• Hospitals may rely upon peer review reports and information provided by other hospitals in reaching their own credentialing decisions without conducting an independent investigation of the prior issues;
• Medical Staff Bylaws do not necessarily constitute a contract; and
• Well documented incident reports, meeting minutes and correspondence continue to be critical components to demonstrate a Hospital's good faith and reasonableness in peer review proceedings.

Background

In W.S.K. vs. M.H.S.B., a physician ("Physician") appealed the denial of his application for medical staff membership and clinical privileges by a Hospital ("Hospital B").  In denying the application, the Hospital B Medical Staff relied upon a lack of veracity by the Physician in the credentialing process, as well as negative peer review information from a prior facility ("Hospital A").  Hospital A had extensive documentation regarding a variety of concerns, including the Physician's lack of responsiveness to pages, poor relationships with the nursing staff and a failure to adhere to the Medical Staff documentation rules.  Hospital A's concerns extended over a period of years and, among other things, reflected:

• Multiple incident reports identifying problematic Physician conduct;
• Repeated efforts by Medical Staff and administrative leadership to address these concerns with the Physician, i.e., Medical Staff Committee meeting minutes, correspondence to the Physician and notes of 1:1 discussions;
• Compliance by Hospital A with Medical Staff Bylaw and Committee processes in reviewing and evaluating the concerns raised, as well as the efforts to communicate behavioral expectations to the Physician; and
• A three part recommendation imposed on the Physician including an administrative suspension, a letter of reprimand and six (6) months probation.

When applying for privileges at Hospital B, the Physician denied having been subject to remedial action at Hospital A.  Hospital B asked the Physician for a release authorizing them to receive peer review information from Hospital A.  Upon receipt, it became apparent that the Physician had not accurately answered questions on the Hospital B application.  Based on this lack of candor and the concerns at Hospital A, Hospital B denied his application.

The Physician argued that Hospital B failed to make a reasonable effort to investigate the facts involved at Hospital A and so failed to satisfy one element of the four part test to quality for immunity under the Health Care Quality Improvement Act ("HCQIA").  The Physician urged the Court to find Hospital B's simple reliance on the Hospital A report was inappropriate, arguing that Hospital B should have independently corroborated Hospital A's findings and conclusions. The Court disagreed, holding that Hospital B was entitled to rely on Hospital A peer review information absent circumstances or events which cautioned against doing so.  In this case, no such issues were alleged or proven. Hospital B's reliance on the third party peer review information was appropriate and so satisfied the requirements for HCQIA immunity. 

The Court's holding offers insight into key aspects of well conducted peer review activities. Hospital A had carefully and thoroughly documented issues with the Physician over a period of years. Their concerns had been considered via a multi-layered Medical Staff Committee process that appropriately included the Physician and allowed for his input.  The Court also found that Hospital B's review of the Physician's application included not only the work of Hospital A, but also relied upon the evaluation of twenty five (25) persons at Hospital B, including twenty (20) physicians, all but one of whom voted against his application. 

In summary, Medical Staff Committees engaged in peer review should ensure they have consistent, detailed and accurate documentation supporting their decisions, including committee minutes evidencing a review of incident reports and appropriate follow-up. Contacts with affected physicians should be recorded via correspondence or memos. Affected physicians must be afforded reasonable opportunities to participate in the discussions.  These steps, along with compliance with Medical Staff Bylaws and policies, provide a reliable framework upon which good faith peer review decisions can be defended and serve as strong evidence that the process qualifies for immunity under HCQIA.

If you have any questions about this matter, please contact James B. Hogan at (317) 977-1439 or jhogan@hallrender.com, Brian C. Betner at (317) 977-1466 or bbetner@hallrender.com, or your regular Hall Render attorney.