Cases and Comments on Contracts

Part 12: Due Process/Majority Rule = Non Review

by Robert V. West, MD JD FAAEM

Modern peer review is a spin off from the obligatory quality assurance and utilization reviews that are attendant to participation in payments under the Social Security Act (see 42 U.S.C. 1320(c)). Prior to the federal minimum standards for peer review, which Congress enacted in 1986 granting qualified immunity to physicians who participated as the judge and jury, most physicians were reluctant to review and critique the work of their colleagues. Furthermore, the physician being reviewed must be afforded due process according to the protections granted by the hospital's medical staff bylaws.

Most physician peer review issues in a hospital involve questions of privileges and credentials. From the standpoint of both the physician being reviewed and the peer review participants, the nucleus around which the process revolves is the formal medical staff hearing. If the peer review process is conducted according to the medical staff bylaws, if the bylaws are consistent with the due process requirements of state and federal law, and if the finding of the hearing panel is consistent with a reasonable belief that quality patient care is the issue, the physician will have little chance to obtain a reversal of a decision adverse to his interest via a court challenge. If the court finds that the physician has been afforded due process, (i.e., the foregoing standards have been met), then the court will leave to the professionals, (i.e., fellow physicians), the professional judgments regarding quality of care. On the other hand, if the court finds the peer review process was conducted in an arbitrary and capricious manner or if it finds objective evidence that issues other than purely professional ones relating to the delivery of quality care were the basis for the decision (e.g., turf battles), then the court may not only find for the physician who was being reviewed, but it may also award that physician punitive damages. Therefore, it is incumbent upon all physicians involved in the peer review process to understand all its phases and the forces which affect it.

The pre-hearing activity in peer review is investigative and informal. It may be triggered by any complaint or suspicion of which the hospital administration or its medical staff becomes aware. That investigative period may last for months during which time records will be reviewed by personnel associated with the hospital and possibly by experts outside the hospital. The physician being reviewed may be unaware of that early activity; nevertheless, the medical staff has not only been actively reviewing the physician's performance, but it may also have had significant legal counsel along the way, likely provided by hospital attorneys. Often the first indication a physician receives that an investigation is being conducted is receipt of an invitation to appear before an "action" committee for the purpose of explaining the physician's management of one or more patients.

Depending on the bylaws the physician may not be permitted to have an attorney present during that proceeding. It is important to understand that during an appearance before the "action" committee the physician being reviewed may not be entitled to examine the evidence being considered and is often not entitled to present evidence other than oral explanations. There are "action" committee procedures in place which prevent the physician being reviewed from presenting office records or other supporting medical evidence which exists outside the hospital medical records. The recommendations of the "action" committee will be transmitted through the credentialing process and ultimately a decision about the physician's hospital practice will be made by some entity, often the executive committee of the medical staff, sometimes the board of trustees of the hospital.

If restrictions are placed on a physician's practice, the physician will have an opportunity to appear before the hearing committee. It is only at this time, according to most bylaws and in keeping with due process, that the physician is entitled to receive documentation of the evidence upon which the decision to restrict the physician's practice was made and which will be considered during the hearing. That evidence can include transcripts of committee records and reports of experts.

At this point it is helpful to identify the forces that are interacting in the peer review process. The process becomes relatively more public as a result of the proceedings of the "action" committee. Members of the medical staff and hospital personnel are more acutely aware of the questions being raised. The leaders of the medical staff and the hospital administration have become united by the process. The administration has provided administrative and legal support; the physician leadership has provided professional judgment. Frequently the medical staff becomes polarized between supporters of the leadership and supporters of the physician whose practice has been restricted. The hospital administration is interested in avoiding the perception that it is not acting in the best interest of future patients. A "fault line" of confrontation has been created.

Most important is to realize the fine line drawn between exclusion from a roster and revocation of your hospital privileges. In California, the minority rule under Fenton, removal from a roster elevates your claim to a revocation of privileges. In most states (majority rule), your hospital privileges may be left intact denying you the option of peer review, but you can be removed from the schedule at the discretion of the "closed" system contract manager. Similarly, in most states employment at will means you can be left off the schedule for a good reason, a bad reason, or no reason at all. Only if your privileges are revoked, can a physician under the hospital's mandatory compliance with federal minimum standards invoke the quasi-judicial powers of the hospital-based peer review committee as it relates to the granting or denial of hospital privileges. The only legal recourse you have in a non-review state as a safeguard to this process is if you can allege and prove tortious activity on the part of the hospital peer review panel. This challenge must allege malice as to the motives of the peer review panel in order to overcome their qualified immunity.