Public Health Law Map - Beta 5 - Medical and Public Health Law Site

the standards set forth in the Act, and the defendant substantially prevails, the court
shall, at the conclusion of the action, award to the defendant the cost of the suit
attributable to such claim, including a reasonable attorney’s fee, if the claim, or the
claimant’s conduct during the litigation of the claim, was frivolous, unreasonable,
without foundation, or in bad faith. A defendant shall not be considered to have
substantially prevailed when the plaintiff obtains an award for damages or permanent
injunctive or declaratory relief. (sec. 11113)
D. Good Faith or Objective Standard?
There have been many cases construing the meaning of the HCQIA since its passage.
There has been nothing surprising in these cases, the act is clearly written and has few
ambiguities. The main issue has been the standard to judge the intent of the peer
reviewers. Because the statutory title of the act is Chapter 117, Encouraging Good
Faith Professional Review Activities, it was initially assumed only peer review done in
good faith would be entitled to immunity under the act. The courts have found that the
actual text of the act does not use a good faith standard, but an objective standard.
[Wayne v. Genesis Med. Ctr., 140 F.3d 1145 (8th Cir. [Iowa] 1998).] This means that if
the reviewing committee follows the procedures of the act, they are immune from
damages even if they conducted the peer review in bad faith. Conversely, if the
procedure is sufficiently flawed, it will not come under the act even if conducted in
good faith.. The objective standard makes it much easier to know that a peer review
process will be protected, even if some members of the committee have hidden
motives.
The act’s immunity is important if the jury finds that the peer review action was taken
in the reasonable belief that it would further the quality of medical care but nonetheless
violated a federal law. This might help when physicians on the peer review committee
violate other laws but conduct the peer review properly. For example, assume that the
physicians on the committee were engaged in anticompetitive activities that do not
concern the practice of the physician they are reviewing. If they conduct a proper peer
review activity, the act might prevent an aggrieved physician from alleging that the
peer review action was tainted by the racketeering activities.
A more interesting question is whether the act would allow peer review activities
designed to improve medical care by reducing competition. For example, specialty
surgeons must get several cases of an unusual condition to keep their skills keen. If
competition between two surgeons denies both the necessary level of cases to maintain
their skills, this will adversely affect the quality of medical care in the community. It
might be appropriate for a peer review committee to consider the adequacy of the
patient base when granting or renewing a specialist’s hospital privileges. The act,
however, defines these considerations as per se improper:
“Action is not considered to be based on the competence or professional conduct of a
physician if the action is primarily based on— … [any] matter that does not relate to
the competence or professional conduct of a physician.”
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