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.

The full text of the case is available at