The development of peer review is linked to the development of hospitals and the increasing responsibility assigned to hospitals for the quality of care rendered by physicians on the hospital medical staff. Its roots have expanded with the onset of managed care. Peer review now is an important tool in all segments of the health care industry for not just the improvement of quality, but for the reduction of health care costs and protection from liability as well.
In an effort to encourage peer review, federal and state legislatures have acted. Most states have statutes that accord protection in the form of immunity and confidentiality. The exact nature of the protection, to whom it applies, and the conferring of immunity on those individuals who participate in the peer review process, all depend on the terms of the individual statute and the case law of the jurisdiction.
The federal Health Care Quality Improvement Act of 1986 provides immunity from antitrust liability for hospitals, health care entities, and those individuals who participate in a peer review process that meets the due process safeguards of the act.
In Pennsylvania, peer review protection took a hit on Oct. 1 when the state Supreme Court ruled that physician peer review at hospitals cannot always be kept confidential. This decision puts Pennsylvania in the middle of the national trend in which state courts have narrowed the confidentiality protections of the peer review process.
In this case, the court unanimously allowed a surgeon access to an audiotape of a hospital board meeting held for the purpose of approving a peer review panel's recommendation. The panel was deliberating the physician's conduct during surgery that allegedly went awry, resulting in the summary suspension of his privileges. Like many state statutes, Pennsylvania's law prohibits disclosure of peer review proceedings in civil lawsuits seeking damages for medical mishaps — usually the focus of a peer review panel hearing.
The deciding factor was the court's determination that the physician's challenge to his review did not concern his performance as a doctor but, instead, whether the process was carried out in a fair manner. The physician challenged the peer review determination as unlawfully and improperly accomplished through coercion condoned and promoted by the hospital.
The physician believed, and therefore proclaimed, that evidence of this coercion (and, hence, unmitigated subversion of his minimum due-process rights) existed on the tape used to record the board meeting. The physician maintained that at the meeting it was revealed that two physicians largely responsible for the physician's suspension acted with ulterior motives.
Since the physician's concern was not the underlying medical matter that led to his suspension, but rather the fairness and integrity of the board's review of that suspension, the court found that the confidentiality statute did not apply. It noted that the statute was not intended to apply to those "rare" instances where the process is misused.
This ruling, viewed by many as the most important health care decision rendered in Pennsylvania in many years, has rocked the state's medical industry. There is both criticism and support for the court's decision. The lawyer for the physician, not surprisingly, applauded the decision, noting that it would ensure that peer review is not a "star chamber" proceeding that leaves a physician unable to confront his accusers or even learn the nature of the accusation.
Perhaps a tad more objective position, however, was voiced by William H. Mahood, M.D., who serves on the Board of Trustees of the American Medical Association. Mahood was quoted by the Philadelphia Inquirer as having said that the decision "strengthens" the peer review process. He believes that doctors who misuse peer review and act in bad faith should be sued.
An adverse peer review decision can have significant ramifications for the physician in question including, but not limited to, a report to the National Practitioner Data Bank and revocation of hospital privileges. As a consequence, maintaining the integrity of due process is crucial.
Even so, some experts believe that the integrity of due process may have been compromised in light of the decision. Lee McCormick, M.D., past president of the Pennsylvania Medical Society, was quoted by the Inquirer as saying that for the peer review process to work, it has to be confidential. Otherwise, in a small hospital, he noted, patient referrals can influence the outcome of a review.
A leading legal expert in the health care industry believes that this decision will "chill" peer review. Most hospital peer review panels are voluntary, with doctors participating on a rotating basis. The court's decision therefore may very well have a negative impact on peer review.
Courts have striven, and always will strive, to protect due process. The problem is that, even in instances where due process is challenged, the discovery of peer review can have a more widespread effect.
For example, in this particular case, although the court's ruling applies only to the physician's legal challenge to his own peer review, it may lead to a civil suit against the hospital. The physician's lawyer said that his client planned to sue the hospital and certain doctors for breach of contract and defamation.
Based on the court's opinion, he seems confident that his client will be permitted to use the tape recording as evidence in such a suit. This would give rise to McCormick's concern that the peer review process would be dramatically inhibited as a result.
Regardless, the court's decision is correct — at least from our perspective. While we disagree with the characterization of peer review as a star chamber, the potential for abuse cannot be denied. The erosion of peer review protection is warranted insofar as it is necessary to maintain the integrity of a process that is designed to protect all participants.
Court holdings like this one should not spell the beginning of the end for peer review. Instead, they should motivate hospitals, managed care organizations, and physicians to implement safeguards designed to improve the process.
Send your comments and questions regarding legal topics to: