A Federal Court denied prevailing party attorneys’ fees to a hospital in a Health Care Quality Improvement Act (HCQIA) proceeding and allowed the hospital to design its own due process in Fox v. Good Samaritan Hospital.

The denial of the attorneys’ fees is basically based upon laches and estoppel theory, because the hospital waited six years before pleading immunity under HCQIA. The Court concluded that although the hospital was the prevailing party, all of the intervening motions and attorneys’ fees could have been avoided had the hospital pleaded immunity at the inception of the case. The Court reversed the lower Court award overturning fees in favor of the hospital of approximately $500,000. 

HCQIA § 11112 provides immunity to hospitals that provide due process rights to physicians, and recommends the procedures to be followed. However, subsection (a)(3) allows hospitals to provide such due process as is fair under the circumstances. 

In the Fox v. Good Samaritan Hospital LP circumstances, Dr. Fox was terminated because he refused to follow a policy adopted by the hospital for call coverage, and admitted that he refused to follow the policy because he thought it was inappropriate and unnecessary. 

Given there was no dispute regarding the facts, the hospital did not provide the typical hearing and appeal mechanism, even though that process existed in the bylaws. Instead, the hospital offered the physician, and Dr. Fox accepted, the opportunity to present his arguments to the Executive Committee and to the Board of Trustees, both of which rejected Dr. Fox’s request to change the policy.

The Court concluded that this ad hoc due process was satisfactory under the HCQIA exception.