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Daniel Horowitz provides legal advice and defense if you face an MEC inquiry or peer review. These proceedings have short triggers and we can provide a better defense if you contact us early in the process. To learn more about the peer review process continue reading. If you need immediate help fill out our “Confidential Contact Form” above.

AMA CODE OF MEDICAL ETHICS OPINION 9.4.1 Addressing “Peer Review”

“Physicians have mutual obligations to hold one another to the ethical standards of their profession. Peer review, by the ethics committees of medical societies, hospital credentials and utilization committees, or other bodies, has long been established by organized medicine to scrutinize professional conduct. Peer review is recognized and accepted as a means of promoting professionalism and maintaining trust. The peer review process is intended to balance physicians’ right to exercise medical judgment freely with the obligation to do so wisely and temperately.”

Click Here for AMA Chapter 9

PEER REVIEW IS MANDATED BY LAW

All states are mandated by federal law to have a system of rules that allow medical groups and hospitals to investigate the conduct, performance and fitness of physicians to perform their duties. The purpose of peer review is to ensure that patient care issues are quickly addressed by a physician committee (MEC) that has the power to suspend a physician’s ability to practice or require remedial training in order to improve performance.

Hearings under these laws give limited rights to physicians and negative peer review findings are often reportable to state medical commissions / medical boards and to the National Practitioner Data Bank. Peer review may be initiated at the request of a patient, physician, or an insurance carrier.

DOCUMENTS YOU WILL NEED

When we speak to you about a peer review proceeding we will ask for your employment contract and the entity “by-laws”. The “by-laws” will spell out the specific rules for the peer review hearing e.g. does the “judicial” officer get to participate in the deliberations either by rule or by invitation (per rule); is there an internal post decision appeal process? Is that appeal mandatory ? If you have an ownership or partnership interest we will need the corporate documents (all of them !) as well.

However, we understand that many physicians do not have copies of these documents. Do not let the search for documents delay your MEC response or Peer Review defense.

PEER REVIEW LAWS MANDATE THAT YOU BE REPORTED

Part of the difficulty with “peer review” is that negotiated resolutions do necessarily resolve the issue.

Once discipline reaches a certain threshold, it must be reported. (There are differences between states on this.) California’s Peer Review law is typical of laws in many other states. The laws mandate that medical groups and hospitals report a physician under certain circumstances. The failure to report can result in serious sanctions.

Image of California Medical Board Peer Review Reporting Form. reflecting the type of form used by peer review groups or other groups to targeted physicians

Section 805(k) of the California Business and Professions Code states: “A willful failure to file an 805 report by any person who is designated or otherwise required by law to file an 805 report is punishable by a fine not to exceed one hundred thousand dollars ($100,000) per violation. A physician who fails to report can be disciplined by the medical board. In other words, even a friendly physician may be forced to report you. (See also Section 805(l))

We can often negotiate the language of the reporting and narrow the scope of the conduct that is reportable. (See Sample Reporting Form)

DUE PROCESS OF LAW

Shows the 14th amendment snippet regarding life liberty and property with reference to limited rights that physicians have in medical-legal proceedings.

If you choose to contest a peer review / MEC decision you can demand a peer review hearing. Never confuse a “peer review hearing” with a courtroom proceeding. The Constitution of the United States barely exists in these peer review chambers.

Due Process Clause of the United States Constitution guarantees “due process of law” before the government may deprive someone of “life, liberty, or property.” (5th & 14th Amendments) For reasons which are established but which we, as physician’s attorneys do not accept, “due process” does not apply to MEC investigations and peer review actions. Read this excellent Law Review Article by Professor Amy Moore explaining both the law and history of the federally mandated peer review and reporting process.

If you go to the AMA website on peer review they state that “Fairness is essential in all disciplinary or other hearings where the reputation, professional status, or livelihood of the physician or medical student may be adversely affected.” They also reference “due process”. “Collectively, through the medical societies and institutions with which they are affiliated, physicians should ensure that such bodies provide procedural safeguards for due process in their constitutions and bylaws or policies.” (See AMA page “Peer Review & Due Process“) See also AMA Policy Paper titled “Legal Protections for Peer Review H-375.962”

But the AMA’s view is only partially “the law”. Yes, there must be some level of fairness but legally “fairness” under “due process” is a very high level of equity and fairness in the abstract is not as rigorous as fairness as defined by “due process”. The basic outlines of peer review are contained in a federal law that mandates the basic rules and gives each state the option of formulating their own rules which comply with basic rules of non-due process fairness. See: Health Care Quality Improvement Act of 1986, 42 USC 11133)

An excellent white paper on this subject is published by the AAEM. The paper takes an upbeat view of physician’s rights in the sense that the AAEM applies basic concepts of due process to a variety of physician related legal matters. The court cases on the subject are often less positive on this subject.

See also AAEM Position Paper on Due Process.

CONGRESSIONAL HISTORY OF PEER REVIEW

The present peer review process started in 1986 when Congress passed the Health Care Quality Improvement Act of 1986 (HCQIA; 42 U.S.C. §§ 11101–11152), which “envisioned minimal due process rights for those involved in the peer review process.” (Merkel, Physicians Policing Physicians: The Development of Medical Staff Peer Review Law at California Hospitals (2004) 38 U.S.F. L.Rev. 301, 318. HCQIA allows states to opt out if their own legislation includes certain basic procedural protections.

STATES OPT OUT AND CREATE THEIR OWN PEER REVIEW RULES

Many states create their own federally compliant Peer Review rules. They all attempt to provide some level of fairness but have different procedures and different paths to judicial review.

Consider California:

In 1989, the Legislature chose to opt out of HCQIA and “design its own peer review system” because of perceived “deficiencies in the federal act and the possible adverse interpretations by the courts.” (§ 809, subd. (a)(2).) California’s peer review statute was codified in sections 809 through 809.9, became effective January 1, 1990, and established minimum procedural standards that must be followed in certain peer review proceedings. (Selma Hospital, supra, 164 Cal.App.4th at p. 1483, 80 Cal.Rptr.3d 745.) Bichai v. DaVita, Inc. (Cal. Ct. App., Dec. 20, 2021, No. F079815) 2021 WL 6000005, at *5

Attorneys Take the Federal Rules that Became State Rules & Write Them to Suit the Lawyers !

Medical staff bylaws increasing the statutory burden of proof are unenforceable, entitling physician to a new peer review hearing

In a recent case, Bichai v. DaVita, Inc. (Dec. 20, 2021, F079815) _ Cal.App.5th _ [2021 WL 6000005] a rule written by lawyers and inserted in the by-laws governing DaVita Inc.’s medical staff at its dialysis facilities, was found to be improper.

The short version of the case is that the doctor was challenging DaVita’s refusal to reinstate privileges. The doctor demanded peer review but the peer review hearing was impossible to win. The lawyer written by-laws required that the doctor prove that the decision to deny the application lacked a substantial factual basis. All lawyers know that this means that any excuse in the record to justify the finding will be enough even if a mountain of evidence is on the side of the doctor. The result was for all practical purposes, rigged.

That extreme (non)-standard does not exist in the federal law that spawned the state law that required the creation of governing by-laws. But it appeared in the by-law(s) and no case specifically said it was improper so there it was. The doctor was David against Goliath.

To challenge the rule, the doctor had lose and then file a writ (a request for urgent relief) with a real judge in the Superior Court. He had a chance but he lost. Spending more money and time, he didn’t quit but instead asked the Court of Appeal to review the decision of the Superior Court judge.

Finally, he won ! The Court of Appeal said that these lawyer written rules contradicted the state law. The state law is contained in Business & Professions Code § 809.3 (b)(2). The state law says that the doctor only had to show that he was qualified by a preponderance of the evidence. That term means that it is more likely than not (that he qualifies). A shorthand name for this rule is the 51% rule. He has to prove his case 51% vs. 49% (or better).

But did he win ???? This victory didn’t mean that the doctor was reinstated. It only meant that he got a new hearing where the proper legal standard had to be applied. Still, it was a victory and we congratulate the intrepid doctor and his fine attorneys for their success. The hard lesson is the fact that as physician lawyers we have to balance the costs of being right.

CLICK HERE – Links to a Million $ + Judgment for a Physician Against His Former Medical Group

The doctor was engaged in this battle since 2017. Had he invested his legal fees in stocks, bonds or a business, would he have been better off ? Does he now have a lawsuit to file against DaVita ? We carefully balance all of the competing interests and have honest discussions with our clients.

A CLOSER LOOK AT BY-LAWS

Peer review is rarely on a physician’s mind when he/she contacts us and asks us to review a contract. This is the honeymoon phase of contract negotiation and hopes and dreams are “good” and “worst case scenarios” are often ignored. But many traps can exist in by-laws.

In many states the medical group or hospital “by-laws” define the rules for peer review. By analogy consider how a President can change the economic landscape by altering administrative rules. Once administrative authority is delegated by Congress, the Executive Branch has extraordinary power. This same type of delegation is included in the laws of many states. A set of “by-laws” establish the rules of “fairness” which apply to proceedings. While the by-laws have to have some semblance of fairness, in practice they can create an Alice in Wonderland scenario into which you are involuntarily drawn.

Some issues which you may confront include:

Do you have input in selecting the hearing officer or is that officer appointed by the group or hospital ?

If there is an adverse finding is there an internal process to appeal? Or must you go immediately to state court ?

And how fair does that quasi-judge (called the hearing officer) have to be ?

Can the panel as the “judge” to help deliberate ?

What about financial conflicts ? What if the proposed hearing officer is potentially going to be hired by the complaining hospital sometime in the future ?

In Natarajan v. Dignity Health (2021) 11 Cal.5th 1095, reh’g denied (Oct. 13, 2021) the California Supreme Court found that the prospect of potential future employment was not enough to render the hearing officer biased against the doctor. The hearing officer’s contract prohibited further appointments at hospital for a period of three years, and though the contractual bar did not extend to other hospitals across the health network, there was no evidence that health network actually controlled the decision to hire hearing officer, who was appointed by hospital’s president via delegation of authority by hospital’s medical staff in its bylaws. (See: Cal. Bus. & Prof. Code § 809.2(b))

PEER REVIEW IMMUNITY

In general, all participants in a peer review hearing are protected against lawsuits arising out of the process. There is good public policy behind this. A group cannot deliberate impartially if they are subject to personal lawsuits by a wealthy but disgruntled physician who has truly earned discipline. However, these same legitimate reasons for protection also protect Peer Review inquires and hearings that are unfounded, prejudicial and improperly motivated.

PEER REVIEW IMMUNITY IS NOT ABSOLUTE

But this protection is not absolute. Consider this recent New Jersey case. (We have put the important parts in bold).

Here, the Court finds that Plaintiffs have plausibly alleged that the AHC, the Hearing Panel, and Webb are not entitled to immunity under the HCQIA or New Jersey’s peer review statute. As described above, Plaintiffs have alleged, among other things, that (1) Dr. Alexander received inadequate notice of the misconduct charges against him at both the AHC Hearing and the Article IX Hearing … (2) the procedures in connection with the AHC Hearing and Article IX Hearing and procedural rulings by the AHC and Hearing Panel were unfair, and, (3) that the MEC initiated the peer review process without sufficient evidence to support the charges against Dr. Alexander and for the purpose of eliminating his competition with the NYU Group, not in the furtherance of quality health care.

These allegations are sufficient to defeat HCQIA immunity at the motion to dismiss stage. Nahas, No. 13-6537, 2016 WL 1029362 at *11 (refusing to dismiss claims based on HCQIA immunity where the plaintiff alleged, among other things, “he was subject to unfair internal review procedures”) Alexander v. Hackensack Meridian Health (D.N.J., Sept. 30, 2020, No. CV 19-18287) 2020 WL 5810526, at *9)

A recent Tennessee case compares the state MEC procedures with the requirements of the federal law and finds that if there is substantial non-compliance the protections do not apply.

Thus, in determining whether a peer review participant is immune under the Health Care Quality Improvement Act, the proper inquiry for the court is whether [a physician] has provided sufficient evidence to permit a jury to find she has overcome, by a preponderance of the evidence, any of the four statutory elements required for immunity under 42 U.S.C. § 11112(a). Ashraf v. Adventist Health System/Sunbelt, Inc. (W.D. Tenn., Aug. 13, 2019, No. 217CV02839SHMDKV) 2019 WL 4180526, at *11, report and recommendation adopted (W.D. Tenn., Sept. 3, 2019, No. 17-CV-2839-SHM-DKV) 2019 WL 4179534

Under HCQIA there is broad but not absolute immunity. That statute “provides immunity from money damages for peer review actions taken in compliance with the statute’s requirements ….” (El-Attar v. Hollywood Presbyterian Medical Center (2013) 56 Cal.4th 976, 988; see 42 U.S.C. § 11111(a)(1).)

In California protections also have clear exceptions.

Civil Code § 43.7 provides qualified immunity to acts taken by a member of a committee of a hospital’s professional staff when those acts are “performed within the scope of the functions of the committee,” and the member “acts without malice, has made a reasonable effort to obtain the facts of the matter as to which he, she, or it acts, and acts in reasonable belief that the action taken by him, her, or it is warranted by the facts known to him, her, it after the reasonable effort to obtain facts.” (Civ. Code, § 43.7, subd. (b).)

However, immunity under 43.7 & 43.8 is qualified, and “proof that the communicator knew the information to be false when it was conveyed establishes malice sufficient to defeat [it].” (Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 723; see Civ. Code, § 43.8, subd. (c).)

CONFLICTS OF INTEREST

Medical Peer Review committees are selected by the same entity that conducts the inquiry. Doctors who serve on the committee are vulnerable professionally as it rarely benefits them to support the individual physician. Medical Conflicts of interest can arise when a particular device or procedure is being questioned and the peer review group gets funding or benefits from a competitor. (We check on the CMS Open Payments website for outside funding to MD’s). Significant investigation using legitimate search tools helps reveal gross conflicts which may justify recusal of a particular peer review juror. But ultimately these hearings are uphill battles found with a jury that would never survive a United States courtroom challenge for bias. Read this article, Best Practices for Recruiting Peer Review Committee Members for insight into a good faith peer review selection.

Compare conflict of interest policies for peer reviewed journals with the sparse policies for peer review committees or medical board expert reviewers. In the right case, this should be raised both at the administrative / investigative level and if need be, in the courts. Learn more about Medical Board actions and peer review.