Courts examine peer review: Maintaining a proper sense of balance

Recent court decisions raise questions about how federal and state protections apply to both sides in the process.

By Amy Lynn Sorrel — Posted Sept. 22, 2008

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Medical peer review is widely viewed as an important component of quality patient care. Yet the threat of liability poses a deterrent to physician participation.

These were the driving forces behind the federal Health Care Quality Improvement Act of 1986. Congress passed the statute to promote the peer review system by granting confidentiality and immunity from liability for money damages to those who conduct reviews in good faith. In addition, all 50 states, on top of their immunity laws, recognize a privilege that generally protects information generated during the review process from discovery during unrelated litigation, such as medical liability cases.

Nevertheless, peer review issues continue to find their way to the courts, with some recent decisions raising questions over how such review protections apply.

"The bottom line is Congress didn't want courts and juries to second-guess the reasonable decisions of peer reviewers. Congress was trying to encourage effective and vigorous peer review so peer reviewers can take action to protect and increase patient safety," said Thomas S. Leatherbury, a health care lawyer and partner with Vinson & Elkins in Dallas.

Because the system continues to face legal challenges, however, it's up to the courts to maintain "the sense of balance necessary in the peer review process," he said.

Physicians and others point to one closely-watched case in Texas that sent a shockwave among observers. Although a trial court's ruling was reversed, the case shed light on peer-review protections.

A Texas jury in 2004 awarded $366 million to a Dallas cardiologist who alleged his privileges had been suspended improperly during a hospital review of his cases. A trial court in 2006 reduced the verdict to $30 million.

But the court affirmed the jury's conclusion that Presbyterian Hospital of Dallas did not qualify for immunity because it unfairly restricted the cardiac catheterization and echocardiography privileges of Lawrence R. Poliner, MD, without enough information to determine if he posed a danger to patients. Dr. Poliner is considering an appeal.

The ruling sent a chilling message to doctors on peer review panels, creating "a lot of uncertainty about what the scope of [HCQIA] immunity was and more fear of damage liability," said Leatherbury, who represented Presbyterian Hospital.

A question of reasonableness

Some of those concerns were alleviated when the 5th Circuit Court of Appeals in July reversed the trial court ruling. Judges unanimously concluded that peer reviewers remain protected as long as their decisions are made "in the reasonable belief that the action was in the furtherance of quality health care," as required under HCQIA.

In determining reasonableness, the court looked at whether the review panel acted appropriately based on available data and followed due process requirements outlined under the federal statute. Judges said courts must analyze such decisions based on objective facts, not on bad-faith intentions such as malice.

The ruling reaffirmed a majority of precedents in other jurisdictions, said Dallas attorney James M. Stewart, who specializes in this litigation.

"There's always a concern the peer review process is going to be challenged, and that's not going to go away," said Stewart, a partner at Stewart Stimmel LLP. "But the courts continue to look for objectivity and process [on the part of peer reviewers], and [federal] law is pretty clear that's what needs to be reviewed."

Clark Stanton, a peer review lawyer and partner with Davis Wright Tremaine LLP in San Francisco, said the 5th Circuit also affirmed the importance of analyzing the peer review process as a whole, "without pulling it apart into bits and pieces, as has been done at the trial court level."

While damage immunities appear to weigh in favor of peer reviewers, doctors who feel they have been wronged are not without remedy, Stanton said. Federal protections do not keep doctors from seeking injunctive relief in state court to stop alleged abusive actions.

The 5th Circuit acknowledged as much, saying such relief "strikes the balance of remedies essential to Congress' objective of vigorous peer review."

But some doctors and legal experts say courts have gone beyond the intent of federal immunity standards by failing to consider potentially malicious intent.

"Doctors shouldn't be chilled from conducting honest peer review. But accountability for unethical peer review should not chill honest peer review," said Karin Zaner, Dr. Poliner's attorney.

Other obstacles make it even harder for physicians to pursue legitimate claims, some experts said. The courts often leave room for review panels to ignore tougher due-process procedures under medical staff bylaws, said Tom Curtis, a Los Angeles-area attorney who specializes in medical staff issues. For example, the 5th Circuit said complying with HCQIA standards was enough to establish immunity.

But Stanton warned that review committees risk losing immunity under state laws for eschewing staff bylaws. He pointed to a June Minnesota Appeals Court ruling in which a physician under review won injunctive relief after judges found that a hospital's failure to follow the staff bylaws amounted to malice under the state's peer review law.

In addition to following HCQIA-outlined procedures and staff bylaws, Stanton recommended that peer review committees tailor their actions to the perceived health care problem at hand rather than rely on a summary suspension -- another key the 5th Circuit emphasized in determining if a review panel acted reasonably.

American Medical Association policy states that "quality of care and patient safety are the goals of peer review." According to AMA guidelines, appropriate review procedures should, at a minimum, meet HCQIA standards and assure fair due-process proceedings, including as drawn in medical staff bylaws. The AMA also continues to monitor legal and regulatory challenges to peer review immunity.

Meanwhile, in the absence of a federal peer review privilege, confidentiality safeguards also continue to come under fire in the courts.

In June 2007, the 11th U.S. Circuit Court of Appeals in Adkins v. Christie joined several other federal appellate courts in ruling that a state peer review privilege did not apply in federal discrimination cases. The court ordered a hospital to turn over seven years of peer review records to a black surgeon who alleged that he was held to a higher standard than his colleagues when a review committee terminated his privileges. Judges concluded that efforts to combat discrimination outweighed any patient safety benefits of the confidential process.

Some doctors and legal experts worry that such decisions open the door for plaintiffs to bypass state laws by bringing federal actions, such as civil rights or antitrust claims.

If sensitive review information is unveiled, "the question is, will doctors be willing to be involved [in peer review] when there is a greater risk of exposing them to litigation," through a defamation, discrimination or medical liability claim, asked Donald J. Palmisano Jr., general counsel to the Medical Assn. of Georgia. The group filed a friend-of-the-court brief in the 11th Circuit.

Different states, different interpretations

Doctors have encountered additional hurdles at the state level, where privilege protections vary widely, said Phil Zarone, a hospital attorney and partner at Pittsburgh-based Horty Springer & Mattern. For example, Georgia's high court has recognized an "absolute embargo" on the use of confidential peer review materials in any type of civil lawsuit. Other states have applied the privilege narrowly to specific cases, such as medical liability claims.

Zarone pointed to a recent legal battle in Florida over erosions to its privilege statute. Voters in November 2004 approved a state constitutional amendment, giving patients access to records related to adverse medical incidents. In March, the state Supreme Court affirmed that the amendment preempted the state peer review privilege and found that it applied retroactively to uncloak related peer review documents created before the measure's passage.

In the face of such disclosures, "the fight and the goal of the [peer review committee] is to try to limit what's turned over to only the necessary and relevant information," Stanton said. Often that can be accomplished through a judge's review or a protective order.

AMA policy supports peer review confidentiality as well as efforts to enact federal legislation that would prohibit the discovery of records related to such proceedings.

Meanwhile, some observers are looking to the Patient Safety and Quality Improvement Act of 2005 as a possible avenue for a federal peer review privilege.

The law, supported by the AMA, would allow the Dept. of Health & Human Services to certify patient safety organizations to which doctors, hospitals and other health care entities could report medical errors. To quell liability concerns, this information would be protected from discovery, according to regulations proposed to implement the measure.

The rules acknowledge that physicians often are reluctant to participate in peer review activities for fear of having such information used against them in court. But they also suggest that only those records generated specifically for PSO reporting activities would qualify as privileged. Zarone said some organizations are asking HHS to clarify whether related peer review documents would be covered, in hopes of gaining some federal safeguards.

Stanton said state and federal laws "reflect the judgment of all 50 legislatures that immunity and confidentiality are important elements of peer review." In spite of growing legal threats to the process, "the continued willingness of physicians to participate under the circumstances is to their credit."

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Peer review put to the test

Lawrence R. Poliner, MD v. Texas Health Systems,
5th U.S. Circuit Court of Appeals, July.
Result: A federal appeals court reversed a $366 million jury verdict in favor of a Dallas cardiologist who sued a hospital peer review committee for allegedly wrongfully suspending his privileges. Judges found the committee's actions were reasonable under the Health Care Quality Improvement Act and granted the panel immunity from liability.

In re: Peer Review Action,
Minnesota Court of Appeals, June.
Result: Judges concluded a hospital peer review committee's failure to follow due process procedures under the medical staff bylaws amounted to malice under Minnesota's peer review statute. The court denied the hospital immunity from liability and awarded the physician under review injunctive relief.

Florida Hospital Waterman Inc. v. Teresa M. Buster; Notami Hospital of Florida Inc. v. Evelyn Bowen and Don Bowen,
Florida Supreme Court, March.
Result: The high court upheld a state constitutional amendment that gave patients access to records related to adverse medical incidents. Judges said that the amendment preempted the state peer review privilege and applied retroactively to documents created before voters passed the measure in 2004.

Russell E. Adkins, MD v. Arthur P. Christie,
11th U.S. Circuit Court of Appeals, June 2007.
Result: The court said state peer review privilege laws do not apply in federal civil rights cases. Judges ordered a hospital to turn over seven years of records to a black surgeon who alleged he was held to a higher standard than his colleagues when a peer review committee terminated his privileges.

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Protecting the process

Legal experts offer recommendations for effective peer review:

  • Allow both sides access to independent legal counsel.
  • Follow due process procedures outlined in the Health Care Quality Improvement Act and medical staff bylaws.
  • Narrowly tailor the peer review action to the perceived health care problem and reserve summary suspension for issues that pose an imminent danger to patient care.
  • Exclude from a hearing panel physicians who are direct economic competitors with the doctor under review.
  • Keep review-related documents confidential and confined to use during proceedings; avoid outside conversations about the process.
  • Limit required disclosures to relevant information.

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