The Health Care Quality Improvement Act (HCQIA), 42 U.S.C.A. §11101 et seq., is a federal law that has, inter alia, a goal of fostering meaningful peer review within health care entities, without participants having a fear of legal action based upon their participation. In accordance with this goal, HCQIA provides statutory immunity from damages to professional review bodies and certain others associated with it, as long as they comply with the HCQIA.
With the many positives of the HCQIA, there are certain negatives. For example, individual physicians who are the subject matter of peer review actions and suffer adverse consequences arising out of those proceedings may find themselves without any legal redress. One must bear in mind that often, when an adverse result occurs to a physician stemming out of a peer review action, such as a loss of medical staff privileges, there may be collateral consequences including but not limited to a report to the National Practitioner Databank (NPDB) that will be published to the physician’s state licensing authority, other hospitals where the physician has privileges and to all the insurance companies with which the physician practices. These other entities may then take action against the physician. In a worst-case scenario, a physician may find him or herself without a medical career and no legal redress.
As noted above, the HCQIA does have certain mandates in order for immunity to attach. A peer review entity is presumed under the law to have met these conditions, unless a preponderance of the evidence demonstrates otherwise.
This June, the Pennsylvania Superior Court opined on a physician’s appeal stemming out of a professional review action that resulted in a loss of employment and his medical staff privileges in the case of Babb v. Centre Community Hospital , 2012 Pa. Super. 125 (Pa. Super. 2012). The physician’s case was dismissed on summary judgment at the trial court level on account of HCQIA immunity for all of the defendants. The Superior Court’s opinion is interesting because it highlights how immunity may apply in some cases and against some defendants and not against others. It further highlights the relevant inquiries for a trial court in determining when immunity should (and should not) apply. This is helpful guidance for lawyers with cases on either side of this argument.
Procedural and Factual Background
The Babb case arose out of the employment relationship between Dr. Terrance E. Babb and the Geisinger Clinic. According to the Superior Court’s opinion, Babb became employed by Geisinger in 1995 and at some point in time the relationship between him and two of his physician colleagues deteriorated. In May 1997, Babb was fired and he invoked a fair hearing pursuant to Geisinger’s policies. According to the opinion, a hearing took place over a series of five sessions from late 1997 into the early part of 1998. The opinion stated that the hearing panel made findings that the evidence supported: allegations of Babb’s inability to work cooperatively; allegations of issues involving medical record keeping; and the occurrence of some irregularity in medical care. According to the opinion, based on these findings, the panel determined that Babb’s conduct “had an adverse impact on patient care.” These findings were accepted by Geisinger’s clinical practice committee and Babb’s termination was affirmed. As a result, Geisinger submitted a report to the NPDB in accordance with the mandates of the HCQIA.
As an additional consequence, on account of his loss of employment by Geisinger, Babb’s staff privileges at Centre Community Hospital (CCH) were withdrawn, as he no longer had malpractice insurance coverage.
In July 1999, Babb reapplied for privileges at CCH. CCH, as part of its review of his application, had the databank report and requested underlying information from Geisinger, which, according to the opinion, Geisinger would not supply without a blanket release from Babb. Babb had certain reasons for not supplying such a release. Ultimately, his application was not accepted by CCH and Babb did not pursue a hearing on this denial. On account of the denial, CCH submitted a report to the NPDB.
After the dismissal of federal law claims in a federal court action, Babb filed suit in state court against Geisinger, the Penn State Geisinger Health System and his two former colleagues (collectively called the “Geisinger defendants” by the court) and CCH. Babb sought monetary damages on state law theories of breach of contract, retaliation, defamation and interference with contractual relations. He also sought injunctive relief relative to the alleged defamation. All defendants eventually moved for summary judgment based upon various theories. The motions were granted in favor of all defendants based upon HCQIA immunity, as stated by the Superior Court, and its determination that Babb “did not provide sufficient facts to overcome the presumption of immunity.” Babb then appealed.
Superior Court Analysis
The Superior Court reviewed in detail the pertinent sections of the HCQIA and associated case law. Significantly, a professional review action must be taken in accordance with four criteria in order for immunity to attach, as per 42 U.S.C.A. §11112(a): “(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 requirement of paragraph (3).” For purposes of summary judgment, the court quoted precedent for the relevant inquiry of whether a reasonable jury could conclude the plaintiff has shown by a preponderance of the evidence that the defendants’ actions were outside the scope of this statutory section.
The court disregarded any of Babb’s arguments relative to Geisinger’s bias and pretextual motives. The court stated these issues are “irrelevant to the objective test of whether the professional review action was reasonable.” Rather, the court stated, “the proper focus for the trial court was whether, viewing all of the information available to it, the peer review body conducted a fair proceeding, made a reasonable effort to obtain the facts and possessed a reasonable belief its action was in furtherance of patient care.”
The court also found incorrect the trial court’s stated inquiry of whether Geisinger had a belief there were patient care issues. The Superior Court stated: “It is not enough that the Geisinger defendants merely believed that patient care issues were implicated, but rather that their belief, and the efforts made to adduce the facts supporting their belief, were reasonable.”
In this regard, the court noted Babb had presented two expert witness reports: one from a physician and another from an attorney. The physician’s report ultimately concluded there was no reasonable basis to question Babb’s patient care. The attorney’s report found the fair hearing panel failed to make reasonable effort to ascertain the facts as to whether Babb’s acts/omissions impacted patient care. The Superior Court concluded that the expert reports, for purposes of a summary judgment motion, raised material issues of fact as to whether Geisinger’s actions were unreasonable. Therefore, it reversed the lower court and determined that Geisinger was not entitled to summary judgment based on HCQIA immunity.
Conversely, it found that the facts produced by Babb did not support a finding that the individual physician defendants had “knowingly” provided the hearing panel with false information. It again reiterated that the individual physicians’ motivations were irrelevant for the analysis. Therefore, the summary judgment decision in favor of the individual defendants was affirmed.
Turning next to CCH, the court disregarded any arguments as to CCH’s motives. Looking at whether CCH made a reasonable effort to obtain the facts relative to Babb’s reapplication for staff privileges, the court stated that Babb incorrectly based his arguments in this regard on CCH’s bias and motives. According to the court, there was no expression by Babb that the procedures and actions were unreasonable outside the context of allegations of bias issues. The court upheld the trial court’s finding that Babb “failed to raise an issue of material fact sufficient to overcome the presumption of reasonableness…” The court also alternatively stated that Babb should have raised issues with CCH at a fair hearing and not for the first time at the trial court.
Lastly, turning to the claims for injunctive relief (for which HCQIA immunity does not apply), the court upheld the grant of summary judgment against CCH only, on account of Babb’s failure to support his underlying claim and to exhaust his legal remedies. •
Vasilios J. Kalogredis is the president and founder of Kalogredis Sansweet Dearden & Burke, a health care law firm, and Professional Practice Consulting Inc., a health care consulting firm, in Wayne, Pa. He can be contacted at 800-688-8314 or at BKalogredis@KSDBHealthlaw.com.
Karilynn Bayus is an associate at the firm. Her practice involves litigation of health care related matters. Bayus graduated from Temple University’s Beasley School of Law in 2006. She may be reached at KBayus@KSDBhealthlaw.com.