Tuesday, February 7, 2012

BNA: Ninth Circuit Affirms Judgment for Hospital, Holds HCQIA Immunity Barred Doctor's Suit

Fox v. Good Samaritan Hospital LP, 9th Cir., No. 10-15989, unpublished 2/3/12

Key Holding: Summary judgment for hospital on basis that HCQIA barred doctor's lawsuit based on suspension of privileges is affirmed.

Key Takeaway: HCQIA immunity applies to hospital professional review action based on doctor's refusal to follow hospital rules where his competence was not at issue.

A California doctor was not able to overcome the presumption that the Health Care Quality Improvement Act (HCQIA), 42 U.S.C. §§11101-11152, granted a hospital immunity for suspending the physician's privileges, a federal appeals court Feb. 3 said in affirming summary judgment for the hospital (Fox v. Good Samaritan Hospital LP, 9th Cir., No. 10-15989, unpublished 2/3/12).

The U.S. Court of Appeals for the Ninth Circuit, in an unpublished opinion, said that, although it found it distressing that defendant Good Samaritan Hospital LP (GSH) waited six years to raise the HCQIA defense, the hospital nevertheless was entitled to immunity in an action brought by Dr. Richard Fox.

This action arose in 1999, when GSH suspended Fox's privileges due to his refusal to comply with a newly enacted hospital rule that required that a physician's designated backups hold the same set of privileges as the physician.

Fox sued GSH and others in federal court in 2004, alleging various causes of action based on his suspension. He also alleged that the hospital's real reasons for suspending his privileges were to retaliate for his previous criticism of patient care at the hospital and to impose a monopoly on the provision of pediatric intensive care services.

District Court Action
The U.S. District Court for the Northern District of California granted the defendants' motion for summary judgment after finding that, although the peer review proceedings that led to the suspension of Fox's privileges did not concern Fox's competency, the HCQIA reached actions taken based on a physician's refusal to follow hospital administrative rules.

The court found that the suspension of Fox's privileges for failure to comply with the alternate coverage rules was a professional review activity within the meaning of the HCQIA and that it was based on the “professional conduct of an individual physician.” The court further found that Fox failed to rebut the presumption that the hospital met the standards for application of the immunity provision.

It later denied Fox's motion for reconsideration and held that the defendants were not entitled to recover costs and attorneys' fees (126 HCDR, 7/2/10).

HCQIA Applied
A hospital is entitled to HCQIA immunity for any “professional review action” taken based on a physician's competence or professional conduct, as long as the hospital afforded the physician adequate procedural protections, the Ninth Circuit said in its decision.

The court found, contrary to Fox's argument, that GSH's action fell within this definition because Fox's professional conduct motivated GSH's decision to suspend his privileges. “A doctor's failure to comply with a rule of the hospital where he practices unquestionably implicates his professional conduct, whether or not he agrees with the rule,” the court wrote.

Additionally, the court said, GSH's failure to offer Fox a formal administrative hearing did not preclude the hospital from claiming HCQIA immunity because “a hearing was not necessary under the unique circumstances of Fox's case.”

Fox did not dispute that he failed to designate backups with identical privileges, as the hospital required. Therefore, a hearing geared toward resolving factual issues would have done nothing to help Fox's case or the hospital's decisionmaking process, the court said.

Fair Procedure
GSH's offer to allow Fox to challenge the rule in informal hearings before the hospital's executive committee and board of trustees provided a fair procedure under the circumstances, the court said.

It also held that GSH's failure to report Fox's suspension to the National Practitioner Data Bank, as required by 42 U.S.C. § 11133(a)(1), did not foreclose HCQIA immunity in this instance. A failure to report forecloses immunity only if the secretary of health and human services publishes the hospital's name in the Federal Register, which did not happen in this case, the court said.

Finally, the court said the lower court did not abuse its discretion in denying GSH's motion for costs and attorneys' fees because the HCQIA defense was available to the hospital at the outset of the litigation and was not asserted “until after nearly six years of costly discovery and multiple rounds of motion practice.” None of these expenses of time or money would have been necessary had the defendants timely raised the HCQIA defense, the court said.

James Alfred Hennefer, of Hennefer Finley & Wood LLP, San Francisco, represented Fox. Thad A. Davis, of Ropes & Gray, San Francisco; David C. Hall, of Hall Prangle & Schoonveld, Chicago; Michael A. Hurwitz, San Jose, Calif.; David Perrault, of Hardy Erich Brown & Wilson, Sacramento; and George A. Shannon Jr., of Shannon Martin, Houston, represented the defendants.

The court's opinion is available here: http://op.bna.com/hl.nsf/r?Open=mapi-8r8lw4.

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