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Structural Denial of Due Process in HCQIA Peer Review Proceedings

(October 12, 2015): The Federal HCQIA peer review statute affords peer-reviewing bodies and their members legal immunity from liability from suits by the physicians they discipline, so long as their peer-review processes include certain due process rights for the accused physician. These due process rights are expressed as a right to a hearing, and are generally outlined in a hospital staff’s bylaws. In most US hospitals, however, these hearing and other due process rights arise only after a decision on the merits of the discipline case have been made, and therefore exist only at what is functionally an appeal level. At this later stage, any decision in the physician’s favor requires a finding of abuse of discretion or bad faith, and a heavy burden of proof is placed on the physician. So the due process rights in practice arise only after the point in the peer review when they can be of most benefit to the physician.

I.  HCQIA Peer Review Basics:

The US Congress enacted The Healthcare Quality Improvement Act of 1986[1] (“HCQIA”, generally pronounced “Hick Kwah”) to address a perceived problem of misbehaving physicians travelling to new states and thus escaping notice of professional discipline actions taken against them[2]. The heart of the HCQIA peer review scheme is a mandatory national reporting scheme and database. Hospitals, their medical staffs, state medical boards and other bodies which discipline clinicians are required to report serious professional sanctions imposed by them to a nationwide database named the National Provider Data Bank[3], or “NPDB”. This database is accessible to other hospitals and boards, insurance carriers and other payers, and most institutions which hire and fire physicians[4]; and as contemplated by Congress, such persons now routinely consult the NPDB to look for a history of professional discipline before recruiting any clinician or granting privileges.

A feature of HCQIA is a grant of legal immunity to the bodies that conduct peer review of medical professionals, and their members, against legal liability for adverse actions they may take against the professionals in peer review proceedings, so long as the proceedings conform to certain basic due process requirements described in the statute. This legal immunity is so desirable that within a short time after enactment of the HCQIA legislation, hospital staffs and other peer reviewing bodies around the US revised their bylaws and other constituent documents to conform to HCQIA’s due process requirements and thus secure immunity. These procedures are normally set down in the hospital’s staff bylaws, and afford the affected physician a hearing where the due process rights apply. The bylaw provisions which set out this process and these rights have become notably uniform across the US.

II.      HCQIA Peer Review Standards for Professional Review Actions:

Under HCQIA, hospitals may undertake a “professional review action”[5] against a physician alleged with misconduct or incompetence. This is any formal action can adversely affect the physician’s clinical privileges or membership in a professional society. Any such action must be based on the recommendations[6] of a “professional review body”, which is normally the hospital’s medical staff or a committee appointed by it to conduct professional review activity.

If the affected physician requests it, he or she must be afforded certain due process rights, in the form of a hearing. The hearing must be held before an independent intermediary such as a mutually acceptable arbiter, a hearing officer, or a panel of individuals appointed by the hospital but who are not in direct economic competition with the physician involved. In the hearing process the physician has the right to be represented by legal counsel, receive a statement of all charges against him, present evidence, and call, examine, and cross-examine witnesses. The physician may also submit a written statement at the close of the hearings and have a record made of the proceedings. At the conclusion of the hearing, the physician then has the right to receive the written recommendation of the arbitrator, officer, or panel, including a statement of the basis for the recommendations. Only if the professional review body follows these standards will it and its members receive immunity from damages under the law.

IV. The HCQIA Peer Review Process is Fundamentally Unfair:

On its face, this process appears to provide the affected physician with adequate due process rights. The statute states that any professional review action cannot be taken until after adequate notice and hearing procedures have been afforded to the doctor. In practice, however, the due process rights arise only at a point when they are of little use.

In the common form of peer review adjudication process provided under staff bylaws written to conform to HCQIA, after receiving complaints about a particular physician or otherwise having professional conduct brought into question, the medical staff, acting through its executive committee, will appoint an investigative or “ad hoc” committee to conduct an investigation into the matter and make a recommendation to the executive committee, which in turn will make a recommendation to the hospital board, about how the matter should be resolved. While technically neither is the executive committee bound to conform to the ad hoc committee’s recommendation, nor is the hospital board bound to conform to the executive committee’s recommendation, in practice most such recommendations are accepted. While these committees are charged to act as fact-finders, their authority normally goes much further, and they are empowered to restrict, suspend, revoke, or otherwise adversely affect the doctor’s privileges during the pendency of their proceedings. HCQIA is drafted so that the due process rights it requires are not obviously applicable to these ad hoc committee and executive committee stages of the peer review process, which amount to the merits determination point in the case. Modern staff bylaws invariably take advantage of this, and list several due process rights which the accused does not have at these stages, and are otherwise silent on what rights he does have at these stages.

Therefore, under most staff bylaws, by the time the accused can request a hearing before a professional review body and enjoy the basic due process rights mandated by HCQIA, the actual decision on his clinical privileges has already been made. Most bylaws make the hearing before a professional review body into nothing more than an appeal right, with grounds for review that are not a decision on the merits of the peer review decision. For the physician to prevail, most bylaws require a showing of absence of an evidentiary basis for the decision, or some form of bad faith. The standard is similar to that applied in a Federal court’s review of an administrative law judge’s decision. Most bylaws also impose the burden of proof on the accused, requiring that the affected physician to make his case by a preponderance of evidence. The process is carefully structured so the due process rights enumerated in HCQIA are not in effect when the actual merits of the peer review case are decided.

V.  Final Remarks:

The common form of medical staff bylaws creates a procedure where an accused physician enjoys due process rights only at a stage when they can be of little or no use. The ad hoc committee of the hospital medical staff, and its executive committee, are in practice free to make determinations about medical staff privileges entirely without the basic procedural and related rights for the accused normally considered necessary for fundamental fairness. The list of due process rights in HCQIA creates an illusion of fair process. But as actually employed, they are nearly useless to the accused.

In light of the above, an accused physician needs to avoid the comfortable fiction that the stages of peer review at the committee level are non-final, and a meaningful hearing with actual due process rights exists at a later stage. The hearing stage in modern peer review is hopelessly weighted against the accused, and once that stage is reached his fate in normally sealed. When a physician finds him or herself in the committee stage of peer review, all their efforts and resources need to be deployed. While most bylaws forbid an accused physician from bringing counsel to committee “meetings” at the committee stage, they cannot prevent his consulting and taking advice from experienced counsel, and the prudent physician will do just that. If he waits to engage counsel for the hearing stage, it is probably too late.

David Parker 5 croppedDavid Parker practices in the business transaction and healthcare areas. In the health law area, Mr. Parker represents providers in Medicare, Medicaid, and private payor administrative proceedings involving overpayment, revocation and other audit matters, and buyers and sellers in healthcare related transactions. He also gives advice on False Claims Act, Stark, and Anti-Kickback Statute issues.  For a free consultation, call:  1 (800) 475-1906.

 

 

[1] 42 U.S.C. §§ 11101 – 11152.

[2] The Congress finds …(t)here is a nationwide need to restrict the ability of incompetent physicians to move from State to State without disclosure or discovery of the physician’s previous damaging or incompetent performance.” 42 USC §11101(3)

[3] The data bank was given its name and current form in HHS regulations adopted under HCQIA and codified at 45 CFR §60.1.

[4] The NPDB is not, however, accessible to direct consumers of medical services i.e. the general public.

[5] HCQIA defines “professional review action” as “an action or recommendation of a professional review body which is taken or made in the conduct of professional review activity, which is based on the competence or professional conduct of an individual physician (which conduct affects or could affect adversely the health or welfare of a patient or patients), and which affects (or may affect) adversely the clinical privileges, or membership in a professional society, of the physician. Such term includes a formal decision of a professional review body not to take an action or make a recommendation described in the previous sentence and also includes professional review activities relating to a professional review action.” § 111151(9).

[6] HCQIA contemplates the existence of a medical staff at hospitals and other provider institutions, which is the body of all licensed clinicians practicing at the institution. Although it is something of a legal fiction, as most medical staffs are not incorporated and aren’t otherwise legal persons, HCQIA treats the medical staff as a legal person to whom certain tasks are delegated by the hospital, namely the administration and adjudication of professional quality control in the form of peer reviews. The medical staff in turn appoints a committee to perform its adjudications. But since the hospital’s board is normally the only body with actual legal authority to perform a legal act like termination of privileges, HCQIA, and therefore most bylaws written with HCQIA in mind, couch the decision-making of the medical staff as a recommendation to the hospital’s board of directors.

Texas Physicians and the Texas Medical Board Under HB 680

HB 680 is an important "win" for Texas physicians.(June 21, 2011):  Last week, Texas Governor Rick Perry signed legislation aimed at bringing modest reform to the rules governing investigations of physicians by the Texas Medical Board. The Texas Medical Board is the state’s regulatory body that licenses and disciplines physicians and other health care professionals. House Bill 680 — HB 680, which takes effect on September 1, 2011, is seen as a hard-fought victory by Texas physicians. To their credit, the Association of American Physicians and Surgeons (AAPS), a professional association of physicians in all types of practices and specialties, has reportedly been one of the strongest advocates for reform measures such as this in Texas and across the country.

I. Important Provisions of HB 680:

The primary purpose behind HB 680 concerned reforming the complaint process filed with the Texas Medical Board. Among other provisions, several of the most important changes to the Board’s rules included the following:

  • The Texas Medical Board may no longer accept “anonymous” complaints. An “anonymous”  complaint is one which lacks sufficient information to identify the source or the name of the person who filed the complaint. Sec. 154.0535 of the Texas Occupations Code.
  • Requires the names and addresses of insurance companies and their agents, third-party administrators and pharmaceutical companies who file complaints to be given to the physician subject to the complaint. Furthermore, unless the notice would jeopardize the investigation, the Texas Medical Board must notify the physician of those complaining parties no later than the 15th day after the date the complaint is filed. Sec. 154.0535
  • Establishes a seven (7) year statute of limitations on complaints, unless the complaint dealt with care provided to a minor. In that case, the Texas Medical Board may not review or proceed on a complaint after the later of either:
    • The date the minor is 21 years of age; or
    • The seventh anniversary of the date of the care. Sec. 154.051
  • Allows the physician to have his Informal Settlement Conference (ISC) hearing with Texas Medical Board officials to be recorded, thereby reducing any potential abuse of power. These recordings become part of the physician’s investigative file and may not be released to third parties unless authorized under other provisions of the Occupations Code. Sec. 164.003.
  • Requires that the Texas Medical Board dispose of a contested case by issuing a final order based on an administrative judge’s (ALJ) findings of fact and conclusions of law.  Importantly, the Texas Medical Board may not change an ALJ’s “Findings of Fact” or “Conclusions of Law” or vacate or modify the ALJ’s order. Nevertheless, the Texas Medical Board still retains its sole authority and discretion to determine the appropriate action or sanction. The ALJ may not make any recommendations regarding these latter decisions. Sec. 164.007(a) and (a-1).
  • Extends the timeframes the Texas Medical Board has to complete a preliminary investigation of a complaint and notify a physician of an ISC from 30 to 45 days. Sec. 154.057(b)
  • Allows the Texas Medical Board to propose and institute a “remedial plan” to resolve the investigation of a complaint. This plan may not contain a condition that either revokes, suspends, limits or restricts a physician’s license or other authorization to practice medicine. Furthermore, the plan may not contain a provision that assesses an administrative penalty against a physician. However, the Texas Medical Board may assess a fee against a license holder participating in a remedial plan in an amount necessary to recover the costs of administrating the plan. Sec. 164.0015
  • Prevents “remedial plans” to be used in certain cases.  For example, “remedial plans” may not be imposed to resolve complaints concerning:
    • A patient’s death;
    • The commission of a felony;
    • A matter where the physician engaged in inappropriate sexual behavior or contact with a patient or became financially or personally involved in an inappropriate manner with a patient; or
    • An appropriate resolution that may involve a medicine. Sec. 164.0015
  • Bars the issue of a remedial plan to resolve complaints against a physician if the license holder has previously entered into a remedial plan with the Texas Medical Board for the resolution of a different complaint. Sec. 164.0015
  • Allows remedial plans to become public information. Furthermore, in civil litigation matters, these plans constitute a settlement agreement under Rule 408[1], Texas Rules of Evidence. Sec. 164.002(c) and (d).

II. Several Provisions of Earlier Legislative Efforts Were Not Included in HB 680:

HB 680 is an important step in the right direction for medical board reform. However, the Bill falls short of earlier legislation that had been introduced in the State. Many of the provisions in HB 680 were taken from Texas HB 1013 which had passed the Texas House 147-0 on May 10, 2011. HB 1013 was allegedly drafted to provide legal due process protections for physicians and require for administrative transparency and accountability by the Board.  Important proposed reforms covered by HB 1013 which were not incorporated in HB 680 include:

  • Eliminating “confidential” complaints. With a “confidential” complaint, the Texas Medical Board knows the name of the person or group who files the complaint but keeps that name confidential from the physician subject to the complaint. The physician would have received a copy of the complaint containing the name of the person filing the complaint. Only patients and the patients’ relatives would have been exempted from disclosure.
  • Prohibiting conflicts of interests by Board members. The provision stems from instances where Texas Medical Board members served as witnesses to medical malpractice cases while serving simultaneously serving on the Board, without disclosure to the public or to the physicians subjected to the Board’s review/discipline.
  • Allowing the Texas Medical Board to only use actively practicing physicians as experts, who would be allowed to review the accused physician’s record, but without knowing the particular name of that physician.
  • Assigning ISC panel members randomly.
  • Entitling physicians, like attorneys, to a right to a jury trial if their license would be revoked.
  • Making the Texas Medical Board annually disclose a list of those individuals who participated on its ISC panels, as well as how often.

Despite having 87 sponsors to the bill, HB 1013 was reportedly blocked from being heard in the Texas Senate.

III.  Conclusion:

As previously discussed, when the Texas Medical Board is unable to resolve a case, the case is then referred to an ALJ at the State Office of Administrative Hearings. Like many States, prior to the passage of HB 680, the Board did not have to accept the “Findings of Fact” or “Conclusions of Law” issued by an ALJ assigned to hear a case.  HB 680 now requires the Board to accept the ALJ’s decisions on whether a physician has committed a violation.  This single change is a huge “win” for Texas physicians.

While Texas physicians are far better off today than they were prior to enactment of HB 680, it is important that they familiarize themselves with their obligations under the Texas Medical Practice Act.  The TMB remains strong and is known for the stringent positions it takes.

Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Liles Parker attorneys have extensive experience representing physicians and other health care professionals in investigations and disciplinary actions taken by the Texas Medical Board and other State Medical Boards.  Need assistance?  Call us for a complimentary initial consultation.  We can be reached at:  1 (800) 475-1006 

 


[1] “Evidence of (1) furnishing or offering or promising to furnish or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice or interest of a witness or a party, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution”