By Damian D. Capozzola, Esq.
The Law Offices of Damian D. Capozzola, Los Angeles
Jamie Terrence, RN
President and Founder, Healthcare Risk Services, Former Director of Risk Management Services (2004-2013), California Hospital Medical Center, Los Angeles
News
A gynecologic oncologist filed a lawsuit against his former employer, a hospital, after a report filed by the hospital with the National Practitioner Data Bank allegedly caused significant damage to his career. The plaintiff had been placed on a precautionary suspension following a surgery, but his privileges later were fully restored. Despite this, the hospital reported him to the Data Bank, describing the suspension as “indefinite” and citing concerns about his clinical care. This report led to the rescission of a job offer and multiple rejections from other potential employers. The plaintiff sued the hospital under several legal theories. The court allowed the plaintiff’s libel and tortious interference claims to proceed, finding that the plaintiff sufficiently alleged the report contained false information and caused him to lose job opportunities.
This case highlights the importance of accuracy in hospital peer review processes and the long-term effect that adverse reports to the Data Bank can have on a physician’s career. Physicians must actively engage in the peer review process, understand their legal rights, and address any inaccuracies in reports to protect their professional reputation. The case also underscores the need for proactive reputation management, as even resolved issues can influence future employment opportunities.
Background
The plaintiff, a gynecologic oncologist, was employed at a hospital in North Carolina beginning in 2013. In February 2019, he announced his resignation, set to take effect in July 2020, as he had secured a new position at another hospital.
On March 2, 2020, the plaintiff performed a complex surgical procedure that resulted in complications, requiring the involvement of other specialists and the removal of a significant portion of a patient’s colon. The day after the surgery, the plaintiff was placed on a “precautionary suspension” because of concerns over this surgery and two prior incidents involving intraoperative organ injuries. This suspension triggered a series of investigations by the hospital.
On March 10, 2020, the hospital’s Credentials Committee modified the suspension to a “lesser sanction with conditions.” However, the situation escalated when, on March 25, 2020, the precautionary suspension was reinstated because of ongoing concerns about the plaintiff’s clinical practices. The plaintiff submitted to the investigative process, and on April 23, 2020, the Credentials Committee fully restored the plaintiff’s privileges, although conditionally, pending a satisfactory fitness-for-duty evaluation.
Yet, on May 4, 2020, the hospital filed a report with the National Practitioner Data Bank indicating that the plaintiff had been subject to an indefinite suspension because of concerns about his preoperative planning and intraoperative care. (The National Practitioner Data Bank is operated by the United States Department of Health and Human Services, collecting adverse actions against healthcare professionals to protect the public).
This report had significant consequences for the plaintiff’s career. By December 2020, the new hospital where he was set to work rescinded its job offer, citing the Data Bank report as the reason. Over the next few years, the plaintiff faced multiple rejections from potential employers, all of whom, the plaintiff alleged, were influenced by the report. The plaintiff claimed that the report was false and that the hospital knew it contained inaccuracies, since his privileges had been fully restored with only a conditional requirement. He argued that the report’s failure to accurately reflect this caused irreparable harm to his reputation and career.
The plaintiff filed the lawsuit on June 9, 2023, and filed an amended complaint in July 2023. He alleged that the report to the Data Bank was false and defamatory, causing him to lose job opportunities. He also claimed that the defendants breached an implied covenant in their employment relationship by reporting him to the Data Bank without proper peer review and failing to correct the false report. He also asserted that the defendants unlawfully interfered with his ability to secure employment and caused him severe emotional distress.
The defendants filed a Motion to Dismiss. The court dismissed several of the plaintiff’s claims, but allowed the libel claims to proceed, recognizing that the plaintiff had adequately alleged that the report contained false, defamatory statements that were published to third parties, specifically his potential employers. The defendants argued that the claims should be dismissed because the report was filed more than a year before the lawsuit, exceeding the statute of limitations for defamation. However, the court noted that under North Carolina’s “multiple publication” rule, each time the defamatory report was accessed by potential employers within the one-year period before the complaint was filed, a new cause of action arose.
The court also allowed the plaintiff’s tortious interference claim to proceed, noting that the plaintiff had sufficiently alleged the existence of prospective business relationships with multiple healthcare entities. The court found that the submission of the report to the Data Bank, which was later accessed by these employers, could be seen as interference with these prospective contracts.
What This Means for You
This case underscores critical issues that medical professionals must be aware of concerning professional conduct, peer review processes, and the lasting implications of adverse reports to national databases like the National Practitioner Data Bank. Hospitals should ensure accuracy when reporting to the National Practitioner Data Bank. Here, the hospital reported that the plaintiff’s suspension was “indefinite,” even though his privileges were later fully restored. Even if the report was accurate at one time, hospitals must ensure that all reports to the Data Bank not only are accurate but also reflective of the most current and complete information to avoid legal repercussions.
The case highlights the importance of fair and unbiased peer review committees. The peer review process, while necessary to maintain high standards of patient care, must be conducted with utmost fairness and accuracy. Any adverse findings, particularly those that lead to suspensions or that are reported to the Data Bank, can have career-ending consequences, as the plaintiff in this case alleged to have faced. Here, the plaintiff alleged that the peer review process was flawed and biased and failed to meet the standards of the Healthcare Quality Improvement Act (HCQIA). If peer review processes are not conducted properly — with due diligence and fairness — hospitals risk losing the legal protections afforded by the HCQIA.
Physicians must be aware of the legal frameworks that both protect and expose them to liability. The HCQIA, for instance, provides certain immunities to those involved in the peer review process, but as the defendants in this case discovered, these are not absolute. The HCQIA is a federal law enacted to improve the quality of healthcare by encouraging peer review among physicians while providing immunity from liability to those who participate in the peer review process, provided certain standards are met.
The law requires that reports be submitted to the National Practitioner Data Bank when a physician’s clinical privileges are adversely affected for more than 30 days because of concerns about competence or conduct. The defendants in the case argued that they were entitled to immunity under the HCQIA because the actions they took regarding the plaintiff’s suspension and the subsequent report to the Data Bank were in compliance with the HCQIA’s standards.
But the court found that the plaintiff’s allegations, if true, could demonstrate that the defendants did not act in accordance with the HCQIA’s requirements. For example, the claim that the defendants reported the suspension as indefinite when it was not could indicate that the report was not based on a reasonable belief in its accuracy. Additionally, if the peer review process was conducted in a biased or incomplete manner, it might not meet the HCQIA’s standard of being taken after a reasonable effort to obtain the facts. The court allowed the case to proceed, indicating that whether the defendants were entitled to HCQIA immunity would be a factual determination better suited for later in the litigation process, possibly at trial.
Another key takeaway is proactive engagement and thorough documentation during the peer review process. The plaintiff actively participated in the process by responding to the suspension, submitting written responses, and meeting with an investigating subcommittee. Despite these efforts, the process ultimately led to a negative report being filed with the Data Bank.
But the plaintiff cited his good faith participation in the process in his complaint against the hospital. Participating in the investigatory process and documenting all interactions, communications with the investigators can be important to establish that the process was unfair and biased as the plaintiff alleged. There should be checks and balances within the peer review process, including proctoring of the physician involved. That way, any reporting that takes place can be reviewed by peers actively involved in and familiar with the case. Often, this process is left to clerical staff, who have little investment or experience in peer review and lack the legal expertise to identify potential risks.
Medical staff committees need support during the peer review process, and it should be provided by trained in-house peer review professionals. Outside peer reviews also are available for reviews if the expertise required is not sufficient within the facility.
Maintaining a pristine professional reputation is more important than ever. This case serves as a lesson for how quickly a professional reputation can be tarnished, and how difficult it can be to restore it once damage is done. Proactive reputation management, including prompt responses to peer review actions and monitoring what is being reported to databases like the Data Bank, is essential for long-term career success.
Finally, the fact that prospective employers can easily access a physician’s history through the Data Bank means that past actions, even those that have been resolved in the physician’s favor, can influence hiring decisions. In this case, the plaintiff alleged that not only did his new employer rescind its offer of employment to him, but that he could not get a job at other hospitals based on the report’s false statements. Physicians should be aware that any suspension, investigation, or adverse action — no matter how minor — could be reported and might need to be addressed with future employers.
Reference
- Decided on Aug. 7, 2024, in the United States District Court for the Western District of North Carolina, Case No. 23-cv-00152.
A gynecologic oncologist filed a lawsuit against his former employer, a hospital, after a report filed by the hospital with the National Practitioner Data Bank allegedly caused significant damage to his career.
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