Court Reverses $33 Million Verdict, Sides with Hospital in Peer-Review Case

The U.S. Court of Appeals for the Fifth Circuit last week ruled in favor of Presbyterian Hospital of Dallas by reversing a lower court decision that awarded $33 million in damages in a peer-review case against the hospital (Lawrence R. Poliner, MD v Texas Health Systems, 7/23/08, No. 06-11235).

The case revolved around a suspension of a doctor's cardiac catheterization lab and echocardiography privileges at Presbyterian Hospital, following a peer review of his performance. The doctor sued the hospital and other doctors involved in his peer review, alleging various federal and state law violations. A district court found that the suspension enjoyed immunity from money damages under the federal Health Care Quality Improvement Act (HCQIA) and granted a partial summary judgment, but the court also decided that whether the temporary restrictions of privileges during the investigation had immunity from money damages presented questions for a jury.

The case proceeded to trial solely on the temporary restrictions of privileges. The jury found for the suspended doctor on defamation claims he had raised. The doctor was able to offer evidence at trial of actual loss of income of about $10,000 but was awarded more than $90 million in defamation damages, nearly all for mental anguish and injury to career. The jury also awarded $110 million in punitive damages. The district court ordered a remittitur of the damages and entered judgment against the defending hospital and peer-review team.

On appeal, the Fifth Circuit held that the defendants are immune under HCQIA from money damages for the temporary restrictions of the doctor's privileges. "The congressional grant of immunity accepts that few physicians would be willing to serve on peer review committees under such a threat," the court noted, citing a Third Circuit explanation that "'the intent of [HCQIA] was not to disturb, but to reinforce, the preexisting reluctance of courts to substitute their judgment on the merits for that of health care professionals and of the governing bodies of hospitals in an area within their expertise.'"

The Fifth Circuit concluded: "Not only has [the doctor] failed to rebut the statutory presumption that the peer review actions were taken in compliance with the statutory standards, the evidence independently demonstrates that the peer review actions met the statutory requirements." An amicus brief filed in the case last year by the American Hospital Association and other heath care organizations urged that hospitals "be allowed the full freedom afforded by HCQIA to protect patients and to improve the quality of care," and that the judgment of the lower court be reversed. Last Wednesday, the Fifth Circuit agreed.

 

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