BILL COPELAND’S HEALTH LAW INSIGHTS

The Poliner Case

As I stated in last month's newsletter, in this issue, I am going to switch gears and discuss Poliner, a credentialing case out of the United States District Court for the Northern District of Texas.¹ The case involves a jury verdict awarding $366 million to a Dallas physician, later reduced by the federal court to $22,542,106.20.² This contested peer review case lasted over seven years, contained 495 separate docket entries, and while there was a reduction in the award, the court sustained the majority of the earlier order that upheld the jury verdict³

The case is important, not for its large damage award, but because it deals with many of the issues commonly found in credentialing cases, such as confidentiality of peer review records, the Health Care Quality Improvement Act immunity, state peer review statutes granting immunity, and damages. It should be required reading for any attorney who practices in the medical staff arena, whether representing hospitals or physicians or serving as hearing officer or as counsel to the hearing officer or hearing panel. It is also an excellent reference document for individuals involved in the credentialing process and/or serving in executive positions in the hospital or medical staff. It is a classic case of how not to impose a summary suspension. I will briefly discuss each of the major points in the court's decision, but first let us review the background of the case.

Background

Lawrence R. Poliner, M.D., is board certified in both internal medicine and cardiovascular diseases. In 1997, he held medical staff privileges, including cath lab privileges, and was practicing cardiology at Presbyterian Hospital of Dallas. On three separate occasions, after procedures in the cath lab, nurses filed Committee Event Report Forms with respect to Dr. Poliner's procedures. These forms were referred to the hospital's Clinical Risk Review Committee. The committee reviewed two of these cases and referred them to the Internal Medicine Department for further review. The other case was reviewed later and referred to Internal Medicine as well. While these cases were still pending, Dr. Levin, director of the cath lab, after reviewing another of Dr. Poliner's cases, patient no. 36, brought it to the attention of the chief of cardiology. Dr. Levin found "that Dr. Poliner performed the angioplasty on the wrong artery and missed a totally occulded left anterior descending coronary artery."⁴ These issues were brought to the attention of Dr. Knochel, chair of internal medicine. Dr. Knochel then spoke to the hospital president, vice president of medical affairs, and in-house counsel. The court describes what happened next:

Dr. Knochel asked plaintiff to accept abeyance of all procedures in the cath lab until an ad hoc committee appointed by Knochel could review plaintiff's cath lab cases. Drs. Levin and Harper were present at the meeting between Knochel and plaintiff. According to plaintiff, he was given an abeyance letter after 2:00 p.m. on May 14,1998 and told to sign and return it by 5:00 p.m. that day or his privileges would be immediately suspended. Plaintiff alleges he was not told about patient no. 36, was not given an opportunity to defend himself against the accusations, and was not told which of his patients were going to be reviewed by the ad hoc committee. Plaintiff was told not to consult an attorney before deciding whether to sign the abeyance letter. Plaintiff signed and returned the abeyance letter agreeing to an abeyance. The abeyance of plaintiff's cath lab privileges did not extend to plaintiff's admission and consultation privileges at the hospital.⁵

The peer review process proceeded in a relatively normal fashion after this, with an ad hoc committee formed to review Dr. Poliner's cases. Finding substantial problems, the ad hoc committee referred the matter to the Internal Medicine Advisory Committee ("IMAC"). The IMAC recommended additional reviews by an outside reviewer; however, one could not be found in time for a scheduled meeting with Dr. Poliner. Dr. Poliner received only three days notice of this meeting in which he was to defend his cases. He requested a postponement for one day or at least to have it rescheduled from 8 a.m. to later in the day. Dr. Knochel denied this request.

The day after this meeting, the IMAC voted unanimously to recommend suspension of Dr. Poliner's privileges. Dr. Knochel summarily suspended Dr. Poliner's cath lab and echocardiography privileges but allowed all other privileges to stay in place. Dr. Knochel told Dr. Poliner that he was entitled to an expedited hearing.

Dr. Poliner requested a hearing but not an expedited one. The hearing proceeded as scheduled and the Hearing Committee recommended Dr. Poliner's privileges be restored with conditions. The Hearing Committee also found that the summary suspension was justified based on evidence available at the time. The hospital's Medical Board upheld the recommendation of the Hearing Committee.

Dr. Poliner then requested an appeal of the summary suspension. He was advised that pursuant to the hospital's bylaws, appeal was limited to a determination of whether he had been substantially provided due process. The appeal committee found that due process had been provided and that it did not have authority to set aside the summary suspension. The hospital's Board of Trustees upheld the appeal committee.

The following year, Dr. Poliner filed suit in federal court⁶ against the hospital, Dr. Knochel and several other physicians alleging antitrust violations, violation of due process, business disparagement, slander and libel, tortuous interference with business and prospective advantage, violation of Deceptive Trade Practices Act, and intentional infliction of mental anguish and emotional distress. He also requested a temporary restraining order, temporary injunction and permanent injunction, declaratory relief that immunity under the Health Care Quality Improvement Act and the Texas Medical Practice Act did not apply, and declaratory relief that the two acts are unconstitutional⁷

The Summary Judgment Proceeding:

In the summary judgment proceeding, the court dismissed the antitrust claims,⁸ and dismissed all charges against physicians other than Knochel, Harper and Levin, finding that the dismissed physicians were protected by the Health Care Quality Improvement Act ("HCQIA). With regard to Knochel, Harper, Levin and the hospital, the court found "a complete failure to investigate and to gather all of the facts from both sides before Dr. Knochel summarily suspended plaintiff's privileges by telling plaintiff to sign the abeyance letter or face immediate suspension"₉

In another interesting finding in the summary judgment proceeding, the court found that the hospital's bylaws created a contract between the hospital and the physicians, and provided contractual due process rights. Therefore, summary judgment for the hospital on the breach of contract claims was denied.¹⁰

In addition, the court denied summary judgment to Knochel, Harper, Lenin and the hospital on the other state law claims. The court found that actual malice had been established as a fact issue with regard to these defendants, indicating that there was evidence that these defendants "violated their own bylaws as well as the HCQIA in summarily suspending Pr. Poliner's privileges."¹¹

The Jury Decision

The jury handed down a unanimous verdict on August 27,2004, finding that defendants acted with actual malice and without justification or privilege. The jury award for compensatory and exemplary damages was $366,210,159.30.¹² Based on the evidence, the jury concluded that:

1. The action to suspend Dr. Poliner's cardiac cauterization lab privileges was not undertaken in the reasonable belief that the action furthered quality health care. Dr. Knochel testified that he did not have enough information to assess whether Dr. Poliner posed a present danger to his patients.¹³
2. The action was not taken in good faith and was taken with malice.¹⁴
3. There was not adequate notice and hearing procedures afforded Dr. Poliner. He was offered no option other than the abeyance, was not allowed to consult with an attorney before accepting the abeyance. In addition, defendants would not discuss patient cases with him.¹⁵
4. There was not a reasonable effort to obtain the facts of the matter.¹⁶

On September 18,2006, the court determined that the award was excessive and reduced it to $22,542,206.20, $21 million in actual damages and $1,542,106.20 in punitive damages.

This case shows how important following ones bylaws, state peer review laws and the HCQIA is. It also provides a good reference guide for physicians' counsel to review what steps the hospital and its medical staff must accomplish prior to imposing a summary suspension, or any other peer review action for that matter.

Other Recent Cases

There have been other recent cases that have not proved to be so fortunate for physician plaintiffs. Take for example Bakare v. Pinnacle Health,¹⁷ a case from the United States District Court in Pennsylvania finding hospital has HCQIA immunity from suspended physician's antitrust and breach of contract claims. In this case, the hospital's quality assurance committee for OB-GYN conducted an extensive review of Dr. Bakare's patients and concluded that his care fell outside the standard of care for the department. The medical executive committee conducted its own investigation and subsequently voted to suspend Dr. Bakare's clinical privileges. The court found that the defendants were entitled to immunity under the HCQIA.

In a New York case¹⁸, Dr. Bauman, a solo practitioner, board certified in obstetrics and gynecology, had been disciplined three times in the past for problems in the care of his patients. Each time, corrective action and additional monitoring were imposed. While he complied and the restrictions were removed, additional problems developed.

After discussing the problem with the quality control committee, which recommended summary suspension, pending an investigation, the OB-GYN chair suspended Dr. Bauman's privileges. He appealed.

A subsequent hearing was convened in accordance with medical staff bylaws; the hearing committee declined to overturn the summary suspension. Dr. Bauman appealed that decision to hospital's board which reinstated his privileges with conditions, including restrictions on hours of practice, increased patient monitoring, and departmental oversight. He agreed to the conditions and continued to admit patients.

In July 2005, indicating that the investigation surrounding the summary suspension uncovered more troubling patient care, the medical staff terminated Dr. Bauman's privileges. Rather than appeal to the hospital board, Bauman sued in federal court. Under New York law, a physician challenging the termination of hospital privileges is required to file a complaint with the state Public Health Council before filing an action in the courts. Bauman did not do so. The court dismissed for lack of jurisdiction.

However, the court indicated that even assuming jurisdiction, Dr. Bauman's claims fail on their merits. He asserted that the summary suspension contained false information and was unwarranted. The court stated, "Nothing in the record suggests that defendants were not acting in good faith to undertake a thorough investigation. In fact, a review of [Dr. Bauman's] exhibits shows the opposite conclusion is the only reasonable conclusion." The court said there was no evidence of bad faith in the investigation; the statements made in the challenged documents were "undeniably true."

Closer to home, the West Virginia case of Walzi v. Clzarleston Area Medical Centerzg discusses immunity under the HCQIA. In this case, Dr. Wahi, a cardiovascular, thoracic, and general surgeon, had several peer review investigations between 1995 and 1999 regarding his care of patients. The investigations resulted in various restrictions and suspensions being placed on Dr. Wahi's privileges prior to 1999. In 1999, his privileges were suspended. While there is disagreement as to why a hearing was never scheduled, suffice it to say that no hearing took place.

As a result of the suspension, the Board of Medicine of West Virginia conducted an investigation, but it was terminated in 2003 with no action taken.

Dr. Wahi brought this action in federal court alleging among other things antitrust, breach of contract, and civil rights violations. Defendants moved to dismiss.

After an extensive review of the HCQIA, the court determined that the hospital's actions qualified a professional review and were entitled to immunity under the Act:

In the present action, it is clear that the suit arises as a result of the recommendations and activities of a health care entity in regard to the competence and professional conduct of Dr. Wahi, and whether he will continue to have privileges at CAMC. . . . The decisions of CAMC have, in fact, adversely affected Dr. Wahi's privileges. Furthermore, the statute does not require that the activities or actions be properly conducted or conducted in a specific manner in order to be deemed a professional review action. Thus, regardless of whether this court determines CAMC's activities to be proper, the underlying action is subject to the requirements of the HCQIA.

Finding that the hospital's actions met the test under the Act, the court granted summary judgment on all but the civil rights and contract claims on this basis. After evaluating the remaining claims, summary judgment was granted on them as well.

Conclusion

The lesson from these cases is that when a professional review action is taken, both the hospital and medical staff bylaws, as well as the HCQIA and state peer review laws should be followed very carefully. Physicians' counsel should review painstakingly the procedural actions taken by the hospital with a view toward discovering inconsistencies between these actions and laws and bylaws. In addition, it is important to be sure that all administrative appeals have been exhausted before filing suit. Dr. Bauman's counsel did not do that and as a result the court lacked jurisdiction.

¹ Poliner v. Texas Health Systems, 3:OO-cv-01007,2006 U.S. Dist. LEXIS 13125 (N.D. Tex. Mar. 27,2006 ) (Referenced herein as Doc. 488).
² Poliner v. Texas Health Systems, 3:OO-cv-01007,2006 U.S. Dist. LEXIS 13125 (N.D. Tex. Sept. 18,2006) (Referenced herein as Doc. 483).
³ See also the Court's September 2003 summary judgment order, Poliner v. Texas Health Systems, 3:OO-cv-01007P, 2003 WL 22255677 (N.D. Tex. Sept. 30,2003) (Referenced herein as Doc. 238).
⁴ Doc. 238 at 7.
⁵Id. at 7 & 8.
⁶Id. at 8 - 11.
⁷Id. at 4.
⁸Id. at 13.
⁹Id. at 31.
¹⁰Id. at 19.
¹¹Id. at 31.
¹²Doc. 483 at 3.
¹³Id. at 7 - 8.
¹⁴Id. at 10.
¹⁵Id. at 9.
¹⁶Id.
¹⁷Bakare v. Pinnacle Health Hosps. Inc., No. 1:03-CV-1098 (M.D. Pa. Aug. 24,2006).
¹⁸Bauman v. Mount Sinai Hosp., No. 05 Civ. 7126 (S.D.N.Y. Sept. 29,2006).
¹⁹Wahi v. Charleston Area Med. Ctr., 2006 U.S. Dist. LEXIS 71 199 (S.D. W.Va. Sept. 29, 2006).
Copyright 2006 William Mack Copeland. You can reprint any part of this newsletter by providing the following acknowledgement: "Reprinted with permission. William Mack Copeland, www.wmcopeland.com."