Michigan high court lets physician sue over bad peer review

The ruling paves the way for the court to answer other questions, such as whether medical staff bylaws are a binding contract.

By — Posted Sept. 18, 2006

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A Michigan internist's dispute with Mercy Memorial Hospital System in Monroe has opened the door for state physicians to bring claims for wrongful peer review against hospitals and peer review committees.

A Michigan Supreme Court ruling in the internist's lawsuit overturned nearly 25-year-old case law under which the courts said they didn't have the expertise to get involved in hospitals' staffing decisions. With that line of reasoning, the courts typically would reject doctors' claims that they had been disciplined unfairly in peer review proceedings, except in rare circumstances.

This time, however, the high court disagreed. It said the courts often are called upon to determine complex matters, and these situations are no different.

"Forgoing review of valid legal claims ... amounts to a grant of unfettered discretion to private hospitals to disregard the legal rights of those who are the subject of a staffing decision," Justice Robert P. Young Jr. wrote.

Justices recognized that Michigan's immunity statute does not protect the peer review committee if it acts with malice, specifically meaning that the committee acted with reckless disregard of the truth. The court went on to say that "participants are not protected if they are not performing evaluations with a focus on improving patient care."

The court also said the scope of peer review immunity does not extend to hospitals because they are not directly involved in peer review.

"Now that this law has been abolished, peer review is safer and can be performed on a fairer basis and for the well-being of the patient," said Monroe internist Bruce B. Feyz, MD, who sued Mercy Memorial.

Medical community gets involved

The Michigan State Medical Society filed an amicus brief supporting the physician, while the Michigan Health and Hospital Assn. filed a friend-of-the-court brief supporting the hospital's arguments. But doctors and hospitals each found something to praise in the court's decision.

"Hopefully, what this ruling will do is prevent, in the future, arbitrary decisions made against doctors without explanation," said MSMS legal counsel Daniel J. Schulte.

Dr. Feyz's attorney, Jeffrey L. Herron, said the malice standard could make it difficult for a physician to prove his case, "but it limits what hospitals can do."

Although the ruling excludes hospitals from liability protections because the law extends only to the participants involved in gathering information and evaluating physicians' practices, MHA legal counsel Michael J. Philbrick said the court's adoption of a limited definition of malice reinforces the immunity afforded to hospital peer review bodies.

The decision is unlikely to "have a severe impact on what hospitals may be held liable for as long as they continue to meet the due process requirements," he said.

Gregory Drutchas, a lawyer for Mercy Memorial, said, "What the court is recognizing is that when the medical staff makes a decision, it is going to get deference."

The ruling stems from a lawsuit Dr. Feyz filed in 2002 claiming that he had been denied a fair peer review hearing in 1998. Dr. Feyz had directed the nursing staff to obtain verbally and record specific information from incoming patients about their prescription drug use. Hospital policy, however, required nurses to document patients' medications by copying their drug labels or a handwritten list from the patients.

Dr. Feyz said he gave his orders after noticing medication errors. "I am the physician and I am responsible."

Hospital objects

The hospital disapproved of Dr. Feyz's orders and instructed the nursing staff not to follow them, court records show.

The hospital then initiated peer review proceedings against Dr. Feyz based on his "failure to complete medical records and his insistence that nursing staff follow his standing orders rather than comply with hospital policy," court records show.

Because of the peer review panel's findings, the hospital referred Dr. Feyz for a psychiatric exam and later placed him on indefinite probation.

Dr. Feyz sued the hospital and medical staff, alleging that his civil rights had been violated and that his due process rights under the medical staff bylaws had been denied.

A trial court dismissed Dr. Feyz's lawsuit, saying the courts don't get involved in disputes involving hospital staffing decisions. An appeals court reversed that ruling in 2005.

In upholding the appellate ruling, the Supreme Court said the rule not to get involved "is inconsistent with the legislative mandate that covers protection of the peer review communicative process."

Now that doctors can bring their claims forward, Herron said, larger questions lie ahead for the courts to answer. For example, as Dr. Feyz's case returns to the trial court, "it now opens the door for other issues to be litigated, such as whether the [medical staff] bylaws are a contract," he said.

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Case at a glance

Bruce B. Feyz, MD, v. Mercy Memorial Hospital System

Venue: Michigan Supreme Court
At issue: Whether the state's peer review immunity statutes allow doctors to sue hospitals and peer review committees for unfair discipline. The high court said yes.
Potential impact: Doctors say the ruling gives them recourse when they are not given a fair peer review hearing and are arbitrarily punished. Hospitals say the courts should not be interfering in their staffing decisions because they lack the expertise.

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