Physician peer review immunity: time to euthanize a fatally flawed policy.

Author:Koepke, Charles R.
  1. INTRODUCTION A. A Hypothetical Case B. Thesis and Organization II. PHYSICIAN PEER REVIEW: AN OVERVIEW A. Physician Credentialing, Hospital Privileges and the Peer Review Process B. Rationale for Physician Peer Review Immunity C Physician Peer Review Protections III. PHYSICIAN PEER REVIEW AS A TOOL TO IMPROVE HEALTH CARE QUALITY IV. EFFECTIVENESS OF CURRENT POLICIES AND LEGISLATION V. THE NEGATIVE IMPLICATIONS AND COSTS OF IMMUNITY A. Bad Faith Peer Review VI. SUGGESTIONS FOR EFFECTIVE PHYSICIAN PEER REVIEW WITHOUT IMMUNITY VII. CONCLUSION I. INTRODUCTION

    1. A Hypothetical Case

      "... Absolute power corrupts absolutely." (2)

      Dr. X is a young, charismatic, board-certified surgeon at the local hospital. (3) While popular among her patients and non-surgical colleagues, to the established surgical "Old Guard," she appears somewhat of a threat. Her training in new, advanced techniques, coupled with splendid bedside manner, has caused her practice to become quite busy. However, disruption in some well-established referral patterns has occurred, and business has been siphoned away from her older colleagues.

      Dr. Y is an endocrinologist at the same hospital. (4) As Vice President of Medical Affairs (VPMA), he is also a paid administrative agent of the hospital. Dr. Y is close, both personally and professionally, to several of the "Old Guard" surgeons. They express concerns about the negative impact Dr. X is having on their practices. Not so subtly, they let Dr. Y know that if something is not done, they will probably start moving their elective cases across the street to the local hospital's competitor. Dr. Y, in his VPMA capacity, is very concerned about the impact this would have on his hospital's bottom line.

      When an untimely, perioperative complication lands Dr. X in front of a surgical morbidity and mortality (5) peer review, Dr. Y seizes his opportunity. Besides this particular event, it also appears that Dr. X has had a few bad outcomes related to some of her "new" surgical techniques, has been occasionally tardy in starting her cases, and is significantly delinquent in completion of her medical records. The physician peer review committee, composed of administrative-friendly and "Old Guard"-sympathetic peers, votes to recommend suspension of Dr. X to the local hospital's governing board. As they do in nearly every instance, the Board adopts the peer review committee's recommendation. Dr. X is suspended.

      Dr. X's response to the suspension of her hospital privileges is to retain an attorney and sue the hospital and the peer review board. Unfortunately for Dr. X, the trial court's ruling for summary judgment for the defense is affirmed on appeal; the peer review committee and hospital are immune from civil liability under the federal Health Care Quality Improvement Act of 1986 (HCQIA), as well as applicable, similar state provisions.

      In the meantime, Dr. X's suspension has been reported to the National Practitioner Data Bank, (6) and she has been unable to acquire privileges at any other hospitals. Thus stigmatized, she is considering giving up medicine altogether. The tremendous time, effort and resources expended in the making of a physician will be lost. (7) Also left in the lurch are Dr. X's patients, practically all of whom thought she was an outstanding surgeon.

      This hypothetical--but not uncommonly recurring--fact pattern demonstrates the destruction of a promising medical career, elimination of competition, promotion of status quo cronyism, and protection of bad faith peer review, without a scintilla of evidence that quality healthcare has been advanced in the process. Certainly, such perverse consequences were not what Representative Ron Wyden of Oregon had in mind when he introduced the HCQIA in 1986. (8) Unfortunately, when policy decisions supported by the weight of the law create both unfair and inequitable results that trample physician property and due process rights, permit conflicts of interest and abuse of process, and fundamentally harm the public interest, then the question must be asked: is physician peer review immunity justified?

    2. Thesis and Organization

      Simply defined, physician peer review is the process whereby doctors evaluate the quality of their colleagues' work product in order to assure that prevailing standards of care are being met. (9) However, because physicians who serve on peer review committees "make neither money nor friends," (10) Congress passed the HCQIA and most state legislatures passed similar provisions providing immunity from civil liability for peer review participants. (11) Unfortunately, despite its good intentions and intuitive attractiveness, physician peer review immunity represents a fatally flawed policy whose time for revision has arrived. Because physician peer review immunity is ineffective for its intended purpose, ripe for administrative abuse and offensive to notions of due process and fundamental fairness, it should be abandoned before it causes more harm.

      Part II of this article describes the physician credentialing and peer review process, then examine the rationale for the HCQIA and similar state statutes as well as protections the law provides for the peer review process. (12) Part III illuminates the erroneous threshold assumption that undergirds the entire justification for physician peer review immunity: specifically, that physician peer review is a competent and capable tool for improving the quality of health care. In Part IV, this article evaluates whether this legislation has been effective in achieving its purposes. Part V utilizes recent and relevant case law to demonstrate exactly how physician peer review immunity operates to disadvantage the aggrieved plaintiff physician, how it may be subverted to the ulterior motivations of economic credentialing, (13) and how it may ultimately threaten rather than improve overall health care quality. Finally, in Part VI, the article presents a comprehensive "de-immunized" approach to physician peer review, which would make the system fundamentally more fair, substantially increase physician participation, and achieve the outcome that is the fundamental purpose of the entire process: improved quality of health care.

  2. PHYSICIAN PEER REVIEW: AN OVERVIEW

    1. Physician Credentialing, Hospital Privileges and the Peer Review Process

      With rare exception, having privileges to admit and treat patients in a hospital setting is an indispensable element to a physician's ability to practice his profession; some specialties are almost exclusively practiced in the hospital arena. (14) The process an applicant physician goes through to receive hospital privileges is called "credentialing." Subsequently, peer review is the "ongoing process whereby the facility monitors physicians' practices to identify and remedy patterns of unacceptable patient care." (15)

      Support for the physician peer review process is based on the intuitively logical premise that only a physician's colleague or peer would possess the expertise appropriate to undertake such an evaluation. (16) The actual peer review process transpires in committees composed of physicians from a hospital's medical staff. In an effort to ensure impartiality, committee compositions generally include "an unbiased hearing officer and practicing physicians who are not in direct economic competition" with the reviewed physician. (17) The peer review committees meet regularly to review quality and performance data for individual physicians for reappointment purposes and as needed to deal with physician incidents potentially adversely affecting patient care. (18) While not the ultimate decision-making body, the peer review committee's recommendations regarding privilege status form the basis upon which the hospital's governing body makes its final decision. (19)

    2. Rationale for Physician Peer Review Immunity

      In the wake of Patrick v. Burger, (20) and premised on a finding that "there [was] an overriding national need to provide incentive and protection for physicians engaging in effective professional peer review," Congress passed the HCQIA. (21) With this objective in mind, the HCQIA was the "legislative response to the medical malpractice crisis" of its day. (22) Concerned that state licensing boards, hospitals, and medical societies were not effectively weeding out incompetent and impaired physicians, the HCQIA sought to encourage and strengthen peer review activity by granting a limited immunity from damages for liability arising from peer review participation. (23) Additionally, the HCQIA created a reporting requirement whereby healthcare entities such as hospitals, insurers, and professional societies were required to report malpractice payments and disciplinary actions to the National Practitioner Data Bank (NPDB), operated by the Secretary of the Department of Health and Human Services, and in some cases to state medical boards. (24)

      One of the largest deterrents to effective peer review at that time was the perceived threat looming over physicians and hospital administrators that they may be sued by a doctor that they were planning to discipline. (25) In fact, testimony received by the Subcommittee on Health and the Environment indicated that these suits were having a "chilling effect" on effective peer review. (26) Due to the threat of retaliatory and often baseless litigation by an accused physician, hospitals and peer review committees were reluctant to report physicians. (27) In order to avoid the possibility of lengthy, expensive, and uncertain litigation, hospitals would often accept "voluntary" resignations from incompetent physicians in exchange for their silence as to the reason for such resignation. (28) Likewise, state medical boards would engage in a form of "physician plea bargaining" by accepting the "voluntary" surrender of a physician's license in exchange for an agreement that the physician would stop practicing in their state. (29)

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