United States: Pennsylvania Supreme Court Upholds More Stringent Standard For Grant Of Immunity Under Federal Health Care Quality Improvement Act

Last Updated: May 22 2013
Article by Joon Hwang

The Pennsylvania Supreme Court's recent decision not to reconsider a lower court ruling that a hospital was not entitled to immunity under the federal Health Care Quality Improvement Act of 1986 ("HCQIA") could have important implications for entities seeking protection under this Act.

HCQIA was enacted, in part, to encourage candid and critical peer review of physicians without fear of creating a damaging record for potential malpractice lawsuits or a floodgate of employment, tort or contractual actions by the physician whose conduct is being reviewed. To achieve this, the HCQIA provides healthcare employers with immunity from adverse actions taken as a result of professional peer reviews. A professional review action subject to immunity must, however, meet certain standards. Notably, the healthcare employer must establish that the peer review action was taken:

  • In the reasonable belief that the action was in furtherance of quality health care;
  • After a reasonable effort to obtain the facts of the matter;
  • After adequate notice and a hearing that was fair to the physician under the circumstances; and
  • In the reasonable belief that the action was warranted by the facts known after such reasonable efforts to obtain facts and after the hearing specified above.

Courts uniformly recognize that addressing disruptive physician behavior is "in furtherance of quality health care."

In Babb v. Centre Community Hospital, the plaintiff doctor sued his health clinic employer for, among other claims, wrongful termination, breach of contract and defamation. The clinic, in turn, claimed it was immune from the lawsuit under the HCQIA because a peer review committee concluded that the plaintiff "had been unable to work cooperatively and effectively with his colleagues and office staff" as well as – based on a review of medical charts – failed to properly diagnose patients. The committee concluded that such conduct adversely impacted the quality of his patient care, thus justifying his termination. The doctor, however, claimed that he presented sufficient expert evidence showing that the alleged medical deficiencies "were pretextual, retaliatory, and trivial."

The trial court judge, in line with past precedent, determined that immunity was available under HCQIA as a matter of law if there was any evidence to support the finding that the plaintiff's termination was based upon improper patient care. Specifically, the court stated:

there are no genuine issues of material fact as to whether Defendants believed that there were patient quality issues relating to Dr. Babb's employment . . . There are obviously other issues surrounding the relationships between Dr. Babb and the administrators and doctors . . . but those issues do not negate the fact that there were patient quality issues as well.

The Superior Court disagreed, concluding it was not enough that the hospital merely believed that improper patient care issues were implicated, "but rather that their belief, and the efforts made to adduce the facts supporting their belief, were reasonable." The court explained:

The proper focus for the trial court was whether, viewing all of the information available to it, the peer review body conducted a fair proceeding, made a reasonable effort to obtain the facts and possessed a reasonable belief its action was in furtherance of patient care. . . . Absent such fair proceeding, reasonable effort, or reasonable belief, immunity will not attach.

The Superior Court reasoned that the doctor and the expert opinions he presented raised sufficient material issues of fact as to whether the doctor had shown that the peer review process or his employer's belief that its actions "were in furtherance of patient care" was unreasonable. Thus, it is up to a jury to decide whether the clinic is entitled to HCQIA immunity.

In upholding the Superior Court's determinations, the Pennsylvania Supreme Court has reaffirmed a more stringent standard for applying HCQIA immunity. Healthcare employers seeking to avail themselves of such immunity in similar circumstances should be prepared to prove that the conduct of the peer review process and the resulting conclusions are objectively reasonable.

Practical tips providers might consider to avoid the result in Babb include insuring a greater emphasis during the course of the physician's due process hearing(s) on how the offending behavior (including disruptive conduct) could adversely impact patient outcomes. It is not necessary that an adverse outcome actually result from the offending conduct, only that the physician created a risk thereof. There must be evidence in the record on this crucial point. Likewise, the factual findings the deliberative body must make should include a specific determination linking the conduct at issue with patient care. Finally, to the extent the offending conduct and its link to adverse clinical outcomes is in dispute, the hearing officer and panel should render factual determinations on the strength and credibility of the evidence on this issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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