Colorado Candor Act C.R.S. 25-51-104 to 106
March 2, 2021
Many of you are aware of “I’m sorry” laws that have been passed in many states which allow doctors and other healthcare providers to express sympathy and regret about an adverse event without it being used against them in a later civil suit. These laws are intended to provide freedom for the practitioner to communicate with a patient on a personal basis without worry over legal consequences of the words that are used. This is good for the practitioner, and good for the patient since it facilitates communication.
Colorado has taken a big step forward through the Colorado Candor Act which went into effect in July 2019 and is seeing ever increasing use since then. The Act provides a mechanism for the practitioner or hospital to reach out to the patient about an adverse event and arrange a confidential discussion. Just as important, it provides that agreements for compensation are not subject to reporting to the state boards or practitioner database as long as certain conditions are met. The intent is to allow for meaningful communication between the provider and the patient, which is beneficial to both, and to lessen the obstacles to a financial resolution. While the Act anticipates that the provider will initiate the request for a Candor meeting, plaintiff’s attorneys are now often making the initial contact and asking that the Candor process be activated. As discussed below, that is OK so long as no demand for settlement is made as part of that request.
This post will provide a review for Colorado practitioners, and for those in other states with similar statutes. It may also encourage similar legislation in other jurisdictions.
The Act provides that a “healthcare provider” may initiate a request for an “open discussion” of an “adverse event”. This must be done with 180 days of the adverse event, and the notice to the patient must include advisements on several important matters. These include the applicable statutes of limitation, the right to have representation, and the fact that any communications will be privileged and confidential and not subject to later discovery. The patient is also advised that the provider may make an offer of compensation or may chose not to. If the provider chooses not to make an offer, this is then communicated verbally. If the provider chooses to make an offer after the meeting, this is done in writing. As part of that offer, that patient is again advised of their right to counsel, if they do not have an attorney, and is also advised of their obligation to satisfy any liens.
The manner in which negotiations are handled is an important feature of the Act and its goal to avoid reporting of any settlement. For example, if the patient’s attorney initiates contact by making a written demand for compensation, the Candor process cannot be used. The only written communication allowed until the time an agreement is reached is the offer of settlement sent by the provider. Once an agreement is reached a standard release agreement can be prepared. C.R.S. 25-51-104 provides that if the requirements of the Act are following, the financial resolution is not a payment resulting from a “written claim or demand for payment”, a “judgement” or a “settlement”, as these are events that would require reporting.
In our experience, and based on feedback from hospital systems, the primary benefit of the act relates to the resolution of adverse events where liability would be admitted if litigation commenced. During the Candor meeting there is freedom to discuss the event, the lessons learned, and any changes moving forward as a result of the event. This includes information that would not typically be discoverable in litigation. The Act provides that this information cannot be used in litigation and is not subject to discovery. However, these discussions would provide a roadmap for the patient and attorney should a claim be pursued. If there is no intent to contest liability if an agreement cannot be reached, then these disclosures are not important. But this process should arguably not be used if liability is questionable and would not be admitted during litigation. There must at least be consideration of the impact of any disclosures on later litigation, despite the official confidentiality.
This question arises most often when the communication is initiated by an attorney for the patient. While it is possible this might be the first notice of an adverse event for which there is no defense, these contacts often involve claims that would probably be disputed. The attorney is simply hoping to access a process that is quick and allows for easier settlement in the absence of the hurdle of reporting. So, again, caution must be used in deciding whether to participate in this process, although it can still be worth considering in a disputed claim. On the other hand, we have found that the Candor process can be an effective means of shutting down a potential claim brought to the attention of the provider by an attorney. If the facts clearly demonstrate that there is no liability, then there is little to be concerned about in making full disclosure and hopefully convincing the patient and attorney that a claim should not be pursued.