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NJ Appellate Court Rejects Physician’s Suit Against Hospital for Revocation of Privileges

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The New Jersey Appellate Division recently upheld a lower court decision to reject a surgeon's lawsuit against a hospital and its Board of Trustees based on both federal and state statutory immunity protections afforded to hospitals and participants in internal peer-review evaluations. 

The suit originated in 2010 when the plaintiff, a general surgeon, had two patients whose cases were reviewed by an independent expert at the request of the Chief of Surgery.  The expert found that the plaintiff failed to provide proactive treatment, prompting an internal review and the plaintiff's privileges were suspended in accordance with the hospital bylaws.  Less than a week after his suspension, the plaintiff sought injunctive relief and the Chancery Division ordered the hospital to provide the plaintiff with the hospital's bylaws, written notice of any adverse action taken against him, medical charts, and a report of the hospital's findings.

During the review, the plaintiff declined three invitations to participate in person.  Instead, he submitted statements in a letter from his attorney.  The committee concluded that the plaintiff's patient care demonstrated poor documentation and delays in management, causing adverse outcomes.  As a result, the committee recommended review of an additional 25 previous surgical cases.  The Chancery Court action was subsequently dismissed upon motion by the hospital.  This spurred the plaintiff to file a motion for reinstatement and a complaint with the Law Division.  The hospital moved to dismiss the motion without prejudice as additional reviews were underway.  The plaintiff did not oppose the motion and the parties entered a consent agreement. 

The hospital hearings were conduced by a panel of physicians with a presiding member from an outside organization.  The panel issued a report in 2012 stating that the plaintiff demonstrated poor judgment, lack of attentiveness, and poor postoperative management.   Notably, the panel also discovered that the plaintiff authored a note falsely indicating he spoke to a patient's mother.  As a result, the Board of Trustees revoked the plaintiff's privileges.  The decision prompted the plaintiff to move to reinstate his Law Division claim, which was denied.  The plaintiff again moved for reinstatement of his claims and filed a Third Amended Complaint, which also named for the first time the Board of Trustees as a defendant.  Law Division Judge Kenneth J. Grispin denied the plaintiff's second motion as it found that plaintiff failed to plead malice as required to rebut the presumption of reasonableness provided by the federal Healthcare Quality Improvement Act of 1986 ("HCQIA") given the record of extensive investigation.   

Plaintiff appealed the decision, contending that the trial court prematurely enforced the defendants' statutory immunities from monetary damages and arguing that the court should have afforded him the opportunity to conduct depositions and further discovery.  While he admitted that some of his patients had not been managed perfectly, plaintiff argued that the revocation of his privileges by the Board of Trustees was unduly harsh.  Accordingly, plaintiff requested that the trial court's order be vacated and that his lawsuit be reinstated for completion of discovery and a decision on the merits.  Defendants maintained that the trial court properly enforced the federal and state immunity statutes, which are designed to protect hospitals and participants in internal peer reviews from having monetary liability to sanctioned doctors.

The three-judge appellate panel supported the trial court decision, highlighting the HCQIA as well as NJSA 2A:84A-22.10, a New Jersey statute that similarly shields hospitals from monetary liability to sanctioned doctors, so long as the peer review investigation was conducted in a fair and reasonable manner.  Even viewing in the light most favorable to the plaintiff, the appellate panel agreed with Judge Grispin that the hospital was entitled to immunity from damages and that the plaintiff failed to present a sufficient basis to overcome those immunities. 

The hospital's review of the plaintiff's performance squarely fit within the definitions provided by HCQIA of "professional review activity" and "professional review bodies," and was thus afforded immunity so long as they acted under the reasonable belief that their actions were in the furtherance of quality healthcare, made a reasonable effort to obtain the facts of the matter, and provided adequate notice of hearing procedures to the physician.  Similarly, NJSA 2A:84A-22.10 broadly protects any person involved in a review and applies so long as the action made was "without malice in the reasonable belief after reasonable investigation that such action or recommendation was warranted upon the basis of facts disclosed."  

The appellate court found no plausible indication that defendants failed to comport with the HCQIA or the state statute.  Although a physician is entitled to a fair and unbiased tribunal and a right to limited disclosure of certain information, the HCQIA grants deference to hospitals making difficult decisions regarding clinical privileges, which is manifested by the law's presumption of immunity. 

As for plaintiff's request for additional discovery and a case to be decided on its merits, the appellate court ruled that the challenger's "right to obtain discovery, particularly depositions, in cases involving immunity statutes is not absolute.  Instead, the court may curtail discovery in its discretion if there are no reasonable indicia that a factual basis to surmount the immunities will be uncovered." 

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