Medical Staff

The Onset of Spring Germinates Lawsuits

Medical Staff Affairs Monthly, April 15, 2006

Dear Colleague,

Last week there were news reports that scientists at the Massachusetts Institute of Technology (MIT) have figured out a way to use viruses to build ultrathin lithium-ion batteries that pack three times the normal energy level for their weight and size. I could have told them that the litigation virus that has infected healthcare is already a model of 'ever-ready' energy. Over the past month there have been several examples of this litigation flu sapping dollars, energy and morale from important patient care activities. Perhaps the most significant is the decision of a federal district court in Texas to uphold a jury decision which awarded compensatory and exemplary (read punitive) damages of $336 million to a physician who alleged a hospital's summary suspension of his privileges was improper (Poliner v. Texas Health Sys., No. 3:00-CV-1007-P (N.D. Tex. Mar. 27, 2006). The court believed there was sufficient evidence to support the jury's finding that the hospital violated its medical staff bylaws, defamed the reputation the plaintiff physician, and tortiously interfered with his existing and prospective business contracts. This is an unfortunate outcome and one in which it is clear that both the jury and the judges have an inadequate understanding of medical staff peer review. Dr. Poliner has claimed that the hospital and physician defendants in this case maliciously utilized the peer review process to interfere with his interventional cardiology practice. Such claims are typically alleged by physicians whose clinical competence is questioned by their peers. When this jury decision was first issued more than a year ago, it did not have a drastically chilling effect on peer review because most commentators across the nation felt that the verdict would not stand (or at least the damages would be significantly reduced). Now that the court has upheld the verdict we can expect to see a negative impact on physician participation in collegial clinical review. Many medical staff members will be asking themselves why they should voluntarily step forward to help protect unidentifiable future patients (the goal of peer review) when it puts their own well-being in such jeopardy. There are some constructive messages that medical staffs should glean from this case in order to strengthen peer review in their own institutions. The discussion of 'investigations' is often a poorly written section in many medical staff governing documents. The rules for investigations, including any allowances for physician notice and rebuttal, should be very meticulously spelled out in medical staff bylaws. It is almost always a good practice (and an important show of good faith) to allow a physician a chance to provide testimony as part of an investigation into his or her performance. In addition, the rationale provided in the bylaws for suspension should clearly include the potential for patient harm and not just actual danger. In the Poliner case, the language of the bylaws required present danger for imposition of a suspension. Many bylaws have begun using the term precautionary suspension to better convey the important patient protection purposes of this type of action. At the end of the day, however, honest peer review is a more dangerous activity because of an aberrant decision like this one, and hospitals need to properly indemnify medical staff members who participate in the process.

The litigation virus doesn't just drive judges and juries to occasional bad judgment. It can drive board members, administrators, and physicians leaders to harmful actions as well. This can be seen in the legal warfare being undertaken at Lawnwood Regional Medical Center and Heart Institute in Florida where lawsuits between doctors and the hospital board seem to have become an unfortunate modus operandi. It is prudent to remember that just because you think that you may have the law on your side, this is not reason enough to undertake legal proceedings. The legal system is usually an unproductive (need I say 'virulent') tool for the resolution of most healthcare disputes. In 2003 the Board at Lawnwood obtained passage of a bill in the Florida legislature which gave it broad authority over medical staff affairs, including the power to amend the medical staff bylaws. This unusual legal approach resulted out of Board frustration with long standing and poorly written bylaws which enabled a small group of doctors to block effective credentialing and peer review at the institution. On March 24 a county circuit judge in Tallahassee ruled that the special law is unconstitutional. Thus, rather than ending years of corrosive and debilitating struggle between the hospital and certain of its physicians, the latest result is only more legal disputation.

One more example from our spring infestation of legal cases. This time it is the federal government infected with the litigation bug. After passing reams of confusing policies and regulations governing physician recruitment by hospitals, the United States brought suit against Alvarado Hospital Medical Center, Inc - a subsidiary of Tenet Healthcare Corp. for criminal violation of the law. Prosecutors said the hospital used doctor relocation agreements to funnel money to physicians who then referred patients in federally funded programs to the medical center. The kickbacks allegedly took the form of overly generous agreements to relocate new physicians to an existing admitter's practice. The United States also alleged that Tenet employees had received personal payments for arranging certain relocation agreements at Alvarado and had obstructed the government's investigation. For the second time, a federal jury in San Diego was unable to reach a verdict, resulting in a mistrial. When the government originally filed this suit it caused great consternation in hospital administrative suites because recruitment is such a prevalent activity and the nature of the charges was quite severe. With a growing physician shortage in this country and increasing patient demand, hospitals deserve crystal clear guidance on permissible recruitment activities rather than threats of legal action by the government.

Virus is a Latin word meaning "slime", particularly that which is foul or poisonous. Many viruses are named according to their place of origin or their predilection (e.g. an oncovirus is any virus known to instigate neoplasia). Perhaps we will soon identify the litigovirus- an infectious organism which instigates the onset of lawsuits. In the meantime, we should all take whatever opportunities we can to immunize against the cascade of legal actions which plagues healthcare. Good resistance can be engendered with excellent communication and dialogue, carefully constructed governing documents, clear laws and regulations, and strong focus on the needs of patients at all times.

Have a healthy spring!

Best Regards,

Todd Sagin, MD, JD
Vice President and Medical Director
The Greeley Company

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