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.”
Thus, if the specialty surgeons were still competent (before competition reduced their skills), the act seems to forbid peer review actions necessary to maintain that competence. Once the competition had reduced the surgeons’ competence, the committee might be able to act to reduce competition. At this point, however, it might be impossible to justify penalizing one surgeon to the benefit of the other. This also may affect the general issue of the hospital’s using medical staff privilege decisions to shape the package of services it offers.