Judges have long been reluctant to intervene in private hospital staffing decisions. They are frequently uncomfortable in second guessing hospital decisions regarding the qualifications and competency of physicians. In the case of public hospitals they have had little choice. Public facilities are public actors and staffing decisions raise constitutional and civil rights issues. In June of this year the Michigan Supreme Court specifically rejected the judicial non-intervention doctrine in private hospital disputes previously adopted by the Michigan Court of Appeals in a line of cases. In Feyz, M.D. v. Mercy Memorial Hospital et al., 719 N.W.2d 1 (Mich. 2006), the court determined that the judicially created “doctrine of non-intervention” was at odds with the Michigan peer review immunity statute.
The case arose out of a dispute in the hospital over nursing orders for patient intake. The plaintiff, Dr. Feyz, insisted that hospital nurses use his special standing orders for patient intake rather than the one adopted by the hospital. Dr. Feyz wanted the nurses to obtain very specific information from patients about their prescription drug use. The defendants directed the nurses to ignore Dr. Feyz’s instructions. Dr. Feyz created “incident reports” concerning several nurses who refused to follow his instructions. He also made chart notes that his instructions were designed to prevent serious past medication errors. Dr. Feyz refused to comply with hospital policy that physicians sign transcriptions of their verbal orders.
The hospital commenced a peer review investigation of Dr. Feyz for his failure to complete medical records and ordered him to undergo a psychiatric evaluation. Dr. Feyz said he discontinued signing the orders when the hospital gave him the use of a pharmacy consult service. When the hospital withdrew the service, Dr. Feyz resumed the placement of his specialized orders. The hospital placed Dr. Feyz on indefinite probation and restricted him from further use of his specialized orders.
Dr. Feyz brought suit under the Persons with Disabilities Civil Rights Act, the Americans with Disabilities Act, the Rehabilitation Act of 1973, 42 U.S.C. § 1983 and § 1985, invasion of privacy, breach of fiduciary and public duties and breach of contract.
The trial court dismissed all of the claims because of immunity under the Michigan Peer Review Statute, MCL. 331.531 The Michigan Court of Appeals reversed the trial court in part by reinstating the civil rights claims, holding that the alleged civil rights claim was not within the scope of peer review and that the violation alleged was “malicious.”
On further appeal, the Michigan Supreme Court rejected the “non-intervention” doctrine outright because the Michigan legislature did not provide peer review immunity for hospitals under the Peer Review Statute indicating a legislative rejection of non-intervention. Second, the court rejected the foundational concern that courts are not qualified to review such cases. (“This claim overlooks the reality that courts routinely review complex claims of all kinds.”)
The court went on to adopt a defamation definition of “malice”, which is the key to exception from peer review immunity – that is, actual knowledge of falsity or reckless disregard of falsity.
[M]aking unfavorable evaluations, determinations, and recommendations based on negative information the peer review entity knows to be false would satisfy the malice standard . . . .
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The defamation definition of “malice” promotes the goals of peer review because peer review participants are not protected if they are not performing evaluations with a focus on improving healthcare, but rather on the basis of false extraneous factors unrelated to patient care.
A defamation action now also appears to be one of the vehicles of choice for challenging peer review actions by private hospitals in the State of Michigan. Dr. Feyz will apparently have his day in court to show that he was not being “disruptive” in demanding more extensive prescription drug information be obtained by nurses, contrary to hospital policy.
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