HOSPITAL PEER REVIEW OF PHYSICIANS:

DOES STATUTORY IMMUNITY INCREASE RISK OF

UNWARRANTED PROFESSIONAL INJURY?

Eleanor D. Kinney, J.D., M.P.H.∗

TABLE OF CONTENTS

I. INTRODUCTION.................................................................................................... 58

II. BACKGROUND...................................................................................................... 60

A. The Institution of Peer Review................................................................. 60

B. The Health Care Quality Improvement Act........................................... 63

1. Statutory Provisions and Relevant Legislative History .............................. 64

2. Judicial Interpretation............................................................................... 67

III. RECENT EVIDENCE OF DYSFUNCTIONAL PEER REVIEW......................... 74

A. Reported Lawsuits ...................................................................................... 74

TABLE 1...................................................................................................... 75

B. Media Reports and Professional Commentary....................................... 76

C. The Extent of the Problem ....................................................................... 79

IV. APPROACHES TO REFORMS.............................................................................. 80

A. The Problems with Peer Review .............................................................. 80

B. Approaches to Reform............................................................................... 81

1. More Rigorous Adherence to Procedural Due Process Principles................ 81

2. Reform of the “Reasonable Belief” Standard............................................. 83

3. Effective Consequences for Hospitals and Physicians that Abuse Peer

Review...................................................................................................... 84

4. More Effective Independent Oversight of Hospital Peer Review

Proceedings ............................................................................................... 84

V. CONCLUSION ........................................................................................................ 85

APPENDIX A............................................................................................................... 85

APPENDIX B ............................................................................................................... 87

∗ J.D. Duke University School of Law, 1973, M.P.H., University of North Carolina at

Chapel Hill, 1979, Hall Render Professor of Law & Co-Director, William S. & Christine S. Hall

Center for Law and Health, Indiana University School of Law – Indianapolis, Indianapolis, IN.

I am indebted to the following colleagues for suggestions on this paper: David Orentlicher,

M.D., J.D., and Robert A. Katz, J.D. I am also indebted to the following individuals for research

assistance with this paper: Emma Haw, Tom Donohoe, Tony Pearson, Jackie Landress,

Faith Long Knotts and Margie Welsh.

58 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

I. INTRODUCTION

In 2004, a Texas jury awarded Dr. Lawrence Poliner $366 million -- one

of the top ten largest jury verdicts that year1 – in his lawsuit against a hospital

and several physicians for malicious peer review.2 Dr. Poliner left a large physician

group and started competing with his former colleagues in the same

hospital. According to the United States District for the Northern District of

Texas, the hospital and peer review committee effectively suspended Dr.

Poliner’s privileges to perform cardiac catheterizations summarily on the basis

of one questionable case and without giving Dr. Poliner an opportunity to

defend himself.3

In a recent California case, a jury awarded Dr. John Ulrich, Jr. $4.3 million

for a hospital dismissal based on a disruptive physician charge and findings

of incompetence that occurred after Dr. Ulrich publicly challenged an

administrative decision to cut professional staff positions at the hospital on

quality of care grounds.4 The California Medical Board’s later review of Dr.

Ulrich’s patient care found no problems.

These cases followed an earlier case involving one Dr. Kenneth Clark

who raised concerns that his hospital did not follow appropriate procedures in

several areas and reporting these problems to the Joint Commission on the

Accreditation of Healthcare Organizations (JCAHO) and other authorities.5

The hospital’s peer review committee determined that Dr. Clark’s actions

1. Natalie White, Surgeon Awarded $366 Million for Revoked Hospital Privileges, 648 LAWYERS

WEEKLY USA 20 (Sept. 27, 2004); Jury Awards $366 Million In Damages To Physician In Peer Review

Case, 13 BUREAU NAT. AFF. 1378 (Sept. 23, 2004);

2. Poliner v. Texas Health Systems, 2003 WL 22255677 (N.D. Tex. 2003), rev’d, (5th Cir.

Jul. 23, 2008). See Myrle Croasdale, Defamation Award Could Chill Peer Review: A Dallas Cardiologist

Won $366 Million In A Lawsuit Claiming A Peer Review Panel Intentionally Ruined His Career, AM.

MED. NEWS (Oct. 4, 2004), available at http://www.amaassn.

org/amednews/2004/10/04/prsd1004.htm).

3. In July 2008, as this article was in the publication process, the United States Court of

Appeals for the Fifth Circuit reversed the decision of the United States District Court for the

Northern District of Texas and entered judgment for the defendants. (5th Cir. Jul. 23, 2008).

The Fifth Circuit ruled that the immunity under the Health Care Quality Improvement Act

applied to the peer review actions in this case. Id.

4. Ulrich v. City & County of San Francisco, 2004 WL 1635542 (N.D. Cal. July 12, 2004).

Dr. Ulrich was discipline when he publically complained about staff cutbacks by the health

department as “an injustice to patients.” See also Steve Twedt, Doctor Who Voiced Protest Wins $4.3

Million Judgment, PITTSBURGH POST-GAZETTE, June 24, 2004, available at

http://www.peerreview.org/whistleblowers/6242004postgaz.pdf).; Steve Twedt, A Negative

Data Bank Listing Isn’t Easy to Erase, Oct. 27, 2003, available at http://www.postgazette.

com/pg/03300/234532.stm.

5. Clark v. Columbia/HCA Info. Services, Inc., 25 P.3d 215 (Nev. 2001). See Steve

Twedt, Doctors Who Spoke Out, PITTSBURG POST-GAZETTE, Oct. 27, 2003, available at

http://www.post-gazette.com/pg/03300/234534.stm.

Hospital Peer Review 59

were “disruptive” and terminated his staff privileges. Dr. Clark’s court challenge

went to the Nevada Supreme Court which ruled that the immunity provisions

in Health Care Quality Improvement Act, discussed below,6 did not

apply.

In these cases, the physicians had challenged the hospital’s administration

and/or powerful doctors on the hospital’s medical staff. Dr. Poliner was

a competitor of members of the peer review committee and at odds with the

hospital administration who supported his competitors. Dr. Ulrich had vocally

and publicly raised concerns about the quality of care to the appropriate

authorities in the hospital administration. Dr. Clark reported serious deficiencies

in quality to regulatory authorities.

In none of these cases was the conduct of the physician ostensibly illegal

or even inappropriate. Indeed, arguably, their conduct was commendable.

Dr. Poliner started practicing on his own while Dr. Ulrich and Dr. Clark

raised quality concerns to the appropriate officials, albeit not in private. All

three physicians paid dearly for their actions in terms of their financial well

being and professional reputations. In all cases, hospitals sought to invoke

the protection of immunity from sit in the Health Care Quality Improvement

Act of 1985 (HCQIA)7 to limit judicial review of their illegal conduct.

In Dr. Clark’s case, Clark v. Columbia/HCA Information Services, Inc.,8 the

Supreme Court of Nevada concluded that the peer review authority did not

meet the statutory qualifications for immunity. So did the United States District

Court for the Northern District of Texas in Dr. Poliner’s case, Poliner v.

Texas Health Systems.9 In so doing, these courts were departing from the vast

majority of courts considering peer review immunity under HCQIA who have

upheld immunity, even in the face of irregularities in the peer review process.

This article addresses the question of whether strong legal immunity of

hospital peer review of physicians in HCQIA and state peer review confidentiality

statutes is appropriate in the highly competitive and commercial market

for physician services in the United States today. Specifically, does immunity

pose an unacceptable risk of unwarranted professional injury to physicians?

The article examines the more recent, reported legal cases, media reports of

disciplinary actions against physicians and professional legal and medical

commentary on hospital peer review. The article suggests that there is need to

reform the various legal immunities currently in place for hospital peer review

of physicians and other procedural reforms of hospital peer review committees

are also in order.

6. See notes 55-75 infra and accompanying text.

7. Pub. L. 99–660, § 415, 100 Stat. 3787 (codified as amended at 42 U.S.C. §§ 11111-5).

8. 25 P.3d 215, 222 (2001).

9. Poliner, 2003 WL 22255677, at 18.

60 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

II. BACKGROUND

This section describes the institution of peer review and physician selfregulation

that is the controversial proceeding explored in this article. This

section also describes the Health Care Quality Improvement Act of 1985

which provides civil immunity to peer review proceedings.

A. The Institution of Peer Review

Medicine is a profession, which is defined as: “a calling requiring specialized

knowledge and often long and intensive academic preparation”10 A distinct

feature of a profession is its obligation and authority to regulate its

members and the practice of the profession. The profession of medicine

regulates entry through state licensure boards, constituted primarily by physicians.

11

Physicians practicing in American hospitals are organized in the hospital

medical staff pursuant to state licensure law and also private accreditation

standards. 12 An important aspect of self-regulation is credentialing physicians

for appointment, retention and termination from hospital medical staffs. Indeed,

hospital medical staff credentialing through peer review is the primary

means of regulating physicians who practice in hospitals.

The Joint Commission on the Accreditation of Health Care Organizations

(JCAHO) is the primary accrediting body for allopathic hospitals in the

United States. As such, the JCAHO establishes standards for the organization

and operation of the hospital medical staff. 13 States also require that hospitals

have medical staffs that conduct peer review as a condition of licensure.14

The Medicare and Medicaid programs require that hospitals have medical

staffs and engage in peer review in order to participate in these programs.15

JCAHO standards require that a hospital have a medical staff and that

the medical staff works with the hospital’s governing board to “enhance the

quality and safety of care, treatment, and services provided to patients.”16 To

that end, the organized medical staff must create medical staff by-laws that

10. “Profession,” Merriam-Webster http://aolsvc.merriamwebster.

aol.com/dictionary/profession (last visited Feb. 15, 2008).

11. Paul Van Grunsven, The Physician and State Regulations § 2.01, HEALTH CARE LAW DESK

REFERENCE 25 (Alison Barnes, Steve Fatum, Robert Gatter & Kevin Gibson eds., 2001).

12. Van Grunsven, supra note 12, at 37-38, §3.01.

13. JOINT COMMISSION, COMPREHENSIVE ACCREDITATION MANUAL FOR HOSPITALS: THE

OFFICIAL HANDBOOK, STANDARD MS 1.20-5.10 (2007).

14. See Timothy S. Jost, The Joint Commission on Accreditation of Hospitals: Private Regulation of

Health Care and the Public Interest, 24 B.C.L. REV. 835, 841-49 (1983).

15. 42 C.F.R. § 482.22 (2008).

16. Kathy Matzka, COMPLIANCE GUIDE TO THE JCAHO MEDICAL STAFF STANDARDS

(2006).

Hospital Peer Review 61

describe the organizational structure of the medical staff and the rules for its

self-governance.17

In 2007, recognizing problems with some hospital peer review proceedings,

the Joint Commission on the Accreditation of Healthcare Organizations

(JCAHO) issued new and reformed Medical Staff Standards for hospitals.18

The 2007 medical staff standards made major changes to the peer review requirements.

Specifically, the major changes were required evaluation of six

areas of general competence before the initial appointment. 19 The six areas of

competence include: – patient care, medical/clinical knowledge, practicebased

learning and improvement, interpersonal and communication skills,

professionalism and systems-based practice.20

The standards require “ongoing professional practice evaluation,”21

which can act” upon reported concerns regarding a privileged practitioner’s

clinical practice and/or competence.”22 The standards also authorize a “focused

professional practice evaluation” that is invoked when a when a physician’s

performance raises concerns or when a hospital lacks documented evidence

that the physician is competent to perform a privilege.23

Another important addition in the 2007 medical staff standards is a provision

that a requirement that the medical staff implement a conscientious and

effective peer review process. 24 Specifically, the Joint Commission accreditation

manual for hospitals requires “mechanisms, including a fair hearing and

appeal process, for addressing adverse decisions for existing medical staff

members and other individuals holding clinical privileges for renewal, revocation,

or revision of clinical privileges.”25 In stating the rationale for MS 4.50,

the JCAHO guidance to the standards states the hearing mechanisms should

“allow the affected individual a fair opportunity to defend herself or himself

… to an unbiased hearing body of the medical staff” along with an opportunity

to appeal to the governing body.26 This guidance also specified the elements

of performance for MS 4.50: 27

• Is designed to provide a fair process that may differ for members

and non-members of the medical staff;

• Has a mechanism to schedule a hearing of such requests [for

hearings];

17. Id.

18. Id.

19. Id.

20. Id.

21. COMPREHENSIVE ACCREDITATION MANUAL, supra note 14, at MS 4.40.

22. Id. at MS 4.45.

23. Id. at MS.4.30.

24. Id. at MS 4.50.

25. Id.

26. Matzka, supra note 16, at MS -24.

27. Id.

62 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

• Has identified the procedures for the hearing to follow;

• Identifies the composition of the hearing committee as a committee

that includes impartial peers;

• With the governing body provides a mechanism to appeal adverse

decisions as provided in the medical staff by-laws.

In July 2008, JCAHO issued a “Sentinel Event Alert” regarding the impact

of disruptive behavior on patient safety.28 At the same time JCAHO

introduced new leadership standards for in all its accreditation programs for

all health care organizations regarding disruptive behaviors.29 These standards

contain two elements of performance that require accredited organizations

to create a code of conduct that defines acceptable and unacceptable

behaviors, and to establish a formal process for managing unacceptable behavior.

30 The new standards take effect January 1, 2009 for hospitals, nursing

homes, home health agencies, laboratories, ambulatory care facilities, and

behavioral health care facilities across the United States.

The primary rational for the new standards is that “[i]ntimidating and

disruptive behaviors can foster medical errors, contribute to poor patient satisfaction

and to preventable adverse outcomes, increase the cost of care, and

cause qualified clinicians, administrators and managers to seek new positions

in more professional environments.” (citation omitted)31 JCAHO went on to

define what intimidating and disruptive behaviors, stating that they include:

“overt actions such as verbal outbursts and physical threats, as well as passive

activities such as refusing to perform assigned tasks or quietly exhibiting uncooperative

attitudes during routine activities.” 32 In addition, JCAHO emphasized

that these behaviors are “often manifested by health care professionals

in positions of power.” 33 Further, health care institutions and other professionals

have often tolerated bad behavior without actions to sanction and

mitigate it. The JCAHO alert substantiated the claims about intimidating and

disruptive behavior with a few empirical studies, law review articles, and several

descriptive commentaries on the phenomenon of such behavior and its

impact on patient safety and satisfaction.34

28. Joint Commission on the Accreditation of Healthcare Organizations, Sentinel Event

Alert: Behaviors that Undermine a Culture of Safety, (July 9, 2008), available at

http://www.jointcommission.org/SentinelEvents/SentinelEventAlert/sea_40.htm.

29. Press Release, Joint Commission Alert: Stop Bad Behavior among Health Care Professionals

Rude Language, Hostile Behavior Threaten Safety, Quality (July 9, 2008), available at

http://www.jointcommission.org/NewsRoom/NewsReleases/nr_07_09_08.htm (This requirement

will be published as Leadership Standard in the 2009 accreditation manuals for

health care organizations).

30. JCAHO Sentinel Event Alert, supra note 28.

31. Id.

32. Id.

33. Id.

34. Id. (See JCAHO bibliography for specific sources meeting these three categories.)

Hospital Peer Review 63

B. The Health Care Quality Improvement Act

In the 1980s, the Supreme Court eliminated the historical immunity of

health care providers from the application of the federal antitrust laws35 and

thereby imposed commercial competition rules on health care providers.36

While ultimately judicial decisions and federal policy limited the role of antitrust

laws in the reorganization of the health care sector,37 the organized

medical professional was quite concerned about the exposure of physicians to

antitrust liability at the time.38

In 1985, one Dr. Patrick recovered a $2.28 million verdict including

treble damages in a federal antitrust suit. 39 Dr. Patrick started practicing independently

in Astoria, Oregon after declining an invitation to join the practice

of the Astoria. The defendant physicians, practicing at the Astoria Clinic,

initiated and participated in hospital peer review proceedings at the only

community hospital in town and voted to terminate Dr. Patrick’s medical staff

privileges.

The Ninth Circuit reversed the verdict concluding that the state action

doctrine under Parker v. Brown, 40 which immunizes conduct that is regulated

by states, immunized the peer review proceedings in this case. The United

States Supreme Court reversed the Ninth circuit ruling that state action doctrine

did not exempt medical peer-review associated activities from federal

antitrust liability and reinstated the verdict.41 The court pointed out why the

elements of the state action doctrine were not met in this case:

The mere presence of some state involvement or monitoring

does not suffice. . . . [A]ctive supervision . . . requires that

state officials have and exercise power to review particular

35. Sherman Antitrust Act, Act of July 2, 1890, ch. 647, 26 Stat. 209 (codified as amended

at 15 U.S.C. §§ 1-7 (2008)).

36. Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975) (eliminating the learned professions

exemption to the federal antitrust laws); Arizona v. Maricopa County Med. Soc’y, 457

U.S. 332, 343-57 (1982) (holding that the maximum fee agreements of a state medical society, as

price-fixing agreements, are per se unlawful under § 1 of the Sherman Act). See also AMA v.

United States, 130 F.2d 233 (D.C. Cir. 1942), aff’d, 317 U.S. 519 (1943) (ruling that the practice

of medicine is trade or commerce within the meaning of the federal antitrust laws); AMA v.

FTC, 638 F.2d 443(2nd Cir. 1980), aff’d by an equally divided court, 455 U.S. 676 (1982).

37. Thomas L. Greaney, Whither Antitrust? The Uncertain Future of Competition Law in Health

Care, 21 HEALTH AFFAIRS 185 (2000).

38. See Carl F. Ameringer, Federal Antitrust Policy and Physician Discontent: Defining Moments in

the Struggle for Congressional Relief , 27 J. HEALTH POL. POL’Y & L. 543 (2002); Clark C. Havighurst,

The Doctors’ Trust: Self-Regulation and the Law, 2 HEALTH AFFAIRS 64 (1983). See also Sara

Rosenbaum, The Impact of United States Law on Medicine as a Profession, 289 JAMA 1546, 1552-55

(2003).

39. Patrick v. Burget, 800 F.2d 1498, 1505 (9th Cir. 1986).

40. 317 U.S. 341 (1943).

41. 486 U.S. 94, 105-06 (1988), rev’g 800 F.2d 1498, (9th Cir. 1986).

64 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

anticompetitive acts of private parties and disapprove those

that fail to accord with state policy.42

Following this verdict as well as many other similar suits that arose during

the same period,43 medical and hospital associations lobbied Congress

hard to obtain immunity under the federal antitrust laws for physicians engaged

in peer review activities.44 The Federal Trade Commission, the Department

of Justice and the House committees overseeing the federal antitrust

laws vigorously opposed this immunity.45 The Department of Justice submitted

a letter during a congressional hearing stating its opposition to the

HCQIA bill’s proposed antitrust exemption:

From the antitrust standpoint, we believe that a need for the

special antitrust exemption in H.R. 5540 covering peer review

activities has not been demonstrated. The rule-ofreason

analysis that would apply in antitrust cases challenging

such activities recognizes the desirable precompetitive potential

of legitimate peer review. On the other hand, keeping

such activities subject to appropriate antitrust review encourages

quality health care by helping to ensure that innovative

and cost-effective providers are not excluded from the market

through unreasonable private restraints. 46

1. Statutory Provisions and Relevant Legislative History

The Health Care Quality Improvement Act (HCQIA) accords civil immunity

to liability for damages under federal antitrust laws, as well as other

federal and state legal actions.47 Excepted are actions brought by states attorney

general48 and under federal civil rights laws.49

However, statutory immunity according to the statute is not absolute.

HCQIA states four procedural requirements for peer review proceedings to

qualify for immunity. The peer review authority must proceed first, with “the

42. 486 U.S. at 101.

43. See Tim A. Thomas, Denial by Hospital of Staff Privileges or Referrals to Physician or Other

Health Care Practitioner as Violation of Sherman Act (15 U.S.C.A. §§ 1 et seq.), 89 A.L.R. FED. 419

(1988).

44. John K. Iglehart, Congress Moves to Bolster Peer Review: The Health Care Quality Improvement

Act of 1986, 316 NEW ENG. J. MED. 960 (1987); see generally HEALTH CARE QUALITY

IMPROVEMENT ACT OF 1986: A LEGISLATIVE HISTORY OF PUB. LAW NO. 99-660 (Bernard D.

Reams ed., 1990)

45. Inglehart, supra note 44 at 961.

46. Health Care Quality Improvement Act of 1986: Hearings before the Subcomm. on Civil and

Constitutional Rights of the H. Comm. on the Judiciary on H.R. 5540 Health Care Quality Improvement Act

of 1986, 99th Cong., 2d Sess. 29-30 (1986) (letter of John R. Bolton, Assistant Attorney General,

Office of Legisl. and Intergovernmental Affairs to Honorable Peter W. Rodino, Jr.,

Chairman, Comm. on the Judiciary, United States House of Representatives).

47. Health Care Quality Improvement Act of 1986, 42 U.S.C. §§ 11101-52 (2008).

48. 42 U.S.C. § 11111(a)(1)(D) (2008); 15 U.S.C. § 15c (2008).

49. 42 U.S.C. § 11111(a)(1)(D) (2008).

Hospital Peer Review 65

reasonable belief that the action was in the furtherance of quality health care”

and, second, only “after a reasonable effort to obtain the facts of the matter.”

50 The peer review authority must also provide “adequate notice and [a]

hearing” or “other procedures [which] are fair . . . under the circumstances.”51

Finally, the peer review authority must act with a reasonable belief that the

facts known after a reasonable investigation warrant the action taken.52

Also, the House Committee Report clearly stated that it adopted a “reasonable

belief” rather than a “good faith” standard as it wanted an objective

rather than a subjective standard for the judicial evaluation of the facts relied

on by the peer review authority.53 Congress wanted courts not to evaluate a

“subjective state of mind” but rather that the information before the peer

review body would have be sufficient to support a “reasonable belief” that the

action would restrict incompetent physicians and/or protect patients.54 Further,

Congress clearly thought wanted to be sure that judicial determinations

of immunity would be streamlined and set a high standard for piercing the

immunity. As the House Committee Report stated:

Reflecting the Committee’s belief that this standard will be

met in the overwhelming majority of professional review actions,

the subsection provides a presumption to that effect,

requiring a plaintiff to show, by clear and convincing evidence,

that no such reasonable belief existed at the time of

the professional review action. This presumption applies

only to the reasonable belief standard, not to the other standards.

Those additional standards require a group engaged in

peer review to make a reasonable effort to obtain the facts, to

provide adequate due process, and to have a reasonable belief

that the professional review action was warranted by the facts

known.55

HCQIA does specify fair due process requirements for peer review proceedings,

but, adherence to these requirements is not mandatory. 56 Rather

hospital will be “deemed to have met the adequate notice and hearing requirement”

of subsection 11112(a) (3) if it has meet the requirements of §

11112(b).57 These features include notice of 30 or more days prior to the

hearing and a statement in the notice that a professional review action has

been proposed to be taken against the physician and the reasons for the pro-

50. 42 U.S.C. § 11112(a) (2008).

51. Id.

52. Id.

53. H.R. REP. 99-903, at 10 (1986).

54. Id; see also Anthony W. Rodgers, Procedural Protections during Medical Peer Review: A Reinterpretation

of the Health Care Quality Improvement Act of 1986, 111 PENN. STATE L. REV. 1047,

1055-57 (2007).

55. House Report, supra note 53,

56. 42 U.S.C. § 11112(b) (2008).

57. Id.; 42 U.S.C. § 11112(a)(3) (2008).

66 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

posed action. 58 The notice must also indicate that the physician has a right to

a hearing and on what terms. The statute indicates that the decision-maker

may not be in “direct economic competition with the physician involved.”59

Additional procedural safeguards in § 11112(b) include representation by

counsel of the physician’s choice, a record of the proceedings available to the

physician for a reasonable charge, the right to call, examine, and crossexamine

witnesses and the right to present evidence determined to be relevant

by the hearing officer, regardless of its admissibility in a court of law. In addition,

the physician has the right to receive the written recommendation of the

arbitrator, officer, or panel, including a statement of the basis for the recommendations,

and a formal written decision from the final decision-making

authority.60

These are exemplary due process standards and actually comport with

the constitutionally mandated due process measures required in Goldberg v.

Kelly61 for the pretermination hearings of welfare recipients. However, they

are not required but only recommended if the hospital wants to ensure that it

has met the statutory standard for due process in § 11112(a)(3). The statute

then goes on to state: “[a] professional review body’s failure to meet the conditions

described in this subsection shall not, in itself, constitute failure to

meet the standards of subsection (a) (3) of this section.” 62 This provision has

allowed courts to overlook the procedural elements of the peer review protections

in considering immunity and thereby effectively eviscerate the due process

protections in § 11112(b).

Furthermore, only in litigation, can a targeted physician ensure a hospital’s

compliance with HCQIA’s protections. In such litigation, physicians are

then confronted with the HCQIA provision that professional review actions

shall be presumed to have met the statutory standards unless the “presumption

is rebutted by a preponderance of the evidence.” 63

HCQIA also established the National Practitioner Databank to which

most malpractice judgments and settlements as well as disciplinary actions by

hospital peer review committees must be reported to and maintained by the

federal government.64 Another congressional concern was perceived problems

with poor quality physician care.65 At the time, the United States was

58. 42 U.S.C. § 11112(b).

59. 42 U.S.C.. § 11112(b)(3)(A)(ii) (2008).

60. 42 U.S.C. § 11112(b).

61. Goldberg v. Kelly, 397 U.S. 254, 255, 262-63 (1970).

62. 42 U.S.C. § 11112(b) (2008).

63. 42 U.S.C. § 11112(a) (2008); see also Joshi v. St. Luke’s Episcopal-Presbyterian Hosp.,

142 S.W.3d 862, 866 (Mo. Ct. App. 2004).

64. 42 U.S.C. §§ 11131-11153 (2008).

65. In 42 U.S.C. §111101 (2008)) Congress made the following findings:

(1) The increasing occurrence of medical malpractice and the need to improve the

quality of medical care have become nationwide problems that warrant greater efforts

than those that can be undertaken by any individual State.

Hospital Peer Review 67

experiencing a crisis in the availability and affordability of medical liability

insurance and there was great concern about the quality of care of medical

care.66

The legislative history indicates that Congress believed that immunity for

peer review was essential to ensure that hospitals would report errant physicians

to the National Practitioner Data Bank. As the House Committee Report

stated:

Thus, there is a clear need to do something to provide protection

for doctors engaging in peer review if this reporting

system is to be workable. To that end, the bill provides limited,

but essential, immunity. Doctors and hospitals who

have acted in accordance with the reasonable belief, due

process, and other requirements of the bill are protected

from damages sought by a disciplined doctor. The bill protects

innocent and often helpless consumers from abuses by

bad doctors without insulating improper anticompetitive behavior

from redress.67

2. Judicial Interpretation

Clearly Congress intended that the procedural requirements in § 11112(a)

for peer review proceedings would serve as a check against the abuse of peer

review by competitors or others with inappropriate motives. Ideally, courts

should provide an adequate check over hospital peer review and thereby deter

abusive peer review. The judicial jurisprudence implementing these procedural

protections indicates that courts may well have abdicated this responsibility.

Indeed, this jurisprudence suggests considerable reluctance on the part

of court to assume this oversight role in an adequate fashion. The apparent

attitude of most courts toward their role is reflected in the following statement

of one court: “[i]t is not up to the courts to second-guess hospitals in

(2) There is a national need to restrict the ability of incompetent physicians to move

from State to State without disclosure or discovery of the physician’s previous damaging

or incompetent performance.

(3) This nationwide problem can be remedied through effective professional peer

review.

(4) The threat of private money damage liability under Federal laws, including treble

damage liability under Federal antitrust law, unreasonably discourages physicians

from participating in effective professional peer review.

(5) There is an overriding national need to provide incentive and protection for

physicians engaging in effective professional peer review.

66. See Kenneth E. Thorpe, The Medical Malpractice ‘Crisis’: Recent Trends and the Impact of

State Tort Reforms, HEALTH AFF., Jan. 21, 2004, at W4-20, available at

http://www.healthaffairs.org; Eleanor D. Kinney, Malpractice Reform in the 1990s: Past

Disappointments, Future Success?, 20 J. HEALTH POL., POL’Y & L. 99, 100 (1995).

67. House Report, supra note 53, at 3.

68 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

their decisions as to the best way to deliver services; it is up to the institution

itself.”68

Following enactment, the United States Court of Appeals for the Fourth

Circuit upheld the constitutionality of the immunity provisions of the Health

Care Quality Improvement Act on grounds that the act was rationally related

to legitimate government purpose of facilitating the frank exchange of information

among health care professionals conducting peer review inquiries

without the fear of reprisals in civil lawsuits.69 Courts also have acknowledged

HCQIA’s general purpose to improve medical care by encouraging

physicians to identify and discipline physicians who are incompetent or engage

in unprofessional behavior. However, prophetically, one court acknowledged,

“At its heart, the HCQIA was intended to deter antitrust suits by disciplined

physicians.”70

Courts have generally accepted the judicial interpretation of the statutory

standard for evaluating a peer review body’s deliberations and decisions. That

prevailing judicial interpretation is: “Might a reasonable jury, viewing the facts

in the best light for the [plaintiff], conclude that he has shown, by a preponderance

of the evidence, that the defendants’ actions are outside the scope of

Section 11112(a)?”71 The Nevada Supreme Court observed that most courts,

in interpreting the language in § 11112(a)(1) requiring that the action be based

on a reasonable belief that it was in furtherance of quality health care, have

rejected plaintiff’s claims when actions were alleged to be on the basis of personal

bias, discrimination, improper motive, or other subjective bases.72 In

these cases, the only evidence presented was of subjective biases or motives

and no evidence showing that the board’s decision was objectively unreasonable.

The Nevada Supreme Court decision, Clark v. Columbia/HCA Information

Services, Inc.,73 is one of the few cases in which a court has denied HCQIA

immunity to a peer review decision. Its analysis provides important insights

into how courts have approached the implementation of HCQIA’s immunity.

Accordingly, courts have been reluctant to pierce the veil of HCQIA immunity.

The Clark court also observed that federal courts had interpreted the

68. Lyons v. Saint Vincent Health Center, 731 A.2d. 206, 213-14 (Pa. Commw. Ct. 1999).

69. Freilich v. Upper Chesapeake Health, Inc., 313 F.3d 205, 212 (4th Cir. 2002); see also

Steve Twedt, Law Gives Hospital Panels Wide Powers over Doctors, PITTSBURGH POST-GAZETTE,

Oct. 30, 2003, available at http://www.post-gazette.com/pg/03302/235117.stm. See also John

Miles, Part II. Application of Antitrust Principles to the Health Care Sector, Chapter 10. Practitioner

Credentialing Based on Peer Review in 2 HEALTH CARE AND ANTITRUST L. § 10:8 (2007).

70. Gordon v. Lewistown Hosp., 423 F.3d 184, 201 (3d Cir. 2005), cert. denied, 126 S. Ct.

1777, (2006).

71. See, e.g., Misischia v. St. John’s Mercy Medical Center, 30 S.W.3d 848, 858 (Mo. App.

2000); Gateway Cardiology, P.C. v. Wright, 204 S.W.3d 676 (Mo.App. 2006).

72. Clark v. Columbia/HCA Info. Serv., Inc., 25 P.3d 215, 223 (Nev. 2001).

73. Id. at 222-25.

Hospital Peer Review 69

presumption of immunity almost exclusively in favor of finding immunity for

peer review board members,74 commenting that:

In fact, in only two cases have federal courts reversed an order

of summary judgment based on immunity because the

physician demonstrated by a preponderance of the evidence

that the board failed to give appropriate fair notice and procedures

in accordance with § 11112(a)(3).75

In addition, the Nevada Supreme Court noted,76 the United States Court

of Appeals for the Tenth Circuit upheld a district court’s finding of no immunity

where the peer review body reviewed only two patient charts before deciding

to revoke the physician’s privileges.77

The recent decision of the United States Court of Appeals for the Fifth

Circuit overturning the jury verdict in Poliner v. Texas Health Systems78 was consistent

with prior court decisions applying the standards for immunity of peer

review activities under HCQIA discussed above. The Fifth Circuit, in contrast

to the district court, concluded that voluntary abeyance of Dr. Poliner’s

privileges in the cardiac catheterization laboratory (the only action against

Poliner at issue in the case) was a covered peer review proceeding and, further

that it met the standards for HCQIA immunity. The Fifth Circuit observed

that the so-called reasonable belief standard is met if “the reviewers, with the

information available to them at the time of the professional review action,

would reasonably have concluded that their action would restrict incompetent

behavior or would protect patients.” 79 The Fifth Circuit noted further that

HCQIA “does not require that the professional review result in an actual improvement

of the quality of health care, nor does it require that the conclusions

reached by the reviewers were in fact correct.” 80 Further, regarding the

second immunity standard, the Fifth Circuit concluded that “HCQIA does

not require the ultimate decision maker to investigate a matter independently,

but requires only a reasonable effort to obtain the facts.” 81

In addition, courts have been reluctant to apply strict due process standards

to the quality of the procedures used in peer review proceedings.82 For

example, one court stated that “[T]he relevant inquiry under [HCQIA] is

whether the totality of the process leading up to the . . . ‘professional review

74. Id. at 222

75. Id. at 222-223, citing Islami v. Covenant Medical Center, Inc., 822 F.Supp. 1361 (N.D.

Iowa 1992).

76. Id. at 223.

77. Brown v. Presbyterian Healthcare Servs., 101 F.3d 1324 (10th Cir.1996).

78. Poliner v. Texas Health Sys., 537 F.3d 368 (5th Cir. 2008), rev’g 2003 WL 22255677

(N.D. Tex. 2003).

79. Id. at 378.

80. Id.

81. Id. at 380.

82. See Karen Jo McGinn, Due Process Considerations in Suspension of a Physician’s Hospital Staff

Privileges, 32 AM. JUR. TRIALS 1 (2007).

70 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

action’ . . . evidenced a reasonable effort to obtain the facts of the matter.”83

Another court described the test as follows:

Since the actions of a private institution are not necessarily

those of the state, the controlling concept in such cases is fair

procedure and not due process. Fair procedure rights apply

when the organization involved is one affected with a public

interest, such as a private hospital.84

In one decision, the court granted immunity even when the hospital violated

its own bylaws by failing to include requisite number of medical staff

members in hearings preceding final decision on revocation of physician’s

staff privileges and nevertheless concluded that the hospital had complied

with HCQIA’s so-called “safe harbor” provisions regarding “adequate notice

and hearing” for the physician.85

Several courts, confronted with the issue, have refused to invoke the exception

even when there are competitors involved in the proceeding. For

example, in Harris v. Bradley Memorial Hospital and Health Center,86 the court

concluded, even in a proceeding involving a competing physician, the HCQIA

immunity stands if the procedure was objectively reasonable and fair:

The plaintiff presents no specific evidence of such bad faith,

other than the fact that [one physician reviewer] is an economic

competitor. Even if the plaintiff had presented evidence

of bad faith, the case law clearly establishes that bad

faith is irrelevant to HCQIA claims. If the defendant’s process

was objectively reasonable and fair as required by the act,

the defendant’s bad faith, without more, will not suffice to

strip the defendant of statutory immunity.87

In Manzetti v. Mercy Hospital of Pittsburgh,88 the Pennsylvania Supreme

Court held that the hospital and reviewers were entitled to immunity under

HCQIA regardless of evidence that the physician’s competitors were involved

in the peer review proceeding. The court stated that evidence of self-interest,

bias or conflicts of interests by the reviewers is immaterial if breaches of quality

were demonstrated. The Supreme Court held that the “reasonable effort”

requirement under the following circumstances:

The requirement that the peer review body expend a “reasonable

effort to obtain the facts” does not require that the

83. Mathews v. Lancaster Gen. Hosp., 87 F.3d 624, 637 (3rd Cir. 1996).

84. Goodstein v. Cedars-Sinai Med. Ctr., 66 Cal. App. 4th 1257 (1998).

85. Meyers v. Columbia/HCA Healthcare Corp., 341 F.3d 461 (6th Cir. 2003) (applying

42 U.S.C. §§ 11111(a)(1) & (3)).

86. Harris v. Bradley Memorial Hosp., 2005 WL 1433841 (Conn. Super. Ct. 2005).

87. Id. at *4.

88. Manzetti v. Mercy Hosp. of Pittsburgh, 776 A.2d 938 (2001); see also Charles I. Artz,

Swinging Pendulum of Peer Review Immunity, PHYSICIANS’ NEWS DIGEST, Nov. 2001, available at

http://physiciansnews.com/law/1101.html.

Hospital Peer Review 71

investigation be flawless. Rather, it connotes that the investigation

must be conducted in a sensible fashion.89

There are numerous examples in which hospital peer review proceedings

were characterized by mistakes and other irregularities in the underlying evidence.

For example, in Brader v. Allegheny General Hospital, the court ignored

the demonstrably inaccurate conclusions in the report of the hospital’s outside

expert, concluding that the other reports were “otherwise thorough.”90 The

Court implied that the expert report must be entirely mistaken, and that the

mistakes must be obvious. Because they were not, the hospital’s decision was

not unreasonable, and the first and fourth prongs of the HCQIA immunity

test were satisfied. In Donnell v. HCA Health Services of Kansas, Inc.,91 the Kansas

Court of Appeals upheld the ruling of the trial court on summary judgment

that physician peer reviewers are immune from liability under HCQIA

even if the review conducted is allegedly “sloppy” or “grossly negligent.”92 In

Weiters v. Roper Hospital, Inc., 93 the court ruled that a reasonable jury could not

conclude that the evidence of a vendetta would overcome the presumption

that the action was taken to improve health care.

In Meyer v. Sunrise Hospital, 94 the Nevada Supreme Court held that a hospital’s

decision to terminate a physician based upon a single incident, albeit a

death, regardless of the high quality of care the physician provided throughout

the remainder of his career, was sufficient to protect the hospital under

HCQIA’s immunity provisions. Of note, one justice of the Nevada Supreme

Court, who felt compelled to uphold the HCQIA immunity, stated that

HCQIA can sometimes be used, “not to improve the quality of medical care,

but to leave a doctor who was unfairly treated without any viable remedy.”95

That Justice also stated:

Basically, as long as the hospitals provide procedural due

process and state some minimal basis related to quality health

care, whether legitimate or not, they are immune from liability.

Unfortunately, this may leave the hospitals and review

board members free to abuse the process for their own purposes.

. . .96

89. Manzetti, 776 A.2d at 948.

90. Brader v. Allegheny Gen. Hosp., 167 F.3d 832, 840 (3d Cir. 1999).

91. Donnell v. HCA Health Servs., 28 P.3d 420 (Kan. Ct. App. 2001); see also Artz, supra

note 88.

92. Donnell, 28 P.3d at 424.

93. Wieters v. Roper Hosp., 58 Fed. Appx. 40, 46 (4th Cir. 2003); see Steve Twedt, The Cost

of Courage: When Right Can Be Wrong, PITTSBURGH POST-GAZETTE., Oct. 27, 2003, available at

http://www.post-gazette.com/pg/03300/234531.stm.

94. Meyer v. Sunrise Hosp., 22 P.3d 1142 (Nev. 2001); see also Artz, supra note 88.

95. Id. at 1153-54.

96. Id.

72 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

Finally, in Poliner v. Texas Health Systems,97 the Fifth Circuit concluded that

the process accorded Dr. Poliner in connection with the voluntary abeyance in

privileges in the cardiac catheterization laboratory for two weeks was adequate.

98 The first reason was that the suspension was less than two weeks so

no hearing was required.99 Second, the defendants were “fully warranted” in

determining that a suspension was necessary to prevent imminent danger. 100

Regarding the last HCQIA requirement that an action be taken “in the reasonable

belief that the action was warranted by the facts known after such

reasonable effort to obtain facts,”101 the Fifth Circuit concluded the temporary

suspension was “tailored to address the health care concerns” raised. 102

In a 2001 article, an attorney who represents physicians in peer review

proceeding reviewed cases in which courts invoked the immunity of the

Health Care Quality Improvement Act even where there was considerable

evidence of misconduct on the part of the peer review committee.103 This

author concluded that, in his experience:

peer review is initiated against a physician for one of three

reasons: (1) by economic competitors for financial reasons;

(2) in retaliation against the physician for not ‘playing ball’ in

one manner or another (economic or otherwise); or (3) in retaliation

for the physician raising concerns about other physicians’

care and seeking to have those providers’ outcomes reviewed.

104

Several legal commentators have argued that the antitrust immunities

under federal law should be repealed or limited.105 Of interest, several student

notes have analyzed the problem of the abuse of peer review and its protec-

97. 537 F.3d 368 (5th Cir. 2008).

98. Id. at 370.

99. Id. at 382.

100. Id.

101. Poliner, 537 F.3d at 376-77.

102. Id. at 384.

103. Artz, supra note 88.

104. Id.

105. See, e.g., Katherine Van Tassel, Hospital Peer Review Standards and Due Process: Moving From

Tort Theories To Contract Principles Based on Clinical Practice Guidelines, 36 SETON HALL L. REV.1179

(2006); Robert S. Adler, Stalking the Rogue Physician: An Analysis of the Health Care Quality Improvement

Act , 28 AM. BUS. L.J. 683 (1991); Lisa M. Nijm, Comment, Pitfalls of Peer Review: The Limited

Protections of State and Federal Peer Review Law for Physicians, 24 J. LEGAL MED. 541 (2003); George

E. Newton II, Maintaining the Balance: Reconciling the Social and Judicial Costs of Medical Peer Review

Protection, 52 ALA. L. REV. 723 (2001); Craig W. Dallon, Understanding Judicial Review of Hospitals’

Physician Credentialing and Peer Review Decisions, 73 TEMP. L. REV. 597 (2000); Lu Ann Treviño, The

Health Care Quality Improvement Act: Sword or Shield? 22 T. MARSHALL L. REV. 315 (1997); Pauline

M. Rosen, Medical Staff Peer Review: Qualifying the Qualified Privilege Provision, 27 LOY. L.A. L. REV.

357 (1993); Mark A. Colantonio, The Health Care Quality Improvement Act of 1986 and Its Impact on

Hospital Law, 91 W. VA. L. REV. 91 (1988).

Hospital Peer Review 73

tion by the Health Care Quality Improvement Act.106 Much of this concern

reflects an ongoing apprehension among many scholars that antitrust immunity

of physician peer review activities does not warrant immunity anymore

than other beneficial commercial activities.107

106. See, e.g., Rodgers, supra note 57, at 1048; Yaan H.H. van Geertruyden, Comment, The

Fox Guarding the Henhouse: How the Health Care Quality Improvement Act of 1986 and State Peer Review

Protection Statutes Have Helped Protect Bad Faith Peer Review in the Medical Community, 18 J. CONTEMP.

HEALTH L. & POL’Y 239 (2001); see also Leigh Ann Lauth, The Patient Safety and Quality Improvement

Act of 2005: An Invitation for Sham Peer Review in the Health Care Setting, 4 IND. HEALTH L.

REV. 151 (2007).

107. See, e.g., Kurt Erskine, Square Pegs and Round Holes: Antitrust Law and Privileging Decision,

44 U. KAN. L. REV. 399 (1996); Charity Scott, Medical Peer Review, Antitrust, and the Effect of Statutory

Reform, 50 MD. L. REV 316 (1991); John Neff, Physician Staff Privilege Cases: Antitrust Liability

and the Health Care Quality Improvement Act, 29 WM. & MARY L. REV. 609 (1988); Clark C.

Havighurst, Professional Peer Review and the Antitrust Laws, 36 CASE W. RES. L. REV. 1117 (1985).

74 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

III. RECENT EVIDENCE OF DYSFUNCTIONAL PEER REVIEW

The cases of Doctors

Poliner, Ulrich and Clark

are not isolated incidents.

There is much evidence

that hospitals and physicians

have gone after other

physicians in inappropriate

peer review proceedings.

This article reviews the

following evidence of dysfunctional

peer review: (1)

cases from Westlaw and

Lexis and various legal

digests on Westlaw, (2)

published journalistic reports,

and (3) web pages of

two physician organizations

dedicated to assisting

physicians in peer review

proceedings, the Semmelweis

Society and the Peer

Review Justice Center. 108

A. Reported Lawsuits

Lawsuits brought by

physicians challenging

hospital peer review proceedings

and decisions

against them have been

plentiful since the 1970s.109

Antitrust lawsuits emerged

108. Semmelweis Soc’y Int’l, http://www.semmelweis.org/ (last visited Nov. 3, 2008);

Center for Peer Review Justice, Inc., http://www.peerreview.org/ (last visited Nov. 3, 2008).

109. See, e.g., Miles supra note 72, at § 10:8; Karen Jo Mcginn, Due Process Considerations in

Suspension of a Physician’s Hospital Staff Privileges, 32 AM. JUR. TRIALS 1 (2007); Thomas, supra note

46; Scott M. Smith, Construction and Application of Health Care Quality Improvement Act of 1986, 121

A.L.R. FED. 255 (1994).

Westlaw & Lexis: “peer review” and “sham”

within the same paragraph in the “All Cases”

database.

Westlaw & Lexis: “peer review,” “faith”

and/or “bad faith” within the same paragraph

in the “All Cases” database.

Westlaw: Cases in the digest under the following

“keys”: 198H HEALTH, 198HI Regulation

in General, 198HI(C) Institutions and

Facilities, 198Hk268 Staff Privileges and Peer

Review, 198Hk273 k. Suspension or termination

of privileges; discipline, and 198Hk274 k.

Liability or immunity.

John Miles, Part II. Application of Antitrust

Principles to the Health Care Sector, Chapter

10. Practitioner Credentialing Based on Peer

Review in 2 HEALTH CARE AND ANTITRUST

L. § 10:8 (2007)

Karen Jo McGinn, Due Process Considerations in

Suspension of a Physician’s Hospital Staff Privileges,

32 AM. JUR. Trials 1 (2007).

ALRs: Tim A. Thomas, Denial by hospital

of staff privileges or referrals to physician

or other health care practitioner as violation

of Sherman Act (15 U.S.C.A. §§ 1 et

seq.), 89 A.L.R. FED. 419 (1988); Scott M.

Smith, Construction and Application of Health

Care Quality Improvement Act of 1986, 121

A.L.R. FED. 255 (1994).

Hospital Peer Review 75

in the 1980s after the United States Supreme Court ruled in several major

decisions that the federal antitrust laws did apply to the health care sector and

its actors after all.110

Cases analyzed were lawsuits brought by physicians on a variety of theories

to challenge an adverse peer review decision over a five year period from

2003 to 2007. The data bases and sources from which these cases were found

are presented in Figure 1. Only cases in which the court has made a judgment

on the merits were included. Cases involving denials of applications for privileges

or disciplinary proceedings before state licensure and disciplinary authorities

were not included. At Table 1 are presented data on the reported

cases, including date of decision, cause(s) of action, application of HCQIA

and/or state statutory immunities, and the final disposition of the case. A

list of the cases included in Table 1 is presented in Appendix A.

TABLE 1

CHARACTERISTICS OF PHYSICIAN LAWSUITS

CHALLENGING PEER REVIEW DECISIONS, 2003-2007

ULTIMATE OUTCOME

Favorable Unfavorable Other

3

The Poliner case

is included in

this number

although the jury

verdict was reversed.

See note

2 supra and accompanying

text.

30 1 case reversed and

remanded summary

judgment for physician

because of disputed

facts.

1 case remanded the

case because the

plaintiff had not exhausted

available

remedies.

Tort

Contract

Civil

Rights

Due

Process

Federal Antitrust

State

Antitrust

Other

23 16 8 8 12 5 1st Amend.

110. Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975) (eliminating the learned professions

exemption to the federal antitrust laws); Arizona v. Maricopa County Med. Soc’y, 457

U.S. 332 (1982) (holding that the maximum fee agreements of a state medical society, as pricefixing

agreements, are per se unlawful under § 1 of the Sherman Act).

76 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

INVOCATION OF HCQIA AND/OR STATE IMMUNITY STATUTES

HCQIA

Immunity

Invoked

HCQIA Immunity

Pierced

State Peer Review

Immunity Invoked

State Peer Review

Immunity

Pierced

18 2 4 1

Physicians did not fare well in the reported cases. Of all 35 lawsuits between

2003 and 2007 – a five year period -- physicians lost 30 cases – a great

majority. In 18 cases (about half), courts upheld the immunity under HCQIA

and found for the defendants. The only reported case in which HCQIA immunity

was ultimately pierced successfully was Ulrich v. City & County of San

Francisco,111 the one of two cases discussed above in which the plaintiff physicians

received multimillion dollar verdicts, 112 In Poliner v. Texas Health Systems,

the Fifth Circuit overturned the multi-million dollar jury verdict.113 In Doe v.

Grant, 114 the appellate court overturned a $6 million verdict on a defamation

claim on grounds that a state statute accorded immunity to the peer review

proceedings in which the defaming statements were made.

It is difficult to tell from the cases whether these three cases are aberrations

or indicative of a larger problem. Cases generally do not provide much

information about the facts of the case other than those facts relevant for

determining if there were sufficient facts at the time to persuade reasonable

minds that quality was at risk – a pretty tough standard for the physician to

overcome. The media reports discussed in the next section suggest that the

immunity is protecting some highly inappropriate conduct on the part of hospital

peer review bodies.115

B. Media Reports and Professional Commentary

The mainstream and medical media have included many articles reporting

on hospital peer review of physicians and abuses in this review.116 In

111. See note 4 supra and accompanying text.

112. See notes 1-4 supra and accompanying text.

113. See notes 1-3 supra and accompanying text.

114. 839 So.2d 408 (La. Ct. App. 2003).

115. See infra Part III.B.

116. Roland F. Chalifoux, So What Is a Sham Peer Review? 7 MEDSCAPE GEN. MED. 47 (2005);

William N. Johnson, Shammed I Am in Peer Review: Due Process Does Not Apply for Physicians Facing

Sham Peer Review, GEN. SURGERY NEWS (2004), available at

http://www.semmelweis.org/Acrobat/article_sham%20i%20am.pdf; Charles Bond, The War Is

On: Why Your Medical Staff Needs to Incorporate and Obtain Its Own Independent Counsel, 6 MEDSCAPE

GEN MED 57 (2004); Greg Piche, The Disagreeable Physician: Disruptive or Disputative? HEALTH

LAWYERS WKLY, April 28, 2005, available at

http://www.healthlawyers.org/Content/ContentGroups/Publications2/Health_Lawyers_Wee

Hospital Peer Review 77

2005, Time Magazine published a story about multiple cases of these abuses.117

In 2007, the Atlanta Journal-Constitution noted that bad faith peer review was an

important part of serious problems at Grady Memorial Hospital in Atlanta

that generated great concern for JCAHO.118 A Pittsburgh journalist published

a series of articles examining the use of peer review proceedings and

other retaliation against physicians who spoke up about poor quality care or

otherwise challenged the hospital’s leadership.119 At Appendix B is presented

the titles to those articles and other media articles reporting on other inappropriate

actions against physicians.

Further, a recent editorial in the Journal of the American College of Cardiology

decried abusive disciplinary proceedings against physicians.120 The American

Association of Physicians and Surgeons has made fighting these abusive proceedings

a cause celebre.121 Targeted physicians have created organizations,

such as the Semmelweis Society International and the Center for Peer Review

Justice, to raise conscientiousness about these abusive proceedings and provide

targeted physicians with legal assistance and other information.122

The organized medical profession is concerned. The American Medical

Association (AMA) has recognized the problem of abusive disciplinary prokly2/

Volume_3/Issue_25/The_Disagreeable_Physician_Disruptive_Or_Disputative_.htm;

Verner S. Waite, Sham Peer Review: Napoleonic Law in Medicine, 8 J AM PHYSICIANS & SURGEONS

83 (2003), available at http://www.semmelweis.org/Acrobat/article_waite_napoleonic.pdf; John

Zicconi, Peer Review: Due Process or Professional Assassination? PHYSICIAN’S RESOURCE, Mar.-Apr.

2001; David Townend, Hospital Peer Review Is a Kangaroo Court, 77 MED. ECONOMICS 133 (2000),

available at http://www.memag.com/memag/article/articleDetail.jsp?id=122302.

117. Jeff Chu, Peer Review: Doctors Who Hurt Doctors, TIME, Aug. 15, 2005, at 52, available at

http://www.time.com/time/magazine/article/0,9171,1090918,00.html.

118. JCAHO Threatens to Shut Down Grady Hospital, THE ATLANTA JOURNAL CONSTITUTION

(Dec. 4, 2007).

119. Steve Twedt, The Cost of Courage: How the Tables Tuen on Doctors, PITTSBURGH POSTGAZETTE,

Oct. 26, 2003, available at www.postgazette.com/pg/03299/234499.stm (The article

is the first in a series of articles on different occasions of so-called sham peer review and actions

against “disruptive” physicians around the country).

120. William W. Parmley, Clinical Peer Review or Competitive Hatchet Job, 36 J. AM .COLLEGE OF

CARDIOLOGY 2347 (2000).

121. Am. Ass’n of Physicians and Surgeons, Sham Peer Review,

http://www.aapsonline.org/peerreview.htm (last visited Nov. 3, 2008); Lawrence R. Huntoon

LR. Editorial: Abuse of the “Disruptive Physician” Clause, 9 J AM PHYSICIANS & SURGEONS 68

(2004); Lawrence R. Huntoon, Editorial: Sham Peer Review and the Courts, 11 J AM PHYSICIANS &

SURGEONS 4 (2006); American Association of Physicians and Surgeons, RESOLUTION 61-01,

2004: Sham Peer Review, http://www.aapsonline.org/resolutions/2004-1.htm (last visited Nov. 3,

2008).

122. See, e.g., Semmelweis, supra note 111; Society, Bryan G. Hall, The Health Care Quality

Improvement Act of 1986 and Physician Peer Reviews: Success or Failure? (2005),

http://www.semmelweis.org/articles/success%20or%20failure.pdf (last visited Nov. 3, 2008).

78 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

ceedings against physicians.123 It has also provided guidance on how to identify

and to discipline a disruptive physician.124

However, the AMA continues to defend immunity for peer review under

current law. The position of the AMA regarding two recent lawsuits exemplifies

the issues at stake. In Chadha v. Charlotte Hungerford Hospital,125 a physician

challenged a hospital’s report to the National Practitioner Data Bank and the

Connecticut Department of Public Health regarding her fitness to practice

medicine, which led to the loss of her medical license. The appellate court

had ruled that physicians who participated in a state investigation of a physician

are not entitled to absolute immunity under state peer review immunity

statutes from a civil lawsuit claiming defamation.126 The Supreme Court of

Connecticut ultimately overruled the appellate court and ruled that immunity

was appropriate. 127

Following the appellate decisions in this case as well as a California appellate

court in another case, 128 an editorial in American Medical News,129 made

the case for absolute immunity for peer review. Noting that the courts were

concerned that absolute immunity would give physicians an “opportunity to

abuse the system to affect competition or to knowingly pass along false or

misleading information,”130 the editorial concluded: “But it is generally

unlikely that physicians will use the system in that way.”131 The editorial then

explained why physicians would not engage in abusive peer review:

It is not only that physicians are expected to personally embrace

the professional and ethical standards that would make

such an action untenable. Discovery of such a dishonest act

123. American Medical Association, Physicians and Disruptive Behavior, Jul. 2004,

http://www.ama-assn.org/ama1/pub/upload/mm/21/disruptive_physician.doc; Speak No

Evil? When Physicians Share Concerns, Their Words Aren’t Always Welcome, AMA VOICE 4-6 (2004).

124. AMA, COUNCIL ON ETHICAL AND JUDICIAL AFFAIRS, PHYSICIANS WITH DISRUPTIVE

BEHAVIOR, E-9.045 (2004), available at

http://www.peerreview.org/disruptive_physician/articles/AMA%20(Professionalism)%20E-

9_045%20Physicians%20with%20Disruptive%20Behavior.htm.

125. 822 A.2d 303, 306 (Conn. App. Ct. 2003); see also Tanya Albert, Defamation Lawsuits

May Have Chilling Effect on Peer Review, AM. MED. NEWS, (Mar. 1, 2004) available at

http://www.ama-assn.org/amednews/2004/03/01/prsa0301.htm).

126. Chadha v. Charlotte Hungerford Hosp. 865 A.2d 1163, 1176 (Conn. 2005).

127. Chadha, 822 A.2d at 305-6.

128. Hassan v. Mercy Am. River Hosp., 118 Cal. Rptr. 2d 81, (Cal. Ct. App. 2002) (the

court ruled that the state peer review immunity statute did not grant absolute immunity to

participants in the peer review process and expressly rejected the medical profession’s arguments

in favor of absolute immunity).

129. Editorial, Peer Review: The Case for Absolute Immunity, AMNEWS Mar 15, 2004, available at

http://www.ama-assn.org/amednews/2004/03/15/edsa0315.htm.

130. Id.

131. Id.

Hospital Peer Review 79

would seriously jeopardize their standing among colleagues

and in the institutions where they practice. 132

Nevertheless, it is noteworthy that some in the medical profession have

questioned whether peer review is an effective way to protect quality of care

in hospitals and to address incompetent and/or disruptive physicians.133

C. The Extent of the Problem

It is important to get some sense of the universe of hospital disciplinary

actions against physicians to assess the nature of the problem. The National

Practitioner Data Bank (NPDB) is probably the best if imperfect source of

data on the number of peer review actions against physicians. The NPDB is a

central repository of information about, among other actions, “professional

review actions primarily taken against physicians and dentists by hospitals and

other health care entities, including health maintenance organizations, group

practices, and professional societies.” 134 The NPDB estimates, while acknowledging

probably under reporting, that actions involving clinical privileges

reported to the national practitioner data bank ranged from 900 to 1,100

per year between 2002 and 2005.135 This is a surprisingly small number of

actions. The judicial decisions and media reports thus represent more than a

miniscule proportion of the peer review proceedings involving physicians that

American hospitals conduct annually.

Further, the media reports in particular tend to focus on cases in which

the physician ultimately prevailed in litigation or obtained a resolution that

appeared to justify his or her conduct. In these media reports, there are two

predominant characteristics of the targeted physicians. They were outspoken

about patient quality and safety issues and perceived as whistleblowers by the

hospital leadership. Or they are competitors of the targeted physicians.

Obviously, not every peer review of a physician is unwarranted, abusive

or malicious. No doubt badly behaved physicians can pose a threat to patient

safety and the smooth operation of health care facilities. And legal immunity

does protect physicians participating in peer review from lawsuits by appropriately

sanctioned physicians. However, the processes for regulating physician

conduct should be designed to operate in a fair manner with respect to

physicians while assuring protection of the public. The evidence discussed in

132. Id.

133. See Gerald Weiss, Is Peer Review Worth Saving? 82 MED. ECON. 46 (2005); Tanya Albert

& Damon Adams, Peer Review under Fire: Real Problems or Trumped-Up Accusations? AMNEWS (Oct.

10, 2005), available at http://www.ama-assn.org/amednews/2005/10/10/prsa1010.htm.

134. U.S. Department of Health and Human Services, Health Resources and Services Administration,

Bureau of Health Professions, Practitioner Data Banks Branch, National Practitioner

Data Bank 2005 Annual Report 11 (2006).

135. Id. at 83, tbl. 1.

80 13 MSU JOURNAL OF MEDICINE AND LAW 57 (2009)

this article suggests that this idea has not been attained in many peer review

proceedings. One reason for this lack of attainment is the fact that the

HCQIA provides so much protection that it shields undesirable and even

illegal conduct on the part of the hospital and physicians that initiate and conduct

some peer review proceedings.

IV. APPROACHES TO REFORMS

This section presents some ideas for the reform of peer review that

would improve peer review proceedings with the twin objectives of avoiding

abuses while ensuring that the essential process of professional review of professional

conduct proceed effectively.

A. The Problems with Peer Review

One major problem with hospital peer review is that HCQIA’s immunity

provisions are designed in a way that physicians are at risk for unwarranted

professional injury. A case can be made that the HCQIA immunity provisions

should be repealed.136 However the repeal of HCQIA is probably

unlikely given the firm position in favor of immunity