The Eighth Circuit Court of Appeals recently held that Minnesota’s peer review immunity statute barred a surgeon’s defamation and tortious interference claims against his former employer and colleagues. In the case, the Eighth Circuit affirmed the high standard necessary for plaintiffs to overcome the peer review immunity provided by the statute. The decision, issued earlier this month, is a win for healthcare providers who utilize a peer review process permitted under state law.
Background: Peer Review Statute
Minnesota Statute section 145.63 provides, in pertinent part:
No review organization and no person who is a member or employee, director, or officer of . . . a review organization shall be liable for damages or other relief in any action brought by a person or persons whose activities have been or are being scrutinized or reviewed by a review organization, by reason of the performance by the person of any duty, function, or activity of such review organization, unless the performance of such duty, function or activity was motivated by malice toward the person affected thereby.
The peer review immunity statute was created “to encourage the medical profession to police its own activities with a minimum of judicial interference.” Campbell v. St. Mary’s Hosp., 312 Minn. 379, 252 N.W.2d 581, 587 (Minn. 1977).
Case Background and Decision
Plaintiff, Dr. Gregory Sherr, was a neurosurgeon who began performing surgeries at a large health system’s hospitals in 2015. The health system utilized a multi-phased peer review process for evaluating and disciplining its physicians. Specifically, the health system’s practitioners sat on councils that conducted peer review of surgeries performed at the health system’s hospitals. Council members referred troublesome cases to the health system’s Medical Executive Committee (MEC) for consideration of corrective action. Physicians who received discipline were then entitled to review by the health system’s Judicial Review Committee (JRC).
After Plaintiff began working at the large health system, it received several complaints about Plaintiff’s work performance. For example, operating room staff reported six cases in which Plaintiff’s patients suffered post-operative infections. No other surgeon had more than two. Other staff members and physicians also submitted various complaints about Plaintiff. The health system’s Spine Council met, discussed these issues, and voted to suspend Plaintiff’s privileges. The MEC then upheld Plaintiff’s suspension. Plaintiff received a hearing before the JRC at which his suspension was ultimately overturned. Plaintiff then alleged that his referral sources had been devastated as a result of the suspension process. Plaintiff resigned and sued the health system and individual members of the Spine Council for defamation, tortious interference with prospective economic relationship, and tortious interference with contract.
The court analyzed three allegedly defamatory statements: (1) Defendants told nurses that Plaintiff’s “speed in surgery was putting his patients at risk”; (2) at the October 6 peer review meeting, Defendants accused Plaintiff of “failing to order some basic and necessary imaging in connection with the treatment” of eight patients; and (3) Dr. Dunn (a defendant) “professed at that same meeting that Dr. Sherr was known by the operating room staff to have his patients ‘lose a liter of blood for every level of fusion surgery Dr. Sherr performed.’”
As to the first statement, the Eight Circuit held that it relied exclusively on inadmissible hearsay and, therefore, did not constitute defamation. As to the second and third statements, the court held that Plaintiff failed to prove they were made with malice because he could not show that the health system or the Spine Council deviated from their established procedure. The court rejected Plaintiff’s argument that it was improper for Dr. Wallenfriedman (another defendant) to lead the peer review process because she competed with Plaintiff for patient referrals. Because Plaintiff showed no clear violation of any established peer review procedure, the court held Defendants were entitled to peer review immunity. Notably, one judge filed a dissent, explaining he would have allowed Plaintiff’s claims to go to trial because there was a dispute as to whether Dr. Wallenfriedman’s presence during the peer review process was evidence of “malice” in the decision-making process.
The court also affirmed summary judgment on Plaintiff’s tortious interference claims on two separate grounds. First, the court held that, to the extent these tortious acts were committed during the peer review process, they are barred by peer immunity. Second, the court affirmed summary judgment on each of these claims on the merits.
Minnesota’s peer review immunity statute is a powerful tool that can protect healthcare organizations from liability. This case re-affirms the immunity to which covered employers can be entitled if they implement and follow objective guidelines when conducting peer review. However, as the dissent in this case highlights, peer review guidelines should be carefully drafted and reviewed by counsel to ensure they meet the statutory requirements.