Courts Hold That Procedural Screw-Ups in Medical Staff Proceedings Can Result in Loss of Immunity 

July, 2008 -

In 1986, Congress passed the Health Care Quality Improvement Act (HCQIA). One of its principal provisions offers immunity to both individuals and institutions involved in professional review actions (PRAs). The HCQIA defines a PRA as “an action or recommendation of a professional review body … based on the competence or professional conduct” of a physician which affects adversely the health or welfare of a patient and the physicians’ clinical privileges.

If the standards set forth in the law are met, hospitals and persons participating in such PRAs “shall not be liable in damages under any law of the United States or of any State (or political subdivision thereof) with respect to the action.”

Therefore, while there are a few exceptions, the general rule is that broad immunity is available. There are four standards which must be met to obtain HCQIA immunity. The PRA must have been taken:

1. in the reasonable belief that the action was taken in furtherance of quality health care;

2. after reasonable effort to obtain the facts of the matter;

3. after adequate notice and hearing procedures were afforded to the physician involved or after such other procedures as were fair to the physician under the circumstances; and

4. in the reasonable belief that the action was warranted by the facts known after following 2 and 3 above. In interpreting these standards, courts have largely agreed that the focus of the inquiry should be whether the action taken was initiated in the reasonable belief that such action would further quality health care. The focus is not whether the initial concerns which caused the PRA to begin are ultimately shown to be medically correct or incorrect.

A few other principles are also well-settled. With regard to #1 above, the inquiry is whether there were legitimate concerns about the care rendered by the physician, and assertions by the physician that the action was motivated by bad faith or animosity toward him are largely irrelevant. This means that a physician’s protestations of malicious action will not carry the day if the initiation of the PRA was based on reasonable quality concerns. With regard to #2 above, physicians who are the subject of such an action are entitled to a “reasonable investigation,” not a “perfect investigation.” With regard to #3 above, there are “notice and hearing procedures” that will satisfy the adequacy standard. These procedures specify the contents of the “notice of proposed action”; the contents of the notice of hearing, including a list of the witnesses to be called by the medical staff/hospital; and the manner in which a hearing, if requested by the physician, is to be held. If these procedures are followed, the health care entity is deemed to have satisfied the fair-hearing requirements of the statute, although a judge or jury may conclude, on a case-by-case basis, that other, lesser procedures also provide adequate protection so as to qualify for immunity. Most hospitals have built their medical staff bylaws’ notice and hearing procedures around those standards set forth in the HCQIA. Finally, with regard to #4, if #2 and #3 are met, it would be rare not to satisfy the requirements of #4, unless the sanction imposed is wholly inconsistent with the results of an investigation. Note the breadth of the immunity provision. If the standards are met, a court—state or federal—can award no damages in a lawsuit brought by the physician, with a few exceptions set forth in the law. In the first case discussed below, for example, the court found that the hospital and defendant physicians were immune and dismissed twelve of the thirteen claims, including claims asserting federal and state antitrust violations, breach of contract, business disparagement, defamation, interference with contract, intentional infliction of emotional distress, fraud, and misrepresentation.  Three courts have recently applied these standards in lawsuits brought by physicians, and the facts of each present lessons about how medical staff PRAs should—and should not—be conducted. In one, the court granted immunity; in the other two, immunity was denied.

Immunity Granted. In Johnson v. Christus Spohn Health System Corporation, a 2008 decision from Texas, the patient was admitted on the morning of March 15 by another physician under the name of the plaintiff physician. That evening, the plaintiff reviewed the patient’s chart, but did not bother to see the patient. He first saw the patient the next evening, March 16. He ordered no consultations. Early the next morning, the patient had a seizure. Hospital personnel contacted plaintiff, but he gave no orders. At 9 a.m. that same day, plaintiff asked the nurses to arrange for two consults for the patient. By mid-morning the nurses had contacted the two consultants. One saw the patient that evening, as did plaintiff. Distressed at the slow pace of her husband’s care, the patient’s wife contacted hospital representatives to complain. The hospital contacted plaintiff, at which time he disparaged the patient and his family to the hospital representative. When the plaintiff and the consultant finally saw the patient, they immediately ordered the patient to be transferred to the ICU, where the patient expired shortly thereafter. Eight days later the Medical Executive Committee met and heard a report of this matter. It immediately voted to suspend plaintiff’s medical staff membership and appointed a committee to investigate. Plaintiff was told the same day that the investigative committee had been appointed and that he would have a chance to meet with it and explain his position. On April 1, the MEC met again at plaintiff’s request and reaffirmed the summary suspension. At the conclusion of its investigation, the investigative committee recommended that plaintiff’s medical staff membership be revoked, and the MEC upheld that recommendation fifteen days later. Plaintiff appealed the recommendation “up the line,” appropriate hearings occurred, and the recommendation was affirmed at each successive stage. In all, the decision to revoke was reviewed by four separate committees. Plaintiff ultimately sued, alleging all sorts of legal claims, including that the Hospital had violated the medical staff bylaws and thereby breached a contract between hospital and physician. All of the defendants—the hospital and a number of physicians involved in the process—claimed immunity under the HCQIA and its state counterpart. The court found that the entire process had been prompted by legitimate concerns regarding plaintiff’s treatment of the patient.  Further, the court found that the plaintiff had been given all of the notice and hearing rights upon which immunity depended and that four separate committees had engaged in fact-finding and review of the matters. In response to plaintiff’s argument that the hospital and medical staff violated the medical staff bylaws, the court commented: “The HCQIA … does not explicitly require compliance with such bylaws and the Court is not convinced that Defendants, individually or collectively, substantially deviated from their relevant internal rules.” The court ruled that each of the defendants was immune. (One of the claims brought by plaintiff was for race discrimination, which is an exception to the immunity provision; that claim was allowed to proceed.)

Immunity Denied. Two cases show what can happen when a hospital’s and medical staff’s attempts to deal with physicians alleged to have provided substandard care are not handled appropriately. In a June 2008 decision entitled In re Peer Review Action, the Minnesota Court of Appeals reviewed a trial court decision granting the plaintiff physician an injunction preventing any sort of peer review action against the physician. The case arose out of the following facts. The hospital’s VPMA received allegations of disruptive behavior by the plaintiff and began an investigation. He met immediately with hospital leadership to notify them of this matter and the commencement of his investigation. Six months later, the hospital  asked the credentials committee of the medical staff to begin a peer review investigation. The hospital’s policy on disruptive behavior contained a detailed communication process when there were allegations of such behavior, including provisions entitling the physician in question to notice of the alleged misconduct and an opportunity to modify his behavior. Here, there was no discussion of any kind with the plaintiff and, therefore, no opportunity for him to alter his behavior. When the credentials committee finally notified him of its investigation, the plaintiff complained that the hospital  ad failed to follow its own policy. The committee recommended discipline. A hearing was held, after which the hearing committee recommended that the plaintiff be suspended for 180 days. The written report of this committee did not describe the alleged behavior or specify the evidence on which the committee relied in reaching its recommendation. When the plaintiff asked for this information, the hospital declined to provide it. Ultimately, the plaintiff appealed to the hospital board, which issued a reduced “sentence.” In concluding that the trial court appropriately issued an injunction against the disciplinary action, the Minnesota Court of Appeals relied principally on its finding that the entire matter was characterized by malice against the physician plaintiff. It based this conclusion on the following factors:

¨    The peer review process began outside the normal methods contained in the bylaws, when the VPMA conducted his own six month investigation.

¨     The investigation occurred in violation of the terms of the disruptive physician policy, which required that a physician have an opportunity to correct his behavior before discipline is imposed.

¨    The incidents cited as disruptive behavior were unfairly old.

¨    This physician was treated differently from others who had acted similarly in violation of the disruptive physician policy.

The court concluded: “The objective evidence of how Hospital violated its own procedures in the course of disciplining physician is a sufficient basis to infer the conclusion of why the Hospital acted as it did—that it was motivated by malice.” (Emphasis in original.) If the hospital was motivated by malice, it could not meet the initial criterion for immunity under the HCQIA—that the PRA was taken in the reasonable belief that it was “in furtherance of quality health care ….” In response to the hospital’s claim that the court was substituting its judgment for that of the peer reviewers, the court noted that it was not engaging “in such mischief.” Rather, the court noted, “Judicial review of peer-review actions is properly limited, as in  this case, to only whether peer reviewers abided by their own established procedures.”  A second case highlights even better the circumstances in which immunity will be denied. In Poliner v. Texas Health Systems d/b/a Presbyterian Hospital of Dallas, a 2006 federal court decision also from Texas, the physician plaintiff prevailed at trial, when a unanimous jury found no immunity and agreed with plaintiff that the defendants had used the peer review process with malice to suspend plaintiff’s privileges summarily. The federal court refused to overturn the jury verdict against the hospital and certain  hysician defendants where the facts presented at trial showed that the defendants had not met the standard for immunity under the HCQIA and its state counterpart.

Nurses at the defendant hospital forwarded three separate complaints regarding the plaintiff physician to the Clinical Risk  review Committee, which evaluated the complaints and forwarded them, in turn, to the internal medicine department. In the three cases, one patient died after a cardiac catheterization, a second had a stroke after the same procedure, and a third was alleged to have been damaged by the physician’s use of a contaminated sheath. A bit later, the head of the catheterization lab brought a fourth case to the attention of the chief cardiologist, who subsequently notified the hospital president, the VPMA and the in-house counsel. This case involved an angioplasty performed on the wrong artery and a problem with another artery that was missed entirely. Having learned of all four cases, the chief of internal medicine approached plaintiff and asked him to accept “abeyance”—a voluntary suspension—of all his procedures in the cath lab until an ad hoc committee could review a representative sample of his cath lab cases. The plaintiff was provided the “abeyance” letter at 2 p.m. and told that he had to sign the letter by 5 p.m. or all of his privileges would be immediately suspended. Plaintiff was told that he should not consult an attorney. Faced with this ultimatum, plaintiff signed the “abeyance” letter. In a subsequent review of forty-four of plaintiff’s cath lab cases, quality issues were found in twenty-nine. A summary suspension was imposed immediately following the review. The hospital and other defendants sought to overturn the jury verdict. The court summarily dismissed this attempt, based on these findings:

¨    The chief of internal medicine, at the time he approached plaintiff and asked that he hold his privileges in abeyance, admitted that he did not have enough information to assess whether plaintiff posed a present danger to patients, the standard for summary suspension.

¨    This same chief told plaintiff that he would suspend all of his privileges if he did not sign the “abeyance” letter, despite the fact that there were many less severe alternatives.

¨    The chief refused to allow plaintiff to consult with an attorney before deciding whether or not to sign the “abeyance” letter.

¨    The chief would not discuss with the plaintiff any of the cases in question before imposing the summary suspension, or even give plaintiff any opportunity to be heard on these cases.

The failures listed above convinced the jury and the judge that the chief and the other defendants had acted not in the reasonable belief that the actions were taken to further quality health care, but because of malice against the physician.

Lessons Learned. First, hospitals and medical staffs must understand that there is very broad immunity available under the HCQIA and equivalent state statutes. The value of such immunity cannot be overstated. Defendants cannot be liable for any damages which are within the scope of the immunity provision and, as a result, any claim within the scope of immunity filed against them will be dismissed. This means that, except for claims not subject to the immunity provisions (and there are not many), the hospital and defendant physicians can get on with life, unburdened with the necessity of defending themselves against such claims.

Second, the medical staff committees and officers and the hospital representatives must act reasonably, following at least the spirit of the medical staff bylaws and medical staff policies. Note that the Minnesota hospital had a disruptive physician policy, the provisions of which were largely ignored. Note also that this hospital ultimately relied on disruptive behavior “incidents” that were quite old. Note finally that the hospital refused to afford the physician even the most basic hallmarks of “due process,” such as notice of the cases involved and an opportunity to present his side of the story. Recall that a  physician subject to a PRA is entitled to a “reasonable” investigation, not a “perfect” one. In other words, some  imperfections in the procedures utilized will not cause HCQIA immunity to be lost. Here, the imperfections convinced judge and jury that the defendants were really “out to get” the plaintiff, not just to protect against sub-standard care. Third, and perhaps most important, if there are serial failures to act in a reasonable manner, as was the case in Johnson and Poliner, even strong proof of the physician’s inferior medical care may not be sufficient to avoid liability. While we don’t know enough about the facts in the Minnesota case, we do have a substantial body of information about the medical care rendered by plainfiff. The four cases which spawned the PRA presented serious problems. Moreover, the subsequent investigation found problems in twenty-nine of forty four cases reviewed. Despite this information, the jury found for Dr.

Poliner and the judge refused to set the jury’s verdict aside. Thus, those involved in peer review cannot rely on the evidence of substandard care to wipe away procedural flaws in how the matter is handled in the early stages of the PRA.

Hospitals and physicians involved in peer review need not wring their hands over the cases in which immunity was denied. Both cases represent peer review proceedings gone awry. What these cases teach is that even bad practitioners will be protected from PRAs which tread on fundamental fairness and suggest that the physician himself, and not the allegedly sub-standard care, is the real target.

 

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