The case of Cowell v. Good Samaritan Community Health Care, a state court case in Washington, provides guidance on two of the four elements of HCQIA immunity, i.e. that the action was reasonably taken in the furtherance of quality health care and the necessary substance to establish a reasonable investigation. 

Dr. Cowell raised an unusual argument to defeat HCQIA immunity. She alleged that the conduct which was the subject of the peer review investigation caused no harm to patients, therefore, an adverse peer review action designed to eliminate that conduct obviously did not serve to further quality health care. 

As noted in the BNA Health Care Reporter, “The court found these arguments “misdirected” because they focused on whether Cowell actually harmed patients and whether the defendants’ actions actually improved health care at the hospital. The court said that HCQIA is not dependent upon those facts; the professional review need not result in actual improvement in health care – it need only be directed to actions reasonably believed to further quality.”

Dr. Cowell also complained about three instances which she believed established the lack of a reasonable investigation. The court responded by quoting the famous excerpt from Singh vs. Blue Cross/Blue Shield of Massachusetts, which states that physicians are entitled to “a reasonable investigation under the Act, not a perfect investigation.”

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In Bansal vs. Mount Carmel Health Systems, Inc., an Ohio state appellate court ruled that the hospital had failed to prove that documents were protected by Ohio’s statutory peer review privilege (Ohio Rev. Code § 2305.25), and reversed a trial court summary judgment decision. Dr. Girraj K. Bansal was removed from the hospital’s call schedule, and then brought suit against the hospital alleging race, color, national origin, and age discrimination in violation of federal civil rights laws, tortious interference with business and contractual relationships, defamation and a violation of his rights under the First Amendment. During discovery, Dr. Bansal requested certain documents, but the hospital asserted the Ohio peer review privilege regarding certain documents. Dr. Bansal filed a motion to compel discovery, and the hospital filed a motion for summary judgment. 

Although the hospital asserted the state peer review privilege, the court decided that simply labeling a document as confidential, privileged or peer review was not sufficient to meet the burden of proof imposed by the statute stating, “The health care entity must provide evidence as to the specific documents requested, not generalities regarding the types of documents usually contained in the peer review committee’s records.”

The court stated that a health care entity may attempt to meet this burden by either submitting the documents in question to the trial court for an in camera inspection, or by presenting affidavit or deposition testimony containing the information necessary for the trial court to make an appropriate decision. The health care entity must first establish the existence of a committee that meets the statutory definition of “peer review committee,” and then must establish that each of the documents that it refuses to produce in response to a discovery request are records of that peer review committee.

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Category:         Peer Review

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In Kentucky, common law president permits discovery of peer review documents. Ohio Rev. Code § 2305.252 protects peer review discovery.

In Saleba v. Schrand, the estate of a Kentucky resident sued an Ohio physician and Good Samaritan Hospital, located in Cincinnati, Ohio, in Kentucky based upon the results of medical services performed in Ohio. The Kentucky Supreme Court affirmed an appeals court ruling that, under Kentucky’s choice of law rules, documents that would have been protected by Ohio’s peer review privilege were discoverable in a medical malpractice action brought in Kentucky.

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The Montana Supreme Court held in John Doe, M.D. v. Community Medical Center that the Health Care Quality Improvement Act (HCQIA) does not preempt state law regarding injunction and breach of contract, thereby allowing the lower court to issue an injunction against Community Medical Center prohibiting it from issuing a Data Bank report regarding the physician summary suspension. 

The basic facts of this case are that a physician was investigated for ordering tests for family members. During the hospital’s investigation regarding this issue, the investigating committee concluded that the physician’s “demeanor and refusal or inability to coherently answer routine and legitimate questions regarding the volume and nature of the tests caused me to have serious and legitimate concerns regarding his mental health and ability to exercise good judgment,” upon which the committee summarily suspended the physician’s clinical privileges. As with most medical staff bylaws, the bylaws in the current case require a finding that the physician’s continued practice posed “the substantial likelihood of imminent impairment of the health or safety of any patient, prospective patent, employee or other person present in the hospital.” 

The physician’s contention was that the hospital had not proven just cause for a summary suspension, and therefore breached its bylaws and accordingly could not issue a report to the National Practitioner’s Data Bank regarding the suspension. The hospital argued that HCQIA preempted state law and required the hospital report.

The Montana Court held that HCQIA did not specifically preempt the state rules regarding breach of contract and injunctions, and that, since the state presumably retained authority to regulate physician conduct and protect its citizens, there was therefore a presumption against preemption. The dissenting opinion stated that this holding would eviscerate HCQIA, and protect physicians rather than patients, contrary to the intent of the statute. 

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In Feller v. Miriam Hospital, the Rhode Island Superior Court provides additional guidance regarding immunity protection pursuant to the Health Care Quality Improvement Act (HCQIA). 

In that case, Dr. Joseph Feller was practicing at Miriam Hospital in Rhode Island. He encountered some disciplinary issues in 2002 and agreed to both monitoring by a hospital appointed panel (Peer Review Panel) and that such panel could institute future adverse credentialing actions (including the termination of his medical staff privileges) without the right of appeal pursuant to the medical staff bylaws. When Dr. Feller encountered additional problems in 2007, the Peer Review Panel investigated the issues and unanimously decided to terminate his privileges.

There were a variety of issues decided by the Rhode Island Superior Court, and the following two provides specific guidance in the HCQIA area.

First, the Rhode Island Court decided that an ad hoc panel was a “professional review body” as defined by HCQIA, in which the definition states “Any committee of a health care entity which conducts professional review activity,” and the definition of professional review activity included the actions taken by the Peer Review Panel. 

Second, the Court decided that physicians could waive provisions of HCQIA by specific agreement, and that HCQIA immunity would still be available if the four elements of HCQIA immunity were present, or were specifically waived by the physician. In this case, Dr. Feller waived his due process and appeal rights by specific consent agreement, which the Court found to be valid. The Court concluded that the provision allowing due process procedures that were “otherwise fair” obviously protected consent agreements of the type entered into by Miriam Hospital and Dr. Feller.

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In Isaiah v. WMHS Braddock Hospital Corporation and Memorial Hospital and Medical Center of Cumberland, the Fourth Circuit affirmed an order granting summary judgment against Dr. Isaiah in favor of WMHS Braddock Hospital on the basis that summary judgment was appropriate under both HCQIA and the Maryland statutes providing immunity for peer review activity (Md. Code Ann., Health Occ. §14-502 and Cts. & Jud. Proc § 5-638).

Since Dr. Isaiah failed to challenge the separate but equally dispositive basis for granting summary judgment, he therefore waived the right to challenge that on appeal, the Court ran its summary judgment and found that there was no reason to even consider the underlying merits of the HCQIA-based claim.

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The Massachusetts Supreme Court ruled in Board of Registration in Medicine v. Hallmark Health Corp. that the Massachusetts licensing board would subpoena certain hospitals peer review records. 

In Director of Health Affairs Policy Planning, University of Connecticut v. Freedom of Information Commission, the Connecticut Supreme Court ruled that the state's freedom of information act contradicted the state's peer review confidentiality act and compelled disclosure of peer review records, although introduction into evidence in civil proceedings would still be prohibited. The court explicitly acknowledged that the decision could chill the operation of peer review proceedings, but stated the holding was compelled by the plain language of the statutes. Note that the holding applies only to government entities. 

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In Hospital Authority of Valdosta and Lowndes County v. Meeks, the Georgia Supreme Court ruled that information contained in a physician's peer review file was not necessarily protected by the Georgia Peer Review Confidentiality Statute.

Although the holding is enticing from the physician perspective, the limitations contained in the opinion render the precedent potentially meaningless.

The case arose as a negligent credentialing action, with the Plaintiff seeking peer review documents claimed by the hospital to be absolutely privileged under the applicable Georgia Peer Review Confidentiality Statute, which is cited in the opinion. In the lower appellate court, the court held that, although the statutes protected all proceedings and information of a review organization, the statute did not necessarily protect information which, although contained in the peer review records, did not involve a peer review committee's evaluation of the subject physician's performance. 

This ruling was affirmed on appeal by the Georgia Supreme Court. From the viewpoint of precedent regarding discovery of confidential information, the opinion does stand for the preposition that material in the peer review file can be accessed by third parties, and presumably by the subject physicians themselves, so long as the information does not involve the evaluation of actual medical services provided by the subject physician. However, from a practical perspective, it is hard to imagine that any meaningful information would not fall within this protected category.

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Stratienko v. Chattanooga-Hamilton County Hospital Authority, has produced yet another important opinion from the HCQIA prospective. In its most recent ruling, the United States District Court for the Eastern District of Tennessee has dismissed a claim by physicians, named as defendants in the litigation arising out of Dr Stratienko's suspension, to recover attorney's fees against Dr. Stratienko. Furthermore, the denial of attorney's fees arises both under the Health Care Quality Improvement Act (HCQIA) and the Civil Rights Act, i.e. 42 U.S.C. § 1983. Both HCQIA and the Civil Rights Act condition the fee award in favor of prevailing defendants on a finding that the claims were frivolous, unreasonable, brought without foundation, or brought in bad faith.

HCQIA § 11113 states:

"In any suit brought against the defendant, to the extent that a defendant has met the standards set forth under section 412(a)[42 U.S.C. § 11112(a)] and the defendant substantially prevails, the Court shall, at the conclusion of the action, award to a substantially prevailing party defending against any such claim the cost of suit attributable to such claim, including a reasonable attorney's fee, if the claim, or the claimant's conduct during the litigation of the claim, was frivolous, unreasonable, without foundation, or in bad faith."

With respect to HCQIA, the Court indicated that it must: 

". . . carefully distinguish between claims it ultimately finds unmeritorious, and claims that are frivolous from the outset . . . Here, though the Court concluded plaintiff's claims lacked merit, plaintiff stated those claims by relying on existing precedent and references to the record . . . While the Court ultimately did not agree with plaintiff's characterization of the facts and legal arguments, this alone does not render his claim frivolous. For these reasons, an award of attorney's fees, under Section 11113 would be inappropriate."

One important aspect of the case is that, although defendants prevailed upon summary judgment and the Court concluded that they had substantially prevailed in accordance with the HCQIA requirements, the mere fact that they had substantially prevailed on summary judgment did not automatically or presumably indicate that the claim was frivolous, unreasonable, without foundation, or in bad faith.

Another significant aspect of the case is the analysis of the various HCQIA attorney's fees claims.

The analysis under the civil rights claim was substantially similar. 42 U.S.C. § 1988 allows attorneys fees for prevailing defendants only, upon a finding by the District Court that the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith. The Court found that "awarding attorney's fees against a losing civil rights plaintiff is an extreme sanction and must be limited to truly egregious cases of misconduct . . . While the Court rejected plaintiff's § 1983 claims as being legally deficient, they were not so wholly without foundation as to be egregious, affording plaintiff no basis on which to bring his suit."

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Is there a duty for a hospital to answer a credentialing inquiry from another institution? A hospital’s refusal to answer an inquiry presumably has the same impact as an employer’s refusal to answer a request for references: when the inquiring party receives no response, they presume, and usually rightly so, that the party to whom the question was directed is following their mother’s advice, i.e. if you don’t have anything good to say about somebody, don’t say anything at all. That usually results in the person seeking credentials being rejected.

Under these circumstances, is there a duty for a hospital to respond to these requests? The hospital certainly expects that institutions to which they submit questions will answer those requests. There is a duty to submit a report to the National Practitioners Data Bank (NPDB). Presumably, if the hospital has submitted such a report, it has satisfied whatever ethical or moral obligation it has to respond because that response is a public record which the querying hospital can obtain.

However, the Data Bank report is often just the trigger, precipitating a request for further information. The responding hospital presumably has adequate immunity.  HCQIA provides immunity for peer review actions. Must state laws provide immunity for responding truthfully, or at least not maliciously, to peer review inquiries. Most hospitals have an application process by which the applicant releases and immunizes those facilities to which their questions will be submitted.

I posted this question in a recent AHLA List Serve. Most responses indicated that nobody was aware of any Joint Commission or state statute imposing such a duty, although there may be some state licensing requirements that do impose that duty.

Kristen Miles, as assistant AG, in the University of Washington Division, did cite a recent case, Liu v. Board of Trustees of the University of Alabama, which holds: “Nothing in the HCQIA mandates that healthcare entities provide peer review information to credentialing authorities in other states in excess of the information required to be reported to the NPDB.”

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In Hussein vs. Duncan Regional Hospital, United States District Court for the Western District of Oklahoma denied immunity under the Health Care Quality Improvement Act (HCQIA) to Duncan Regional Hospital because it terminated a physician's privileges and reported him to the National Practitioners Data Bank (NPDB) without providing notice or an opportunity to be heard. 

Dr. Hussein applied for and was granted locum tenens privileges at Duncan Regional Hospital for a two week period in April 2004. After only several days of practicing at the Hospital, Dr. Hussein left the hospital and did not return, asserting that the Hospital was requiring him to read too many films per day and thus jeopardizing patient care.

Following meetings at the Credential's Committee, the Medical Executive Committee and the Hospital's Board of Directors, Dr. Hussein's privileges at the Hospital were terminated and the NPDB stated that Dr. Hussein had deserted the Hospital, jeopardized patient care and that his temporary privileges had been terminated.

The opinion states that it is undisputed that the Hospital did not provide Dr. Hussein with notice or an opportunity to be heard. 

Among the defenses asserted by the Hospital was immunity pursuant to the terms of the Health Care Quality Improvement Act. The court held that, "as it is undisputed that Dr. Hussein was not given any notice or opportunity to be heard prior to the Hospital's report . . . the court concludes that defendants are not entitled to immunity under (HCQIA)." The Act provides immunity only if certain conditions are met, one of which is a requirement of notice and an opportunity to be heard to the NPDB. 

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Most participants in the credentialing process are familiar with state statutes providing peer review immunity and confidentiality. The Tennessee statute analyzed in Smith v. Pratt and HCA Health Services of Tennessee, Inc. /d/b/a CentennialMedicalCenter take that immunity one step further. 

In this malpractice case, the court held that Tennessee Code § 63-6-219 provides immunity for negligent credentialing. The Code cited provisions of the statutes stating that physicians, hospital administrators and employees, directors and trustees, and institutions and entities are immune from liability to any patient for damages resulting from any decision or action entered or acted upon by such committees within the scope or function of the duties of such medical review committees if made or taken in good faith without malice, and on the basis of facts reasonably known or reasonably believed to exist at the time. These immunity statutes are typically viewed from the prospective of aggrieved physicians seeking damages or other redress for the termination or denial of clinical privileges. Liability by hospitals for damages arising out of negligent credentialing decisions is well accepted in many states of this country. The court in Smith v. Pratt recognizes that the Tennessee statute, although "not a shining example of legislative drafting" as described by the court, clearly provides much greater immunity than typically associated with such statutes.

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In Chudacoff vs. UniversityMedicalCenter of Southern Nevada, et al., the United States District Court for the District of Nevada granted partial summary judgment on behalf of Richard M. Chudacoff, M.D., enjoining University Medical Center from reporting Dr. Chudacoff to the National Practitioner Data Bank, and granted summary judgment on Dr. Chudacoff's behalf denying immunity under the Health Care Quality Improvement Act to the hospital. The court concluded that the hospital's suspension of Dr. Chudacoff without providing due process rights required by the medical staff bylaws violated Dr. Chudacoff's due process rights. The court stated "The fatal flaw here is that the defendant's suspended Chudacoff's staff privileges before giving him any type of notice or opportunity to be heard with respect to that suspension . . . Chudacoff's due process rights were violated by the timing of the MEC's actions."

In addition to enjoining a Data Bank Report and denying HCQIA immunity, this court recognized that physicians' clinical privileges are protected property interests under Nevada state law which would not be revoked without constitutionally sufficient due process. This is one of the few cases that recognizes medical staff membership and clinical privileges as a state protected property interest. 

The court declined to issue an injunction reinstating Dr. Chudacoff because of its perception that the ongoing medical staff appeals process would be resolved in Dr. Chudacoff's favor, but left that remedy as a future option. 

This case is a perfect example of how physicians should deal with medical staff credentialing disputes that are conducted in flagrant violation of the medical staff bylaws. 

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A physician in Knoxville, Tennessee, Dr. Abu-Hatab, sued Blount Memorial Hospital alleging that his medical staff membership and clinical privileges had been terminated and retaliation for exercising his First Amendment right of free speech regarding complaints about medical care in the hospital. The United States District Court for the Eastern District of Tennessee granted summary judgment to the hospital in both counts.

Dr. Abu-Hatab joined the practice of Dr. Siddiqi at the hospital. Dr. Siddiqi's practice had an exclusive contract for dialysis services at the hospital. At some point, Dr. Abu-Hatab started his own practice and attempted to persuade the hospital to terminate its exclusive arrangement with Dr. Siddiqi.

At this point, as usually happens, the plot thickens and Dr. Abu-Hatab is accused of disruptive conduct. This is the classic chicken and egg dilemma with disruptive physician cases, which cannot be resolved without extensive review of the facts, but the question is always whether the hospital is retaliating by harassing a physician who is seeking to change the existing political and contractual structures with the hospital or whether a disgruntled physician, who was unable to legitimately change the situation, then becomes disruptive in an attempt to illegitimately undermine the existing structure.

In this case, the court granted summary judgment in favor of the hospital, basically concluding that the physician was the offending party. In analyzing the elements of immunity under the Health Care Quality Improvement Act, the court concluded:

(1)        There was evidence in the record conclusively demonstrating that the hospital's decisions were made and they were furthering quality healthcare;

(2)        There was voluminous evidence detailing the hospital's ongoing and thorough efforts to investigate the complaints against Dr. Abu-Hatab, thereby establishing a reasonable effort to obtain the facts;

(3)        The hospital provided Dr. Abu-Hatab with adequate notice and an opportunity to be heard at every stage of the proceeding; and

(4)        A reasonable jury could not find, based upon the ponderous of voluminous evidence, that the action was not warranted by the facts known to the hospital at the time.

Dr. Abu-Hatab also asserted that he had a constitutional right under the First Amendment to criticize the medical care at the hospital. This issue is analyzed under the law pertaining to public employees' rights for free speech under the First Amendment. The basic rules establish that the speech is protected only if it touched on a matter of public concern and there was no overriding state interest that would be undermined by allowing the speech. The court concluded that the issue involved Dr. Abu-Hatab's dispute with management of the hospital, and not a public issue, because Dr. Abu-Hatab's criticism of the dialysis contract involved administrative issues rather than political, social or economic concerns affecting the local community.

A copy of the opinion is available for review.

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The California Supreme Court vindicated Dr. Mileikowsky when it affirmed an appellate court decision setting aside the hospital's governing board decision terminating Dr. Mileikowsky's hearing and ordering the hospital to convene and conduct a new hearing in accordance with the medical staff bylaws. 

The basis of the dispute was a ruling and action by the hearing officer in the original medical staff hearing terminating the hearing on the basis of disruptive and uncooperative conduct by Dr. Mileikowsky, which was affirmed by the hospital's governing board in accordance with the appeal procedures of the medical staff bylaws.

Dr. Mileikowsky then sought mandamus in civil court, seeking an injunction ordering a new hearing. The trial court denied that petition; the appellate court reversed and remanded; and the Supreme Court affirmed the appellate court ruling.

The basis of the decision is that "the hearing officer lacked authority to prevent the reviewing panel from fulfilling its statutory duty to review the peer review committee's recommendation" based upon both the bylaws and the California statute defining due process.

A copy of the case is attached at the link below.

This case was featured in a Med Law Blog post on December 27, 2007, when we reported that the California Supreme Court would hear the Mileikowsky hearing officer case, which gives you an idea of how long it takes for appellate cases to wind their way through the court system.

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The Court of Appeals for the State of California has overruled a trial court decision holding a summary suspension was not a formal proceeding entitled to Anti-SLAPP protection. In Arunasalam v. St. Mary Medical Center, Dr. Arunasalam was summarily suspended for disruptive conduct and sought a Medical Staff Hearing, but the Medical Staff Hearing was delayed because of the resignation of one of the hearing panel members during the proceedings. While proceedings were ongoing to convene a new panel, Dr. Arunasalam sought injunctive relief. 

The hospital moved to strike the petition for injunctive relief under the provisions of the Anti-SLAPP statute, which is California's statute protecting administrative proceedings from "strategic lawsuits against public participation." The intent of the statute is to prevent frivolous suits against formal governmental proceedings in order to allow the proceedings to follow the statutorily mandated course of action.

The trail court held that a summary suspension was not a formal proceeding under California law, and therefore the Anti-SLAPP did not apply.

On appeal, the appellate court reversed the trial court holding that a summary suspension was part of the formal proceedings included in the California statute regulating medical staff proceedings.

View a PDF of the case.

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The trial court in Baptist Health vs. Murphy has issued a decision permanently enjoining Baptist Health from enforcing its economic credentialing policy, and finding that Baptist Health tortuously interfered with the plaintiff physician's contracts and engaged in deceptive trade practices under the Arkansas Deceptive Trade Practices Law. 

Attached below is a comment on the article by Michael Callahan and a link to the opinion. Watch for the teleconference on the case to be presented by the American Health Lawyers Association and moderated by Mike Callahan. 

There should be some very interesting content in this presentation, because the Arkansas trial court made some very provocative comments regarding the exceptional protection to the afforded physician/patient relationships, the anti-competitive and anti-public policy aspects of economic credentialing, the advantages of specialty hospitals and the role of marriage in this issue. You will have to read the opinion to discover the impact of marriage in this case.

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"In case you have not already seen this decision/order that was entered last Friday, attached is part of the long litigation saga in the ongoing Baptist v. Murphy litigation in Arkansas. I would strongly suggest that you all read this case because it is far ranging and addresses restraint of trade, public policy, tax exemption, fraud and deceptive business practices and even the sanctity of marriage as grounds to support the imposition of a permanent injunction to enjoin the implementation of an "economic credentialing policy" that would have required applicants and current medical staff members and any family member to divest themselves of their economic interest in a competing heart hospital. I assume you have all read the 2006 Arkansas Supreme Court decision which the trial court has based its order after a 10 day trial.

At a minimum, it is instructive as a road map for all hospitals to consider when contemplating a similar policy. There are many lessons learned and, at least in my opinion, mistakes the hospital made when developing the policy that others would have or will avoid. Also, had this dispute occurred in a different market where there were more hospital providers and managed care plans that would have given excluded providers other hospital options, I think the result could have been different. In addition, there are some unique public policy holdings in Arkansas along with other legal theories which exist in many other states which had no application here that also might have led to a different result.

The person who interviewed me did not know if an appeal was being contemplated or not. I have not compared this order to the 2006 Supreme Court decision to know whether the two are consistent or not. If so, it would seem that further appeals may be futile although that does not seem to have served as an obstacle in this ongoing dispute. Anyway, hope all is well with everyone."

MICHAEL R. CALLAHAN

michael.callahan@kattenlaw.com

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www.medlawblog.com/uploads/file/BaptistvMurphyInjunction0209(1).pdf

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AHLA and a Florida newspaper have reported an ongoing case in which 4 trauma surgeons have obtained a TRO blocking  their summary suspensions, but the case is not over yet and there  is no formal opinion. The AHLA report and the newspaper link are below.

Hospital officials argue suspension of trauma surgeons was necessary to protect patient safety.

Florida Today (2/12, Jenks) reported that, in a hearing before the "retired 18th Judicial Circuit Court Judge Larry Johnston," Holmes Regional Medical Center officials said they "believed 'patients were at imminent risk' when" they "ordered the suspension of four" trauma surgeons. The case centers on "whether some of the surgeons had performed enough procedures to be qualified as trauma surgeons" and whether "some quality data required by the state had been missing." Dr. Richard Hynes, chief medical officer argued that the hospital's "greatest concern was that, when a negative outcome occurred, we might not even know about it." But, when "Health First, the company which operates Holmes and employs the four surgeons, went to court" over the suspensions, it "successfully won a temporary injunction," which was later extended. Health First argued that "the surgeons' suspension did not meet the 'imminent danger' test required under the hospital bylaws," and that "the suspensions 'jeopardized patient safety.'"

http://www.floridatoday.com/article/20090212/NEWS01/902120337/1006/news01

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On January 21, 2009, the U.S. Supreme Court denied Dr. Poliner's petition to review the Fifth Circuit's holding , leaving standing the decision that  Texas Health System and Dr. James Knoechel qualified for HCQIA immunity.

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(Chuck Mowll, cmowll@jointcommission.org) http://www.jointcommission.org/Library/jconline/jconline_jan_2009.htm

Standard MS.1.20 Task Force to meet in March

The MS.1.20 Task Force will meet in March to continue its work of determining the best approach to revise Standard MS.1.20 relating to Medical Staff bylaws. Any recommended changes would be the subject of a field review and consideration by the Board of Commissioners. At its June 2007 meeting, the Board of Commissioners approved revisions to the hospital standard MS.1.20 related to medical staff bylaws and associated rules and regulations and policies. Following concerns received from hospitals, the 19-member Task Force was convened in January 2008 by the Board to analyze the potential impact of implementing the revised standard. One aspect of the revised standard the Task Force was asked to examine is the perceived prescriptiveness of the standard regarding the level of associated details related to the requirements that must be in the medical staff bylaws. The Task Force will consider whether these associated details should be in the medical staff bylaws or can reside in rules and regulations or policies. At its May 2008 meeting, the Board suspended the July 2009 implementation of the June 2007 revisions. The Standard MS.1.20 in the 2008 Hospital Accreditation Manual (MS.01.01.01 in the 2009 manual) will remain in effect until further notice. Note: There is an indefinite moratorium on the implementation of Element of Performance 19 of the current MS.1.20/MS.01.01.01. Therefore, the Joint Commission survey assesses whether each of the topics identified in EPs 1 through 18 are addressed in the bylaws, and whether necessary detail is addressed in either the bylaws, or rules and regulations, or policies. The survey does not assess how much of the detail is placed in rules and regulations or policies, rather than in bylaws; that decision is left to each medical staff and governing body.

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In Cole vs. St. James Healthcare, the Montana Supreme Court affirmed the entry of a preliminary injunction against St. James Healthcare. The facts, briefly stated, were that the hospital had undertaken an investigation in a manner that was not authorized by the medical staff bylaws and changed Dr. Cole's Medical Staff status without following the due process procedures, ultimately denying Dr. Cole's application for reappointment and offering a medical staff hearing at that point. Dr. Cole obtained an injunction at the trial court level by which the court ordered the following:

1.         The defendant is enjoined from refusing to consider Dr. Jesse A. Cole to have full lack of privileges at St. James Healthcare, and is ordered to reinstate Dr. Cole's privileges to the status of full active staff privileges;

2.         The defendant is enjoined from adopting the recommendation of the Matovich investigation not to renew Dr. Cole's privileges at St. James Healthcare, and such investigation and recommendation did not involve peer review as contemplated by the hospital bylaws;

3.         The defendant is enjoined from making any adverse report to the National Practitioner Data Bank regarding the hospital's reduction of Dr. Cole's privileges; and

4.         The defendant is enjoined from taking any further adverse action against Dr. Cole's full active staff privileges unless and until the hospital utilizes a peer review investigation conducted by its medical staff as required by the hospital's bylaws. 

In this case, there was no issue regarding contractual status of the bylaws; both parties accepted the proposition that the bylaws constitute a contract. 

The case is also important because the opinion recognizes that an adverse report to the National Practitioners Data Bank could cause irreparable injury, thereby forming the basis for issuing injunctive relief.

A copy of the opinion is available at the following link.

http://op.bna.com/hl.nsf/id/mapi-7mwk84/$File/cole.pdf

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A Colorado state appeals court concluded breach of due process provisions of the Health Care Quality Immunity Act (HCQIA) precluded immunity for St. Mary's Hospital and MedicalCenter, even though the medical staff bylaws might not have required notice and a fair hearing for revocation of provisional clinical privileges.

The hospital's medical staff bylaws provided no due process procedures regarding provisional privileges, and the hospital argued on summary judgments that it was entitled to HCQIA immunity. Although the trial court agreed, the state appellate court overruled and held that compliance with the bylaws is irrelevant regarding HCQIA immunity.

The full opinion is available at http://op.bna.com/hl.nsf/r?Open=mapi-7mcrs6.

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The United States District Court for the Northern District of Oklahoma has required Ardent Health Services to produce unredacted documents relating to the files of identified peer review physicians who practiced at the hospitals in order to examine whether the plaintiff's peer review situation was handled differently than other physicians within the hospital. 

The Court held that the Oklahoma statutory peer review privilege does not apply in this case and that the applicable test is Federal Rule Civil Procedure 26(b)(1), i.e. relevance, and the corresponding provisions of Rule 26(b)(2)(c) pertaining to burdensome, expense, and likely value. 

A copy of the opinion is attached at the link below.

http://op.bna.com/hl.nsf/id/psts-7ljnar/$File/cohl.pdf

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Dr. Poliner has petitioned the United States Supreme Court to review the Fifth Circuit decision dismissing his claims against Texas Health Systems based upon immunity under the Health Care Quality Improvement Act. Dr. Poliner is arguing that the Fifth Circuit in particular and courts in general have gone too far in granting immunity under the "objective standards" and refusing to consider any "subjective" evidence of bad faith, malicious intent and personal bias. The petition asserts that case law is basically providing absolute immunity for peer review decisions, rather than the qualified immunity described by the statute. The Supreme Court is not required to accept appeals; the Court can either allow the Circuit Court decision to stand or accept the appeal and decide the issue.

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Cases denying hospitals' summary judgment motions based upon the Health Care Quality Improvement Act (HCQIA) immunity are rare. Stratienko v. Chattanooga-HamiltonCountyHospital Authority (full text opinion below) is one of the exceptions in which the physician not only defeated the motion for summary judgment, but also obtained an injunction against the summary suspension. 

The U.S. District Court for the Eastern District of Tennessee denied the hospital's motion for summary judgment. The Hospital suspended Dr. Stratienko's clinical privileges within two hours after an alleged physical altercation with another physician. Because of the precipitous timing of the suspension, the Court ruled that a jury could conclude that the elements of HCQIA had not been satisfied.

Furthermore, the physician had obtained an injunction prohibiting the enforcement of the summary suspension pending the exhaustion of the remedies under the Bylaws, which the District Court declined to dissolve.

http://op.bna.com/hl.nsf/id/mapi-7jdpbu/$File/stratienko.pdf

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In Nasim v. Los Robles Regional Medical Center (2008 Cal. App. LEXIS 1251), a California Appellate State Court held that adoption of credentialing criteria which would retroactively deny a physician certain clinical privileges was illegal under California law. 

Los Robles Regional Medical Center adopted standards requiring board certification, and those standards required that subspecialty board certification be obtained within two consecutive board exams after initial board certification. Those criteria made it impossible for Dr. Nasim to obtain subspecialty board certification within the time limit specified by the credentialing criteria. The hospital claimed that it had appropriate authority to adopt medical staff standards; the court agreed that the hospital had the right to adopt standards, but disagreed with their application to Dr. Nasim, stating as follows:

"The hospital claims that there is no showing that Nasim was treated unfairly or arbitrarily by its application of Rule IV. But the Rule is not applied uniformly. Staff doctors were exempt from the board certification requirements. . . The trial court could find that the distinction the hospital made between the provisional and active staff might be appropriate if the rule had been applied prospectively. But it became artificial when applied retroactively to Nasim in 2003 and thereafter."

A copy of the opinion is available at the link below. 

uploads/file/Sohail Nasim.rtf

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Physicians initiating peer review litigation should be careful of two issues involving attorney's fees. First, Section 42 USC 11113 of the Health Care Quality Improvement Act provides that hospitals may recover attorney's fees from physicians who file frivolous or bad faith claims.

Second, sometimes the application for medical staff privileges contains clauses providing the immunity to the peer review participants and/or providing that the physician applicant will reimburse attorneys fees in the event of an unsuccessful credentialing dispute. In Adeduntan vs. Hospital Authority of Clark County the United States District Court for the Middle of District of Georgia found that a physician who was unsuccessful in prosecuting a peer review action against the Hospital Authority, Athens Regional Medical Center, and several physicians involved in the peer review process was required to reimburse the hospital and those physicians for their attorneys fees. 

This presents a dilemma for medical staff members. The application should be a four man process approved by the medical staff as part of the medical staff by-laws that will require individual medical staff members to reimburse the hospital for the attorney's fees in the event of a dispute? Should there be some condition so that only frivolous lawsuits would generate reimbursement obligations? If the medical staff by-laws require individual physicians to reimburse attorneys fees when they lose a credentialing, should they be able to recover attorney's fees when they win a credentialing case? The opinion in the Adeduntan case is attached in the link below.

http://op.bna.com/hl.nsf/r?Open=mapi-7h7nhr

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Click on the link to read the Poliner Opinion, as referenced in the previous blog post:

www.medlawblog.com/Poliner.pdf

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The Fifth Circuit reversed the dictrict court holding in the Poliner case, and concluding that the hospital had conducted an appropriate investigation and was therefore entltled to HCQIA immunity.

As with most of these cases, the law is fairly clear and the facts are the issue. In Poliner, the physician was asked or coerced into accepting an "abeyance". The court see this as an issue - it saw the action as an adverse peer review action regardless. The issue thebn was whether the hospital had conducted enough of an investigation as of that point to take the action it took. The court concluded that it had.

I'll post the entire case in the "links" section of the Medlaw Blog on Monday morning, when there is somebody here that knows how to do that. 

A critical lesson from this case, and one thart is a common thread in most peer review cases, is that proctection is not provided by the ability to sue afterwards. Protection is provided by insuring a fair peer review process.  IMHO, one way to assure fairness is to allow the investigated physician to appoint a member of the investigating committee and a member of the hearing panel, if necessary. this certainly would not change tjhe balance of power in the process, but it would go a long way to assuring fairness and transparency in the process. It would seem difficult for a reasonable hospital administration to refuse to include this in the bylaws. I suggest medical staffs use the bylaw review process sure to follow the Joint Commission  developments on MS.1.20 as a means to develop discussion on this issue.

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The Supreme Court of Kansas ruled on May 16, 2008 affirmed in the case of Kansas Heart Hospital, LLC and Cardiac Health of Wichita vs. Badr Idbeis, M.D. and 13 other shareholder defendants, that the Kansas Heart Hospital, LLC and Cardiac Health of Wichita were justified in forcing a mandatory redemption of the other physician's ownership interest due to investment in a competing medical facility.

Medical industry commentators were quick to compare this case to the Baptist Health case in which a hospital system is imposing non-competition or loyalty provisions as a condition for obtaining staff membership and clinical privileges, i.e. economic credentialing.

Note that the cases, although perhaps similar in impact, are quite different from a legal prospective.  The Kansas Heart Hospital case involves a determination by the Kansas Court regarding the applicability of a very technical provision of corporate law regarding the difference between redemption provisions and corporate by-laws and repurchase provisions in corporate agreements involving private shareholders.  The Court basically enforced the provisions of the corporate agreements voluntarily entered into by the physicians. 

Baptist Health is quite a different story.  It involves an attempt by a hospital to enforce economic credentialing by-law provisions which allow physicians to practice within its facilities only if they do not have competing investments.  That case involves the application of fraud and abuse rules and the community responsibilities of non-profit heath care facilities.  The Baptist Heart case has not yet been finally resolved.

A copy of the Kansas Heart Opinion appears at the link below.

www.medlawblog.com/Kansas Heart Hospital.rtf

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The U.S. District Court for the Eastern District of Tennessee concluded that a hospital's affirmative defenses pursuant to the Healthcare Quality Improvement Act (HCQIA) were not sufficient to independently establish federal jurisdiction, and therefore approved a physician's motion to remand the state court case that had been removed to federal court by the hospital defendant. 

You can view an analysis of the case by Bart Lee, Esquire (www.medlawblog.com/Breach of Contract.doc) and a copy of the opinion.  www.medlawblog.com/Opinion.pdf

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The Joint Commission announced the suspension of the planned July 2009 implementation date for the revised MS1.20 Medical Staff Standards.  The Implementation Task Force has recommended a full field review and anticipates both changes to the existing proposals and a delayed implementation date.  The full text of the news release is available at the link below.

http://www.jointcommission.org/NewsRoom/NewsReleases/nr_06_03_08.htm

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Innovative Application of Section 1981 and Medical Staff By Laws as Contracts

Ennix v. Stanton (and Alta Bates Summit Medical Center) significantly broaden the use of 42 U.S.C. §1981 in credentialing cases. In this United States District Court case for the Northern District of California, the court denies the hospital's motion for summary judgment, holding that Dr. Ennix, an African-American cardiac surgeon has satisfied the burden of pleading his contract and discrimination actions against Alta Bates Summit Medical Center. 

Medical Staff By Laws as Contracts:

Establishing a contract based upon the medical staff by laws is already an uphill fight in California. California state courts have already ruled, in O-Byrne v. Santa Monica, that the medical staff by laws do not themselves constitute a contract. However, the court ruled that Dr. Ennix has sufficiently pled that the medical staff by laws and credentialing process created a contract between the hospital and Dr. Ennix over and above the medical staff by laws themselves. The court stated that this was enough to defeat the hospital's motion for summary judgment. 

Section 1981 Discrimination:

Section 1981 provides that all persons shall have the same right to make and enforce contracts. Dr. Ennix has alleged racial discrimination based upon the contract claim. The District Court applied the McDonnell Douglas test, concluding that Dr. Ennix satisfied the initial burden of establishing a prima facie case of racial discrimination. The burden then shifted to the hospital to prove it had a legitimate non-discriminatory reason for the adverse action, in support of which the hospital asserted the decisions of the peer review committees regarding substandard care provided by Dr. Ennix. The court assumed this was sufficient to shift the burden back to Dr. Ennix to prove these allegations were a mere pretext. The court then concluded that Dr. Ennix had offered sufficient evidence regarding the disparate treatment of Dr. Ennix in the peer review process to establish genuine issues of material fact. 

The inclusion of the 1981 cause of action avoids the immunity provisions of HCQIA.

A copy of the opinion is attached.

http://op.bna.com/hl.nsf/r?Open=psts-7ecphz

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The Kadlec case is the latest in the trend to find hospitals and physicians liable for "negligent credentialing." The theory is that hospitals are responsible if they allow incompetent physicians to operate on patients at their facilities. This first phase of negligent credentialing has been on the books for almost twenty years.

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Bipolar Physician Has ADA Standing to Sue for Medical Staff Privileges

In Haas v. Wyoming Valley Healthcare System, the U.S. District Court for the Middle District of Pennsylvania concluded that a physician had standing under Title III of the Americans with Disabilities Act (ADA) and Section 5.04 of the Rehabilitation Act concluded that an independent contractor physician had standing to sue for denial of medical staff privileges, but also concluded that the physician did not satisfy the "otherwise qualified" conditions for protection. 

In an interesting twist, the Trial Court rejected the jury decision awarding Dr. Haas $250,000.00, entered judgment as a matter of law on behalf of the hospital, and denied the physician's motion for attorney's fees based upon the jury verdict as moot.

Facts:

Dr. Haas was diagnosed with bipolar disorder in 1994 during his residency. He underwent treatment, completed his training, and obtained privileges at Wyoming Valley Health System in 2000. Dr. Haas suffered an episode during surgery in 2001 which resulted in his taking a leave of absence and seeking additional treatment. Dr. Haas applied for reinstatement, which application was granted by the hospital on the condition that Dr. Haas essentially utilize a "co-surgeon" during his operations. Dr. Haas' request that this condition be eliminated was rejected and he filed suit against he hospital. The text of the opinion appears below.

Analysis:

There are two basic legal issues, i.e. whether Dr. Haas had standing as an independent contractor to seek protection under the ADA and the Rehabilitation Act and whether Dr. Haas satisfied the conditions of those statutes.

The court concluded that Title III of the ADA and Section 5.04 of the Rehabilitation Act applied to individuals, regardless of their employee or independent contractor status, unlike Title I of the ADA which applies to employment situations.

Granting standing, the court then analyzed whether Dr. Haas was entitled to the benefits of these public accommodations because his disability could be reasonably accommodated. The court agreed with the hospital that the only reasonable accommodation would be that imposed by the hospital, i.e. a orthopedic co-surgeon to oversee and assume responsibility of the case in the event of any problem. Otherwise, the court agreed with the hospital that Dr. Haas posed a direct threat to patient care. 

Therefore, the court concluded that it was not discriminatory treatment to require Dr. Haas to satisfy the additional conditions of his appointment, which Dr. Haas was unable to do. 

http://op.bna.com/hl.nsf/id/psts-7djm83/$File/haas.pdf

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Malpractice Plaintiff Obtains Peer Review Records

A United States District Court has decided that malpractice plaintiffs seeking recovery pursuant to the Federal Tort Claims Act are entitled to obtain hospital peer review records, regardless of state immunity laws. In Vezina vs. United States of America, the Plaintiff brought suit for personal injuries, allegedly suffered while being treated by a physician employed by the Department of Health and Human Services and the Southwest Louisiana Center Health Services Clinic, and Women's and Children's Hospital. The Plaintiff sought discovery of the hospital's peer review records and the hospital filed a motion to quash. The court concluded that, since the action was founded upon the Federal Tort Claims Act and federal common law would apply, which recognizes no peer review privilege, that the requested peer review records should be produced pursuant to a protective order.

The court held that the Louisiana State peer review immunity and confidentiality statute did not apply to actions brought pursuant to the Federal Tort Claims Act.

The hospital had also asserted that confidentiality pursuant to the Healthcare Quality Improvement Act ("HCQIA") and HIPAA, the court, citing earlier decisions named in the text of the opinion, concluded that HCQIA provides immunity for production of peer review records and confidentiality protection for the reports submitted to the National Practitioners' Data Bank, but otherwise provided no additional confidentiality protection. With respect to HIPAA, a court concluded that HIPAA did not protect or prevent the production of non-party patient information so long as the information was provided in accordance with the protective order as required by HIPAA. 

Although the holding of the case is limited to malpractice claims brought pursuant to the Federal Tort Claims Act, the preemption of the state confidentiality and peer review protection acts by federal common law in federal causes of action should be meaningful in other cases founded upon federal statutes. 

http://op.bna.com/hl.nsf/id/psts-7dbmvk/$File/vez.pdf

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Georgia Peer Review Decision Exhibits Rare Common Sense

Finally, there seems to be a peer review decision that exhibits common sense. In Madonna v. Satilla Health Services, Inc., and LeFever vs. Satilla Health Services, Inc., the Georgia Court of Appeals handed a peer review decision in a case pitting exclusive contract rights against individual peer review privileges which makes common sense. Since this is the second in a series of cases involving Satilla Regional Medical Center, perhaps the courts are finally understanding the issues. 

Satilla Regional Medical Center sought an exclusive cardiology agreement with Baptist Specialty Physicians, Inc., a Georgia Professional Corporation. In entering into the exclusive cardiology agreement, the hospital sought to terminate the cardiology clinical privileges of other individual physicians, one of whom had existing clinical privileges and one of whom sought medical staff membership and clinical privileges. 

The court addressed three issues which are commonly presented in these situations, and appear to have the correct answers on all three. 

First the court ruled that both public and private hospitals are required to follow their bylaws. The court avoided the contract analysis that seems to be popular these days and the arcane issues of consideration, privity, and preexisting statutory duty. Instead, the court reasoned that, since hospitals are required to adopt bylaws in accordance to state hospital licensing regulations, they should be required to follow them once adopted. 

Second, the court held that bylaws apply as equally to existing staff members as they do to physicians submitting initial applications, unless of course the bylaws specifically provide otherwise. In Satilla, one of the physicians had lost his medical staff membership and clinical privileges when his cardiology contract was terminated, because the contract specifically provided that medical staff membership and clinical privileges were contingent upon the existence of the contract. The physician then applied for new medical staff membership and clinical privileges, and the hospital refused to process the application because of the exclusive services agreement.

Finally, the court acknowledged that hospitals can certainly enter into exclusive service agreements. However, the authority to enter into such agreements is tempered by any restrictions in the bylaws and preexisting medical staff and clinical privilege relationships. Thankfully, the court did not get mired in the ridiculous argument that clinical privileges do not necessarily give physicians with those privileges the right to use hospital equipment intrinsically necessary to exercise those privileges, which issue was discussed in the Levy v. Clinton Memorial Hospital case posted on the MedLaw Blog on February 5, 2008.

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TOO MUCH IMMUNITY IN PEER REVIEW!

An Iowa Appellate Court has reversed the earlier trial court decision in Estate of Horst G. Blume v. Marian Health Center, first reported in the MedLaw Blog on April 9, 2007. 

The trial court previously held the hospital had breached the medical staff bylaws and was therefore excluded from the benefit of Health Care Quality Improvement Act immunity because it had failed to provide the due process procedures provided in its bylaws and required by the statute. The Appellate Court has reversed that decision on the basis that there were additional immunity provisions provided in the bylaws themselves, as follows:

“The practitioner extends absolute immunity to… the hospital… for any actions… taken… by this hospital… relating to… proceedings for suspension… of clinical privileges or for… revocation of appointment, or for any other disciplinary action.”

This case illustrates the unusual outcome where the court is actually enforcing the bylaws but the hospital has immunity nonetheless. The full text of the decision is attached in the link below.

http://op.bna.com/hl.nsf/id/mapi-7bzn9q/$File/blume.pdf

This is way too much immunity! One must ask why a medical staff would adopt bylaws including specific due process rights but also include a provision that the hospital is immune from violation of those rights. At least the much-maligned immunity provided by the Healthcare Quality Improvement Act requires compliance with due process procedures in order to qualify for immunity. 

Joint Commission MS 1.20, which is subject to intense review at this point, will provide hospital medical staffs the opportunity to reevaluate their bylaws. The medical staff leaders should make sure that these unlimited immunity provisions are not included in the bylaws.

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PEER REVIEW NEWS: NEVER RESIGN PREMATURELY

Catholic Health Initiatives v. Gross is an excellent example of why premature resignations of medical staff privileges could have permanent adverse consequences. Dr. Gross was recruited by Centura Health – St. Thomas Moore Hospital, which is operated by Catholic Health Initiatives. Shortly after the commencement of the contract, Dr. Gross was involved in a peer review investigation, after which the Medical Executive Committee required Dr. Gross to obtain an evaluation of his surgical skills and requested that he voluntarily withdraw his privileges for certain surgical cases until the completion of the recommended corrective actions. MEC told Dr. Gross that he could be summarily suspended if he failed to follow those recommendations.

Dr. Gross abruptly resigned, but his first resignation specified a future effective date. The MEC responded by questioning whether Dr. Gross intended to voluntarily withdraw his privileges during the interim period, after which Dr. Gross sent a second resignation letter effective immediately. Shortly thereafter, Dr. Gross sent a third letter stating that he had not had sufficient time to consider his options and attempting to withdraw his resignation. The MEC responded by advising Dr. Gross that he could not withdraw his resignation and that he would have to reapply for medical staff privileges if he wished to continue at the hospital. Dr. Gross never submitted a new application nor did he request a hearing regarding the adverse peer review actions which had already occurred. The hospital thereafter reported Dr. Gross to the National Practitioner Data Bank for resigning while under an investigation. 

Centura Health then sued Dr. Gross for advances paid pursuant to the Recruitment Agreement, and Dr. Gross counterclaimed against the hospital and the Medical Executive Committee for denial of due process, failure to act in good faith, and tortious interference with existing and future business relationships. The United States District Court for the District of Colorado initially awarded and subsequently reaffirmed summary judgment in favor of the Medical Executive Committee, the individual members thereof, and the hospital, dismissing Dr. Gross’ claims for denial of due process and breach of implied duty of good faith and fair dealing. The hospital argued that Dr. Gross had no right to any due process under the bylaws because he resigned before any action was taken that would have entitled him to a hearing on to any of the other due process rights under the bylaws and that he had failed to exhaust his administrative remedies. The court agreed that the corrective action recommended by the hospital did not rise to the level of an adverse peer review action triggering due process rights pursuant to the bylaws, and also agreed that Dr. Gross had basically waived those rights by resigning and making himself ineligible for those protections.

The District Court also dismissed Dr. Gross’ claim that the hospital was tortiously interfering with his prospective business relationships by filing the National Data Bank Report, holding that the Data Bank Report accurately stated the facts that had occurred and was required by the Health Care Quality Improvement Act. Since the Data Bank Report was required and there was no doubt regarding the truth of the report, the immunity provisions of HCQIA protected the hospital. 

The court declined only to grant summary judgment dismissing Dr. Gross’ claims for intortious interference with existing business relationships because there was a factual issue regarding the hospital’s allegedly defamatory statements to other members of the administration and medical staff which were not immunized as part of the peer review process.

Finally, the court also granted the hospital summary judgment on its contract action to recover funds advanced to Dr. Gross pursuant to the recruitment agreement.

The case illustrates the “double-whammy” associated with premature resignations of medical staff membership and clinical privileges. First, if the resignation is made during an investigation or in order to avoid an investigation, the act generates an automatic unfavorable Data Bank Report. Second, because of the doctrine of exhaustion of administrative remedies, resignation could, as happened in the Gross case, waive any opportunity to challenge the adverse peer review actions in accordance with the medical staff bylaws. Not only does that waive the right to pursue whatever due process rights a physician might have pursuant to the bylaws, but it also forecloses recourse to the civil courts, leaving the physicians with no recourse of any kind by the hospital stand behind the shield of HCQIA immunity. The key to piercing this shield of immunity is showing that the due process rights mandated by HCQIA were not provided. When the physician waives those rights by premature resignation, that opportunity is forever lost. A copy of the opinion granting the various motions for summary judgment and the subsequent opinion denying the motions of both parties to reconsider those orders is attached at the link below.

http://op.bna.com/hl.nsf/id/mapi-79zptc/$File/catholic.pdf

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PENNSYLVANIA HOSPITAL IMPOSES MANDATORY CALL

AND TERMINATES CLINICAL PRIVILEGES

Lehigh Valley Hospital has terminated the clinical privileges of three orthopedic hand surgeons because they won’t accept every hand injury case transferred to the Cedar Crest emergency room. The story was reported in the February 17, 2008 edition of the Morning Call and the full story can be accessed at the link below.

http://www.mcall.com/news/local/all-b1_5hand.6269571feb17,0,6433912.story?track=rss

The story highlights the conflict between hospital obligations to provide 24 hour coverage, usually mandated by EMTALA, and subspecialty physicians’ increasing unwillingness to accept call coverage responsibilities without additional compensation. However, it is important to note that the orthopedic hand surgeons who are the subject of this story maintain that call compensation is not an issue in this dispute; they maintain that the call coverage conflict is simply a result of too much volume putting resource pressures on their practices. 

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Levy v. Clinton Memorial Hospital, a recent Ohio state court case, confirms the longstanding concept that hospitals may close medical staffs or departments for quality of care reasons, but also reaches the absurd legal conclusion that medical staff bylaws do not constitute contracts and that clinical privileges are equipment specific. 

FACTS

Clinton Memorial Hospital expanded its cancer care facilities by adding a linear accelerator, which is really nothing more than upgrading to current standard of care. The hospital awarded a full-time exclusive contract to Dr. Stella Ling to provide radiation oncology services. The radiology oncology services were previously provided by a group consisting of Drs. Richard Levy, Peter Fried, and Marc Mosbacher. 

The hospital took the logically absurd position that the exclusive contract did not impact the clinical privileges of Drs. Levy, Fried and Mosbacher, because they were still permitted to provide radiation oncology services at the hospital using the old equipment, but they were not entitled to use the linear accelerator. Of course, the old equipment had been removed and replaced by the linear accelerator. If widely adopted, this theory would allow hospitals to change privileges by changing equipment. Theoretically, hospitals could disenfranchise an entire group of specialists by replacing the equipment at the hospital. 

CLOSED MEDICAL STAFF

Although the headlines of the case deal with the idea of closing a medical staff or a medical staff department, that is a fairly well accepted principal and not widely contested. The issue is really what happens to the physicians with existing staff privileges. When the closing of the medical staff department does not disenfranchise the existing physicians, there is rarely a complaint about the process. However, when physicians are replaced by other physicians, those disenfranchised are quick to suggest future denial of due process. This issue of often puts physicians against physicians.

MEDICAL STAFF BYLAWS AS CONTRACTS

The majority position on this issue is that medical staff bylaws do constitute contracts, as noted by general posts on the MedLaw Blog. This Ohio court goes to absurd legal constructions to find that medical staff bylaws do not constitute a contract. Primarily, the court finds there is no mutuality of obligations, because only the hospital is required to follow the bylaws and the physicians are not required to even practice at the hospital. Of course, if the hospital had actually terminated the physicians medical staff privileges under circumstances in which the hospital desired to utilize the medical staff to process procedures, the first argument the hospital would have made had the physicians gone straight to court is that the physicians were obligated to use the administrative remedies of the bylaws. Medical staffs would do themselves a great favor if they simply stated in the bylaws that the bylaws were intended to be binding on both parties. In fact, the court stated that the medical staff bylaws were merely statements of general intent and did not reflect any meeting of the minds. 

DENIAL OF HEARING RIGHTS

The hospital denied that the physicians had medical staff due process hearing rights because, even though the change in the equipment might have been a constructive termination of their privileges, the privileges were not terminated for professional cause and the bylaws provided hearing rights only in the event of some type of professional cause termination. Ironically, the hospital is also arguing that it had the right to close the medical staff because it had the right to make improvements in quality of care, but that would not have been an issue had the physicians maintained their clinical privileges for the term of their appointments. 

The issue medical staffs must confront in dealing with these issues is whether hospitals should be permitted to constructively terminate clinical privileges by awarding exclusive contracts or changing equipment during the term of the appointment of existing medical staff members, or whether those types of changes must protect those existing rights. No dispute would be raised if the hospital simply declined to renew the medical staff privileges of the current physicians at the next renewal time. After all, if the medical staff bylaws do constitute contracts and the physicians have two year appointments, those contractual two year appointments expire at the end of two years. 

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EXHAUSTION OF ADMINISTRATIVE REMEDIES CONFIRMED AGAIN

A Colorado Federal District Court has confirmed the applicability of the doctrine of exhaustion administrative remedies regarding credentialing disputes. In Catholic Health Initiatives, Colorado v. Gross, Dr. Gross terminated the hospital peer review process by resigning during the early stages of an investigation. The facts of the case indicate that a quality issue regarding Dr. Gross’ performance arose at the hospital. The hospital notified Dr. Gross of its evaluation and indicated that he should either voluntarily withdraw his privileges to perform certain surgical cases or that he continues to perform the procedures only with the assistance of a proctor under specified conditions. Rather than comply, Dr. Gross resigned. When Dr. Gross attempted to withdraw his resignation, the hospital took the position that the resignation was final and that Dr. Gross’ only recourse was to reapply for medical staff membership and clinical privileges.

Dr. Gross filed suit in District Court alleging breach of a duty of good faith, denial due process and tortious interference with contractual relationships. The District Court granted the hospital’s motion for summary judgment on the due process and breach of contract issues, but split its decision on two tortious interference claims. One claim based upon a Data Bank Report was dismissed based upon HCQIA immunity. The second, based upon the hospital’s non-peer review conduct, was not dismissed.

The Federal District Court followed the recent holding of the Colorado Supreme Court in Crow v. Penrose-St. Francis Healthcare System, which required that a physician must exhaust all peer review committee administrative remedies before seeking relief in court. This decision was featured in a Med Law Blog post on October 29, 2007.

A copy of the full opinion is available at the following link:

http://op.bna.com/hl.nsf/id/mapi-79zptc/$File/catholic.pdf

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JOINT COMMISSION ANNOUNCES MS.1.20 TASK FORCE

The Joint Commission today announced the establishment of a special fact finding task force that will examine implementation issues related to revised hospital medical staff standard MS.1.20 and address issues of concern that have been raised.   The Joint Commission expects the task force report at the Board of Commissioners meeting on February 29, 2008. The text of the Joint Commission press release can be accessed through the link below.

http://www.jointcommission.org/NewsRoom/NewsReleases/nr_1_3_08.htm

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The California Supreme Court has agreed to hear the appeal of Mileikowsky vs. West Hills Hospital and Medical Center. The question to be heard on appeal is:

“Does the presiding officer in a medical review proceeding have the authority to terminate the hearing as a sanction for a party’s failure to cooperate in discovery, or must that decision be made by the hearing committee in power to decide the case on the merits?” 

During medical staff proceedings, in which Dr. Mileikowsky was appealing the hospital’s denial of clinical privileges, the hearing officer terminated the medical staff proceeding on grounds that Dr. Mileikowsky essentially failed to cooperate during the proceedings. The termination effectively affirmed the hospital’s denial of Dr. Mileikowsky’s application, which result was affirmed by the hospital’s governing board.

Dr. Mileikowsky filed a state proceeding known as a petition for a writ of mandate, challenging the hospital board’s decision. The trial court denied the petition, again effectively affirming the denial of Dr. Mileikowsky’s application. However, on appeal, the state appellate court held that the hearing officer had exceeded his statutory authority in California and ordered a new medical staff hearing. The hospital has appealed this decision to the California Supreme Court.

This case was the subject of a Med Law Blog post on September 20, 2007.  

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HCQIA IMMUNITY DENIED FOR

HOSPITAL VIOLATIONS OF DUE PROCESS

In the case of Wilkey vs. The McCullough - Hyde Memorial Hospital , the United States District for the Southern District of Ohio denied the hospital's request for summary judgment based upon immunity under the Health Care Quality Improvement Act because the hospital allegedly used an incompetent expert, denied Dr. Wilkey the opportunity to cross-examine that expert, and withheld a second favorable external review. This is only a denial of a motion for summary judgment, so the ultimate resolution of the case might indeed be different. However, this is a case where the hospital's denial of due process in the common law sense of the word has deprived it of HCQIA immunity at this level. A link to the full case is posted below:

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PEER REVIEW LITIGATION REQUIRES PRIOR

EXHAUSTION OF ADMINISTRATIVE REMEDIES 

The Colorado Supreme Court decided that physicians must exhaust administrative remedies before seeking injunctive relief or monetary damages in court; in the case of Crow vs. Penrose-St. Francis Health Care System, the Court stated:

“Because the governing board has yet to reach its final decision on the physician’s peer review, the physician has not exhausted his administrative remedies and his case was not ripe for judicial review. Therefore, the Supreme Court orders the District Court to grant the hospital’s motion to dismiss the physician’s claims.”

Dr. Crow was summarily suspended by St. Francis Health Care System. The Court reviewed the hospital’s bylaws and concluded that it had a five-step peer review process:

1.         An ad hoc peer review committee investigates complaints and makes recommendations to the credentials committee;

2.         The credentials committee reviews the issue and makes a recommendation to the medical executive committee;

3.         The medical executive committee reviews the issue and makes a recommendation to the governing board of the hospital;

4.         The physician has the right to a medical staff hearing regarding any adverse recommendation; and

5.         The physician has an appellate hearing to an appeals committee following an adverse decision of the medical staff committee.

The Court further determined that the first three steps of the peer review process had been completed promptly, but that the hospital had attempted on eleven separate occasions to schedule the medical staff hearing but all of those had been rejected by the physician, while the physician asserted that he had a right to require the hospital to produce the medical records that were the subject of the hearing in order to properly defend himself. With respect to the last issue, the Court concluded that the physician had ample opportunity to review the medical records at the hospital at anytime.

The Colorado Supreme Court’s conclusion was based upon both specific Colorado statute and general common law. The Court concluded that a peer review process was an administrative proceeding under Colorado law and that exhaustion of administrative remedies was specifically required as a condition precedent to litigation. The Court also concluded that the general rule among the states required exhaustion of administrative remedies.

The Court also concluded that it need not decide the issue of peer review immunity pursuant to the Health Care Quality Improvement Act because that issue was not ripe for decision in the context of this case. The full text of the opinion is at the following link:

http://www.courts.state.co.us/supct/opinions/2006/06SA323.pdf

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The new Joint Commission Medical Staff standards (MS.1.20) are creating significant turmoil within the healthcare industry.  Below is a BNA Report regarding the American Health Lawyers Association teleconference on the issue, in which Mike Cassidy, one of Tucker's Pennsylvania healthcare attorneys, was a presenter:

Revised Joint Commission Standards for Medical Staff Operations Roil Industry

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California courts have been active concerning peer review issues, ruling on three major decisions in the month of August. The Court of Appeals of California and the Federal District Court for the Northern District of California issued opinions further clarifying peer review processes in the state. These decisions not only affect practitioners within California, but also will influence courts across the country faced with the similar issues.

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Although the newly adopted Joint Commission Standard MS.1.20 will compel hospitals and medical staffs to re-evaluate the provisions of the medical staff by-laws on a multitude of issues, I would like to focus just upon peer review issues from the physician’s perspective, i.e., the physician who is the “target” of the peer review investigation or process.

While some stakeholders in this process from all perspectives, i.e., hospitals, physicians, administrators, medical staff officers, reject the notion that sham peer review is a problem, there is nevertheless almost universal acknowledgment that the peer review process is a threatening process to physicians being investigated. True peer review is not designed as a threatening process; it is a process intended to correct behavior and improve the quality of care. Although summary suspension and other disciplinary acts at the later stages of the peer review process inevitably occur, and in many and even in perhaps the substantial majority of cases may be justified, disciplinary actions should be an unfortunate result of a process rather than the goal of a process.

However, since the disciplinary peer review process (as distinguished from typical morbidity and mortality conferences) is very secretive and is conducted without the participation and sometimes without the knowledge of the target physician, the perception of this process as being a secretive and punitive process is all to often supported by the facts. MS.1.20 provides the opportunity to improve this process from the physician perspective, without changing either the confidentiality of the process from the perspective of a third party or affecting the control or governance of the process by the hospital or medical staff. Confidentiality was never intended to exclude physician participation. After all, most of the gory details of the process are not only disclosed, but highlighted and emphasized, once a decision to impose adverse peer review is made. My suggestions are as follows:

1.         Knowledge and Representation on the Ad Hoc/Investigative Committee: Standard bylaws provide that an investigative committee is appointed or assigned to investigate complaints about physicians. Physicians are typically notified that this action has occurred, but we believe physicians should always be notified and should also have the opportunity to approve or appoint one member of the committee, without regard to the total number of members of the committee. The goal is not to achieve a voting balance of power or stalemate, but simply to assure the absence of secrecy and the presence of accountability.

2.         Physician Participation in the Investigated Process: Standard bylaws often provide that the physician is granted the opportunity to meet with the investigative committee and discuss the findings. However, once findings have been made, the participation of the physician is almost irrelevant. The opportunity for the committee to make a decision considering all perspectives has already been lost. Physician participation in the process must start at the inception of the process, as it would in lower level peer review not intended to result in disciplinary consequences. 

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The Oklahoma Supreme Court has decided  the Oklahoma Peer Review statute (Professional Review Bodies - Protection From Liability Act) does not provide blanket immunity to peer review bodies in Oklahoma. The statute is only a defense to liability if the peer review body meets all of the requirements of the Act. In Smith v. Deaconess Hospital, a copy of which is attached at the link below, the Oklahoma Supreme Court overruled a trial court decision granting the hospital’s motion to dismiss and remanded the case for further proceedings. Among the significant shortcomings described by the Court, was the inability of Dr. Smith to cross examine the author of a peer review report of Dr. Smith’s cases and the failure to follow the bylaw procedures. The Oklahoma statute is reproduced in the text of the opinion, and it follows the structure of the requirements of the Health Care Quality Improvement Act, i.e., it establishes four similar conditions for qualified immunity and provides for specific procedural rights.

http://op.bna.com/hl.nsf/id/thyd-73qrnv/$File/Smith%20v%20Deaconess%20Hospital.htm

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Dr. John C. Perry and his practice, Teddy Bear Obstetrics & Gynecology, P.S., sued Kadlec Medical Center (which you may recall is the hospital that obtained a negligent credentialing judgment against Lakeview Medical Center in Louisiana for failing to provide credentialing information) and several members of the medical staff alleging that his credentials at Kadlec were improperly revoked as a result of a conspiracy by the defendants in restraint of trade in violation of Section 1 of the Sherman Act. 

The defendants filed a Motion to Dismiss under Federal Rule 12(b)(6), arguing that Dr. Perry failed to state a cause of action. The court reviewed the requirements for satisfactorily pleading an antitrust action in federal court and the general antitrust requirements, which are basically that the plaintiff adequately plead  facts indicating the existence of a conspiracy to restrain trade, or an attempted conspiracy, and harm to competition.

The element of harming competition has been a problem for many physicians alleging antitrust violations,  because the general rule is that the antitrust laws are intended to protect competition and not competitors. In order to proceed, the court indicated that Dr. Perry had to reasonably plead some actual harm to competition, such as price increase or at least the absence of price decreases in the OB-GYN field, a decrease in the availability of sufficient OB-GYNs in the market adversely impacting  patient access, or a decrease in quality. The court concluded that Dr. Perry had not adequately plead any of those facts and that the presence of other physicians in the market ,and in fact other physicians within Dr. Perry's practice,  belied any market impact or injury. 

The court concluded that "Factual allegations which plaintiffs say they could plea in an amended complaint are not enough to raise the right to relief above the speculative level. Not enough factual matter is alleged which, if taken as true, suggests there was any injury to competition beyond the impact on Dr. Perry. The plaintiffs have not plead enough facts in their complaint, nor have they proposed to plead enough facts in an amended complaint to reach a reasonable expectation that discovery will reveal evidence of injury to competition". The opinion in the case of John C. Perry, M.D. and Teddy Bear Obstetrics & Gynecology, P.S. v. Thomas M. Rado, M.D., et al., is available at the following link:

http://www.healthlawyers.org/email/pg/070529antitrust/Perry_v_Rado.pdf

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Curtsinger v. HCA, Inc.

Dr. Curtsinger's case illustrates one of the traps for the unwary in medical staff privileging cases. Dr. Curtsinger was summarily suspended, but was reinstated upon agreeing to a leave of absence to fulfill certain conditions for reinstatement. Upon completion of those conditions, Dr. Curtsinger requested return from his leave of absence; the hospital agreed to the return but imposed additional conditions which, according to the Court opinion, would have waived certain of Dr. Curtsinger's due process rights under the existing bylaws. This case illustrates the unanticipated consequences of what can happen when physicians voluntarily take themselves out of the due process protections of the medical staff bylaws, which commonly occurs in connection with leaves of absence. Typical medical staff bylaws require hospital approval for the return from a leave of absence but do not include denials of applications to return from leaves of absence as adverse peer review decisions subject to the fair hearing procedures of the bylaws.

Dr. Curtsinger's complaint against the hospital was dismissed on the basis of hospital immunity pursuant to the Health Care Quality Improvement Act (HCQIA). The Court concluded that the hospital had met all four standards for immunity under the HCQIA:

1.     Dr. Curtsinger's behavior was disruptive and disruptive behavior can affect patient care, so there could be a reasonable belief that the action was taken in the furtherance of quality healthcare;

2.     The hospital conducted a reasonable investigation;

3.     The hospital provided adequate due process, i.e., notice and hearing rights, and the Court rejected Dr. Curtsinger's contention that there should have been two separate notices and two separate hearings for the initial summary suspension and the subsequent denial for return from the leave of absence; and

4.     The action was taken in the reasonable belief that it was warranted because the evidence submitted by the hospital was not "so obviously mistaken or inadequate to make reliance upon them unreasonable".

The case also contained an interesting procedural decision regarding discovery of peer review records. The Court concluded that Dr. Curtsinger was entitled to discovery regarding issues of malice or bad faith regarding the peer review process but not entitled to discovery regarding other substantive issues. The distinction was concocted by the court based on the presumption language of HCQIA, which shifts the burden of proof to the physician. Since the physician bears the burden of disproving all HCQIA elements, I cannot see the distinction between the burden of proof regarding bad faith issues and the burden of proof regarding the other medical issues. Hospitals choose to disclose whatever peer review records they wish to disclose to the physician to make the case, but withhold the rest.

The opinion is available at: http://www.tsc.slate.tn.us./opinions/tca/pdf/072/curtsingerjopn.

Braswell v. HaywoodRegionalMedicalCenter

Dr. Braswell's case involved a different issue but his breach of contract claim was still dismissed pursuant to the immunity provisions of HCQIA. Dr. Braswell claimed the peer review actions instituted against him were retaliation for protected free speech under the First Amendment. Dr. Braswell was a general surgeon at a hospital in North Carolina and a member of a hospital committee recruiting additional general surgeons into the area.  The hospital agreed to recruit and subsidize the general surgeon for Dr. Braswell's practice and for another practice in the community. Dr. Braswell wrote to the physician being recruited for the other practice and, using the information supplied to the recruiting committee, advised the other surgeon being recruited that he was concerned that there would be insufficient patient volume to support two surgeons. The other recruited surgeons subsequently chose to accept the position at a different hospital.

Shortly thereafter, Dr. Braswell's peer review problems started. There was not sufficient factual information in the case to examine whether the cases and outcomes involved in the peer review process were in any way similar to the cases and the outcomes experienced by Dr. Braswell prior to the recruiting issue.

With regard to the free speech argument, the Court concluded that Dr. Braswell was not a public employee and therefore not entitled to protection under the First Amendment, because Dr. Braswell was an independent contractor/medical staff member and not an employee of the hospital. 

The Court also dismissed Dr. Braswell's breach of contract claim on the basis of HCQIA immunity. Since it dismissed the complaint, the Court did not discuss whether the bylaws constituted a contract under North Carolina law.

One interesting aspect of the HCQIA immunity was the fact that the hearing committee for Dr. Braswell's medical staff hearing concluded that the hospital had not satisfactorily documented its investigation, despite the fact that there may have been serious quality issues. The Court's opinion presumes that these actions were in violation of the bylaws but also concludes that the due process was fair under the circumstances, therefore allowing Dr. Braswell the protection of the "good enough" clause.

The opinion is available at: http://op.bna.com/hl.nsf/r?open=psts-72rpj6.

Semmelweis National Meeting

Mike Cassidy presented to the Semmelweis Society at its National Meeting in Washington, DC on the topic, “Protecting Yourself in Peer Review; What the Bylaws Should Say and What You Shouldn’t.”  

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My last MedLaw Blog post described four rules for making the peer review process fair. Here are four rules physicians should follow to protect themselves regardless of the peer review process.

1.         Recognize peer review when it is happening to you. There is no doubt that peer review is occurring when you get a letter proposing adverse peer review actions. The more problematic cases are the peer review processes that begin with collegial counseling or intervention.

There are two types of collegial intervention, but both can be traps. The first is the meaning discussion with a well-meaning colleague who serves on the relevant peer review committee. Since most colleagues desire to avoid conflict among themselves, it is sometimes difficult to identify these conversations as actual peer review. However, these conversations can show up later as recorded attempts to correct perceived misconduct.

The second and more obvious collegial intervention is an actual meeting with somebody that is less of a colleague and more of a peer review officer. Even though these interventions are clearly peer review, physicians often perceive these somewhat informed meetings as officious intrusions and either disregard the meetings or respond inappropriately.

It is important to recognize that both of these interventions can have future consequences if they are not recognized as harbingers of precursors to potential peer review problems.

2.         Request access to peer review records. Whenever physicians are advised that someone perceives a problem with their performance or their conduct, that physician should request a copy of the complaint or record precipitating the peer review contact, even if the hospital insists upon maintaining anonymity at that point. It is important to know how many complaints there may have been and what those complaints say. It is also important that physicians create a record of this process, preferably a record that includes at least neutral and perhaps partial witnesses. Third-party witnesses are important to prevent later distortions of the facts.

3.         Resist the urge to counterattack. Most accomplished individuals, and doctors include themselves in this category, resent disparaging comments about their conduct or competence. Resist the urge to be overly defensive. Threatening whistleblower disclosures and accusing the other physicians involved in the peer review process of competitive conspiracies and jealousies polarizes the peer review process. The other physicians resent the attacks just as much the target physician resents the intrusion. The precipitous counter attack rarely reads the mutually acceptable results.

4.         Retain experienced counsel. It is amazing that physicians who seek a medical consult at the first sign of a medical problem outside the scope of their particular sub-specialty nevertheless believe they can represent themselves in the peer review process or of that counsel is not necessary until the end of the process, when the physician as legal-patient now requires emergency surgery. Seeking experienced counsel is not an indication of lack intelligence; the issue is not intelligence, but training, experience and detached analysis.

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Sham peer review is created and perpetuated by secrecy. Charles Mackay wrote in “Eternal Justice”:

“But the sunshine aye shall light the sky,

As round and round we run;

And the truth shall ever come uppermost,

And justice shall be done.”

Physicians do not need voluminous due process protections in medical staff bylaws in order to protect their interests; they merely need the opportunity to assure that the truth will come out. Here are four suggestions to let the truth be told.

1.         Notice. Physicians should receive notice and/or copies of all complaints filed against them, whether they are mere incident reports or formal complaints requesting investigation by the medical staff. Notice provide the physicians an opportunity to respond to the complaint at the time it was made, rather than allowing them to accumulate until a more serious dispute arises. Hospitals respond that effective peer review requires confidentiality and immunity. However, the confidentiality provisions were never intended to allow anonymous complaints; they were intended to prevent third parties from discovering peer review documents as part of a tort or malpractice complaint. Those people submitting valid complaints are protected by the immunity provisions of state peer review laws, so confidentiality should not be an issue.

Hospitals defended their position by arguing that they are concerned about retaliation. Retaliation should not be permitted. Retaliation should be punishable by suspension, which may or may not be reportable to the Data Bank. Once physicians understand that they cannot retaliate against hospital employees who are just trying to do their job, retaliation should not be an issue.

Physicians should receive notice of ongoing investigations. There is nothing worst than being on the “watch list” or being on “double secret probation” in an environment in which incident reports and case review are being invited.

2.         Cross examination of witnesses. All individuals who submit reports should be included within the definition of the term “witnesses” and their reports should not be accepted as true or relied upon by the medical staff hearing committee unless the physician has had the opportunity to cross examine those individuals about those complaints. Cross examination does need to be integration under harsh lights; it is simply intended to give the physician the right to question and point out errors, inconsistencies and inaccuracies in written complaints. The immunity provisions of the state peer review laws should protect those witnesses from good faith disclosures.

3.         Premature suspensions: Clinical privileges should not be suspended unless the physician has had the opportunity to respond or to explain the situation which has thought to be the problem. Medical staff bylaws should allow suspension in those situations in which patient’s safety is an immediate and significant concern. When deciding whether patient’s safety gets protected or the physician’s right to practice gets protected, obviously the hospitals must come down on the side of patient safety. However, except in those situations, which exception will always give the hospital the most leverage or upper hand in these proceedings, suspension should not be imposed before the physician has had the opportunity to defend himself.

4.         Participation in the hearing panel: The due process procedures of the medical staff peer hearing process should allow the physician to appoint a member of the hearing panel. The hospital may retain the right to appoint the majority of the members; this safeguard is not intended to deadlock the process. It is merely intended to bring the light of day into the deliberations.

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The United States District Court for the District of Iowa held that Mercy Medical Center-Sioux City was not immune from liability under the Federal Health Care Quality Improvement Act. The Court entered summary judgment to the estate of Dr. Horst G. Blume on the basis of Mercy’s breach of contract and awarded damages to Dr. Blume in the amount of $146,000.

The District Court found that Mercy was not immune under the Federal Health Care Quality Improvement Act (HCQIA) because it breached its bylaws by never providing Dr. Blume the hearing to which he was entitled under the bylaws and that it failed to conduct a reasonable investigation as required by one of the elements of the HCQIA. The key facts regarding the failure to conduct a reasonable investigation were that Dr. Blume was never provided access to incident reports allegedly supporting the hospital’s action, that there was no reasonable effort by the hospital to obtain any facts in contrast to those incident reports, and that Dr. Blume was not given a meaningful opportunity to rebut those charges.

The hospital asserted in its defense that the HCQIA merely required a procedure which was fair to the physician under the circumstances. The Court acknowledged the existence of that language, but concluded it was not applicable to the present case.

In granting summary judgment on breach of contract issues, the Iowa Court followed the majority position with regard to medical staff bylaws, finding that the medical staff bylaws constituted a contract between the hospital and the individual members of the medical staff.

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RESTRICTIVE COVENANT UNENFORCEABLE

BY SURVIVING SPOUSE 

The Virginia Supreme Court ruled that a medical practice corporation, ownership of which had transferred from the deceased sole physician shareholder to his spouse and which was converted to a business corporation by state law, could not enforce a restrictive covenant because it could not practice medicine and had no enforceable interest. This same result could apply in Pennsylvania because it has the same combination of corporate practice of medicine and professional corporation laws. The Virginia case is Parikh v. Family Care Center and the case is available at: http://op.bna.com/hl.nsf/id/psts-6z2sn8/$File/parkikh.pdf. Although liquidated damages would prejudice your injunction rights, liquidated damages would be an effective resolution for this problem.

RADIOLOGIST DENIED ANTI-TRUST RELIEF

DESPITE PROVING CONSPIRACY

Dr. Saskia V. W. Hilton failed to demonstrate that “competition in the market for pediatric radiology services” was injured despite producing evidence that would have supported finding of an anti-competitive conduct by this hospital and its existing pediatric radiologist. The classic position is that the law protects competition not competitors.

See: http://op.bna.com/hl.nsf/id/psts-6z8qrp/$File/hilton.pdf 

CALIFORNIA PHYSICIAN NOT DAMAGED

BY BOARD CERTIFICATION REQUIREMENT

A California physician lost his medical staff privileges when he failed to meet the hospital’s new board certification requirements was found not to be entitled to pursue an action in court for damages relating to the termination of his clinical privileges because the court rule that the decision of the hospital, under California law, was a quasi legislative act of general application, in the form of the adoption of minimum qualification standards for clinical privileges, which did not create an individual cause of action. See: Tran vs. MissionHospitalRegionalMedicalCenter at:

http://op.bna.com/hl.nsf/id/thyd-9prg/$File/Tran%20v%20Mission%20Hospital.pdf

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A California court recently concluded that exhaustion of administrative remedies was not required as a condition precedent to reinstatement of a physician. The summary description of this holding is somewhat misleading, because it is commonly accepted that physicians must exhaust their administrative remedies, i.e., the medical staff peer review hearing process, before pursuing either civil or equitable remedies. The California holding would apparently contradict that.

However, the California case involves peculiar circumstances. The physician was both a member of medical staff of the hospital and an employee of the hospital. The hospital summarily suspended the physician’s clinical privileges and terminated the physician’s employment. During an extended period of legal posturing, the parties were unable to agree upon a medical staff peer review process, due to technicalities in the due process procedures which gave both sides an arguable position about the appointment of a hearing officer.

During that period, the physician petitioned for an injunction reinstating her employment. The court cited an earlier California case holding that there must be a “pre-termination” hearing with respect to the employment if continued employment presented no immediate danger to patients. The court reasoned that since the physician’s clinical privileges were already summarily suspended and the physician could, therefore, not pose any risk to patients, the physician was, therefore, entitled to a pre-termination hearing with respect to the termination of her employment. Since the pre-termination hearing had not been held, the court ordered reinstatement of the petitioner’s employment and the hospital placed the physician on paid administrative leave. 

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JOINT COMMISSION PROPOSES STANDARDS FOR DISRUPTIVE PHYSICIANS

The Joint Commission (which has always been the informal name for the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and which will now be its formal name) has proposed disruptive behavior standards for Joint Commission accreditation, which it intends to apply in early 2007.

The new standard, LD.3.15, will state: “As a critical component of the culture of safety, leaders set expectations for behavior among those who work in the organization.” The new elements of performance will be as follows:

1.         The leaders develop a code of conduct that applies to everyone who works in the organization.

2.         The code of conduct defines desirable and disruptive behavior.

3.         All who work in the organization are educated about both desirable and disruptive behaviors.

4.         The leaders develop processes for managing disruptive behavior.

5.         Leaders identify the rules of individual leadership groups in managing disruptive behavior.

6.         The organized medical staff manages disruptive behavior exhibited by physicians or individuals who are granted clinical privileges.

7.         Leaders establish a fair hearing process for those who exhibit disruptive behavior.

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“The U. S. District Court for the Middle District of Pennsylvania ruled that Lewistown Hospital was not entitled to recover the legal costs incurred fighting the allegations of Dr. Alan D. Gordon under the Sherman Act because the hospital could not show the claims brought by the ophthalmologist were frivolous or unreasonable, or brought in bad faith.” BNA Health Care Daily, October 18, 2006.

The Health Care Quality Improvement Act (HCQIA), § 11113, provides as follows:

“In any suit brought against the defendant, to the extent that a defendant has met the standards set forth under § 11112 (A) of this title and the defendant substantially prevails, the court shall, at the conclusion of the action, award to a substantially prevailing party defending against any such claim the cost of the suit attributable to such claim, including a reasonable attorneys’ fees, if the claim, or the claimant’s conduct or the litigation of the claim, was frivolous, unreasonable, without foundation, or in bad faith. For the purposes of this section, a defendant shall not be considered to have substantially prevailed when the plaintiff obtains an award for damages or permanent injunctive or declaratory relief.”

Lewistown Hospital had alleged that Dr. Gordon was either frivolous or unreasonable and acted in bad faith. Dr. Gordon argued that, in order to prevail, Lewistown must prove that he was both frivolous and that he acted in bad faith. The court rejected that argument, interpreting the statutory conditions in the disjunctive manner based upon the presence of the word "or".

However, the court also concluded that feelings of hostility or revenge do not demonstrate bad faith and are not uncommon in adversarial proceedings stating “to find bad faith on the existence of such feelings alone, absent some indication that those feelings fuel litigation, believed to be baseless, just for the sake of litigation, would seem to award attorneys’ fees in almost every case.” The court opined that, in order to show bad faith, the plaintiff would have had to knowingly proceed when the claim was “baseless, known to be baseless, and motivated by improper purpose.”

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Cowett v. TCH Pediatrics Inc. seems to endorse bad faith peer review, but a closer examination of the opinion should reveal a significant distinction between bad faith peer review and peer review involving legitimate peer review concerns in situations which also include bad faith motivations among the peer review entities.

After following the fair hearing procedures provided by the By-Laws of the parties (which included TCH Pediatrics Inc, Forum Health, Western Reserve Care System, and Tod’s Children’s Hospital), Dr. Cowett was terminated from the medical staff and then sued the parties, asserting numerous claims which were not specified in the appellate opinion addressing only the issue of HCQIA immunity at the summary judgment level. The Appellate Court granted summary judgment on behalf of the Defendants based upon the immunity provided by the federal Health Care Quality Improvement Act (HCQIA). Dr. Cowett asserted that immunity should not be available because the peer review process was conducted in bad faith, and the Opinion implies that evidence regarding the existence of bad faith was at least potentially present. However, the Court concluded that:

“Dr. Cowett believes Forum should not be immune from suit pursuant to HCQIA because it acted in bad faith when determining that his privileges should be revoked. However, the only relevant issues under HCQIA are with regard to the objective reasonableness of the hospital’s actions, not whether those actions were taken in good faith. No reasonable fact finder could conclude that Dr. Cowett could overcome the presumption that Forum’s actions were reasonable. Accordingly, the judgment of the trial court is affirmed.”

Therefore, the Court concluded that, since there was evidence upon which a reasonable conclusion could be founded justifying the peer review actions taken by the hospital as having been based upon the reasonable belief that they were in the furtherance of quality health care, evidence that the hospital had potentially bad faith motives was irrelevant.

This case appears to miss the focus of the Health Care Quality Improvement Act. In HCQIA, there are four standards for immunity. The Cowett case focuses on the first, i.e., whether there was a reasonable belief that the action was in furtherance of quality health care. Using this standard, any bad faith peer review can be justified so long the peer review entity is able to identify events which can be objectively classified as legitimate patient care concerns. However, there is another standard in HCQIA which requires a “reasonable belief that the action was warranted by the facts.” This can only be a relative standard, a subjective standard, because there cannot be a reasonable belief that one physician should be subjected to peer review for causing a certain event if other physicians are causing the same events and are not subject to peer review, assuming, of course, that the peer review entities are equally aware of both circumstances and choose to act in one but not in the other.

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Click here to read Mike Cassidy's article published in Health Lawyers News, September 2006.

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A health law news service recently reported a United States District Court holding that a physician whose privileges were summarily suspended and ultimately terminated by a Pennsylvania hospital could not prevail on antitrust or breach of contract claims asserted against the hospital based upon the federal and state peer review immunity statutes. Although it is accurate to state that Bakare v. Pinnale Health Hospitals, Inc. dismissed the antitrust and breach of contract claims, the article overlooked what I believe to be the most significant aspect of the decision, which was that neither the federal Health Care Quality Improvement Act (HCQIA) nor the Pennsylvania Peer Review Protection Act immunized defamatory statements which, although made by physicians involved in the peer review process, were not made as part of the peer review process.

It is also important to realize that this decision was made based upon a motion for summary judgment. The Court did not conclude that defamatory statements had been made nor that the defendants were liable for the defamatory statements; the Court only dismissed the defendants’ motion for summary judgment of certain defamation claims. The impact of the dismissal is that the Court concluded there was sufficient evidence to allow the issues to be presented to a jury with respect to the defamation occurring outside the peer review process, stating as follows:

“Finally, claims relating to Dr. Moore’s statements in the operating room lounge and Dr. Bakare’s moonlighting contract does not arise out of the peer review process and, therefore, are not covered under HCQIA immunity.”

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JCAHO MS.1.20 (i.e. the proposed medical staff by-laws standards to be adopted by the Joint Commission for the Accreditation of Healthcare Organizations) has been generating significant controversy since amendments were first proposed in January of 2004, which amendments would have required approval of both the medical staff and the hospital governing board to adopt and amend the medical staff by-laws. Enforcement of these accreditation standards would prohibit unilateral amendment of medical staff by-laws by a hospital or its governing board, which created significant controversy among hospitals and their governing board because of the perceived “veto” power and granted to the medical staff. Although medical staff leadership welcomed this approach, said leadership has never felt nearly as threatened about this standard as the hospitals have because medical staff leadership have never expected unilateral amendment opportunities.

The latest iteration of MS.1.20 was recently posted on the JCAHO website (http://www.jointcommission.org/Standards/FieldReviews/fr_ms120.htm). The proposed standards are available for review and comment through October 27, 2006. Significant among the performance standards are the following:

“A.2. Medical staff by-laws are adopted and amended by the medical staff and approved by the governing body.”

“A.4. The governing body acts in accordance with the medical staff by-laws, rules and regulations, and policies that are adopted by the medical staff and approved by the governing body.”

A.7. to A.11. The medical staff by-laws or rules and regulations and policies adopted by the organized medical staff and approved by the governing body delineate the structure of the medical staff, both practitioners who are eligible for membership in the organized medical staff, most practitioners who are eligible to vote on the medical staff by-laws and their amendments, and the organized medical staff officers and the methods for their selection and removal.

These accreditation guidelines will also be interesting when viewed in relation to the issue of whether medical staff by-laws create enforceable contracts, because of the standards which are applied. Even in those states which have decided that medical staff by-laws in and of themselves do not create contracts with medical staff members, the general opinion has been the adoption of medical staff by-laws nevertheless creates an obligation or requiring the hospital to act in accordance with the by-laws, regulations and policies which it has adopted.

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An adverse peer review report to the National Practitioner Data Bank is a threat frequently used by hospitals to leverage physicians into otherwise unacceptable peer review compromises. Once the report has been made to the Data Bank, the alleged adverse peer review of action is public knowledge and significantly jeopardizes physicians’ continued practice opportunities. Although the Data Bank allows physicians to submit a dispute and has a process to contest the report filed by the hospital, that process is cumbersome and does not provide much recourse for physicians who disagree with the ultimate decision by the Secretary of Health and Human Services.

The United States District Court for the District of Nebraska has provided a breath of fresh air and potential recourse to this process. In Costa v. Leavitt (2006 U.S. Dist. LEXIS 51675), the District Court ordered the Secretary of Health and Human Services “to remove the National Practitioner Data Bank the adverse action report filed on April 6, 2005, by Gothenburg Memorial Hospital.” In this case, the hospital was in the process of denying a physician’s application for reappointment, with the credentials committee making an adverse recommendation what the by-laws requiring approval of that recommendation before final action, when the physician withdrew his application for reappointment. The hospital submitted a report which stated:

“Dr. Costa’s competence and professionalism are under review at the Gothenburg Memorial Hospital at the time he withdrew his medical staff application for reappointment and surrendered his privileges. The medical staff had concerns regarding recent obstetrical cases in which Dr. Costa was the primary physician, as well as concerns regarding his professionalism to nursing and administrative staff. Dr. Costa surrendered his privileges one and one-half hours after the medical staff unanimously voted to reject his application for reappointment and prior to that recommendation being forwarded to the board of directors for further action.”

The physician disputed this report with the National Practitioner Data Bank, utilizing the dispute mechanism provided by the regulations. The Secretary of the Department of Health and Human Services ultimately determined that the hospital report was accurate. The District Court concluded that the evidence did not support the Secretary’s determination and ordered the Secretary to remove that report.

| Posted By Michael Cassidy In Credentialing | 0 Comments | Permalink

In a recent discovery order of The United States District Court, the Southern District of Texas confirms the relevance and discoverability of patient records in credentialing disputes involving comparative peer review, i.e., the peer review disputes where the penalties imposed one physician are dissimilar or unequal to those imposed on others. 

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ARKANSAS SUPREME COURT RULES ECONOMIC CREDENTIALING POLICIES COULD VIOLATE FRAUD AND ABUSE RULES IN BAPTIST HEALTH CASE

The Arkansas Supreme Court affirmed a state appellate court ruling issuing a temporary injunction prohibiting Baptist Health, enjoining the hospital from enforcing its economic credentialing policies. The basis of this injunction is that the Baptist Health economic credentialing policy, which would prohibit physicians from owning financial interest in competitive facilities from maintaining Medical Staff membership and clinical privileges at Baptist Health, is the following;

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Credentialing Developments: U.S. Supreme Court Refuses To Review Hearing Officer Authority Ruling; Ohio Court Of Appeals Allows Discovery Of Peer Review Records Under Prior Law

Hearing Officer Authority

In California, a Medical Staff Hearing Officer terminated a Medical Staff Hearing on the grounds the physician was "repeatedly disruptive, disdainful of the Hearing Officer's authority, and flagrantly violated the rules pertaining to discovery and documentary exhibits." This ruling allows the ruling by a California State Court that the termination did not violate the physician's due process rights to stand. Meleikowsky v. Tenet Healthsystem, U.S. No. 05-638.

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In Bocobo v. Radiology Consultants of South Jersey, et al, a federal district court granted summary judgment to the radiology group and hospital defendants on eleven counts including the denial of a medical staff hearing. The radiologist was employed by the radiology group and the exclusive contract between the hospital and the group provided that medical staff membership and clinical privileges were coterminous, and that the physician was not entiltled to a medical staff fair hearing if the termination resulted from termination of employment by the mecial group. 2005 U.S. Dist.LEXIS 29321.

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In Naples Community Hospital v.Desmond Hussy,M.D., a Florida state court held that the Medical Staff By-Laws, and the Hospital policies enacted by the Board pursuant to those By-Laws, constitute a contract between the Hospital and the individual members of the Medical Staff. However, this did not entitle a physician to a due process hearing following the denial of his application for Medical Staff membership and clinical privileges. This physician's privileges had expired. During the term of the physician's prior privileges, the Hospital had entered into an exclusive contract, granting a different physician the exclusive right to practice those privileges at the Hospital. Although the Hospital allowed the physician with the existing privileges to continue to practice those privileges until the natural expiration thereof, his application for renewal was denied. The court held that the physician was not entitled to a due process hearing because the By-Laws provided for a due process hearing only if the privileges were terminated for professional cause, but not if they were not renewed as a business decision of the Hospital.

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JCAHO has posted a field review notice regarding hospital Medical Staff credentialing in privileging standards. The proposed standards would establish additional evidence based processes for the determining the competence of practitioners. See the JCAHO website link for the field review.

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Physicians often ignore crucial early warning signs in the credentialing process. Physicians also sometimes ignore the fact that the credentialing process is a structured legal process which can trap the unwary and penalize the careless. Here are 10 mistakes physicians make during the process, along with advice on how to prevent them.

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President Bush signed the Patient Safety and Quality Improvement Act of 2005 on July 29, 2005, describing the legislation as "a critical step towards our goals insuring top quality, patient-driven healthcare for all Americans."

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