The Colorado legislature recently passed the “Colorado Candor Act.” The law becomes effective July 1, 2019 and applies to conduct occurring on and after that date. It is codified at C.R.S. § 25-51-101, et. seq. and has the potential to impact the pre-litigation resolution of adverse events in the healthcare setting and the circumstances under which any such resolution is reported to licensing entities and the National Practitioner Data Bank (“NPDB”). The following is a brief summary of some highlights but not all significant aspects of this new statute.

The Act describes a process for healthcare providers, separately or jointly with a health facility, to engage in an “open discussion” with patients who have been affected by an “adverse health care incident,” which the Act defines to include death or physical injury. To fall within the protections the Act offers, the “open discussion” must be initiated by the healthcare provider or facility, not the patient. An “open discussion” is privileged and confidential and cannot be discovered, disclosed or admitted in any subsequent judicial or administrative proceeding that may arise out of the adverse health care incident. However, the Act specifically does not afford confidentiality to documents or materials that are not prepared specifically for use in the “open discussion” process.

A provider (alone or with a facility) initiates an “open discussion” by providing written notice to the patient of a desire to enter into an “open discussion” under the Act. The notice must be provided within 180 days after the provider knew or reasonably should have known of the “adverse health care incident” and must include an explanation of the patient’s right to obtain and authorize the release of medical records, a statement that the patient has the right to seek legal counsel, and copies of applicable Colorado statutes of limitations, along with notice that the time to file a lawsuit is limited and not extended by engaging in an “open discussion.” If the provider is a public entity or employed by a public entity, a copy of the Colorado Governmental Immunity Act (“CGIA”) must also be provided with notice that the deadline for filing notice under the CGIA is not extended by engaging in an “open discussion.” The notice must further inform the patient of the confidential nature of any “open discussion” under the Candor Act.

An appropriately initiated “open discussion” allows for confidential investigation of the event,  communication of that investigation with the patient, and a determination of whether an offer of compensation is warranted.  The Act sets forth, in detail, how a provider should communicate a decision to offer, or decline to offer, compensation for the adverse health care incident. Offers of compensation must be in writing, but all other communication about possible compensation may not be in writing. Though a patient may withdraw from the “open discussion” at any time, a withdrawal does not jeopardize the confidentiality of “open discussion” communications.

If an offer of compensation is made and the patient is not represented by counsel, the Act requires various additional notices to be provided to the patient, including but not limited to the right to seek counsel. The provider/entity may also require the execution of documents and court approval to resolve the incident. The Act confirms that compensation resulting from the “open discussion” is not to be construed as:

  • a payment resulting from a written claim or demand for payment;
  • a final judgment or settlement for purposes of reporting by an insurance company;
  • a malpractice settlement;
  • a final judgment or settlement under the Health Care Availability Act;
  • a final judgment or settlement under the Medical Transparency Act; or
  • a payment requiring report to a licensed professional’s licensing board.

Until the Act goes into effect, it is impossible to predict its impact on malpractice claims or communications between Colorado providers and their patients. Although we understand the Act was drafted with the intent that a resolution under an “open discussion” would not be reportable to the NPDB, the statute does not specifically articulate this and there is no update to the NPDB Guidebook or related guidance as to the NPDB’s position at this time.

Please do not hesitate to contact Caplan and Earnest’s healthcare attorneys to discuss this and other issues related to the Colorado Candor Act if you have questions about the Act’s applicability to your health care operations.