March 15, 2010

Indiana Court of Appeals Upholds Hospital's Peer Review Process and Affirms Immunity Under State and Federal Law

Last week, the Indiana Court of Appeals issued its Opinion in the matter of W.S.K. v. M.H.S.B.   In reaching its decision, the Court had occasion to analyze, and ultimately apply, peer review immunity under both Indiana's Peer Review Statute and the Health Care Quality Improvement Act. 

The subject physician, W.S.K., had applied for initial staff appointment and medical privileges at the defendant Hospital, M.H.S.B.  The Hospital ultimately denied the application as a result of the physician's documented peer review history at another facility, as well as his failure to disclose certain information related to this history on his application for privileges at M.H.S.B.  Thereafter, the physician filed a lawsuit in State Court.  The physician sought judicial review of the Hospital's denial of his application, and in doing so, made claims of discrimination, breach of contract, defamation, tortious interference and emotional distress.  The Hospital denied these claims, argued the claims were legally deficient, and also sought immunity for the Hospital's peer review activities under the Health Care Quality Improvement Act ("HCQIA") (42 U.S.C. 11101-11152) and Indiana's Peer Review Statute (Ind. Code 34-30-15-1).  After consideration of the Hospital's motion for summary judgment, the Trial Court granted the motion and entered summary judgment in favor of the Hospital on all counts of the physician's Complaint.  The physician opted to pursue some, but not all of his claims, on appeal.

Peer Review Immunity

In affirming the Trial Court's decision, the Indiana Court of Appeals took note of the extensive due process afforded the physician by M.H.S.B.  Prior to the Hospital's ultimate decision to deny the application, and pursuant to the Hospital's Medical Staff Bylaws, the matter was considered by the Chief of the Department of Medicine, the Credentials Committee, the Medical Executive Committee, a Fair Hearing Panel, and an Appellate Review Committee.  The Court determined that the extent of this multi-level review warranted application of peer review immunity pursuant to both HCQIA and Indiana's Peer Review Statute. 

The Court disagreed with the physician that M.H.S.B. was required to reinvestigate the peer review findings at the physician's other facility.  Under  the circumstances of this case, the Court found M.H.S.B.'s reliance upon these findings appropriate, and irrespective, noted that the physician had ample opportunity to challenge these findings, if he wished to do so, over the course of the multi-level review afforded him at M.H.S.B.

Discrimination

In affirming the dismissal of the physician's claim for discrimination, the Court disagreed with the physician that he had established qualification to obtain privileges at the Hospital.  The  physician argued that because he had obtained the requisite professional training and credentials of a physician, he was qualified for a position on the medical staff.  The physician argued that past disciplinary proceedings, prior job performance sanctions, and certain other personal and professional concerns were not relevant to this determination.  The Court disagreed.  The Court found the physician's position too narrow, noting  that "surely the Supreme Court did not intend to bind the hand of healthcare providers in this fashion." 

Breach of Contract

The physician argued that the Hospital's Medical Staff Bylaws constituted a contract between the Hospital and initial staff applicants such as himself.  Here too, the Court disagreed.  The Court not only found there was no "mutuality of obligation" among the parties sufficient to give rise to a legal contract, the Court also cited to a provision in the Bylaws that expressly stated they were not to be construed as a contract.  The Court further held,  in any event, that the Hospital had complied with the Bylaws by following those procedures set forth in them. 

Defamation

Finally, the Court affirmed the dismissal of the physician's claim for defamation.  The physician argued that the information contained in the Hospital's report of adverse action to the National Practitioner Data Bank and Indiana Medical Licensing Board was false, and therefore, actionable.  In addition to extending immunity to the Hospital for these reporting obligations, the Court determined that the information contained in the reports was truthful, and as a result, the physician's claim failed. 

A copy of the Opinion issued by the Indiana Court of Appeals may be found at:  http://www.in.gov/judiciary/opinions/pdf/03101009ehf.pdf.  

The Hospital in this matter was represented by Christopher C. Eades and Kimberly A. Emil at Hall, Render, Killian, Heath & Lyman, P.C.  Should you have any questions, please do not hesitate to contact your local counsel, or any Hall Render attorney at 317-633-4884.