Laws Governing Peer Immunity, Physician Credentialing Upheld

Donna J. Senft

MANAGED CARE February 2002. ©MediMedia USA

Donna J. Senft

A federal court in Maryland recently addressed challenges to several laws governing physician credentialing. The challenges arose when a physician whose hospital privileges were revoked filed a civil action against the hospital and 14 individuals involved in its credentialing process, along with the state of Maryland and the United States. The physician also alleged violations of the Americans with Disabilities Act and the Federal Rehabilitation Act. Last May, the U.S. District Court of Maryland dismissed all of her claims.

The suit grew out of the plaintiff physician’s application for reinstatement of privileges, which was approved through November 1999. This decision was later revoked, with privileges extended only until April 1999 while the committee considered her reappointment, which it ultimately denied. The physician challenged the decision and requested a hearing, resulting in a January 2000 recommendation to provide a one-year retroactive reappointment.

An appellate review committee recommended in April that reappointment be denied. This recommendation was accepted and the physician’s privileges were terminated. Subsequently, she filed a complaint asserting multiple claims (in bold text, below) challenging the constitutionality of the state physician credentialing law and related regulations, and the federal Health Care Quality Improvement Act (HCQIA).

Physician-credentialing law

Fourteenth Amendment and Section 1983 violation. Maryland law requires hospitals to establish a physician-credentialing process with biannual formal reappointments. Regulations provide specific standards for reappointment processes, including analysis and documentation of the physician’s performance, including the doctor’s “attitudes, cooperation, and ability to work with others.”

The physician challenged Maryland’s physician-credentialing law and corresponding regulations, stating the language violated her right to free speech and right to due process, and was unconstitutionally vague.

Neither the 14th Amendment nor a Section 1983 challenge provide relief for “private conduct” by an individual. Because the defendant hospital is a private facility, the physician would have had to demonstrate that the hospital and the 14 peer reviewers were functioning as state actors to sustain a constitutional challenge against them.

The court determined that the regulation merely requires a hospital to establish a formal reappointment process consisting of objective criteria, such as ability to work with others. Because the regulation does not require the hospital to make a specific decision, there is no state actor and the constitutional challenge fails.

Violation of due-process rights. The physician also alleged that Maryland’s regulatory requirement that hospitals consider “attitudes, cooperation, and ability to work with others” when making reappointment decisions is too vague and unrelated to patient care.

To succeed in a due-process argument, the plaintiff would have had to prove that the regulation was not rationally related to a legitimate state interest. Following the lead of other U.S. courts, the Maryland district court quickly found that such rational relation exists. Disruptive conduct and an inability to work in harmony with other members of the health care team may have an adverse impact on patient care.

Therefore, hospitals have the right to base credentialing decisions on behavioral factors, such as attitude and cooperation. The court also determined that the regulatory language clearly notifies a physician of conduct that might result in a loss of hospital privileges.

Put another way, the regulation codifies the common-law right that allows private hospitals discretion to determine whom to grant practice privileges to — a point the court emphasized.

Equal protection. The physician argued that the regulation could not be uniformly applied and thus violated the Equal Protection Clause. She alleged that her fundamental right to free speech was violated and that she was the victim of sex discrimination. There is no gender-specific language in this regulation and no restrictions on freedom of speech. The court again was required to apply the rational-basis test. For the same reasons, this argument failed.

Health Care Quality Improvement Act

The HCQIA was established after Congress recognized a need to “restrict the ability of incompetent physicians to move from state to state without disclosure or discovery of the physician’s previous damaging or incompetent performance.”

This act also limits the liability of those who participate in professional-review actions and explicitly defines such an action. The court did not decide whether the plaintiff could have sustained her challenges to the act, but noted that even if she did have a cause of action, it would have failed for the reasons below:

Due process and equal protection. As with the state law, the language of the federal act neither distinguishes between classes of people nor restricts fundamental rights. The burden is on the plaintiff to prove that the act is not rationally related to a legitimate government interest.

The court recognizes that providing some limited immunity to peer reviewers ensures honest peer-review discussions, and that more effective peer review will lead to improved health care — a legitimate governmental interest.

The physician claimed that her due-process rights were violated because of vague language in the peer-immunity provision. Specifically, immunity is granted when the reviewer acts “in the reasonable belief that the action was [taken] in the furtherance of quality health care.”

The court noted that, unlike the state regulation, the federal statute does not establish standards when evaluating physician performance, but merely sets standards for the reviewers. This establishes an objective “reasonable person” test — a test that the courts have applied for years — so the court struck down the vagueness argument.

The court did not specify whether the physician had a protected liberty or property interest in her medical privileges, but it determined that even if the interest was protected, the HCQIA does not outline specific procedural steps for deciding whether to grant or deny privileges — only that actions not be taken until “adequate notice and hearing procedures are afforded to the physician.” The court concluded that the act does not deprive a person of due process rights, but acts to ensure that peer review is procedurally fair.

10th Amendment violation. The 10th Amendment ensures that the federal government does not infringe on state sovereignty. Congress always has had the ability to regulate matters of interstate commerce. In creating the HCQIA, Congress acknowledged that the adoption of the National Practitioner Data Bank would prevent incompetent physicians from re-establishing a practice in another state.

Nothing in the HCQIA requires state governments to take certain actions. The reporting provisions apply to individual health care entities. State medical licensing boards have certain reporting requirements as well, but these are not seen as unduly burdensome. Additionally, states are free to license, discipline, and regulate physicians in any manner they choose.

Donna J. Senft practices health law at the Baltimore firm Ober, Kaler, Grimes, & Shriver.