigation, Defendant agreed to produce some of the coding audits and related documents to the DOJ.  In exchange, the DOJ agreed that certain confidentiality provisions would govern its obtaining the documents.  Ultimately, the DOJ and Defendant reached a settlement of the fraud investigation.  Once the nature, extent and results of the DOJ investigation were revealed, private insurance companies and private individuals filed a number of lawsuits seeking recovery of excess sums tendered by the private payors (Plaintiff) to Columbia/HCA (Defendant).  The private payors (Plaintiff) sought an order from the district court compelling Defendant to produce the coding audits, which Defendant refused to do on the grounds of the attorney-client privilege.  The district court concluded that Defendant had waived any privilege associated with the documents.  Defendant appealed

Issue.

Is the attorney-client privilege waived completely by voluntary disclosure of private communications by a person or corporation to third parties and by other conduct that implies a waiver of the privilege or consent to disclosure?

Held.

(Russell, J.)  Yes.  The attorney-client privilege is waived completely by voluntary disclosure of private communications by a person or corporation to third parties and by other conduct that implies a waiver of the privilege or consent to disclosure.  This court rejects the concept of selective waiver in any of its various forms because such concept has little or no relation to encourage open communication between a client and his or her attorney.  It merely encourages voluntary disclosure to government agencies.  The attorney-client privilege was never designed to protect conversations between a client and the Government, i.e., an adverse party.  The ability to talk candidly with the government is not found among the reasons for the privilege.  Secondly, any form of selective waiver, even that which stems from a confidentiality agreement, transforms the attorney-client privilege into just another tool to use and manipulate in order to gain tactical or strategic advantage.  Additionally, attorney-client privilege is a matter of common law right.  It is not a creature of contract, arranged between parties to suit the whim of the moment.  Permitting selective privilege does not serve the public ends of adequate representation that the attorney-client privilege is designed to protect.  Maintaining the all or nothing waiver rule makes the law more predictable and makes its administration easier.  Following a selective waiver approach, on the other hand, would require, at the very least, a new set of difficult line-drawing exercises that would consume time and increase uncertainty.  Affirmed

Dissent.

(Boggs, J.)  The court’s opinion unnecessarily raises the cost of cooperating with a government investigation.  Realistically speaking, the choice the court is facing today is not between narrower and wider disclosure, but between a disclosure to government officials only and no disclosure at all.  A third-party waiver rule would increase the information available over that produced by the court’s rule and would assist the truth-seeking process

Discussion.

As made clear by the Columbia/HCA decision, once the privacy for the sake of which the privilege was created is gone by the client’s own consent, the privilege does not remain just to give the client an additional weapon to use or not at his or her choice.