Immunity for Actions of Hospital Internal Review Committees

Hurwitz v. AHS Hospital Corp., 438 N.J. Super. 269 (App. Div. 2014).  The Healthcare Quality Improvement Act of 1986 (“HCQIA”), 42 U.S.C. §§11111-11112, creates an immunity from damages claims arising out of a “professional review action of a professional review body,” provided that the action was taken in the reasonable belief that it furthered quality healthcare, that the professional review body made a reasonable effort to obtain the facts of the matter, and that adequate notice and hearing procedures were afforded to the physician involved.  To defeat HCQIA immunity, a physician plaintiff must show, by a preponderance of the evidence, “that the defendant took action without a reasonable belief in initiating the action, failed to provide adequate notice and hearing procedures, or otherwise took action without a reasonable belief it was warranted by the facts after a reasonable investigation.”  A cognate New Jersey statute, N.J.S.A. 2A:84A-22.10, provides a similar immunity.  Federal courts have ruled that the HCQIA immunity is a question of law, to be decided by a judge “whenever the record in a particular case becomes sufficiently developed,” and that there is a need for strong “judicial deference to hospital decision-making.”

Plaintiff in this case is a surgeon as to whom the defendant hospital conducted an internal review after the revelation of deficiencies n the care that he had provided to certain patients.  After extensive proceedings before a hearing panel, in which plaintiff was represented by counsel, and which culminated in a recommendation that plaintiff be suspended, the hospital’s Board of Trustees, the final authority, went further and revoked plaintiff’s clinical privileges.  Plaintiff brought suit, and a convoluted procedural history resulted.  Ultimately, however, the Law Division granted defendants’ motion to dismiss plaintiff’s case based on HCQIA immunity.  That decision was issued before plaintiff had taken full discovery.  Plaintiff appealed, but the Appellate Division affirmed in a thorough opinion by Judge Sabatino.

As a preliminary matter, Judge Sabatino observed that because both sides had submitted materials beyond the pleadings in connection with defendants’ dispositive motion, that motion should have been treated as a motion for summary judgment under Rule 4:46 rather than a motion to dismiss the complaint for failure to state a claim under Rule 4:6-2(e).  As a result, the standard of review for summary judgment decisions, which affords the opponent of the motion the most favorable view of the records and all reasonable inferences, applied.  That did not affect the result, however, since Judge Sabatino stated in a footnote that even if the standard of review of a ruling on a motion to dismiss had governed, plaintiff’s complaint would have failed as a matter of law.

The panel found no question that the participants in the hospital’s internal review were all “professional review bodies” under the HCQIA definition of that term.  Likewise, the revocation of plaintiff’s clinical privileges constituted a “professional review action.”  Accordingly, “the federal immunity presumptively governs this case, so long as the hospital and its participants proceeded in a fair and reasonable manner and with a reasonable belief that the actions taken were in furtherance of quality health care and warranted by the facts.”  Plaintiff did not rebut that presumption, or even create a genuine issue of material fact as to the fairness of the proceedings and the existence of a reasonable basis for the proceedings and the result so as to defeat summary judgment.  Though the court did not have transcripts of the hospital review proceedings, Judge Sabatino found that not to be necessary in every case.  Here, “the other documents provided to the court sufficiently establish that the physician was afforded a fair and reasonable opportunity to be heard, and show that the hospital’s ultimate decision was reasonably attained based upon factual determinations generated from those internal hearings.”

Plaintiff contended that the immunity was lost because the hospital had not told him that they had begun an investigation and had referred the matter to an outside reviewer, and because the revocation of his clinical privileges was more severe than the suspension that the hearing panel had recommended.  Judge Sabatino found no merit in those arguments.  As to the first point, he quoted a federal case that had stated that “nothing in the [HCQIA] requires that a physician be permitted to participate in the review of his [own patient’s] care.”  As to the second argument, Judge Sabatino adopted an analogy cited by the Law Division:  “attorney discipline cases, in which the Supreme Court sometimes imposes a harsher ultimate sanction on a licensee than that recommended by the Disciplinary Review Board.”

Finally, the panel concluded that the Law Division had not abused its discretion in disposing of the case before full discovery had been completed.  Judge Sabatino declined “to adopt a per se rule that declaring that a plaintiff physician who has lost his clinical privileges is always entitled to depositions or other full-blown discovery in litigating HCQIA immunity issues.”  He noted that while some federal cases had decided immunity issues on a summary judgment record, others had ruled at the motion to dismiss stage.  Neither the HCQIA nor the New Jersey analog required full discovery.  And full discovery might, in some cases, “dilut[e] the practical benefit of the immunity protection” by entangling defendants in lengthy and expensive pre-trial proceedings.  Adopting a “case-specific” approach, the panel concluded that, in the circumstances here, where plaintiff had obtained paper dicovery and had learned much about the facts from the review panel’s hearings, it was not improper to rule on the immunity issue without allowing depositions.