• Taking Chances2:24

The Nebraska Supreme Court recently dismissed a libel suit brought against the Chair of the Department of Psychiatry at Immanuel Medical Center. In the case of Shilling v. Moore, the Nebraska high court based its decision on the immunity provided in the Federal Health Care Quality Improvement Act.


The federal government anticipated that some physicians would be reluctant to participate in peer review activities for fear of litigation. So legislators included in the Federal Health Care Quality Improvement Act protections for physicians who provide information to professional review bodies.


In most cases, the Act gives physicians immunity from liability for lawsuits that arise from peer review activities. Lawsuits that are brought, are either based on theories of libel or on antitrust, alleging that some physicians conspired to use peer review to restrain trade.

The Nebraska case involves Dr. Kay Shilling, a licensed psychiatrist who held staff privileges at Immanuel Medical Center for six years. When Immanuel's credentialing committee reviewed her reapplication for staff privileges, the committee asked Dr. Moore, her department chair, to comment on the quality of her practice.


As part of his overall review, Dr. Moore conducted an independent medical examination of one of Dr. Shilling's patients, whose care had been criticized by several other staff members. Dr. Moore found no evidence to support Dr. Shilling's diagnosis and treatment of this patient. He noted that utilization and quality review records for Dr. Shilling's patients also reflected concern about her ability to diagnose accurately and prescribe appropriately.


Dr. Moore reported to the credentialing committee his opinion that Dr. Shilling did not have the necessary skills and experience to perform her job appropriately. The credentialing committee denied Dr. Shilling's reapplication for admitting privi1eges.


Dr. Shilling sued Dr. Moore for libel, claiming he maliciously made false statements to the credentialing committee. Her premise was that Dr. Moore told her in a telephone conversation that she had no patient care problems, but he told the credentialing committee she had many problems. Therefore, there was the possibility that Dr. Moore lied to the credentialing committee.


Dr. Shilling wanted a jury to decide whether Dr. Moore's statements to the credentialing committee were false and whether he knew they were false when he made them. A Nebraska district court dismissed the case against Dr. Moore. Dr. Shilling appealed.


The Nebraska Supreme Court agreed that this case should not go to trial. They recognized that the Federal Health Care Quality Improvement Act allows liability if a physician provides information which he knows is false to a peer review committee. However, the Court felt that the dispute about the telephone conversation was insufficient evidence on which to base the claim of malicious false reporting. They affirmed the dismissal of Dr. Shilling’s lawsuit against Dr. Moore.

Suits confronting a peer review committee may also arise from antitrust law. The allegation would generally assert anti-competitive behavior through the denial or restriction of privi1eges. These snits, however, have not met with great success. Such allegations usually require proof that the acts of the committee were in had faith and that individuals with an economic interest had a scheme to restrain trade. Even if the plaintiff can show there was a conspiracy, the plaintiff must still show that the conspiracy had an adverse effect on competition.


The courts in these antitrust cases are split on whether a hospital can conspire with its medical staff in violation of the Federal anti-trust act. Some courts have ruled that medical staff who make peer review decisions represent the hospital, so it's impossible for the hospital conspire with itself. Other courts have decided that staff members are individuals who can conspire.


Either way, the burden on the plaintiff is to prove that an unfavorable peer review decision was reached for inappropriate reasons. Because of this, the most effective defense against antitrust claims is for the peer review process to be detailed and fair, and for committees to document carefully that that the process was followed in every case.


The idea of peer review— a profession monitoring itself— is broadly appealing. Legislators see health care peer review as a fair and efficient way to protect the public while providing a broad range of intervention options. Many states have peer review statutes which offer more protection than the federal law.


The Massachusetts statute, for example, extends the liability protection beyond physicians to anyone who communicates in good faith to a health care peer review body. A peer review body in Massachusetts can be a mortality and morbidity conference, a credentialing committee, or a professional medical society. The purpose of this broad immunity is to encourage individuals to pass along information which might protect the public. While none of these statutes prevent physicians from being sued, they discourage frivolous actions.


As the size of networks increases, physicians find themselves working with other providers whose experience and expertise may be unknown to them. Physicians need to be able to rely on the credentialing process of their networks and other institutions to ensure that quality care is delivered by all members of their teams. However, the credentialing process is largely dependent upon the cooperation of other physicians.

These physicians must feel free to provide honest and fair evaluations of their peers. Because these evaluations are mostly premised upon criteria that is subjective rather than objective, the opinions of reasonable professionals may differ, and the law recognizes this. For it is exactly this subjective analysis that is necessary to ensure that patients will be treated by competent and caring professionals.


Court Protects Peer Review

by Attorney Frank E. Reardon

November 1996

Healthcare Law, Litigation & Public Policy   Medical Licensure & Discipline ♦ Employment Board of Registration

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