Amicus Curiae Brief — Wahi v. Charleston Area Area Medical Medical Medical Center Center (No. 09-430)

= INTHE

Supreme Court of the Gnited States

RAKESH WAHI, M.D.

Petitioner,

CHARLESTON AREA MEDICAL CENTER, E7AL.,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Fourth Circuit

MOTION TO FILE BRIEF AMICUS CURIAE

IN SUPPORT OF PETITIONER

AND

BRIEF OF AMICUS CURIAE ASSOCIATION OF

AMERICAN PHYSICLANS AND SURGEONS, INC.

IN SUPPORT OF PETITIONER

ANDREW L. SCHLAFLY

939 OLD CHESTER ROAD

FAR HILLS, NJ 07931

(908) 719-8608

Counsel for Amicus Curiae

RENNES RR RRR CERT SE oN OS SR CS HET SEIS

WILSON-EPES PRINTING Co., INC. — (202)789-O0096 — WASHINGTON, D. C. 20002

i

MOTION FOR LEAVE TO FILE A BRIEF AS

AMICUS CURIAE IN SUPPORT OF THE

PETITION FOR WRIT OF CERTIORARI

Pursuant to Rule 37.2(b) of the Rules of the Su-

preme Court, the Association of American Physicians

and Surgeons, Inc. (“‘AAPS”) respectfully moves this

Court for leave to file the accompanying brief amicus

curiae in support of the Petition for Writ of Certiorari

submitted by Petitioner Rakesh Wahi. Respondents

have not granted consent, thereby making this mo-

tion necessary.

AAPS is a non-profit, national group of thousands

of physicians founded in 1943, dedicated to defending

the patient-physician relationship and free enterprise

in medicine. AAPS has filed amicus curiae briefs in

several federal appellate cases concerning sham peer

review, and on many other important medical issues.

See, e.g., Stenberg v. Carhart, 530 U.S. 914, 933

(2000) (citing an AAPS amicus brief); Springer v.

Henry, 435 F.3d 268, 271 (3d Cir. 2006) (citing an

AAPS amucus brief in the first paragraph of the deci-

sion); United States v. Rutgard, 116 F.3d 1270 (9th

Cir. 1997) (reversal of a sentence as urged by an amz-

cus brief submitted by AAPS).

There is a growing misuse of peer review common:

ly known as “sham peer review.” Sham peer review

consists of manipulation of peer review to eliminate

physicians for economic or other improper reasons.

Accountability for wrongdoing is essential to deter

and guard against sham peer review, and the lower

court’s standard for immunizing such wrongdoing by

hospitals with respect to physicians has a disastrous

effect on health care. AAPS has members who have

been injured by bad faith or “sham” peer review, simi-

ii

lar to what has occurred here. Many good physicians

have lost their ability to practice medicine, and their

patients have lost their access to the physicians of

their choice, because of these sham peer reviews.

The Petition has national implications for the de-

livery of quality medical care and the integrity of pro-

fessional peer review. Patients suffer when physi-

cians are removed from hospital staffs, and their ca-

reers ruined, based on improper motives. When im-

munity shields and encourages hospitals to engage in

sham peer review, as occurred here, the chilling effect

on good physicians is catastrophic. Few physicians

will speak out in favor of patient care and preserva-

tion of life if it means risking their careers at the

hands of a biased hospital committee.

AAPS submits the attached brief to explain the

national significance of how the decision below unjus-

tifiably encourages “sham peer review” by hospitals.

In this brief AAPS also demonstrates the importance

of restoring integrity to peer review for the benefit of

medical care nationwide.

For the above reasons, AAPS respectfully requests

that this motion for leave to file the attached brief

amicus curiae be granted.

Respectfully submitted,

ANDREW L. SCHLAFLY

939 OLD CHESTER ROAD

FAR HILLS, Nd 07931

(908) 719-8608

Counsel for the Association

of American Physicians &

Surgeons, Inc.

iil

QUESTIONS PRESENTED

1. The Health Care Quality Improvement Act, 42

U.S.C. §§ 11101-11152, provides a hospital inmunity

from monetary damages for disciplining a doctor “af-

ter’ providing “adequate notice and hearing” or other

“fair” procedures. § 11112(a)(3) (emphasis added). By

contrast, the Act allows disciplining “immediately” —

that is, before notice and a hearing or other “fair”

procedures — only where “failure to take such an ac-

tion may result in an imminent danger to the health

of any individual.” § 11112(c). Did the court below

err in holding, in conflict with four other circuits, that

a hospital can obtain immunity for disciplining a doc-

tor immediately — before notice and a hearing —

where the hospital concedes that it did not find or re-

ly upon the possibility of imminent danger?

2. Under the Act, may an immunity determination be

made by a jury, as the First and Tenth Circuits hold,

or is a jury forbidden from making such a determina-

tion, as the Eleventh Circuit and Colorado Supreme

Court hold — and as the Fourth Circuit effectively

held here?

iV

TABLE OF CONTENTS

Pages

MOTION FOR LEAVE TO FILE...........................0seccee i

QUESTIONS PRESENTED .................cccccsccscscesscossess iil

Re He ins sonic ncecesincccccsecnsicccssencessavencs iv

Fe I orncciincicrckoicoassscsccscasecccesocses v

INTEREST OF AMICUS CURIAE...................00.0.0000. 1

Ae GP FEIN E, wvcnecccscceccvcssccssnccensesecceses 2

Sr a aaa aniad 5

I. A CRISIS OF NATIONAL SIGNIFICANCE RESULTS

FROM THE “UNCONVENTIONAL STANDARD”

APPLIED BY THE FOURTH CIRCUIT BELOW, WHICH

IMPEDES COMPETITION, FRUSTRATES

INNOVATION, AND INTERFERES WITH QUALITY

NE II vais sis tc cinkesisactaseuiereieubanceedeiaasimamends 7

II. THE PETITION SHOULD BE GRANTED TO CURB THE

LEGAL ABUSES ARISING FROM SHAM PEER

IIILHCQIA IMMUNITY DOES NOT EXTEND TO A

SUMMARY SUSPENSION TAKEN WITHOUT

IMMINENT DANGER, NOTICE, OR A_ PRIOR

HEARING, AND THE DECISION BELOW THEREBY

INTERFERES WITH FEDERALISM............0.0s0eeeeeeees 19

INIT sikniditsuliniciminatimnndieimcanniiie 24

Vv

TABLE OF AUTHORITIES

Pages

Cases

Abshire v. Cline, 193 W. Va. 180, 455 S.E.2d 549

IRE rn ROEDER ee eR SY et cite et! 20-21

Armstrong v. Manzo, 380 U.S. 545 (1965)......... 20

Clark v. Columbia/HCA Info. Servs., 117 Nev.

468, 25 P.3d 215 (Sup. Ct. Nev. 2001)............ 23

Drstrict of Columbia v. Heller, 128 S. Ct. 2783

ESERIES Pe inert os ea eer MOO 2

Edward J. DeBartolo Corp. v. Fla. Gulf Coast

Bldg. & Constr. Trades Council, 485 U.S. 568

REE eae epPinee ca? hye en Tea BPSD OR ey 21

Gabaldoni v. Washington County Hosp. Ass'n,

SEO FB BEG GEE Civ. BOOT) gnnnccccccccccccccccesccsees 8

Goldberg v. Kelly, 397 U.S. 254 (1970).............. 20

Gonzales v. Oregon, 546 U.S. 243 (2006)........... 21

Gonzales v. Raich, 545 U.S. 1 (2005) ...... ee. 23

Grannis v. Ordean, 234 U.S. 385 (1914)............ 20

Harris v. Bradley Mem. Hosp. & Health Ctr.,

2005 Conn. Super. LEXIS 1401 (Conn. Super.

a UY WU occas occ oncesussusuncsaisons 23-24

Horner v. Dep’t of Mental Health, Mental Retar-

dation, & Substance Abuse Servs., 268 Va. 187

Linder v. United States, 268 U.S. 5 (1925)........ 22

Poliner v. Tex. Health Sys., 537 F.3d 368 (5th Cir.

2008), cert. denied, 129 S. Ct. 1002 (2009) 16-17

Premiere Network Servs. v. SBC Comm., 440

F.3d 683 (5 Cir. 2006) .................cccceececeeeceeee a2

v1

SEC v. Sloan, 436 U.S. 103 (1978) ............0..0.000- 20

Springer v. Henry, 435 F.3d 268 (3d Cir. 2006) ...i

Stenberg v. Carhart, 530 U.S. 914 (2000)......... i, 2

United States v. Bass, 404 U.S. 336 (1971) ..22-23

United States v. Lopez, 514 U.S. 549 (1995) .22-23

United States v. Rutgard, 116 F.3d 1270 (9th Cir.

i ER A Sa 2 ons REET aOR i

Wahi v. Charleston Area Med. Center, 453 F.

Supp. 2d 942 (S.D. W.Va. 2006), afd, 562 F.3d

occa cesccccnsavececscnéscncessnesensseces 20

Wahi v. Charleston Area Med. Center, 562 F.3d

TD a... cs sencsanssensanensevvessenes passim

Will v. Michigan Dep t of State Police, 491 U.S. 58

eet 0 td a sieucuuwwanauase 21

Statute and Legislative History

Pe Fen Ge 2k oe iii

Oe ED a «,...<ssasacocsosaccesvarensonsnenessneis 20

We, FF EE I vncssscscescesssccnecssanseecsnessess iii, 19

EE, i IO... ssnisnnntnesodsooenatnuvoannteeens iii

Articles and Treatise

Roland Chalifoux, Jr., M.D., “So What Is a Sham

Peer Review?’, 7 Medscape General Medicine

cs awasancansenteaanenencs 9

Jeff Chu, “Doctors Who Hurt Doctors,” Time 52

I ee 10

H. Friendly, “Federalism: A Foreword,” 86 Yale L.

J. 1019 (1977)

Vii

Lawrence Huntoon, M.D., Ph.D., “Tactics Charac-

teristic of Sham Peer Review,” Journa/ of

American Physicians and Surgeons 64 (Fall

iT ee REPELS LAIR SIRES OO 13-14, 17

Lawrence Huntoon, M.D., Ph.D., “Abuse of the

‘Disruptive Physician’ Clause,” Journal of

American Physicians and Surgeons 68 (Fall

Re ae MU eam Ne 2 9-10

John Minarcik, M.D., “Sham Peer Review: a Pa-

thology Report,” Journal of American Physi-

cians and Surgeons 121 (Winter 2004) ............ 9

William Parmley, “Clinical Peer Review or Com-

petitive Hatchet Job,” 36 Journal of the Ameri-

can College of Cardiology 2347 (2000)............ 10

Scott Plantz, M.D., et al., “A National Survey of

Board-Certified Emergency Physicians: Quality

of Care and Practice Structure Issues,” 16 Am.

J. of Emerg. Med. 1 (Jan. 1998)..................008 11

Bob Stuart, “Court Rules for Whistleblower,”

News Virginian (June 16, 2004).................06+ 12

William Summers, “Sham Peer Review: A Psy-

chiatrist’s Experience and Analysis,” Journal of

American Physicians and Surgeons 125 (Winter

LER ARLE SRY. A) aN RP CN 9

David Townsend, “Hospital Peer Review Is a

Kangaroo Court,” Medical Economics 133 (Feb.

Oe I a aici dikes eh ouateande canbe Gevires ditadesaeecskae 9

Steve Twedt, “The Cost of Courage: How the

Tables Turn on Doctors,” Pittsburgh Post-

Gazette Al (Oct. 26, 2003) ..............0.000ccce eee eeeeee fs)

Gail Weiss, “Is Peer Review Worth Saving?” Med:

ical Economics (Feb. 18, 2005)............0...0cec0eeeee g

Vill

G. Wood, The Creation of the American Republic,

I iaiscus cisinscischtnconenkanivcesnabsteciius 22

John Zicconi, “Due Process or Professional Assas-

sination?” Unique Opportunities (March/April

SRA OE Te ARR EE Sree OES NP ROTTS 9

Internet

http://www.allianceforpatientsafety.org/hs2.pdf

I al siiseananeen nae 18

http://www.jpands.org/voll0no4/summers.pdf (viewed

eee ERTS Sedat et eB rea DEF RPS EE Pa RN RSE a 9

http://www.jpands.org/voll4no3/huntoon.pdf (viewed

ES REAR ROR Oe OPT Tae EDT eee pee 14

http://www.jpands.org/vol9no3/huntoon.pdf (viewed

A aR RR ES PRN a SAE ee CONC SOF ca 10

http://www.jpands.org/vol9no04/minarcik.pdf (viewed

EEE ir cha pee PERO IPS RRR 9

http://www.memag.com/memagp/article/articleDetail.js

p?id=147405 (viewed 11/6/09) ..........00...cecee esos 9

http://www.post-gazette.com/pg/03299/234499.stm

I I occ scneiatesanntagtarunspnitceanosane 9

http://www.uoworks.com/pdfs/feats/PEERREVIEW.p

Re EI icadsccoprscseseskersscasecactetopvesernes 9

No. 09-430

| IN THE

Supreme Court of the United States

RAKESH WAHI, M.D.

Petitioner,

v.

CHARLESTON AREA MEDICAL CENTER, £7'AL.,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Fourth Circuit

INTEREST OF AMICUS CURIAE'

The Association of American Physicians and

Surgeons, Inc. (““AAPS”), founded in 1943, is a non-

profit, national group of thousands of physicians.

AAPS has members who have suffered from bad faith

' Timely notice for this brief was provided in compliance with

Rule 37.2(a) of the Supreme Court of the United States. Res-

pondents did not consent and hence an accompanying motion is

filed with this brief. Pursuant to its Rule 37.6, counsel for am

cus curiae authored this brief in whole, and no counse!] for a par-

ty authored this brief in whole or in part, nor did any person or

entity, other than amicus, its members, or its counsel make a

monetary contribution to the preparation or submission of this

brief:

2

peer review by hospitals, also known as “sham peer

review,” as retaliation for competing with a hospital,

practicing innovative medicine or simply standing up

on behalf of patients. In many cases the sham peer

reviews are initiated because a talented physician

posed a competitive threat to a hospital, or to col-

leagues who are powerful at a hospital.

AAPS is dedicated to defending the practice of

private and ethical medicine so that physicians may

best serve their patients without interference by

third parties. AAPS has filed amicus curtae briefs in

numerous cases before the United States Supreme

Court and federal Courts of Appeals, and its submis-

sions have been cited in opinions. See, e.g., District

of Columbia v. Heller, 128 S. Ct. 2783, 2860 (2008)

(Breyer, Stevens, Souter and Ginsburg, JJ., dissent

ing); Stenberg v. Carhart, 530 U.S. 914, 933 (2000).

The issues presented in this case are of national

importance, affecting virtually every hospital in the

nation, every physician at every hospital, and every

one of their patients. Amuscus has a direct and vital

interest in the issues presented by the Petition, based

on the harmful effect on the practice of medicine and

the quality of patient care that results from judicially

created — and statutorily unjustified — immunity for

bad faith peer review.

SUMMARY OF ARGUMENT

Bad faith or “sham” peer review is an issue of

enormous national importance. It is a pervasive na-

tional problem that impedes medical innovation, in-

terferes with beneficial competition, and punishes

extraordinarily good medical care. In no industry

other than health care can a self-interested rival

3

thwart competition with impunity and destroy good

professionals with abandon, while enjoying full legal

immunity for the wrongdoing.

In this case, the Respondent Charleston Area

Medical Center (CAMC) concedes it did not rely on

any imminent danger in summarily suspending Peti-

tioner Wahi’s privileges. See Petition at 25. But im-

minent danger is the only legitimate and statutorily

justified basis for taking such draconian, emergency

action. The real motivation for the CAMC to take

such drastic action was apparently just as Petitioner

Wahi alleged: “CAMC’s decisions to suspend [Peti-

tioner Wahi] and deny his application for reappoint:

ment were taken in bad faith to prevent competition

by monopolizing the field of cardiac surgery in the re-

gion and to prevent him from practicing medicine.”

Wahi v. Charleston Area Med. Center, 562 F.3d 599,

605 (4th Cir. 2009) (Pet. at 10a).

Sham peer review, which is at the heart of this

case, works as follows. A hospital seeking to destroy

a potential competitor finds a pretext for revoking or

restricting the physician’s medical privileges, as oc”

curred here. That results in an entry against the

physician in the National Practitioner Data Bank, as

occurred here, which is the equivalent of a profes-

sional blacklist and a death-sentence to the physi-

cian’s career. /d. at 603 (Pet. at 7a). The physician,

as in the case of Petitioner Rakesh Wahi, M.D., is

then unable to obtain hospital privileges anywhere.

Physicians, who have invested the best years of their

lives and hundreds of thousands of dollars in their

education and training, cannot afford to risk being

destroyed by sham peer review. The chilling effect of

granting immunity to wrongdoing in this process is

4

unfathomable; it utterly destroys competition and in-

novation in everything affected by hospitals, which is

nearly the entire health care system.

Lower courts have developed an unjustified stan-

dard that fully allows bad faith by hospitals without

accountability. A hospital need only find a single

mistake in the physician’s practice — something all

physicians have, as no one is perfect — and this satis-

fies the purely objective standard adopted by the

courts for affirming a hospital’s revocation or limita:

tion of privileges.

In this case, the CAMC, an affiliation of seven

hospitals in West Virginia, suspended Petitioner Wa-

hi and denied his application for reappointment for

one likely reason: economics rather than quality of

care. The hospital’s basis for denying Petitioner Wa-

hi reappointment was not for a medical error, but for

his provision of care (an operation) to a high risk pa-

tient. See J.A. 586. Hospitals intimidate physicians

into withholding or rationing care from the most sick-

ly (and most costly) patients in this manner. After

all, hospitals are economic entities motivated by

money as much as any other business. But only hos-

pitals enjoy a legal standard granting them full im-

munity for their wrongdoing in destroying a profes-

sional. What occurred in this case is playing out in

nearly every hospital in this nation, and the cost of

allowing hospitals to continue to engage in bad faith

peer review to suppress competition, innovation and

quality care is astronomical.

The appellate court below adopted and applied a

particularly “unconventional standard” to deny ac”

countability for this sham peer review and thereby

prevent Wahi from obtaining his full day in court.

5

The appellate court has split with other Circuits on

the proper standard for reviewing allegations of bad

faith peer review. This Court should grant the Peti-

tion for Writ of Certiorari to correct this especially

“unconventional standard” and restore accountability

for wrongdoing by hospitals which take action against

professionals who may seek to compete against them,

or may develop a technique that threatens the hos-

pital’s revenue, or may simply stand up for the care of

patients at the hospital.

The Petition should be granted due to the national

importance of this issue. The misuse by a hospital of

peer review at issue in this case is pervasive in the

health care industry.

The health care industry consumes one-sixth of

our nation’s economy and has dominated national

politics for most of 2009. Costs are increasing faster

than the quality of care. Basic economic principles

dictate that high prices are typically the result of in-

adequate competition, and that is certainly the case

in the profitable hospital industry. With increasing

frequency, when there is even a hint of competition

against a hospital by a physician on its staff, the hos-

pital initiates a sham peer review. The precedent set

below unjustifiably immunizes the hospital from ac-

countability and liability for its bad faith in destroy-

ing potential competitors.

ARGUMENT

At issue here is the particularly “unconventional

standard” adopted by the Fourth Circuit and imple-

mented below in granting summary judgment to a

hospital for destroying a professional and potential

competitor through bad faith peer review. 562-F.3d

6

at 607 (quotations omitted). Petitioner Wahi posed a

potentially competitive threat to CAMC, and it re-

sponded by summarily suspending his privileges and

reporting him to the National Practitioner Data

Bank, destroying his surgical career. Instead of ap-

plying the express prohibition on HCQIA immunity

for summary suspensions in the absence of imminent

danger, the court below upheld the hospital’s discip-

line and prevented the issue from going to a jury.

This Court should grant the Petition for three rea-

sons. First, there is national significance to the ap-

plication below of an especially unconventional stan-

dard that immunizes bad faith peer review even

when it is anticompetitive and perpetrated without a

hearing or even notice. By protecting wrongdoing by

hospitals in initiating peer review and falsely report-

ing competitors to the National Practitioner Data

Bank as though they are bad doctors, the standard

adopted by the appellate court worsens the chilling

effect imposed by hospitals on medical innovation by

potential competitors who reasonably fear retaliation.

Second, the Petition should be granted to curb

growing legal abuses encouraged by judicial immuni-

ty granted to bad faith peer review of physicians.

The hospital bar is increasingly relying on contriv-

ances and sensationalism to destroy physicians who

might compete with a hospi‘al, and courts below are

repeating tabloid-like allegations as though they have

merit. This case features a cardio-thoracic physician

as Petitioner, and despite being in a high-risk field

his medical record is remarkably clean. But that did

not stop the hospital from exploiting its immunity

with trumped-up and almost National Enquirerstyle

allegations, which were then repeated by the court

below as though they were true.

7

Finally, a physician’s right to a hearing and, in

the absence of imminent danger, adequate notice be-

fore suspension, are essential to deter and inhibit

sham peer review. The granting of blanket immunity

below in the absence of the requisite notice or a prior

hearing — and not even an ex post facto hearing — has

dire consequences for the entire health care field.

The statute does not support granting hospitals such

sweeping immunity for their wrongdoing against po-

tential competitors.

Proper application of HCQIA procedures to hos-

pital peer review arises in nearly every hospital in

the nation, and affects most of the hundreds of thou-

sands of physicians having hospital privileges. In

light of the enormous national significance, the Peti-

tion should be granted.

I. A CRISIS OF NATIONAL SIGNIFICANCE

RESULTS FROM THE “UNCONVENTIONAL

STANDARD” APPLIED BY THE FOURTH CIRCUIT

BELOW, WHICH IMPEDES COMPETITION,

FRUSTRATES INNOVATION, AND INTERFERES

WITH QUALITY MEDICAL CARE.

It should be axiomatic that summary suspension

of a physician’s privileges — which plainly has the ef-

fect of destroying his reputation and career — requires

a showing of imminent danger before immunity can

insulate the decision from accountability. Four Cir-

cuits have so held, and nothing in the Health Care

Quality Immunity Act (HCQIA) suggests otherwise.

Yet the appellate court below split with these au-

thorities and turned HCQIA on its head by holding

otherwise. It adopted a version of a HCQIA standard

that it describes as “unconventional”, and its holding

essentially gives hospitals carte blanche to destroy

8

any physician who might become an obstacle to hos-

pital profits. This creates not only a circuit split,? but

also a crisis of national significance, as no physician

can be innovative or competitive without fearing an

unjustified summary suspension, which is then re-

ported to the National Practitioner Data Bank with

devastating reputational effect. Such blacklisting

typically permanently prevents the physician from

obtaining hospital privileges again. Petitioner Wahi,

a superb cardio-thoracic surgeon, has been destroyed

and his patients have been deprived of his superior

care.

The decision below extends a prior ruling by

Fourth Circuit beyond all statutory limits, to signifi-

cant national detriment. In Gabaldoni v. Washington

County Hosp. Ass'n, 250 F.3d 255 (4th Cir. 2001), a

physician enjoyed procedural safeguards that are not

present here. There the physician received a full

hearing, unlike here. The “presumption of immunity”

embraced by the Gaba/doni Court, see id. at 260,

makes little sense where, as here, there was a sum-

mary suspension without any imminent danger and

there was no subsequent hearing at all. In opening

the door to meritless summary suspensions and pro-

viding full immunity to hospitals for such wrong-

doing, the decision below conflicts with the other cir-

cuits and causes a problem of national significance.

2 The circuit splits created by the decision below are described

well in Points I.B and II of the Petition. Briefly, the decision

below creates a circuit split over whether HCQIA immunity at-

taches to a summary suspension imposed without imminent

danger, and widens another split over whether HCQIA bars a

jury trial.

9

Medical literature has frequently described the

abuses perpetrated by the hospital industry against

good physicians under the guise of peer review, and

the aberrant decision below opens the floodgates to

more sham peer review. See e.g., Gail Weiss, “Is Peer

Review Worth Saving?” Medical Economics (Feb. 18,

2005);3 Steve Twedt, “The Cost of Courage: How the

Tables Turn on Doctors,” Pittsburgh Post-Gazette Al

(Oct. 26, 2003);4 John Zicconi, “Due Process or Profes-

sional Assassination?” Unique Oppcrtunities

(March/April 2001);5 David Townsend, “Hospital Peer

Review Is a Kangaroo Court,” Medical Economics 133

(Feb. 7, 2000).

Many additional medical journal articles have de-

tailed the abuses of peer review, which continue to

worsen. See, e.g., William Summers, “Sham Peer Re-

view: A Psychiatrist’s Experience and Analysis,”

Journal of American Physicians and Surgeons 125

(Winter 2005);6 Roland Chalifoux, Jr., M.D., “So

What Is a Sham Peer Review?”, 7 Medscape General

Medicine (No. 4) 47 (2005); John Minarcik, M.D.,

“Sham Peer Review: a Pathology Report,” Journal of

American Physicians and Surgeons 121 (Winter

2004);7 Lawrence Huntoon, M.D., Ph.D., “Abuse of

the ‘Disruptive Physician’ Clause,” Journal of Ameri-

3 http://www.memag.com/memag/article/article Detail.

jsp?id=147405 (viewed 11/6/09)

4 http://www.post-gazette.com/pg/03299/234499.stm (viewed

11/6/09)

5 http://www.uoworks.com/pdfs/feats/PEERREVIEW.pdf (viewed

11/6/09)

6 http://www.jpands.org/vollOno4/summers.pdf (viewed 11/6/09)

7http://www.jpands.org/vol9no04/minarcik.pdf (viewed 11/6/09)

10

can Physicians and Surgeons 68 (Fall 2004);§ Wil-

liam Parmley, “Clinical Peer Review or Competitive

Hatchet Job,” 36 Journal of the American College of

Cardiology 2347 (2000).

As courts increasingly immunize hospitals for

wrongdoing in peer review, the epidemic of bad faith

review of potential competitors worsens. Such wrong:

ful conduct interferes with quality medical care and

impedes the benefits of competition and free enter-

prise. “Sham peer review’ is not “peer review” at all,

but is tortious conduct labeled “peer review” by hos-

pitals in order to exploit a judicially created immuni-

ty. The decision below should be reversed to ensure

that hospitals do not continue to summarily suspend

physicians — thereby destroying their careers and

chilling innovation and competition — without ade-

quate basis.

In an economic sense, it is not surprising that

hospital administrators hired to maximize profits

would exploit their immunity for the benefit of share-

holders, at the expense of patient care. And if this

immunity were actually created by Congress, then

the courts might leave the problem for Congress to

resolve. But Congress did not create such sweeping

immunity in HCQIA or any other federal law. More-

over, principles of federalism militate against such a

massive interference with state law in this field.

When courts expand immunity to sham peer re-

view the “system is too open to manipulation and

needs reform.” Jeff Chu, “Doctors Who Hurt Doc-

tors,” Time 52 (Aug. 15, 2005) (citing the Association

of American Physicians and Surgeons). In medicine

8 http://www.jpands.org/vol9no3/huntoon.pdf (viewed 11/6/09)

1]

aS in any industry, a sweeping grant of immunity to

one side is as disastrous as it is unjustified. For phy-

sicians who truly are a danger to patients, state med-

ical boards can and will restrict or revoke their li-

censes to practice medicine. Likewise, they can weed

out complaints filed under questionable motivations,

such as when the West Virginia state medical board

repeatedly exonerated Dr. Wahi. In addition, pa-

tients themselves will abandon a bad physician, just

as shoppers will not continue buying bad products. If

a hospital wishes to rid itself of a negligent physician,

it is always free to do so regardless of whether it has

special immunity under federal law. But immunity

for sham peer review by a hospital is inappropriate.

Unchecked retaliation against innovators and out-

spoken physicians is a growing problem. Nearly 25%

of physicians who reported concerns with patient

care, which could include denial of care to handi-

capped infants or those in persistent vegetative

states, suffered threats to their jobs. Scott Plantz,

M.D., et al, “A National Survey of Board-Certified

Emergency Physicians: Quality of Care and Practice

Structure Issues,” 16 Am. J. of Emerg. Med. 1, 2-3

(Jan. 1998). Steve Twedt of the Pittsburgh Post:

Gazette has reported on the same problem in his se-

ries beginning Oct. 26, 2003, entitled “Cost of Cou-

rage.”9 His articles showed how retaliation occurs

nationwide, describing in detail the experiences of 25

physicians and a nurse, who suffered from actions

adverse to their careers after they tried to improve

care at their respective institutions.

9 http://www.post-gazette.com/pg/03299/234499.stm (viewed

11/6/09)

12

Dr. Harry Horner is a physician who had to fight

all the way to the Supreme Court of Virginia to ob-

tain reinstatement after retaliation for complaining

about poor care at the hospital. See Horner v. Dep't

of Mental Health, Mental Retardation, & Substance

Abuse Servs., 268 Va. 187 (2004). Though difficult to

glean from the reported decision, Dr. Horner was ex-

posing the poor care of patients when an administra-

tor at Western State Hospital accused him of violat-

ing another employee's right to confidentiality. The

administration of Dr. Horner’s hospital added accusa-

tions that he was guilty of abuse and neglect because

he failed to wear gloves while dressing a wound on a

patient’s foot. See Bob Stuart, “Court Rules for Whis-

tleblower,” News Virginian (June 16, 2004). Such

pretextual allegations have become common; judicial

relief for it, however, is vanishing.

The chilling effect of a grant of immunity to hos-

pitals in the absence of a hearing is clear: destroy the

career of one physician, and hundreds or thousands of

physicians will refrain from speaking out or compet-

ing against the perpetrators. The result is a crisis of

national significance.

13

II. THE PETITION SHOULD BE GRANTED TO

CURB THE LEGAL ABUSES ARISING FROM

SHAM PEER REVIEW.

The overly broad immunity for bad faith allega-

tions in peer review has resulted in legal abuses, and

repetition by courts of contrivances as though they

were factual. Often the allegations are even de-

signed, with the help of the hospital bar, to have a

superficial sensationalism in order to shock the lay-

man. Peer review is becoming tabloid-like, with the

science of medicine being replaced by what might

shock a judge or newspaper reader when the mis-

takes are actually harmless or not even the physi-

cian’s responsibility, and hospitals have an incentive

in ruining good physicians who might compete. A

grant of the Petition is necessary to curb the deceitful

allegations and limit their repetition in court deci-

sious. Obvious logical flaws and transparent sensa-

tionalism (for the layman) should no longer be tole-

rated in proceedings under HCQIA.

The leading medical expert in this field recently

published an expose of the pattern of deception by

hospitals to exploit the especially “unconventional

standard” of immunity adopted by the court below.

“The tactics used by hospitals and others in conduct:

ing a sham peer review are remarkably similar

throughout the country.” Lawrence Huntoon, M.D.,

Ph.D., “Tactics Characteristic of Sham Peer Review,”

Journal of American Physicians and Surgeons 64

14

(Fall 2009).1° Dr. Huntoon emphasized about a dozen

deceptive tricks played by hospitals, and several of

these familiar deceits made it into the decision below.

The decision below should be reversed on this ground

alone.

For example, the court below disparaged Petition-

er Wahi by saying he is “not a first-time offender.”

562 F.3d at 613 (Pet. 29a). But Petitioner Wahi was

exonerated every time he was falsely accused of

something. The CAMC exonerated him in its own in-

vestigation, and the West Virginia medical board ex-

onerated him three different times when it was

prompted to investigate him. The fact that the hos-

pital repeatedly asserted baseless, trumped-up

charges is not an indictment of the accused, but of the

accuser. It is evidence of improper use of peer review

rather than improper practice of medicine. For the

court below to use the fact of repeated review of a

physician — while omitting that he was exonerated —

is an Ulustration of how misguided its standard is.

Another example of a deceptive argument made

by hospitals and which has superficial appeal — but

which is logically nonsensical — is described by Dr.

Huntoon as the “Numerator-Without-Denominator

Tactic”:

Although the numerator-without-denominator

tactic can be used against any physician, it is most

commonly used against surgeons. Hospitals that

0 http://www.jpands.org/voll4no3/huntoon.pdf (viewed 11/6/09)

(Neither AAPS nor its counsel has any control over the content

of this journal; Dr. Huntoon has served as an expert in sham

peer review cases, and has presented the material in this article

as speeches accredited for Continuing Medical Education (CME)

credits).

15

use this tactic typically select cases that are spe-

cifically designed to highlight complications or

negative outcomes. The selection of cases often

falls outside the routine protocol used for selecting

cases for review of physicians practicing at the

hospital. The hospital then presents this select

group of cases to peer reviewers as evidence that

the targeted physician is a bad doctor or provides

unsafe care.

Id. at 64. The defect of this approach — exploited by

the hospital bar — is that statistically insignificant

mistakes in a physician’s record are meaningless for

evaluating his record. Dr. Huntoon explained this

further:

Hospitals that use this tactic specifically omit the

denominator (how many cases of that type the

physician has performed over a period of time),

thus eliminating the possibility of calculating a

complication rate that could be used to make a

fair comparison with statistics of other colleagues,

or statistics published in medical literature. Vir-

tually all surgeons, of course, experience complica

tions, and the only surgeons who have zero com:

plications are those who do not perform surgery,

or who do not report their complications.

Id. at 65.

This fallacious approach of sham peer review was

embraced below. The lower court adopted and ap-

plicd a standard that encourages dismissal of cases

no matter how small the “numerator” is and no mat-

ter how large the omitted “denominator” is in the

hospital allegation. Respondent CAMC could not

even find an adverse outcome to use against the car-

dio-thoracic surgeon Petitioner Wahi, so instead it

relied on non-substantive allegations like “Failure to

16

obtain a proctor when required to do so.” 562 F.3d at

611 (Pet. at 25a). Where is the “denominator” for

that apparently inconsequential infraction? On this

meager basis a surgeon’s career can be destroyed?

There is no indication of how often this occurred or

what its significance, if any, was. In adopting a stan-

dard that allows discipline for this, the court’s

precedent violates the maxim of de minimis non curat

lex (the law does not concern itself with trifles). Yet

such specious accusations against good physicians

and surgeons are encouraged by the standard

adopted below.

No court would take seriously an allegation that

an attorney was incompetent based on a statistic that

he lost a certain number of cases without first asking

what the denominator is: how many cases did he

handle overall, and how difficult were those cases?

But in a precedent cited favorably below, the Fifth

Circuit took that defective approach in affirming rep-

utation-ending discipline of a physician. See Poliner

v. Tex. Health Sys., 537 F.3d 368 (5th Cir. 2008), cert.

denied, 129 S. Ct. 1002 (2009).

In Poliner, the Fifth Circuit held in favor of a hos-

pital despite proof of its bad faith in disciplining an

innovative cardiologist. That court used several sta-

tistically insignificant examples dredged up by the

hospital: a harmless rash, an unpreventable death,

inadequate hospital diagnostic equipment, and nurs-

ing staff errors. The five cases at the heart of that

decision were plainly contrived, as most consisted of

patients who performed well, and included inevitable

complications (like a rash) that were no fault of the

targeted physician. Jd. at 371-72. But as in other

sham peer review cases, the hospital bar prefers ex-

amples designed to inflame an unjustified shock in a

17

layman (especially a court), rather than a bona fide

medical deficiency. Operating on the correct artery

but missing a second clogged one (due to equipment

failure) was a medically harmless and statistically

insignificant allegation against Dr. Poliner, but a

claim having an exaggerated effect on a layman. /d.

at 371 n.9 (repeating the allegation of a missed artery

while holding that “for our purposes, it does nut mat

ter” whether the artery allegation was meaningful).

These types of titillating but medically insignificant

allegations now dominate peer review cases in judi-

cial proceedings.

Another page from the hospital playbook for de-

stroying a physician-competitor is to smear him as

somehow being “disruptive”. Huntoon, “Tactics Cha-

racteristic of Sham Peer Revew,” Journal of American

Physicians and Surgeons, supra, at 65. The decision

below accepted that allegation at face value also:

there were “[mJultiple incident reports surrounding

bizarre professional behavior and inappropriate per-

sonal behavior among nursing staff.” 562 F.3d at 611

(Pet. at 25a). Nurses are employees of a hospital, and

it is commonplace now for hospital administrators to

arrange for these “incident reports” when they want

to target a potential competitor for retaliation. This

implausible accusation of “bizarre” and “inappro-

priate” behavior looks more like headline puffing

found in the National Enquirer than an earnest eval-

uation of a surgeon’s abilities and record. The hos:

pital bar encourages accusations that shock a court

(and newspapers), despite a lack of medical signific-

ance. CAMC’s baseless assertion of “bizarre” conduct

with nurses ilustrates its bad faith in trying to frame

a good physician. Yet the standard adopted below

18

encourages courts to accept these meritless and far-

fetched charges at face value.

The Petition should be granted to curb the pattern

of legal maneuvering and artful alleging with respect

to what should be an honest medical evaluation of a

professional’s record of performance. Lower courts

now repeat superficial accusations made by the hos-

pital bar as though they have medical significance,

when they do not. If the CAMC’s specious allegations

here demonstrate anything at all, they illustrate how

strikingly clean Petitioner Wahi’s record has been in

the high-risk field of cardio-thoracic surgery.

The standard adopted below by the Fourth Circuit

to shield accountability for sham peer review leads to

an inappropriate grant of immunity to hospitals for

contrived, insignificant accusations against physi-

cians. The citation of trivial issues that are common

to every busy professional are all-too-often accepted

by lower courts as proof that the hospital was justi-

fied, and the decision below encourages this.

Distorted, shock-provoking assertions by hospitals

in peer review have become commonplace. There is a

thriving hospital bar that perfects the art of making a

good physician look bad to the uninformed. The lead-

ing law firm for hospitals, Horty & Springer, actually

conducts special seminars at luxurious resorts for

hospital administrators, to teach them how to use

sham peer review as a way of “[djealing with econom-

ic competition from medical staff members.”!! The

sham peer review of Petitioner Wahi is right out of

this playbook.

i http://www.allianceforpatientsafety.org/hs2.pdf (viewed

1 1/6/09)

19

Physicians reasonably expect judicial review to be

as logical as medicine and science are. But the lower

court's expansive and erroneous implementation of

the especially “unconventional standard” for immuni-

ty encourages more bad faith accusations, which then

spill into judicial decisions. The Petition should be

granted to curb these legal distortions.

Il. HCQIA Immunity DOES NoT EXTEND TO A

SUMMARY SUSPENSION TAKEN WITHOUT

IMMINENT DANGER, NOTICE, OR A PRIOR

HEARING, AND THE DECISION BELOW

THEREBY INTERFERES WITH FEDERALISM.

The court below erred in conferring HCQIA im-

munity on a summary suspension taken without im-

minent danger, without proper notice, and without

providing a prior (or even a subsequent) hearing to

Petitioner. The adoption below of such sweeping im-

munity interferes with well-settled principles of fede-

ralism.

HCQIA expressly requires adequate notice and

hearing procedures:

“For purposes of the protection set forth in section

411(a), a professional review action must be taken

—... after adequate notice and hearing procedures

are afforded to the physician involved or after

such other procedures as are fair to the physician

under the circumstances.”

42 U.S.C. § 11112(a) & (a)(3). CAMC concedes that

there was no imminent danger to justify the sum-

mary suspension, that no prior notice was provided to

Petitioner Wahi, and that a hearing was never held.

20

See Petition at 25; Wadi v. Charleston Area Med.

Center, 453 F. Supp. 2d 942, 947 (S.D. W.Va. 2006),

affd, 562 F.3d 599 (4t Cir. 2009).

This Court has noted in various contexts how no-

tice and a hearing are essential parts of basic due

process, and Congress cannot be presumed to allow

immunity to attach in an absence of those essential

safeguards. Justice Brennan observed in the securi-

ties context, for example, that even a short suspen-

sion “without notice or hearing so obviously violates

fundamentals of due process and fair play that no

reasonable individual could suppose that Congress

intended to authorize such a thing.” SEC v. Sloan,

436 U.S. 103, 123-24 (1978) (Brennan, J., concurring).

“The fundamental requisite of due process of law is

the opportunity to be heard.” Goldberg v. Kelly, 397

U.S. 254, 267 (1970) (quoting Grannis v. Ordean, 234

U.S. 385, 394 (1914)). In emphasizing the importance

of adequate advance notice, the Court has stressed

that “[t]he hearing must be ‘at a meaningful time and

in a meaningful manner.” /d. (quoting Armstrong v.

Manzo, 380 U.S. 545, 552 (1965)).

Nothing in HCQIA authorizes immunity for a

summary suspension taken without imminent dan-

ger, notice and a hearing. In its Preamble, HCQIA

limits its purpose to immunize against “[t]he threat of

private money damage liability under Federal laws,

including treble damage liability under Federal anti-

trust law, [which] unreasonably discourages physi-

cians from participating in effective professional peer

review.” 42 U.S.C. § 11101(4). Notice and a hearing

are fundamental aspects of due process under both

West Virginia and federal law. See, e.g., Abshire v.

Cline, 193 W. Va. 180, 183, 455 S.E.2d 549, 552

21

(1995) (emphasizing that a hearing is a “fundamental

right to due process”).

Without a clear statutory mandate, Congress

should not be presumed to have preempted due

process protections, particularly in the traditionally

local domain of medical practice. Where, as here, the

dispute concerns “the usual constitutional balance

between the states and the federal government,” then

statutory construction requires that Congress “must

make unmistakably clear its intention to do so in the

statute’s language.” Premiere Network Servs. v. SBC

Comm., 440 F.3d 683, 690 n.8 (5t Cir. 2006) (citing

Will v. Michigan Dep't of State Police, 491 U.S. 58, 65

(1989) and Gonzales v. Oregon, 546 U.S. 243 (2006),

emphasis added). Congress did not make it “unmis-

takably clear” in HCQIA that it preempts traditional

state-law rights to notice and a hearing. Nothing

supports such a massive expansion in federal power

over the medical profession. Where “Congress did not

have this far-reaching intent to alter the federal-state

balance and the congressional role in maintaining it,”

state law must remain applicable. Gonzales v. Ore-

gon, 546 U.S. at 275.

The Supreme Court has emphasized that “where

an otherwise acceptable construction of a statute

would raise serious constitutional problems, [courts

shall] construe the statute to avoid such problems un-

less such construction is plainly contrary to the intent

of Congress.” Hdward J. DeBartolo Corp. v. Fla. Gulf

Coast Bldg. & Constr. Trades Council, 485 U.S. 568,

575 (1988). The expansion by the decision below in

the scope of HCQIA immunity causes a constitutional

problem: it would lead to massive disruption of state

law with respect to hospital administration.

22

This disruption would adversely affect all pa-

tients. Medical care is essential to nearly every

American, and is the source of numerous controver-

sial local issues from abortion to end-of-life care to so-

called medical use of marijuana. Wholesale federal

preemption of state law under an expanded HCQIA

immunity with respect to hospital administration

would violate well-established principles of federal-

ism. As Justice Kennedy has observed:

[Flederalism was the unique contribu-

tion of the Framers to political science

and political theory. Though on the sur-

face the idea may seem _ counter-

intuitive, it was the insight of the Fra-

mers that freedom was enhanced by the

creation of two governments, not one.

United States v. Lopez, 514 U.S. 549, 576 (1995)

(Kennedy, J., concurring) (citing H. Friendly, “Fede-

ralism: A Foreword,” 86 Yale L. J. 1019 (1977) and G.

Wood, The Creation of the American Republic, 1776-

1787, pp. 524-532, 564 (1969)).

Nationwide, hospitals seek to extend HCQIA im-

munity beyond sensible limits in a manner that

would lead to federal control over all of medicine.

This is contrary to precedent and congressional ac-

tion. This Court has emphasized that “[olbviously,

direct control of medical practice in the States is

beyond the power of the Federal Government.” JLind-

er v. United States, 268 U.S. 5, 18 (1925). At no time

has Congress attempted to alter state jurisdiction

over medicine, despite the urgings of hospitals. “Un-

less Congress conveys its purpose clearly, it will not

be deemed to have significantly changed the federal-

state balance.” United States v. Bass, 404 U.S. 336,

23

349 (1971). Congress never authorized such a com-

plete disregard of state law for medical practice, an

area in which “{s]tates lay claim by right of history

and expertise.” Gonzales v. Raich, 545 U.S. 1, 48

(2005) (O’Connor, J., dissenting) (quoting Lopez, 514

U.S. at 583 (Kennedy, J., concurring)).

The Supreme Court of Nevada has already con-

cluded that there are meaningful limits on the scope

of immunity under HCQIA. This has benefited Ne-

vadan patients and physicians alike. See Clark v. Co-

lumbia/HCA Info. Servs., 117 Nev. 468, 25 P.3d 215

(Sup. Ct. Nev. 2001). There the court denied HCQIA

immunity to the hospital (HCA) for revoking a physi-

cian’s privileges based upon the pretext of disruptive

behavior by the physician. In reversing a grant of

summary judgment to the hospital by the court be-

low, the court held that “the board is not entitled to

immunity as a matter of law.” 117 Nev. at 480, 25

P.3d at 223. That court found that the real reason for

the sham peer review against the physician was his

filing of reports critical of the hospital.

Similarly, a state court in Connecticut has re-

jected the insatiable demand of hospitals for complete

federal immunity. In Harris v. Bradley Mem. Hosp.

& Health Ctr., 2005 Conn. Super. LEXIS 1401 (Conn.

Super. Ct. May 19, 2005), the court held that HCQIA

does not immunize a hospital against all claims for

damages because not all summary suspensions quali-

fy as peer review under HCQIA. That court decided:

After a review of the case law and the evidence,

presented by the plaintiff, the court concludes that

the plaintiff engaged in more than one profession-

al review action and that the plaintiff has demon-

strated the existence of a genuine issue of materi-

24

al fact concerning whether one of those actions sa-

tisfied the statutory requirements for immunity.

Id. at *15 - *16.

Neither the plain meaning of HCQIA nor well-

established principles of federalism support the deci-

sion below, which applied immunity to a summary

suspension without imminent danger, notice to the

physician, or a subsequent hearing.

CONCLUSION

This Court should grant the Petition for Writ of

Certiorari.

Respectfully submitted,

ANDREW L. SCHLAFLY

939 OLD CHESTER ROAD

FAR HILLS, NJ 07931

(908) 719-8608

Counsel for Amicus

Dated: November 12, 2009