iThe Seventh Circuit recently issued a decision highlighting the importance of conducting an objectively reasonable or good faith peer review action — particularly in situations involving the termination of a physician’s clinical privileges — and the protections provided under the Health Care Quality and Improvement Act (“HCQIA”).1 The decision also provides a helpful refresher on the elements and prerequisites of various causes of action often alleged in lawsuits arising out of peer review actions.
Cardiothoracic Surgeon’s Privileges Terminated Due to Clinical Concerns
Dr. Nazir Khan worked as a cardiothoracic surgeon for approximately twenty years for St. Elizabeth’s Hospital, which, following a merger, became Presence Chicago Hospitals Network in 2005 (the “Hospital”).2 In late 2017, the Hospital’s Chief Executive Officer (“CEO”) and Chief Medical Officer (“CMO”) asked Dr. Khan to resign from the Medical Staff based upon a “pattern” involving his cases.3 According to Dr. Khan, he was not provided any specific details regarding the “pattern” and was told to immediately sign a leave of absence agreement, which he did.4
A couple of weeks later, pursuant to the Hospital’s Medical Staff Bylaws, the Hospital’s Medical Executive Committee (“MEC”) appointed an Investigative Committee to address the quality concerns raised regarding Dr. Khan’s practice at the Hospital.5 Thereafter, the Hospital’s Quality Assurance Committee identified four surgical cases performed by Dr. Khan that raised clinical concerns and also identified clinical concerns related to a high infection rate, responsiveness to calls and pages, and case management trends.6 The MEC informed Dr. Khan that he needed to undergo a physical and psychological examination to address the concerns.7 Dr. Khan refused, arguing the testing was unjustified.8 Shortly thereafter, Dr. Khan asked the MEC to send a log of his cases to an outside reviewer. According to Dr. Khan, the Hospital ignored his request.9 Dr. Khan’s privileges were terminated approximately six months later.10
Surgeon Sues for Everything but the Kitchen Sink
Two years after his privileges were terminated, Dr. Khan filed a lawsuit against the Hospital, the Hospital’s Board of Directors, and various health care providers alleging violation of the Hospital Medical Staff Bylaws, fraudulent actions and wrongful termination of privileges, violation of HCQIA, breach of contract, violation of federal antitrust laws, violation of Title VII of the Civil Rights Act, and defamation.11 In his complaint, Dr. Khan claimed that the CEO and CMO of the Hospital conspired against him and coerced him into taking the leave of absence from the Hospital and that the leave of absence agreement violated the Hospital’s Medical Staff Bylaws because it failed to state the duration of the leave of absence.12 While Dr. Khan acknowledged signing the leave of absence agreement, he claimed he signed the agreement under duress.13 According to Dr. Khan, the Hospital wanted him removed from the medical staff so it could use its own radiologists to perform and charge for the endovascular procedures Dr. Khan had been performing. Dr. Khan also asserted that the Hospital’s peer review committee relied on false statements and failed to provide an appropriate notice and hearing.14
The district court dismissed all claims, stating that even viewing Dr. Khan’s claims liberally, his antitrust, HCQIA, and Title VII claims required dismissal.15 The district court declined to exercise supplemental jurisdiction over Dr. Khan’s remaining state law claims. As to his antitrust claims, the district court found that Dr. Khan had only pled that his injury was the loss of clinical privileges, which was insufficient to state an antitrust injury, and that he failed to plead the existence of a relevant commercial market.16 The district court dismissed Dr. Khan’s HCQIA claim, noting that HCQIA does not provide a private right of action to aggrieved physicians.17 The district court also dismissed Dr. Khan’s Title VII claim, determining that Dr. Khan failed to allege that he filed a charge with the Equal Employment Opportunity Commission (“EEOC”) within the requisite time period and receive a right-to-sue letter, which is a prerequisite to bring the claim in federal court.18 Dr. Khan subsequently amended his complaint, this time attaching an EEOC right-to-sue letter. The district court dismissed the complaint again, however, as the letter confirmed that Dr. Khan was untimely in submitting his charge to the EEOC.19
Dr. Khan appealed the district court decision to the Seventh Circuit (the “Court”), which, in early January 2022, affirmed the dismissal of Dr. Khan’s claims. On appeal, Dr. Khan argued that the district court should have tolled the statute of limitations relating to his Title VII claim because he was unaware of the time requirement associated with filing a charge to the EEOC until his complaint was dismissed.20 Because Dr. Khan raised the argument for the first time on appeal, the Court concluded his argument was waived and further noted that he had failed to allege any facts that would warrant tolling.21 The Court also affirmed the dismissal of Dr. Khan’s antitrust claims and HCQIA claim, agreeing that Dr. Khan failed to allege an injury to the market and emphasizing that HCQIA does not provide a private right of action and “indeed, it immunizes those engaged in good-faith peer review.”22
Key Take-Away
This case highlights the importance of conducting an objectively reasonable, good faith peer review action. While the text of HCQIA does not require proof of good faith, the Court nonetheless considered the good faith of the defendants in dismissing Dr. Kahn’s lawsuit. While there is no magical, one-size-fits-all formula to follow when engaging in peer review, in order to obtain civil immunity protections under HCQIA, it is imperative that health care entities and providers follow formally adopted written procedures that focus on furthering quality health care, mandate that reasonable efforts take place to investigate and obtain facts pertaining to the matter and provide adequate notice and an opportunity for a hearing when required. In these situations, health care entities and providers are in the best position to justify their actions and are presumed to have met the requirements to receive civil immunity protections under HCQIA, unless rebutted by a preponderance of the evidence.
In this case, the Hospital appears to have conducted the peer review process specified in the Hospital’s Medical Staff Bylaws to address quality concerns raised regarding Dr. Khan’s professional conduct. While all steps taken by the Hospital during the peer review process were not made known, neither the Seventh Circuit nor the underlying district court referenced any actions taken by the Hospital that would support a finding that it acted in bad faith or that a sham peer review process took place.
Footnotes
1 While the Seventh Circuit’s decision considers whether the peer review action was conducted in good faith, the prevailing standard for most courts is whether the action was “objectively reasonable.” See, e.g., Poliner v. Texas Health Sys., 537 F.3d 368 (5th Cir. 2008).
2 Khan v. Presence Chicago Hosps. Network, No. 21-2159, 2022 WL 42731, at *1 (7th Cir. Jan. 5, 2022).
3Id. at *1; Khan v. Presence St. Mary & St. Elizabeth Hosps., No. 20 C 3819, 2020 WL 6750535, at *1 (N.D. Ill. Nov. 17, 2020).
4Presence Chicago Hosps. Network, 2022 WL 42731, at *1; Presence St. Mary & St. Elizabeth Hosps., 2020 WL 6750535, at *1.
5Presence St. Mary & St. Elizabeth Hosps., 2020 WL 6750535, at *1.
6 Id.; Presence Chicago Hosps. Network, 2022 WL 42731, at *1.
7Presence Chicago Hosps. Network, 2022 WL 42731, at *1.
8 Presence Chicago Hosps. Network, 2022 WL 42731, at *1; Presence St. Mary & St. Elizabeth Hosps., 2020 WL 6750535, at *1.
9 It is unclear from the court decisions whether Dr. Khan voluntarily terminated his privileges, or whether the Hospital terminated his privileges following his refusal to undergo the required physical and psychological evaluation.
10 Presence Chicago Hosps. Network, 2022 WL 42731, at *1 and Presence St. Mary & St. Elizabeth Hosps., 2020 WL 6750535, at *1. 11Presence Chicago Hosps. Network, 2022 WL 42731, at *1; Presence St. Mary & St. Elizabeth Hosps., 2020 WL 6750535, at *2.
12 Presence St. Mary & St. Elizabeth Hosps., 2020 WL 6750535, at *1.
13 Presence Chicago Hosps. Network, 2022 WL 42731, at *1.
14 See id. at *2.
15 Id. at *1; Presence St. Mary & St. Elizabeth Hosps., 2020 WL 6750535, at *2.
16 Id. at *3.
17 Presence Chicago Hosps. Network, 2022 WL 42731, at *1.
18 Presence St. Mary & St. Elizabeth Hosps., 2020 WL 6750535, at *4.
19 Presence Chicago Hosps. Network, 2022 WL 42731, at *1.
20 Id. at *2.
21 Id.
22Id.
