United States: Superior Court: Due Care Required Of Physicians Performing Peer Review Services

I'm pleased to share with you the following post from my colleague J.Benjamin Nevius, Esquire who practices in our Chester County Office.

Last week, the Pennsylvania Superior Court issued an opinion in Pollina v. Dishong, 2014 PA Super 153 (Pa. Super. Ct. 2014), holding that neither the Pennsylvania Peer Review Protection Act, 63 Pa.C.S.A. § 425.1 et seq., nor the doctrine of judicial privilege, will insulate a physician against negligence claims arising from a failure to exercise due care in the peer review process.

In 2010, Pennsylvania's Bureau of Program Integrity ("BPI") received a complaint from a disgruntled former employee of a dental practice located in Johnstown, Pennsylvania.  The employee alleged that the practice and its proprietor (together, the "Provider"), had engaged in fraudulent billing practices with respect to Pennsylvania's Medical Assistance program ("MA") – also known as Medicaid.  BPI, which frequently retains medical professionals to perform peer review services in connection with fraud investigations, retained Arthur Kravitz, DMD to assist with the investigation.

Dr. Kravitz attended an unannounced inspection of the Provider, interviewed employees, and reviewed 78 patient files.  At the conclusion of his investigation, Dr. Kravitz issued a report opining among other things, that the Provider over-prescribed medications and performed unnecessary dental procedures.  As a result of Dr. Kravitz's findings, BPI referred the matter to the Pennsylvania Attorney General ("AG") for further handling.  In October 2011, BPI suspended MA payments to the Provider during the pendency of the investigation, as required by law.

The Provider appealed to the Bureau of Hearings and Appeals ("BHA"), another bureau within the DPW, seeking to reinstate the MA payments.  Both the BHA and AG ultimately concluded that there was insufficient evidence to support the fraud allegations and, in April 2012, BPI reinstated the MA payments.  By that time, however, the damage had already been done.  The Provider sustained substantial economic loss as a result of the suspension, and had terminated all but three essential employees.

The Provider subsequently sued Dr. Kravitz for failure to exercise due care in his investigation.  Dr. Kravitz filed preliminary objections, arguing that he is entitled to peer review immunity and/or judicial privilege because he rendered his opinions in the course of a judicial or quasi-judicial proceeding.  The Superior Court refused to extend immunity to Dr. Kravitz for many reasons, the biggest being that the allegations did not pertain to the substance of Dr. Kravitz's professional opinions, but rather the care used in investigating the allegations against the Provider.

Citing LLMD of Michigan, Inc. v. Jackson-Cross Co., 740 A.2d 186, 191 (Pa. 1999), the Superior Court held:

[T]he goal of ensuring that the path to truth is unobstructed and the judicial process is protected, by fostering an atmosphere where the expert witness will be forthright and candid in stating his or her opinion, is not advanced by immunizing an expert witness from his or her negligence in formulating that opinion.  The judicial process will be enhanced only by requiring that an expert witness render services to the degree of care, skill and proficiency commonly exercised by the ordinarily skillful, careful and prudent members of their profession.

The decision demonstrates the exposure physicians face in performing peer review services, particularly when an opinion could mean termination or suspension of MA payments to a medical provider.  Physicians offering peer review services to BPI and other review organizations (including insurance carriers) should review coverage to ensure they are adequately protected against risk.

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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