Peer review is governed by state and federal law.
Federal law provides protections for peer reviewers if the process meets
Improper peer review can result in civil and criminal liability.
Adverse peer review decisions must be reported to the National
Practitioner Data Bank.
Physicians have few rights in managed care deselection procedures.
In the 1980s, peer review of physicians for hospital medical staff privileges was
the central legal battle ground for professional review. Physicians who were
denied privileges or removed from hospital medical staffs sued, claiming unfair
or illegal treatment. Physicians who conducted the reviews demanded legal
protection because of the potential liability and costs associated with
defending an action brought by a physician denied privileges. The federal
government responded with sweeping immunity from damages in peer
review–related lawsuits, effectively limiting the legal review of these decisions,
if the peer review committee complied with the due process standards of the
federal law. This has made peer review for hospital privileges less important as
a legal issue, just as deselection by managed care organizations (MCOs) rises
Deselection is the process by which an MCO terminates a physician’s contract to
provide services. The term deselection is used, rather than peer review,
because deselection is usually done for reasons that do not implicate
preserving or improving the quality of medical care. This section reviews the
law on traditional peer review, then discusses deselection and the laws that
are applicable to deselection decisions.