Poliner: A Reassuring Federal Appeals Court Decision, But a Cautionary Tale and Some Practical Advice for Peer Review Bodies

31 July 2008 Publication
Author(s): Michael M. Biehl Shirley P. Morrigan

Legal News Alert: Health Care

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.

Legal Process
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:

  1. Under the applicable medical staff bylaws, a summary suspension is indicated when the practitioner’s acts constitute a present danger to the health of his patients
  2. Dr. Knochel testified that he did not have enough information to assess whether Dr. Poliner posed a present danger to his patients at the time he asked Dr. Poliner to agree to the abeyance
  3. Dr. Knochel threatened Dr. Poliner with suspension of his privileges if Dr. Poliner refused to sign the abeyance letter, even though according to Dr. Knochel, no one had determined that Dr. Poliner was a present threat to his patients
  4. Three of the four cases referenced in the abeyance letter involved patients Dr. Poliner had treated months prior; thus, those cases could not have posed an immediate danger
  5. Dr. Knochel failed to offer Dr. Poliner any less severe options

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.

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

  1. This case was overturned after a decade of costly litigation. Because of the unpredictability of juries and complex and often highly technical nature of the issues involved, courts are not good places to decide medical issues.
  2. Organizations should always comply with their medical staff bylaws and all internal rules, policies, and usual practices, especially any peer review policy that the organization has adopted. An organization can be creative within its rules, but it should be careful and always seek legal advice if it has any doubts about whether the plan is appropriate.
  3. Organizations should engage in progressive discipline, with summary suspension only used as the last choice.
  4. Thoroughly document every step in the process to retain transparency. Do not wait until there are 40 cases that lead to concerns to evaluate a problematic physician. Ask about each case as it comes up. Schedule extra meetings just to discuss cases if necessary. Identify cases that appear to be problematic and have the committee responsible for peer review decide whether the issue warrants further scrutiny. The physician should not vote as to whether his or her own case merits further evaluation. Ask for a written response by the physician to specific concerns in the case. Evaluate the physician’s response. If it is not persuasive enough to sway the committee, invite the physician to an interview. Give the physician plenty of time to prepare. Be flexible about date of interview, within reasonable limits. Allow adequate time for the interview; do not expect to discuss 40 cases in 10 minutes. Excuse the physician after the interview, as he or she should not vote on his or her own case. The committee should vote on the case, assign it a category, and decide on a course of action. At the very least, the committee should write a detailed letter to the physician stating the category of the case and the aspects of the case that are problematic or below the standard of care.
  5. Avoid closed-door, unwitnessed discussions. These may not have state law protection or privilege as peer review proceedings. Such discussions create “he said/she said” evidentiary problems.
  6. Be very careful if you threaten action. A threatened summary suspension followed by a relinquishment of privileges may be reportable to federal authorities, including the National Practitioner Data Bank, state boards, or both.
  7. Be careful of words and arrangements that are meant to get around reportable events (i.e., “precautionary suspension,” “abeyance,” or “voluntary resignation”) in exchange for not conducting an investigation. If it looks like a duck and quacks like a duck, it may well be a duck.
  8. If there is anyone on the committee who cannot be objective at any point in the process, ask him or her to recuse himself or herself from both the discussion and the decision.
  9. Consider the pros and cons of external peer review. An external peer reviewer may be either too easy or too hard on the physician. He or she may not be willing to testify if the committee decides to take an action that requires a hearing. This can be very damaging. He or she also may require the physician to agree to the review. Peer review bodies can not afford to allow the physician being reviewed to stop an external peer review. 

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our health care clients and colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals:

Michael Biehl
Milwaukee, Wisconsin

Rachelle R. Hart
Milwaukee, Wisconsin

Maureen Kwiecinski
Milwaukee, Wisconsin

Stephanie L. (Lynn) McClelland
Los Angeles, California

Shirley P. Morrigan
Los Angeles, California

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