On July 23, 2008, the United States Court of Appeals for the Fifth Circuit (Court) overturned a multimillion-dollar jury award to Dr. Lawrence Poliner, a cardiologist who alleged that a hospital and certain physicians improperly suspended his cardiac catheterization lab and echocardiography privileges, causing injury to his reputation and career. At trial, the jury was persuaded that the hospital and its physicians had not acted in good faith during the peer review process and awarded Dr. Poliner more than $360 million in compensatory and punitive damages. The district court reduced the jury’s award to $33 million. Last week, the Court held that all the defendants were entitled to immunity under the federal Health Care Quality Improvement Act (HCQIA) and eliminated the jury award.
The Court generally characterized the defendants’ actions as reasonable and warranted. In addition, the Court held that the good or bad faith of the defendants, and the defendants’ alleged failure to comply with medical staff bylaws, were irrelevant to the determination of whether the defendants acted in an objectively reasonable manner, and were therefore entitled to HCQIA immunity. The Court rejected Dr. Poliner’s assertions of malice and bad faith and concluded that Dr. Poliner failed to rebut HCQIA’s presumption that the defendants’ actions were taken in compliance with HCQIA standards.
This Alert provides a case summary and a number of practical recommendations. Peer review bodies throughout the country should make sure that they do not rely on this case for the proposition that all peer reviewers are safe from liability.
From 1996 to 1998, Dr. Poliner, an interventional cardiologist in solo practice, held privileges at Presbyterian Hospital of Dallas, including privileges to perform procedures in the cardiac catheterization lab, echocardiography, admission, and consultation. Between September and December of 1997, nurses at the hospital filed three reports concerning Dr. Poliner. On May 12, 1998, approximately five months after the reports were filed and while the review of these cases by the department’s advisory committee was still pending, Dr. Poliner admitted a patient suffering from chest pain through the hospital’s emergency room. Diagnostic tests indicated that the patient had blockage in her coronary arteries, and Dr. Poliner performed an angioplasty of one coronary artery, but failed to diagnose a significant blockage in another artery.
The following day, Department Chair Dr. James Knochel learned of the missed diagnosis and, after consultation with other members of the department’s advisory committee, decided that he would seek what he called an “abeyance” of Dr. Poliner’s catheterization lab privileges. The abeyance letter was delivered to Dr. Poliner on the afternoon of May 14, 1998, and Dr. Poliner was asked to sign and return it by the end of the day. Dr. Poliner’s request for additional time to consult with a lawyer was rejected. After Dr. Poliner asked what his options were, and Dr. Knochel asserted that the only alternative was the immediate suspension of Dr. Poliner’s privileges, Dr. Poliner signed the abeyance letter.
In the two weeks following, an ad hoc committee reviewed 44 randomly selected cases and concluded that Dr. Poliner provided “substandard care” in 29 of the cases. On May 27, 1998, the advisory committee, with Dr. Knochel as chairman, met to consider the ad hoc committee’s report and recommended the involvement of an external reviewer and an extension of the abeyance. No outside reviewer could be found on short notice. The committee met again on June 11, 1997 and recommended summary suspension of Dr. Poliner’s catheterization lab and echocardiography privileges by unanimous vote on June 12, 1997.
Dr. Poliner requested a hearing to review the suspension. The medical staff hearing committee concluded that the earlier summary suspension was “justified based on evidence available at the time,” but that Dr. Poliner’s privileges should be reinstated, with a post-procedure consultation requirement for his first 30 patients. This recommendation was accepted by the hospital’s medical board, and Dr. Poliner was informed of the decision by a letter dated November 20, 1998. Although his privileges were reinstated, Dr. Poliner expressed his desire to appeal the June 12 summary suspension to the hospital's committee on professional affairs. Dr. Poliner expressed concern that, although his privileges had been restored, the presence of the summary suspension on his record would continue to be harmful to him. The committee on professional affairs declined to set aside the suspension, a decision that was upheld by the hospital's board of trustees.
Dr. Poliner subsequently filed suit against the hospital, Dr. Knochel, and others involved in the peer review process. He said that the defendants “improperly and maliciously used the peer review process to summarily suspend [his] privileges, thereby causing damage to his interventional cardiology practice.” Poliner claimed that the suspension was motivated by competitors acting in bad faith and asserted numerous claims, including federal and state antitrust claims, violations of the Deceptive Trade Practices Act, and other tort claims.
The district court concluded that there were two separate peer review actions, the May 14 abeyance and the June 12 suspension. The district court also found that participants in the June 12 suspension were entitled to immunity under HCQIA. However, the district court questioned whether Dr. Knochel's threat of immediate suspension was coercive. If Poliner had not freely agreed to the abeyance, the district reasoned that the abeyance was in fact a summary suspension. If so, there were additional issues of fact, specifically, whether the imposition of the summary suspension satisfied HCQIA standards. Prior to submitting the case to the jury, the district court questioned whether the abeyance period actually involved two peer review actions and eventually decided to charge the jury that the May 14 abeyance and the May 27 extension were separate peer review actions.
At trial, the jury found that the professional review related to the May 14 abeyance did not meet the standards for immunity under HCQIA or applicable Texas law. The jury found in favor of Dr. Poliner on all claims, including breach of contract, defamation, business disparagement, tortious interference with a contract, and intentional infliction of emotional distress. The jury further found that the defendants had acted maliciously and without justification or privilege, and awarded compensatory and exemplary damages of more than $360 million.
In upholding the jury’s verdict (but reducing the award), the district court concluded that the jury’s verdict was supported by the following (and other) evidence:
On appeal, the Fifth Circuit Court of Appeals agreed that the May 14 abeyance and the May 27 extension were both “professional review actions” under HCQIA. As a preliminary matter, the Court noted that for the purpose of determining whether HCQIA immunity provisions apply, it does not matter whether the peer review action in question was imposed in accordance with medical staff bylaws, but rather whether the peer review action satisfies HCQIA standards.
The Court began its analysis by reviewing the applicable HCQIA immunity provision and outlining the four HCQIA standards that must be met before a participant in the peer review process is entitled to immunity under HCQIA. The Court noted that when a professional review action meets four requirements, HCQIA provides that participants in the peer review process immunity from liability. To qualify for immunity under HCQIA, the peer review action must be taken: (1) in the reasonable belief that the action was in the furtherance of quality health care; (2) after a reasonable effort to obtain the facts of the matter; (3) after adequate notice and hearing procedures are afforded to the physician involved or after such other procedures as are fair to the physician under the circumstances; and (4) in the reasonable belief that the action was warranted by the facts known after such reasonable effort to obtain facts and after meeting the requirements set forth in the third standard. The Court also noted that professional review actions are presumed to meet HCQIA requirements, unless such presumption is rebutted by a preponderance of evidence.
The Court then examined whether each of the peer review actions, the May 14 abeyance and the May 27 continuation, met the four-prong test described above. According to the Court, both actions were taken “in the reasonable belief that the action was in furtherance of quality health care,” and therefore met the first standard. Notably, the Court asserted that “the good or bad faith of the reviewers is irrelevant” to the determination of reasonableness, and it is not necessary that the action actually advance quality care. According to the Court, the reviewers need only demonstrate that their beliefs were objectively reasonable under the facts available at the time. The Court dismissed Dr. Poliner’s arguments that the actions were maliciously motivated, concluding that the peer reviewers in this case had an “ample basis for concern.”
The Court then considered whether the actions were taken “after a reasonable effort to obtain the facts in the matter.” The Court considered “the totality of the process” leading up to both actions. The Court found that efforts to obtain information during reviews that occurred prior to the May 14 action, and the case reviews that occurred prior to the May 27 extension were sufficient to demonstrate a reasonable attempt to obtain the facts.
The Court also rejected Dr. Poliner’s arguments that omissions in the investigation and Dr. Knochel’s admission that there was insufficient information to justify a summary suspension under the bylaws (“present danger”) indicated that a reasonable effort to obtain the facts did not occur prior to the May 14 abeyance. The Court again emphasized that compliance with medical staff bylaws is irrelevant to a determination of whether HCQIA immunity applies and does not defeat a peer reviewer’s right to HCQIA immunity. However, the Court also asserted that this does not mean that peer reviewers who comply with HCQIA are free to violate applicable bylaws and state law. Although monetary relief may be unobtainable, doctors who are subjected to unjustified or malicious peer review actions can still seek injunctive or declaratory relief. According to the Court, although this lack of potential monetary relief may lead to “harsh outcomes,” such results are a consequence of a congressional decision that the benefits of robust peer review outweigh the burdens of an occasional unjust result.
In its analysis of the third HCQIA requirement, the Court noted that notice and hearing procedures are not required if: (1) no professional review action is taken; (2) the suspension or restriction is not longer than 14 days (during which an investigation is conducted); or (3) the failure to impose immediate restrictions or suspension is necessary to prevent imminent danger to the health of an individual and subsequent notice and hearing procedures are provided. According to the Court, the May 14 abeyance fell within the second exception; that is, the restriction was for a period fewer than 14 days, during which an investigation was conducted. The Court also held that the May 27 extension was acceptable under this requirement because the defendants were “fully warranted” in concluding that further restrictions were necessary to prevent imminent danger, and defendants imposed the extension after procedures that were fair to Dr. Poliner.
Addressing the final prong, the Court considered whether each peer review action was taken in the reasonable belief that the action was warranted by the facts known after such reasonable effort to obtain facts. The Court asserted that both actions were “tailored to address the health care concerns,” and there was an objectively reasonable basis for concluding that the temporary restrictions were warranted; therefore both actions met the requirements of the fourth standard.
Ultimately, the Court concluded that Dr. Poliner had failed to rebut the statutory presumption that the peer review actions were taken in compliance with HCQIA standards, and thus all of the defendants were entitled to immunity.
Practical Advice for Peer Review Bodies
Rachelle R. Hart
Stephanie L. (Lynn) McClelland
Shirley P. Morrigan