135019662 Important Legal Developments And Impact On MSP Responsibilities - PowerPoint Presentation

135019662

Important Legal Developments And Impact On MSP Responsibilities Michael R. Callahan Katten Muchin Rosenman LLP312-902-5634 (phone)michael.callahan@kattenlaw.com October 1, 2018

Peer Review Privilege Cases

Daley v. Ingalls Memorial Hospital (No. 1-17-0891) 2018 IL App (1st Dist.) (June 28, 2018) BackgroundThis is a medical malpractice case brought by the administrator of the estate of a patient who was treated and subsequently died several months later based on an allegation that the hospital had failed to adequately monitor and treat the patient’s glucose levels.During discovery, the plaintiff requested whether the incident was reported to, or investigated by, any hospital or governmental committee, agency or other body. The hospital objected claiming that two responsive incident reports and a report which included statements and complaints made by the family while the patient was in the hospital were privileged and confidential and therefore not subject to discovery under the Patient Safety and Quality Improvement Act of 2005 (“PSA”).

Daley v. Ingalls Memorial Hospital (No. 1-17-0891) 2018 IL App (1st Dist.) (June 28, 2018) (cont’d) The basis of the hospital's argument was that it had collected this information within its patient safety evaluation system (“PSES”) and reported it to Clarity PSO, a federally certified patient safety organization. In further support of its argument, the hospital submitted two affidavits from its associate general counsel which represented that the hospital had contracted with the PSO in 2009 to conduct activities to improve the hospital’s patient safety and quality healthcare and for the purpose of reporting adverse events to the PSO. After submitting the documents to the trial court for an in camera inspection, the court ordered the hospital to turn over portions of the reports that the court said should have been in the medical records which the hospital deemed to be privileged patient safety work product (“PSWP”). The hospital refused and the court imposed a “friendly contempt order” which allowed for an immediate and direct appeal to the Illinois Appellate Court.

Daley v. Ingalls Memorial Hospital (No. 1-17-0891) 2018 IL App (1st Dist.) (June 28, 2018) (cont’d) Decision In one of the few reported appellate decisions from around the country, the Appellate Court, in a very detailed analysis, reversed the decision of the trial court and held as follows:The PSA created a system of voluntary, confidential and non-punitive sharing of healthcare errors to facilitate and promote strategies to improve patient safety and quality of healthcare.To facilitate the sharing of medical errors, Congress provided for the creation of patient safety organizations to receive information about medical errors, analyze the errors and recommend strategies to healthcare providers to prevent such errors in the future.

Daley v. Ingalls Memorial Hospital (No. 1-17-0891) 2018 IL App (1st Dist.) (June 28, 2018) (cont’d) Congress included privilege and confidentiality provisions to encourage the sharing of data within a protected legal environment, both within and across states, without the threat that the information will be used against providers by plaintiff attorney and others. The hospital clearly established that it had contracted with the PSO. Its PSES identified the disputed reports as having been collected within its PSES for reporting to Clarity PSO and that the information was used for the purpose of improving patient safety and quality of healthcare. Therefore the reports qualified as privileged PSWP and were not subject to discovery or admissibility into evidence. The Court rejected the plaintiffs arguments that the information in question should have been included in the patient’s medical record and therefore was not privileged under the PSA or that the patient would somehow be deprived from being able to prove up a malpractice action without access to the privileged information.

Daley v. Ingalls Memorial Hospital (No. 1-17-0891) 2018 IL App (1st Dist.) (June 28, 2018) (cont’d) The Court further held that the PSA preempted any state law which otherwise would have required the discovery of this information. In addition, there was no existing state law which required that the hospital report the disputed information to the state. Lessons Learned Find out whether your hospital is in a PSO. If so, obtain a copy of the PSES in order to determine what impact on your MSP responsibilities. Find out whether the policies and procedures affecting these responsibilities differ if the hospital is seeking peer review privileges under state law and the PSA. Compliance with policies and required documentation is critical in preserving the privilege protections . You cannot treat mandated reports to the government as PSWP.

Nahas v. Shore Medical Center (No. 13-6537) D.N.J. (April 27,2018) BackgroundPlaintiff physician sued a hospital and its Medical Executive Committee alleging that they had engaged in “malicious peer review” resulting in his loss of clinical privileges to perform endovascular surgery at the hospital.The sole issue before the court in this case was whether the MEC can be individually sued. Decision The court went through the medical staff bylaws, including a description of all of the responsibilities and role of the MEC. The court noted that the MEC is not registered with any state or governmental agency as a separate or distinct legal entity, it is not registered as a non-profit and has no bank account of its own and does not maintain any insurance coverage. The MEC members are insured under the hospital’s insurance policy.

Nahas v. Shore Medical Center (No. 13-6537) D.N.J. (April 27,2018) (cont'd) The court then engaged in a detailed analysis looking at decisions from around the country to determine whether there have been any decisions which have addressed the question of whether MECs can sue and be sued. It noted that most cases are brought against individual physician members, including those members on an MEC in addition to the hospital itself, rather than specifically against the MEC.In its review of prior New Jersey state court decisions, the federal district court reached the conclusion that the MEC qualifies as a voluntary unincorporated association. Furthermore, because it is recognized as a collective entity, governed by a set of formal hospital bylaws, and authorized to make recommendations to the hospital and are viewed as a separate “profession review body under HCQIA”, the court concluded that “the MEC has the capacity to sue or be sued, but [the court] expresses no opinion whatsoever on what claims may be brought against it.”

Nahas v. Shore Medical Center (No. 13-6537) D.N.J. (April 27,2018) (cont’d) Lessons LearnedThis decision is not binding in other jurisdictions and flies in the face of other decisions in which the medical staff, the MEC and other physician committees, when making recommendations to a board of directors, are seen as a single entity under federal antitrust laws. Will this decision have a chilling effect on future MEC recommendations or interests in serving on the MEC? Even more interesting is the court’s determination that an MEC can also sue, which suggests that it may bring a lawsuit against a hospital should it disagree with the board of directors regarding a particular decision. The decision also raises the question of whether the entire medical staff can be considered a voluntary unincorporated association with the ability to sue and be sued.

Cousino v. Mercy St. Vincent Medical Center (No. L-17-1218) Ohio Ct. App. (April 20, 2018) Background Case involves a medical malpractice claim against the hospital arguing that it had negligently credentialed the pediatric cardiologist who had performed a cardiac catheterization on the plaintiff's child.During discovery, the hospital opposed the plaintiff’s efforts to obtain information what the hospital argued was privileged under Ohio’s peer review statute and submitted two separate affidavits in support of its argument. Although the trial court established that the hospital had met the definition of a “peer review committee” and that the responsive documents to the request were created exclusively by and for the use of the committee and thus were privileged, the hospital failed to provide evidence that “there is not a personnel file or other responsive documents outside of the credentialing file”. It subsequently ordered the hospital to produce a long.

Cousino v. Mercy St. Vincent Medical Center (No. L-17-1218) Ohio Ct. App. (April 20, 2018) (cont’d) list of documents, including the physician’s personnel file, documents relating to any disciplinary actions taken against the decision, as well as communications relating to such actions Decision Under the state statute, all documents generated by or exclusively for a peer review committee are privileged and immune from discovery. In addition, the statute also protects any documents that are maintained in the peer review committee’s records that are generated by an “original source” other than the committee itself and then produced or presented to a peer review committee. The court also noted, however, that the hospital made reference to documents created by a peer review or credentials committee that are placed in each “physician’s file” suggesting that such a file may be separate and distinct from a “credentialing file”.

Cousino v. Mercy St. Vincent Medical Center (No. L-17-1218) Ohio Ct. App. (April 20, 2018) (cont’d) Consequently, for any responsive documents outside of the credentialing file which the hospital claims are privileged, the hospital must establish that each was generated by or exclusively for the use of the peer review committee through an affidavit and by submitting the disputed documents to the court for an in camera review. The hospital cannot merely assert a general statement that the materials outside of the file are privileged. Lessons LearnedMSPs must be very familiar with your state and/or federal peer review privilege, how the statute is interpreted, and how it affects MSP responsibilities. Hospitals are required to prepare detailed logs to support privilege claim for each document .

Cousino v. Mercy St. Vincent Medical Center (No. L-17-1218) Ohio Ct. App. (April 20, 2018) (cont’d) Most hospitals and medical staffs have a physician “credentialing file” and a “quality file”. It is important that you not comingle this information so as to inadvertently turn over privileged information when providing a copy of the credentials file in response to a discovery dispute .Credential files typically are not protected.You also should also be aware that employed physicians are entitled to a copy of their employment file. Privileged information, which normally is not made available to physicians unless there is a request for disciplinary action, placed in the employment file could be used against the hospital in an employment action or in a negligence lawsuit.

Reginelli v. Boggs (No. JS-25A-2017) Pa. Sup. Ct., (March 27, 2018) BackgroundThis is another medical malpractice action in which the plaintiff brought suit against a defendant emergency room physician who was employed by a physician group, which had an exclusive contract with the hospital, as well as against the hospital under the theory of corporate negligence and vicarious liability.During discovery, the medical director of the emergency department, who also was employed by the company (“ERMI”) testified she had prepared and maintained a “performance file” on the defendant physician as part of her regular practice of physician chart review. The hospital objected arguing that the information was privileged under the state’s peer review statute.

Reginelli v. Boggs (No. JS-25A-2017) Pa. Sup. Ct., (March 27, 2018) (cont'd) The trial court and the superior court both determined, however, that ERMI was an independent contractor and not a “licensed healthcare provider” under the statute and that the hospital “neither generated nor maintained [the defendant’s] performance file”.It further held that even if ERMI could claim the privilege protection, it was waived when the information was disclosed to the hospital.Decision The Pennsylvania Supreme Court applied a strict construction of the statute, holding that the definition of a professional healthcare provider extends only to peer review conducted on behalf of a specific list of providers, which did not include physician groups or independent contractors with a hospital.

Reginelli v. Boggs (No. JS-25A-2017) Pa. Sup. Ct., (March 27, 2018) (cont’d) Because the record did not indicate whether the medical director was actually conducting peer review on behalf of the hospital or solely for ERMI, or that the records review was part of a committee process rather than an individual evaluation, it concluded that the review was not conducted on behalf of the hospital.In dicta, the court also stated that credentialing activities are not considered privileged peer review activities. Lessons Learned It is extremely important that MSPs understand which entities, providers, physician groups, etc., are or are not covered under state and/or federal peer review statues. Courts, more often than not, are going to strictly interpret and limit the application of privilege statutes.

Reginelli v. Boggs (No. JS-25A-2017) Pa. Sup. Ct., (March 27, 2018) (cont’d) It also is important that the hospital review all contracts with its independent contractors and exclusive groups to determine whether there are ways, under the state statute and case law, to structure the arrangement in order to extend privilege protections to these groups.For example, if the record established that the medical director as head of the department was primarily conducting peer review activities for the benefit of the hospital and secondarily for the group and/or if the reviews were being conducted by the medical director clearly in his position as the department chair and member of the medical executive committee, then the protections might have applied. Be careful about improper disclosures which could result in waiving the privilege protections. Physician groups and all licensed entities are covered under the Patient Safety Act.

Camden Clark Memorial Hospital v. Nguyen, No. 16-0834, Sup. Ct. W. Va., (November 13, 2017) Background Plaintiff is a general surgeon who was employed by a physician corporation which was wholly owned by the parent company in which one of it’s affiliates was Camden Clark Medical Center.As a condition as membership, the plaintiff was required to become board certified in his primary area of practice within five years of completing his residency. Failure to obtain board certification under the medical staff bylaws would render him illegible for reappointment. Although his employment agreement with the group was renewed, shortly thereafter it was terminated because he failed to obtain board certification. Membership on the medical staff was a condition of his employment.

Camden Clark Memorial Hospital v. Nguyen, No. 16-0834, Sup. Ct. W. Va., (November 13, 2017) (cont'd) While he had been a member of the medical staff, he did express some concerns about patient care because he was asked to provide coverage in specialty areas for which he had no training or expertise. He also supported similar claims made by another surgeon who was on the medical staff. Although he maintained the physician group did not require that he obtained tail coverage upon his termination, the group subsequently sued the plaintiff claiming that he had breached the employment agreement by not purchasing tail coverage.The physician brought multiple counterclaims against the group but also sued the parent corporation because it deprived him of the peer review process which he argued was required under the employment agreement He further asserted that the decision of the hospital to not reappoint him was in retaliation for his reporting patient care concerns in violation of the states Patient Safety Act which prohibits retaliation or discrimination against healthcare workers who make a good faith report when advocating on behalf of patients.

Camden Clark Memorial Hospital v. Nguyen, No. 16-0834, Sup. Ct. W. Va., (November 13, 2017) (cont’d) The circuit court denied the hospital’s motion to dismiss in which it argued that the hospital’s decision was immune from liability based on a previous Supreme Court ruling that the courts only look to determine whether a hospital followed it’s bylaws and processes and if the proceedings were fair. DecisionOn appeal, the Supreme Court reiterated that it’s limited role when reviewing a typical peer review decision subsequent to a hearing when a physician is subjected to disciplinary action. What distinguished those cases from this particular case is that the claim was not a violation of bylaws but rather a violation of a state statute designed to protect healthcare workers against retaliatory efforts when reporting patient care concerns or issues.

Camden Clark Memorial Hospital v. Nguyen, No. 16-0834, Sup. Ct. W. Va., (November 13, 2017) (cont’d) The Court further indicated that it was appropriate for judges to avoid this limited review when a physician brings a breach of contract, tort or other similar allegations as the basis for the disciplinary action taken. One of the judges issued a strong dissenting opinion contending that the Court’s decision in this case opened the door for physician plaintiffs to bring any allegation against the hospital that legitimately disciplines a physician thereby completely undermining the immunity protections otherwise afforded to hospitals and physician representatives. Lessons Learned Most courts are reluctant to grant a defendant's motion to dismiss at the early stage of litigation before any discovery has been taken. Courts are required to treat all well plead allegations as true in deciding whether the case should or should not be dismissed.

Camden Clark Memorial Hospital v. Nguyen, No. 16-0834, Sup. Ct. W. Va., (November 13, 2017) (cont’d) The Court did not address whether it was or was not appropriate for the physician to be terminated because he failed to obtain board certification within the requisite period of time.Also, the record did not indicate whether the physician sought a peer review process as supposedly required under his employment agreement. Nor did he attempt to seek a waiver which was permitted under the bylaws. Most physician employment agreements contain a “clean sweep” provision whereby termination from employment by a physician group or a group with an exclusive contract results in the automatic waiver of any hearing rights under the medical staff bylaws. It is important that physician employment agreements be carefully examined to determine whether they do or do not provide any peer review, hearing or other similar rights prior to termination.

Camden Clark Memorial Hospital v. Nguyen, No. 16-0834, Sup. Ct. W. Va., (November 13, 2017) (cont’d) Hospitals are not required to report terminated physicians to the Data Bank if no hearing is provided but must keep in mind that the HCQIA immunities also are not available when there is no fair hearing offered.

Brugaletta v. Garcia (N.J. Sup. Ct.) (July 25, 2018) Background This case involves a medical malpractice action in which a patient sued a hospital alleging negligence with respect to an ED physician's diagnosis, care and treatment of the plaintiff.Among the discovery interrogatories, the plaintiff requested the names and addresses of anyone who was made aware of the litigation and the circumstances surrounding the patient's care.The hospital objected but did identify that there were two such reports but refused to produce them claiming they were privileged “self critical analysis” under the state’s Patient Safety Act.

Brugaletta v. Garcia (N.J. Sup. Ct.) (July 25, 2018) (cont’d) The trial court ordered the release of a redacted version of one of the reports after finding it was the product of a self critical analysis but determined that the plaintiff had suffered a Serious Preventable Adverse Event ("SPAE") which should have been reported to the state and thus ordered the redacted version, with only the facts, to be reported both to the plaintiff and to the Department of Health. The hospital appealed and the Appellate Division reversed the trial court’s order determining that a hospital need only establish that it engaged in a self-critical analysis in order for the information to be considered privileged and therefore not discoverable. It further determined that the trial court exceeded it’s authority by requiring the hospital to submit a SPAE because an expert opinion would have been required in order to determine whether such a report was required.

Brugaletta v. Garcia (N.J. Sup. Ct.) (July 25, 2018) (cont’d) Decision In affirming the appellate court’s decision, the Supreme Court made the following rulings:The privilege for self critical analysis is not dependent on whether the event in question was or was not reportable to the state.the New Jersey Patient Safety Act does not bar discovery or admission into evidence information that would otherwise be discoverable or admissible or obtained from other sources such as "facts". Medical records and other record keeping standards and documents surrounding a patient's care are not the subject of self critical analysis and therefore are discoverable.

Brugaletta v. Garcia (N.J. Sup. Ct.) (July 25, 2018) (cont’d) Just as a defendant is required to provide a step by step narrative as to the steps it took to establish that it had engaged in self examining analysis, so to was it required to provide the underlying non-privileged facts about the patients' care responsive to the interrogatory request which was not done in this case. Lessons LearnedHospitals are required to comply with all mandated adverse event, never event and other similar report says required under state and federal law and may not seek to avoid this obligation by characterizing the information as privileged under state or federal law. Because medical records are never privileged, it is important that information relating to the self critical analysis or peer review privilege or other privileged information not be purposely or inadvertently contained in the discoverable medical records.

Brugaletta v. Garcia (N.J. Sup. Ct.) (July 25, 2018) (cont’d) Hospitals need to strictly enforce their medical record policies to make sure records are complete but also that they do not contain information that would otherwise be privileged or which makes disparaging or other critical comments about the patient or hospital personnel.

Grounds For Termination Cases

Powell v. Bear Valley Community Hospital (No. D072616, Cal. App. Ct. 4th District, (March 26, 2018) Background Plaintiff in this case is a physician who had previously been terminated at another hospital for misrepresenting, on two occasions, that he fully disclosed to a young boy’s parents the fact he severed the boy's bile duct during a hernia procedure or regarding the ensuing implications.The Texas State Board of Medical Examiners investigated the revocation in a letter dated in 2001. It took no action but authorized him to use the 2001 letter when applying to other hospitals. The hospital also reported the physician to the Data Bank citing “issues of unprofessional conduct” to which the physician responded in pointing out that the Texas board dismissed the allegations.

Powell v. Bear Valley Community Hospital (No. D072616 Cal. App. Ct. 4th District, (March 26, 2018) (cont’d) The plaintiff’s lawsuit against the hospital was dismissed on summary judgement.In 2011 the plaintiff applied for membership at Bear Valley which required that he separately provide “full details” regarding the loss of any privileges or any denied application.Although the MEC recommended appointment, it was based on the plaintiff's representation that his termination at the other hospital was because he disagreed with management regarding the use of advanced or costly surgical procedures and that he did not get along with a pediatric patient’s parents although the patient suffered no adverse outcome.

Powell v. Bear Valley Community Hospital (No. D072616 Cal. App. Ct. 4th District, (March 26, 2018) (cont’d) The plaintiff was given one year provisional medical staff privileges during which time 12 of his cases were sent for outside review, eight of which reflected some degree of concern or problems regarding his medical care and practice.The MEC recommended that he be advanced to Active Staff membership although it had only reviewed only two of the cases. After the board saw the entire report, it expressed concern which led to a retraction of the recommendation for active privileges so he could be placed on a 90 day proctoring requirement. The MEC again supported his reappointment but the board still expressed reservations in light of the quality of care issues that had been identified. The board also asked for additional information regarding termination of this privileges at the other hospital.

Powell v. Bear Valley Community Hospital (No. D072616 Cal. App. Ct. 4th District, (March 26, 2018) (cont’d) During this process, because the physician did not release the alleged “exoneration letter” of 2001, the application was deemed incomplete and the physician’s membership lapsed. No hearing was provided.The plaintiff subsequently reapplied but during the process, rather than provide the 2001 letter, he submitted a separate letter dated 2002 which he claimed was the exoneration letter. The MEC again recommended that he be granted active staff privileges but when the board invited the physician to attend and present additional documentation he declined to do so and did not provide any other materials including the 2001 letter . Consequently, the board denied his request for privileges. The basis of the board’s decision was: Patient care issues identified during the external peer review. Incomplete application for privileges and/or failure to provide the 2001 letter.

Powell v. Bear Valley Community Hospital (No. D072616 Cal. App. Ct. 4th District, (March 26, 2018) (cont’d) Misrepresentation of facts surrounding his termination of privileges at the other hospital.DecisionPhysician was not entitled to a hearing before the lapse of his provisional staff privileges because of his failure to comply with the application process and to submit the requested documents. The board did not exceed it’s authority to exercise independent judgment, relying upon appropriate evidence, when it did not agree with the MEC’s recommendation that the physician be appointed. The board’s request for additional information was clearly justified. Although the hearing committee did not agree that the issues identified in the external case review were sufficient to deny his appointment, it determined that he lied to various individuals about the circumstances surrounding his prior termination “showing a propensity for dishonest and non-ethical conduct that could negatively impact his or other physician’s provision of medical care”.

Powell v. Bear Valley Community Hospital (No. D072616 Cal. App. Ct. 4th District, (March 26, 2018) (cont’d) Lessons Learned The medical staff bylaws should include a clear provision which places the burden of producing any and all information necessary to make an informed appointment and reappointment decision.Physicians also should be required to update their appointment and reappointment applications while they are pending.The failure to produce such information when requested should result in the withdrawal of the application from further consideration. The bylaws also should include a provision such that any misrepresentation or deceit associated with the physician’s response could result in a report to the National Practitioner Data Bank if the application is denied.

Powell v. Bear Valley Community Hospital (No. D072616 Cal. App. Ct. 4th District, (March 26, 2018) (cont’d) In addition, the bylaws should include a provision that if such information is disclosed after the physician’s appointment then the physician will be subjected to disciplinary action and a Data Bank Report.The courts are divided on the question of whether a physician should be able to maintain membership and clinical privileges during the pendency of an application, investigation or hearing when privileges otherwise would expire. Some hospitals will grant “temporary privileges” for a period of time to cover the investigation and hearing process assuming that the physician is not at fault in terms of providing required information. Boards are not bound by recommendations of their medical executive committee, one way or the other, but should provide a justifiable basis for not accepting the recommendation.

El-Khalil v. Oakwood Healthcare Inc., (No. 329986) (MI. App. Ct.) (April 17, 2018) BackgroundPhysician in this case initially filed a lawsuit against one of the hospitals in a hospital system alleging a breach of contract and a civil rights violation claiming that the hospital retaliated against him when he brought to the hospitals attention illegal activities engaged in by a number of the physicians.The case was dismissed when the trial court found that the defendants were statutorily immune from liability and that the physician had failed to allege sufficient facts to support a discrimination claim under the Civil Rights Act. Physician subsequently filed a separate lawsuit alleging that the system and it’s affiliated hospital again breached a contract and violated his civil rights when he was informed that his staff privileges at two of the system hospitals were going to expire and he was not going to be reappointed.

El-Khalil v. Oakwood Healthcare Inc., (No. 329986) (MI. App. Ct.) (April 17, 2018) (cont’d)Hospitals argued there was no breach of contract because the bylaws did not constitute a contract, that any such claim was barred by the release and waiver of liability contained in the bylaws, that he had failed to set forth a case of retaliation, and that the peer review statute barred any discovery to support his claims.The trial court held that the bylaws were a contract but they were not breached because the hospital's decision was based on plaintiff's inability to provide efficient and quality care. The physician released the hospital from liability because he offered no evidence to support his allegations of malice and bad faith. Furthermore , the trial court determined that the defendants were immune under both HCQIA and the Michigan peer review immunity statute.

El-Khalil v. Oakwood Healthcare Inc., (No. 329986) (MI. App. Ct.) (April 17, 2018) (cont’d) DecisionOn appeal, the Michigan Court of Appeals determined that the plaintiff had met all but one of the elements for stating a civil rights violation.In this case ,the physician was required to show that the adverse employment action was based on the filing of his previous 2014 lawsuit.The appellate court, however, pointed out that attached to the plaintiff’s lawsuit were copies of complaints filed by other physicians accusing him of harassing and threatening behavior as well as verbal abuse of staff which the hospitals pointed was the basis of their decision not to reappoint him, and not the prior lawsuit. The hospital noted that in the medical staff bylaws, physicians were required to “furnish quality care in a manner that promotes a safe, cooperative and professional healthcare environment”.

El-Khalil v. Oakwood Healthcare Inc., (No. 329986) (MI. App. Ct.) (April 17, 2018) (cont’d) The court, in citing to other court decisions, clearly accepted the view that “disruptive behavior” is detrimental to the quality of healthcare being provided and can serve as a proper basis for termination.Lessons LearnedIrrespective of whether medical staff bylaws are considered a contract in your state, the legal requirement is that hospitals and medical staffs but follow their bylaws when engaged in peer review and disciplinary actions. The medical staff bylaws and the appointment and reappointment applications should contain a waiver of lability/immunity provision as a condition of membership in order to defend against these types of peer review lawsuits. Some bylaws require that if the physician sues anyway, he/she must pay the hospital's legal fees.

El-Khalil v. Oakwood Healthcare Inc., (No. 329986) (MI. App. Ct.) (April 17, 2018) (cont’d) Many bylaws for health care systems now include provisions which state that any disciplinary or similar action taken at one hospital applies to all.In addition to bylaws that identify and require that a physician be “cooperative and act professionally”, your bylaws should cite to the obligation to comply with any and all code of conduct and or disruptive behavior policies as a continued condition of membership.

Fair Procedure Cases

Dhillon v. John Muir Health, (No. A143195) (Cal. Ct. App.) (April 18, 2018) BackgroundPlaintiff is a physician who sued a hospital after it required that he and another physician be obligated to attend an anger management program based on a complaint that he was verbally abusive and physically aggressive to another hospital physician during a meeting in violation of the code of conduct.Based on this conclusion by an ad hoc investigative committee, the MECs of two of the hospital’s campuses determined that an anger management program was required and if he failed to complete the program he would be subjected to a limited suspension of his clinical privileges. Because the physician did not partake in the program within the required time frame, the hospital imposed a 14 day suspension. The bylaws did not provide a hearing right for either action and therefore no fair hearing was provided.

Dhillon v. John Muir Health, (No. A143195) (Cal. Ct. App.) (April 18, 2018) (cont’d) Upon filing suit, the decision of the trial court to require a hearing was appealed by the system.DecisionIn looking to the medical staff bylaws, the court determined that the anger management class “in no way [can] be considered a significant restriction or condition of clinical privileges under the bylaws”. In addition, the bylaws specifically stated that a 14 day suspension was not grounds for a hearing if based solely on a plaintiff’s refusal to comply with informal corrective actions required by the MEC. Lessons Learned The medical staff’s bylaws should clearly state what actions do or do not trigger hearing rights.

Dhillon v. John Muir Health, (No. A143195) (Cal. Ct. App.) (April 18, 2018) (cont’d) Remedial action which does not prevent the exercise of clinical privileges should not trigger hearing rights.Making a vague reference to a hearing based on a “restriction of privileges” opens up the question of whether monitoring, proctoring an FPPE plan or similar action is a “restriction” that would entitle the physician to a hearing. Bylaws should incorporate language, such as "collegial intention" and similar standards, which focus on taking remediation steps verses disciplinary action in response to identified problems. Note that the bylaws for this hospital imposed a suspension without a hearing if it involved the refusal to abide by informal or other remedial action which does not trigger a report to the Data Bank.

Dhillon v. John Muir Health, (No. A143195) (Cal. Ct. App.) (April 18, 2018) (cont’d) Make sure whether the imposition of an administrative suspension, such as failure to pay dues, maintain insurance or complete records, does or does not require that a hearing be offered to the physician under your state law.

Murphy v. Advocate Health & Hospitals Corporation (No. 160513) (2017 ll. App. 4 th) (March 7, 2017)BackgroundPhysician was summarily suspended initially based on quality of care concerns following the death of his patient.Although this initial suspension was based only on the care of one patient, the MEC agreed to lift the suspension if the physician voluntarily relinquished his privileges pending a further investigation. Once the physician retained legal council, the medical staff was informed that the plaintiff no longer wished to relinquish privileges. He argued that the hospital violated the Illinois Hospital L icensing Act when it did not base the decision on a claim that the plaintiff’s continued practice presented an “imminent danger” to patients as required under the Act.

Murphy v. Advocate Health & Hospitals Corporation (No. 160513, 2017 Il. App. 4th (March 7, 2017) (cont’d) The MEC then reinstated the summary suspension based on specific deficiencies relating to the patient who died but also made reference to four peer review cases, two of which had been completed and two which were in the process of peer review, in addition to inadequate documentation or management as reflected in 10 Midas Reports.In response to a detailed request for documents relating to the summary suspension, the hospital failed to produce all of the information which supposedly supported the summary suspension including the medical records at issue. Decision Hospital failed to comply with its disclosure obligations to the physician which resulted in the denial of a fair hearing. Illinois law requires that a physician be given access to all information “pertinent to” the basis of the decision.

Murphy v. Advocate Health & Hospitals Corporation (No. 160513, 2017 Il. App. 4th (March 7, 2017) (cont’d) The hospital's mere identification of the four peer review cases and 10 Midas reports, without providing him the substance to those reports did not sufficiently comply with the disclosure requirements under state law and the medical staff bylaws.The appellate court reversed and required that a fair intraprofessional conference be conducted. Lessons Learned The hospital’s fair hearing process must correctly and completely incorporate any state hearing requirements as well as the procedures outlined under HCQIA in order to maximize your immunity protections. The general rule is that the courts will not substitute their judgment for that of hospitals and medical staffs, particularly when it involves quality of care issues, but a hospital must substantially comply with it’s bylaws and the procedure must be fair.

Murphy v. Advocate Health & Hospitals Corporation (No. 160513, 2017 Il. App. 4th (March 7, 2017) (cont’d) The Appellate Court in this case believed that the preceding were inherently unfair because the physician was not able to adequately prepare or challenge the claims of substandard care and “immediate danger” without having access to all of the necessary information on which to base his defense.

HCQIA Cases

Emlich v. OhioHealth Corp. (No. 2:14-cv-1697) (S.D. Ohio) (April 19 2018) BackgroundThe physician plaintiff was a gastroenterologist at a hospital that was part of the OhioHealth System.A two month long ad hoc committee investigation identified a series of quality of care concerns which led to a recommendation to terminate his privileges. The MEC voted unanimously to accept the recommendation and a hearing officer determined that there was a substantial factual basis to support the recommendation. The physician sued after OhioHealth upheld the recommendation and notified him that his privileges were terminated at all of its hospitals because the action was based on clinical care deficiencies.

Emlich v. OhioHealth Corp. (No. 2:14-cv-1697) S.D. Ohio, (April 19 2018) (cont’d) The physician alleged that the termination was based on his opposition to the hospital's decision to implement a closed-model for the intensive care unit and on what he thought were fraudulent billing practices. His claims included a violation of due process, the antitrust laws as well as defamation.Decision In determining that the hospital was immune from damages under HCQIA the court made the following findings: There was extensive documentation substantiating the quality of care and professional conduct concerns. There was no evidence that the hospital was biased and attempted to retaliate against him. The hospital made a reasonable effort to obtain the facts including obtaining evidence from multiple sources.

Emlich v. OhioHealth Corp. (No. 2:14-cv-1697) (S.D. Ohio) (April 19 2018) (cont’d) The physician received adequate notice and hearing procedures because it fully complied with HCQIA safe harbor Harper provision.The hospital had a reasonable belief that the facts warranted plaintiff's termination because of potential preventable and serious harm to patients. The court rejected the plaintiff's claim that there was a violation of the antitrust laws because he failed to establish any antitrust injury or any competition reducing result based on the hospital's actions. Finally, because the alleged “false statements” to support his defamation claim occurred during the peer review process, the state’s peer review privilege barred the discovery of these statements and therefore the plaintiff had no basis to support the claim.

Emlich v. OhioHealth Corp. (No. 2:14-cv-1697) (S.D. Ohio) (April 19 2018) (cont’d) Lessons LearnedIt is extremely important that your bylaws adhere to the hearing process established under HCQIA in order to assert and obtain the civil immunity protections.Keep in mind that these protections do no not apply in discrimination cases.In addition, state peer review privilege statutes will not apply in federal court actions to preempt a federal claim. Privilege protections under the federal Patient Safety Act do apply in all state and federal proceedings. Document, document, document

Kolb v. North Side Hospital, (No. A17A0114) (Ga. App. Ct.) (June 29, 2017) BackgroundPlaintiff was summarily suspended based on a “reasonable suspicion of impairment” due to various reports and statements she made to hospital physicians and personnel.The suspension letter indicated that privileges could possibly be reinstated if she submitted to a medical and psychiatric evaluation and depending on the results. She was further advised of her right to seek a fair hearing. The fair hearing committee determined that the MEC proved, by a preponderance of the evidence, that there was a sufficient basis for the suspension and that it was not arbitrary, unreasonable or capricious.

Kolb v. North Side Hospital, (No. A17A0114) (Ga. App. Ct.) (June 29, 2017) (cont’d) It further stated that the physician could possibly return in some limited capacity but only through a long term independent evaluation and compliance with any recommended treatment and monitoring.With some modification, the Appellate Committee accepted the fair hearing recommendations. S he declined to accept and subsequently sued the hospital. The trial court granted summary judgment in favor of the hospital and she appealed. Decision Included in her claims on appeal was that the trial court gave too much deference to the hospital's decision; that the hospital failed to comply with HCQIA because care for her patients was not an issue; it failed to follow it’s own bylaws; and it suspended the physician without first conducting an investigation.

Kolb v. North Side Hospital, (No. A17A0114) (Ga. App. Ct.) (June 29, 2017) (cont’d) The reports on which the suspension was based included the following statements:That a manufacturer of silicone was trying to kill her and that the FBI might be after her.She carries a gun because there’s a bounty on her head and in fact she appeared to have a gun in an area outside the operating room. The military wanted to hire her to do remote viewing. The government might be after her because she removed a microchip from a federal witness. That she was the reincarnation of Lizzie Borden.

Kolb v. North Side Hospital, (No. A17A0114) (Ga. App. Ct.) (June 29, 2017) (cont’d) At the hearing, the fact that she had a gun, and felt that she needed one to protect herself from a possible assassination suggested that even if that claim was true, it meant that the staff, patients and others were possibly being placed at risk.In affirming the trial court's decision, the Appellate Court held as follows:The physician did not present any credible evidence to show by a preponderance of the evidence that the MEC’s decision to suspend was not based on a reasonable belief that it was furthering the quality of healthcare at the hospital. The bylaws specifically provided that a “practitioner who is suffering an impairment may be summarily suspended”. The HCQIA immunity protections are not necessarily undermined by an allegation that the bylaws were not followed or, in this case, the hospital's Impaired Provider Policy.

Kolb v. North Side Hospital, (No. A17A0114) (Ga. App. Ct.) (June 29, 2017) (cont’d) The lack of a pre-investigation process before the suspension was imposed would not, in and of itself, result in the loss of the immunity protections particularly where the plaintiff admitted to the statements she made to other hospital personnel.Lessons Learned When faced with a possible physician impairment, you need to make an informed decision on whether to go through the code of conduct process, the impaired physician process, or disciplinary action. The preference is to choose a path that avoids disciplinary action but these other paths should always allow for the imposition of a suspension or other necessary remedial action if necessary to protect patients, hospital personnel and the general public as was the situation in this case.

Kolb v. North Side Hospital, (No. A17A0114) (Ga. App. Ct.) (June 29, 2017) (cont’d) The bylaws should contain a requirement that physician and hospital personnel be required to report when there is a "reasonable suspicion" of any possible impairment.Document, document, document!

Sharda v. Sunrise Hospital and Medical Center No. 2:16-CV-2233 Fed. Dist. Ct. Nevada (July 3, 2017) Background The plaintiff was a member of the medical staff for approximately 10 years.During the reappointment process in 2011, the hospital requested information that was missing from his application.Because he failed to timely respond to the request, his privileges lapsed but were subsequently reinstated. Two years later in 2013, the plaintiff’s privileges lapsed again for the same reason. In 2013, he filed another appointment application which again was denied on the grounds that he failed to supply the documentation which had been requested in 2011. In December, 2015 while his request for appointment was pending, the physician went to the hospital to treat a patient who he previously consulted at the request of a hospital employed physician. The hospital issued him a cease and desist letter and barred him from practicing medicine at the hospital.

Sharda v. Sunrise Hospital and Medical Center No. 2:16-CV-2233 Fed. Dist. Ct. Nevada (July 3, 2017) (cont’d) In January, 2016, the credentials committee recommended denying his request because of his trespass and his settlement with the U.S. Department of Justice regarding a Medicare billing issue.The physician submitted a request for a fair hearing in February of 2016 which was acknowledged by the hospital but the hospital in it’s notice did not identify any proposed dates or times for the fair hearing. The physician subsequently sued. Decision In determining whether the HCQIA immunity protections applied in this case, the court identified that the statute requires the hospital to notify a physician when it proposes a professional review action, i.e. hearing, the rationale behind the action, a statement of his or her rights including, the right to legal counsel. In addition, the hospital must provide: “the place, time and date of the hearing, which date shall not be less than 30 days after the date of the notice.”

Sharda v. Sunrise Hospital and Medical Center No. 2:16-CV-2233 Fed. Dist. Ct. Nevada (July 3, 2017) (cont’d) The plaintiff argued that this responsibility was the hospital's and not his own. Based on this failure, the court determined that the hospital was not eligible for the HCQIA immunity protections.In addition, because the physician had not yet exhausted his administrative remedies it was not appropriate for the court to substantively address his antitrust, breach of contract, tortious interference and other similar claims. Instead, the hospital was ordered to go back and provide the physician timely notice and a hearing as required under its bylaws. Lessons Learned A hospital's fair hearing process must conform to the requirements of HCQIA as well as to any applicable state law.

Sharda v. Sunrise Hospital and Medical Center No. 2:16-CV-2233 Fed. Dist. Ct. Nevada (July 3, 2017) (cont’d) Failure to follow your bylaws or follow these standards will likely result in the denial of important immunity protections under state and federal law. Although courts have very limited jurisdiction and do not substitute their judgement for that of a hospital and it’s medical staff, courts are empowered to require that a hospital follow it’s bylaws and need not wait for a physician to exhaust all of his or her administrative hearing rights.

Antitrust Cases

McGary v. Williamsport Regional Medical Center, (No. 4:12-CD-01742) (PA. Fed. Dist. Ct.) (May 22, 2018) Background The plaintiff in this case was a cardiothoracic surgeon who had previously practiced at the hospital for an 8 year period between 1999 and 2007.Five years later, after practicing elsewhere, the physician sought to return to the hospital and applied for privileges.The existing credentialing policy required that cardiothoracic surgeon applicants had performed at least 100 heart surgery and 100 lung surgeries during the previous year. Her application was denied because the physician had performed only 37 heart surgeries and 15 lung surgeries during that time. Physician then filed a lawsuit naming the medical center, the system and four physicians alleging a violation of antitrust laws, a breach of contract, interference with her prospective contractual relationships and a conspiracy in restraint of trade.

McGary v. Williamsport Regional Medical Center, (No. 4:12-CD-01742) (PA. Fed. Dist. Ct.) (May 22, 2018) (cont’d) DecisionIn determining whether her antitrust and conspiracy claims were viable, the court noted that the hospital was affiliated with the healthcare system and furthermore, one of the physicians was the hospital's employed chief medical officer and the other physicians were employed by a physician group which was owned by the hospital.Consequently, because it takes two independent actors to conspire and all of the defendants would be considered a “single economic entity, under an antitrust analysis a person cannot conspire with themselves and thus the plaintiff's antitrust claims failed. Concerning her monopolization claim, she was required to demonstrate that the defendants engaged in “anti competitive conduct” or that the actions resulted in “antitrust injury.” The mere fact that she might be economically harmed is insufficient to show such injury.

McGary v. Williamsport Regional Medical Center, (No. 4:12-CD-01742) (PA. Fed. Dist. Ct.) (May 22, 2018) (cont’d) In response to her argument that the hospital was relying on outdated surgical number standards as a pretext for denying her application, the record showed there were at least seven other surgeons who met this requirement as members on the medical staff and that she was the only applicant who was ever turned down for failing to satisfy the required numbers. Lessons Learned Physicians do not have a legal, constitutional or other right to obtain membership on a medical staff. Most courts even deny reviewing such disputes with a private hospital except perhaps to determine whether the hospital followed it’s own procedures. “Economic credentialing” is not illegal nor does it amount to a violation of antitrust law.

McGary v. Williamsport Regional Medical Center, (No. 4:12-CD-01742) (PA. Fed. Dist. Ct.) (May 22, 2018) (cont’d) Hospitals are entitled to create legitimate qualifying standards, such as a minimum number of surgical procedures, as a condition of obtaining membership and maintaining.It is important, however, that such standards be uniformly applied. Had the hospital in this case made exceptions without any legitimate basis the court might not have dismissed her lawsuit. Also, the medical staff and its committees shall never be in a position to veto whether a physician's request for appointment, reappointment, grant of privileges and similar requests. To do so will expose them to antitrust, discrimination, based on contract and other similar claims. The denial of an initial appointment application should not trigger hearing rights unless the hospital is required to report the physician to the state and/or the Data Bank.