Fourth Circuit Affirms Summary Judgment Under Health Care Quality Improvement Act of 1986

Congratulations to my partners, Rick Jones and David Givens for successfully defending Charleston Area Medical Center, Inc. before the United States Court of Appeals for the Fourth Circuit in the matter of Wahi v. Charleston Area Medical Center, Inc., et al., Slip Op. No. 06-2162 (4th Cir. April 10, 2009). Rick argued the case against well known lawyer, Kenneth Starr, who represented Rakesh Wahi, M.D., the appellant in the matter.

Following is a summary and some of the significant points regarding the impact on peer review privileges.

Wahi v. Charleston Area Medical Center, Inc., et al., Slip Op. No. 06-2162 (4th Cir. April 10, 2009) is a significant decision analyzing the immunity provisions of the Health Care Quality Improvement Act of 1986 (“HCQIA”). It affirms summary judgment on various claims made by the Plaintiff, a cardiothoracic surgeon, arising from the suspension of his privileges at Charleston Area Medical Center (“CAMC”), a Charleston, West Virginia hospital. The underlying facts and procedural history span over a decade of Dr. Wahi's tenure at CAMC. Dr. Wahi was granted privileges at CAMC in 1993. For a variety of reasons, CAMC summarily suspended his privileges in 1996 and reported the suspension, as required, to the National Practitioner Data Bank ("NPDB"). Following rehabilitative efforts, Dr. Wahi was granted restricted privileges.

Subsequently, there were documented instances of Wahi practicing outside the scope of his restricted privileges, as well as charges of practicing below the standard of care. In July 1999, Dr. Wahi was again summarily suspended, and requested a hearing under the applicable provisions of the hospital’s governing documents.

Not satisfied with the hearing procedures set forth in the governing documents, Dr. Wahi retained counsel to negotiate with the hospital over the hearing process. He objected to the hearing examiners, procedures, and ultimately sought the intervention of a state circuit court before the hearing process even began. Following the state court's refusal to intervene, Dr. Wahi ceased efforts to move forward with the hearing process and, some five years later, filed suit in the United States District Court for the Southern District of West Virginia alleging anti-trust monopolization and conspiracy, breach of contract, civil rights conspiracy, defamation and breach of contract. Following limited discovery on the application of immunity under HCQIA1, CAMC moved for summary judgment. Judge Goodwin granted CAMC's motion as to all counts finding that Dr. Wahi failed to rebut the statutory presumption of immunity. Dr. Wahi appealed.

The Fourth Circuit found that Dr. Wahi abandoned any appellate claim as to three of the four prongs under the HCQIA immunity standards and focused its immunity analysis solely on the issue of whether CAMC’s failure to actually set and hold a hearing deprived the hospital of its legally presumed immunity.

The Fourth Circuit affirmed summary judgment, finding the hospital was immune for its actions under the HCQIA despite the fact that a hearing was never actually scheduled or conducted. CAMC’s notification to Dr. Wahi of the charges, the hospital’s many attempts to provide a hearing, and Dr. Wahi’s non-cooperation in the hearing process led the court to conclude that CAMC’s process, when considered in its totality, satisfied the minimum standard of reasonableness required under HCQIA. The Court found that Dr. Wahi’s evidence was simply insufficient to overcome the statutory presumption of immunity under HCQIA, and affirmed the district court's ruling.

The Court also affirmed the District Court’s refusal to grant injunctive relief, finding Wahi did not prove CAMC committed any wrong; that CAMC was not a “state actor” for purposes of § 1983 claims; that he failed to amend his complaint to include a defamation claim, making it non reviewable on appeal; and, that because the hospital bylaws did not form a contract under state law, Dr. Wahi could not allege breach of contract for any violation of the bylaws. A final argument rejected by the Court was Dr. Wahi’s claim that CAMC breached confidentiality required by 45 C.F.R. § 60.13 by disclosures to the press, finding the NPDB “does not prevent the entity who reported NPDB from disclosing the mere fact that a report was filed.”

The Wahi opinion has significance for hospitals and others involved in peer review matters:

• HCQIA provides a means of minimizing and limiting discovery to issues related to the availability of immunity to a hospital. HCQIA provides a vehicle through which a hospital may obtain summary disposition of cases without running the risks associated with a jury trial.
• For a hospital to avail itself of HCQIA immunity, there need not be precise compliance with all the elements of one’s governing documents, but the hospital may show from a totality of the circumstances that its handling of the matter was objectively reasonable.
• HCQIA’s “safe harbor” provisions should be read expansively and not narrowly construed.
• The reasonableness of a hospital’s actions is not a subjective determination, and neither good nor bad motives should be considered; rather, the court should look at the objective, overall reasonableness of the hospital’s actions, even if it is later determined that the facts were different or the standard of care was actually met.
• A hospital should use care in properly documenting the information upon which it acts and the manner of notifying the physician of the charges and, above all else, make sure the physician is fully advised of the charges and given the opportunity to explain or rebut any charges against him. Proper documentation of all the steps required for HCQIA is crucial.

Rick and David would like to recognize fellow partner, Nate Tawney, and associate, Justin Jack who also worked on defending the matter and assisted in the preparation of this summary.