May 2002  

I have combined these two topics for this newsletter since they are intimately intertwined in practice.  The medical staff needs to have excellent performance improvement data in order to find if any peer review is needed.  I must also up front disclose my biases.  I believe strongly in being innocent until PROVEN guilty.  This is why I defend physicians in peer review matters and make a good hearing officer.  If the physician is truly over the line, I will not defend him/her but instead will try to negotiate the best settlement I can for my client.  However, I have found many instances of a physician being peer reviewed for political and not quality concerns.  Those I will vigorously oppose.  

Performance Improvement

When I first started in medical practice many years ago we had tissue committees in the surgical department to compare the pre-operative diagnosis and operation to the surgical specimen.  If they did not jibe we looked at the chart and maybe pulled other charts of the physician.  This was a waste of everyone’s time.  The pathologist could do this and if there were any major discrepancies the chief of the department could be notified.  

The next in the evolution was to find the “bad apple” by random pulling of charts of random physicians for review by the division or department. This was called quality assessment and worked as well as the tissue committee. It didn’t.  

The current format utilized in most institutions is performance improvement. This is where the division or department set certain criteria and the charts are reviewed by nurses for trends against those criteria or in rare instances outright problems. The problems usually are bought to light by either incident reports or a problem found by trending against the established criteria.  If there are either trends established or the outright unexpected bad outcome, those charts are reviewed by either the chair of the division or department as a whole.  This has dramatically cut back the busy work for the physicians.  

An example of how the department chief can make a difference was an instance where a surgeon was found to have many abscesses after colon resection.  As department chief I looked at all the records and found the problem was the discharge coding, not the surgeon.  The resected colons had diverticular abscesses in the pathological specimens but no post operative pelvic abscesses.  I explained this to the review nurses and the coding people and there were no further problems.  The physician was never even notified of a potential problem.   

If there is truly a problem, the physician is invited or required to attend a meeting to discuss the case(s).  Most times this ends the problem as there are reasonable explanations for the issue. Also it has been found in most studies that medical problems are not the fault of individuals, but systems. It is my belief that there are almost no “bad apples” left anymore and that almost all problems are system related. These system problems can be better reviewed and fixed by a multi-disciplinary committee than by blaming any individual physician, nurse or other provider. In the recent rash of wrong site surgery the problem has been a breakdown of the system utilized to prevent the incidents and not the fault of any one particular person.   

Peer Review  

In the rare instance where there is truly a trend or other information such as malpractice cases coming to light showing a potential problem physician, peer review should be performed.  What is peer review?  It is an investigation by the physician’s peers of whether the practitioner is an imminent threat to patients and deserves summary suspension or restriction of privileges or questions about the quality of care given by the practitioner which deserve more considered deliberation prior to any action.  The entire process should be part of the medical staff’s bylaws.  Medical staffs should also consider the use of informal dispute resolution instead of corrective actions for minor deficiencies or drug and alcohol problems.  The latter is an appropriate referral to the medical staff’s diversion program.  

There is a difference between summary suspension and automatic suspension.  The latter is late recredentialing, medical record or other regulatory problems and has nothing to do with quality of care.  These actions do not need to be reported to the State or the National Practitioner Data Bank (NPDB) and should be enumerated in the medical staff bylaws.  

Summary suspension or restriction of privileges is just that and should only be used when the accusations are so severe as to pose an immediate threat to patient welfare.  An example would be a physician reporting to the operating room intoxicated or under the influence of drugs. After the summary suspension or restriction, which can only be done by the individuals enumerated in the medical staff bylaws, the practitioner deserves an immediate hearing before the Medical Executive Committee.  This group should either continue the suspension and give the physician his/her rights to a due process procedure (discussed later) or reverse the decision and return the practitioner to full status.  Some hospitals have bylaw requirements to do a formal peer review on a summarily suspended or restricted practitioner within a certain amount of days. HCQIA does not pose a time limit of when the practitioner should get the hearing. In some states if a practitioner is suspended for more than a certain number of days as provided in the state laws there needs to be a report to the State Medical Board.  

What happens in reality is the hospital attorney gets involved and states that the case may not be strong enough so all the physician’s cases are then scrutinized.  This takes significant time and may lead to a second charge of multiple quality problems to bolster the original complaint.  The physician is left on a limb without hospital privileges during this investigation and not allowed to defend him/her self on the original charge during the time allotted by the bylaws.  The eventual peer review, many weeks or months later, will then encompass both the original case and the other cases that were not picked up originally. This is not fair to the physician.  The physician should be allowed to defend him/herself on the original charge and then if exonerated and other problems are brought to light, a second peer review should be held.  Yes, I realize this costs a significant amount of time and money for both the hospital and the physician, but what would you want if it was you?  

Assuming the peer review is not for a summary suspension but for potential quality of care issues, the procedures of the medical staff bylaws must be followed.  Please note that it is my opinion that those practitioners that argue against the hospital policies and do not interfere with quality of care except to attempt to improve it are not disruptive physicians. (Please see my article on disruptive physicians at  The bylaws are usually fashioned after the federal (Health Care Quality Improvement Act, HCQIA) or state law (California Business and Professional Code 809) of what is required for adequate due process.  This includes notice of all charges with enough specificity to allow the practitioner to defend him/herself.  These charges usually start from the Division or Department and then the final decision to recommend actions against the physician comes from the Medical Executive Committee (MEC).  The MEC also is in charge of who does the necessary investigation into any allegations.  It is the time after the MEC makes its recommendation and prior to the forwarding of that recommendation to the Board that the peer review proceedings take place. There are strict time elements in most bylaws that must be followed. The notice must also state what will happen if the charge is substantiated including a report to the National Practitioner Data Bank (NPDB) and the state licensing board.   

If the physician wishes to fight the MEC recommendation he/she can request a peer review or judicial review hearing. The peer or judicial review committee is appointed by the Chief of Staff and consists of practitioners that have not been involved in any prior actions or investigations on this matter and who are not competitors of the accused.  In many small hospitals this is impossible to attain.  Those hospitals should utilize outside physicians to perform the peer review.  Many state medical societies and some private organizations will provide the non-competitive physicians.  It will cost money to hire these physicians and they may be placed on the staff temporarily so they may be appointed to your peer review committee and protect the findings from being discovered by a plaintiff’s attorney.  

Prior to the actual hearing, the physician is allowed to inspect and copy all documents used to make the charge.  The hearing body has the same right regarding all documents of the practitioner.  There usually is no discovery of other physician’s records.  There is a possible exception in some cases where the practitioner is claiming discrimination as the basis for the hearing.  

The order of the peer review is like a trial.  The first action is called voir dire.  This is where the physician or the physician’s attorney asks questions to the peer review panel and hearing officer to make sure none are biased, and that they can decide the matter based on its merits. If any bias is found, the individual should be replaced. Following this each side gives its opening arguments and then the medical staff presents its case with written materials and/or witnesses.  The witnesses can be questioned by either side.  Following the medical staff side, the physician presents his/her side also with documents and witnesses.  Again these witnesses may be asked questions by either side.  Finally there are closing arguments by both sides and then the peer review committee deliberates and renders its verdict.  There is usually a hearing officer present during the procedure to keep things moving and rule on any evidentiary matters.  The hearing is not run as a court and some hearsay may be admitted.   

The matter of whether or not an attorney for the physician is allowed may come up.  The rule in California under B&P 809.3(e) is if the peer review body denies the physician an attorney, they can not have one advising them.  In fact, almost all peer review hearings allow the physician to have an attorney present.  I was involved with one that did not and after each question the physician came outside the room to tell me the question and discuss the answer.  After happening several times the committee soon got the idea and I was allowed in the room.  

The burden of proof is different depending on who the accused is.  If the accused is already on the staff the burden is on the medical staff to show that its decision on the purported quality of care problems and proposed punishment is reasonable and fair. The evidentiary standard should be in the bylaws indicating who needs to show by either a preponderance of evidence or clear and convincing evidence in order to prevail.  If the accused is a staff applicant who has been refused staff admittance for a quality of care purpose the burden is on the applicant to show they are qualified for staff status.  

Following the decision a written report describing the decision and the rationale for that decision is made to MEC who convened the peer review panel.  If the decision is against the physician, the physician can appeal to the governing board.  There is potential conflict of interest if the same people sit on the MEC and the Board and also for the medical staff attorney.  If an attorney is representing the hospital medical staff or is a hearing officer at the peer review hearing, it is a conflict to also advise the board at this hearing.  This has been stated by the AMA and upheld in the only post HCQIA case in California to address the issue ( Howitt v Sup. Ct., 3 Cal App. 4th).  

If the governing board, which has the ultimate authority for granting or removing staff membership and privileges, agrees with the decision, the physician can apply in California to the courts for a Writ of Mandate seeking to show the unfairness of the procedure. Any appeal to the court may not be done until the hospital action is complete. In California it is against public policy to contract your fair hearing rights away.   

California does not subscribe to the HCQIA but has its own opt out provision, Business and Professional Code 809. However, under both, there are the same general rights for the practitioner and the same antitrust protections, assuming reasonable due process, for the peer review committee. Under the HCQIA or the state law, one can not get damages for an antitrust violation in peer review but the hospital can be enjoined from removal of the practitioner. Of course there are responsibilities to get this immunity.  The major one is to query the NPDB at least every two years about any reported issues. Others include giving the practitioners their basic due process rights.  

Some of the other immunities under California law are absolute immunity for all testimony to a peer review or other protected entities, even if a lie.  Obviously I believe this is a bad law and there should only be a qualified immunity which would leave out lies and malice.  HCQIA does not give immunity for deliberate lies.   

Depending on the state, the immunity from discovery of peer review hearings can be strong on not.  In California the immunity is strong but in some of the eastern states this is not as true.  In New Jersey, a root cause analysis prepared for a JCAHO requirement was ruled to be discoverable.  Please remember that peer review ONLY applies to state actions such as medical malpractice and NOT to federal actions such as EMTALA or ADA violations.  There is not a federal right of peer review discovery protection.  The other right of discovery in California is by the California Medical Board under an investigative bona fide subpoena.  This doesn’t include the information for any non quality of care reasons. To sum up, peer review records are not protected if subpoenaed by the Medical Board under the investigative subpoena or for their Diversion Program, to the affected physician in a suit against the hospital for the peer review, and in any federal matters. There is also a special rule in Los Angeles where the records may be subpoenaed in a criminal case.   The medical staff should always consult with counsel when faced with any subpoena for peer review records.  

For those serving on peer review panels it is important to make sure the institution for which they are serving has insurance to defend and indemnify them in case of any lawsuit against them for their peer review work.  Remember, defending a suit can be very expensive, even if you win.     

Following the conclusion of the hospital’s action if the allegations against the practitioner are upheld, the hospital has a duty to report the final action to the NPDB and the state licensing board.  This includes reporting those practitioners who resign their staff privileges after being notified of an investigation against them for quality of care issues.  Please remember that if there is no actual restriction of privileges but only concurrent  monitoring there is no need to report to the data bank and no need for a peer review hearing.   

I hope this overview of the rules of peer review is helpful.  It is imperative that the bylaws be followed and that all is done with the same fairness as you would want if it was being done to you.  No one could ask for more.  

Finally, remember that the AMA has stated that there is great potential for conflict of interest if the attorney used by the hospital is the same one used by the medical staff.  They recommend separate counsel for the two entities and paid for separately.  As I mentioned above it is a conflict of interest for an attorney to represent the medical staff in a peer review hearing or serve as a hearing officer and also advise the Board in the same matter.  I am available for practice consultations on compliance, HIPAA and medical staff bylaws, as well as general business issues.   

All should follow the maxim as stated by former Detroit Lion coach Monte Clark that the key to this whole business is sincerity and once you can fake that, you’ve got it made.  Have a great spring and another of these tomes will be forthcoming in August.  


DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.