A potent weapon: federal peer review immunity under HCQIA.

• Author: Baxter, Michael J.
• Position: Health Care Quality Improvement Act of 1986 - The New Perils of Health Care Law

THE proliferation of managed care has compelled all health care providers to participate. Physicians who are not part of a practice group with managed care contracts or who aren't preferred providers with multiple managed care organizations are doomed to extinction. To achieve and maintain those relations, health care providers must be in good standing with both the managed care organizations and the acute care facilities at which they maintain privileges. Physicians who lose hospital staff privileges for quality of care reasons risk the immediate termination of managed care contracts.

As the stakes surrounding physician credentialing have risen, the providers' responses to adverse credentialing actions have escalated. These responses -- usually in the form of claims of antitrust violations, intentional torts and discrimination -- have focused attention on federal and state peer review immunity laws. When properly applied, peer review immunity is a powerful defense for credentialing entities and an almost insurmountable hurdle to individual health care providers.

HEALTH CARE QUALITY IMPROVEMENT ACT

The best-known and primary source of peer review immunity is the Health Care Quality Improvement Act of 1986, 42 U.S.C. [sub-section] 11101-11152 (HCQIA). Enacted to encourage the health care industry to conduct meaningful peer review, the statute's immunity provisions have been expansively interpreted and applied by the courts. Simply stated, the act provides near complete immunity to claims for monetary damages arising from peer review actions. However, to qualify for immunity, several statutory threshold requirements must be met.

1. Professional Review Action

   In order for a credentialing or peer review decision to qualify for immunity under HCQIA, it must be a "professional review action," which is defined in 42 U.S.C. [sections] 11151(9) as:

   an action or recommendation of a

   professional review body which is taken or made in

   the conduct of professional review activity,

   which is based on the competence or

   professional conduct of an individual physician

   (which conduct affects or could affect

   adversely the health or welfare of a patient or

   patients), and which affects (or may affect)

   adversely the clinical privileges, or

   membership in a professional society, of the

   physician.

   In 42 U.S.C. [sections] 11151(11), the statute also defines "professional review body," as:

   a health care entity and the governing body

   or any committee of a health care entity

   which conducts professional review activity,

   and includes any committee of the medical

   staff of such an entity when assisting the

   governing body in a professional review

   activity.

   In several recent decisions, courts have considered challenges to the applicability of the immunity based on arguments that the action at issue was not a professional review action.

   In Burney v. East Alabama Medical Center(1) an Alabama federal district court held that a letter sent to a credentialed physician advising him to comply with certain peer review criteria in his practice was a professional review activity. The court found that preliminary investigation and fact finding that lead to professional review actions are in fact professional review activity and therefore eligible for immunity. The court cited Mathews v. Lancaster General Hospital,(2) in which the Third Circuit held that "professional review activity" includes preliminary investigative measures taken in a reasonable effort to obtain the facts relevant to a possible change in a physician's privileges, and Fobbs v. Holy Cross Health System Corp.,(3) in which a California federal district court stated that "professional review activity" means the investigative process during on which a professional review action is based.

   Conversely, in Ehlen v. St. Cloud Hospital(4) the Minnesota Court of Appeals concluded that a hospital's enactment of a rule requiring all of its staff urologists to be available to treat at the hospital within 30 minutes of a request was not "professional review activity." The court reasoned that because the rule applied to all urologists at the hospital, not just to the physician challenging the...