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Limits on Immunity from Suit for Credentialing and Peer Review Actions

The Florida 2nd DCA issued a recent decision, Hakki v. Galencare, Inc., 43 FLW D263 (Fla. 2d DCA, 1/31/18), that provides additional insight into medical staff credentialing. In this case, the Chief of Surgery, Dr. Hakki, alleged that the surgical services department of the hospital was underreporting surgical complications and that this was being done intentionally to ultimately enhance reimbursement. When Dr. Hakki allegedly pressed the issue, he claimed that the CMO and others in hospital administration threatened him with revocation, non-reappointment, and National Practitioner Data Bank (NPDB) reporting that would all be injurious to his career. He alleged that when he refused to stop complaining, his medical staff privileges were not renewed based on specifically alleged false statements to the hospital Board of Trustees. The hospital then made a report to the NPDB. Such type of report is reviewed customarily by any hospital in connection with the medical staff appointment process.

Dr. Hakki filed a suit against the hospital for defamation. The hospital moved and the trial court granted a dismissal with prejudice pursuant to Sections 395.0191 (7) and 393.0193(5), Florida Statutes. These statutes deal with medical staff credentialing and peer review processes, respectively, and grant hospitals an immunity from both damages and immunity from suit (and from even being sued) for actions which arise out of the credentialing or peer review process absent evidence of intentional fraud. This immunity is a powerful defense against physician claims that arise when they suffer an adverse action against their privileges. The immunity would apply to all state law tort and contract claims, as long as the wrongful action concerns and arises out of the credentialing or peer review processes. It probably would not provide immunity from civil rights claims.

The District Court of Appeal reversed the dismissal. Dr. Hakki argued that the use of the NPDB report to injure his reputation did not arise out of the credentialing process and, therefore, it defamed him and was not subject to the statutory immunity. He also argued that he had specifically alleged statements made and actions taken by the hospitals administration which constituted ?intentional fraud? that did not arise out of the credentialing or peer review processes.

The hospital argued that the statements alleged by Dr. Hakki were not alleged with sufficient specificity as is required by law, and also that all of the statements concerned credentialing or otherwise related to and arose out of the credentialing or peer review processes. The Court did not address the argument that NPDB reporting does not involve the credentialing process. The Court rejected the hospital?s second argument as the statements alleged in the complaint were very detailed and specific as to person, place, time and substance. The Court further noted that the statements at issue were made prior to and were unrelated to the credentialing/peer review processes ? they were threats that if Dr. Hakki did not change what he was doing, the administration would begin credentialing/peer review action against him.

This case is a very important one in the jurisprudence surrounding the credentialing and peer review processes both for the physician and for the facility. Very few cases in Florida give insight into what a physician must allege to avoid the immunity in Sections 395.0191 and 395.0193. This case helps describe the degree of specificity required to plead intentional fraud, that the statements or misconduct must precede the credentialing and peer review process and in no way arise out of either of or concern those processes. This decision helps to bring some clarity to when the immunity should or should not apply.

The case is factually common wherever a physician loses privileges or has their privileges ?non-renewed.? The physician typically claims that they have been the champion of patient safety against the hospital administration solely motivated by profit and uninterested in the safety of their patients. For a physician, the lesson of this case is that to avoid the immunity granted hospitals by statute, there must be an allegation that, before any disciplinary or corrective action was initiated by the hospital/medical staff, someone in administration or in medical staff leadership threatened to punish or sanction the practitioner for conduct that is in no way related to that practitioner?s medical behavior, skill or judgment.

For the hospital, the lesson of the case is to have the CMO, President of the Medical Staff or Department/Division Chair/Chief meet with physicians that seem unwilling or unable to follow the rules and policies of the facility, capture the existence and substance of the meeting in written form and to note that the counseling meeting is part of the disciplinary process of the hospital/medical staff. Once a ?difficult? physician is subject to stronger discipline/corrective action (suspension, non-renewal, revocation of privileges), he/she will assert that the discipline is a sanction for their ?championing patient safety.? Without evidence that the disciplinary process had begun before this corrective action and was unsuccessful, the claim of the practitioner that he/she is being punished for speaking up for patients will be difficult to disprove. Instead the burden will shift to the hospital to prove the negative; to show that the corrective action was motivated by wholly proper reasons.

For further information regarding issues relating to medical staff privileges and credentialing, please contact Earl Googe, Esq. at 904-359-7749.

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