'Malicious Peer Review' Destroyed Doc's Career, He Says

Alicia Gallegos

May 05, 2021

Cardiothoracic surgeon J. Marvin Smith III, MD, had always thrived on a busy practice schedule, often performing 20 to 30 surgeries a week. A practicing surgeon for more than 40 years, Smith says he had no plans to slow down anytime soon.

But Smith says his career was derailed when leaders at Methodist Healthcare System of San Antonio initiated a sudden peer review proceeding against him. The hospital system alleged certain surgeries performed by Smith had excessive mortality rates. When he proved the data inaccurate, Smith said administrators next claimed he was cognitively impaired and wasn't safe to practice.

Smith has now been embroiled in a peer review dispute with the hospital system for more than 2 years and says the conflict has essentially forced him out of surgical practice. He believes the peer review was "malicious" and was really launched because of complaints he made about nurse staffing and other issues at the hospital.

"I think it is absolutely in bad faith and is disingenuous what they've told me along the way," said Smith, 73. "It's because I pointed out deficiencies in nursing care, and they want to get rid of me. It would be a lot easier for them if I had a contract and they could control me better. But the fact that I was independent, meant they had to resort to a malicious peer review to try and push me out."

Smith had a peer review hearing with Methodist in March 2021, and in April, a panel found in Smith's favor, according to Smith. The findings were sent to the hospital's medical board for review, which issued a decision in early May.

Eric A. Pullen, an attorney for Smith, said he could not go into detail about the board's decision for legal reasons, but that "the medical board's decision did not completely resolve the matter, and Dr Smith intends to exercise his procedural rights, which could include an appeal."

Methodist Hospital Texsan and its parent company, Methodist Health System of San Antonio, did not respond to messages seeking comment about the case. Without hearing from the hospital system, its side is unknown and it is unclear if there is more to the story from Methodist's view.

Malicious peer review — also called sham peer review — is defined as misusing the medical peer review process for malevolent purposes, such as to silence or to remove a physician. The problem is not new, but some experts, such as Lawrence Huntoon, MD, PhD, say the practice has become more common in recent years, particularly against independent doctors.

Huntoon believes there is a nationwide trend at many hospitals to get rid of independent physicians and replace them with employed doctors, he said.

However, because most sham peer reviews go on behind closed doors, there are no data to pinpoint its prevalence or measure its growth.

"Independent physicians are basically being purged from medical staffs across the United States," said Huntoon, who is chair of the Association of American Physicians and Surgeons' Committee to Combat Sham Peer Review. "The hospitals want more control over how physicians practice and who they refer to, and they do that by having employees."

The American Hospital Association declined to comment for this story.

Did Hospital Target Doc for Being Vocal?

When members of Methodist's medical staff first approached Smith with concerns about his surgery outcomes in November 2018, the physician says he was surprised, but that he was open to an assessment.

"They came to me and said they thought my numbers were bad, and I said, 'Well my gosh, I certainly don't want that to be the case. I need to see what numbers you are talking about,'" Smith recalled. "I've been president of the Bexar County Medical Society; I've been involved with standards and ethics for the Society of Thoracic Surgeons. Quality healthcare means a whole lot to me."

The statistical information provided by hospital administrators indicated that Smith's mortality rates for coronary artery surgery in 2018 were "excessive" and that his rates for aortic surgery were "unacceptable," according to a lawsuit Smith filed against the hospital system. Smith, who is double boarded with the American Board of Surgery and the American Board of Thoracic Surgery, said his outcomes had never come into question in the past. Smith says the timing was suspicious to him, however, considering he had recently raised concerns with the hospital through letters about nursing performance, staffing, and compensation, he said.

A peer review investigation was initiated. In the meantime, Smith agreed to intensivist consults on his post-operative patients and consults with the hospital's "Heart Team" on all pre-operative cardiac, valve, and aortic cases. A vocal critic of the Heart Team, Smith had long contended the entity provided no meaningful benefit to his patients in most cases and, rather, increased hospital stays and raised medical expenses. Despite his agreement, Smith was later asked to voluntarily stop performing surgeries at the hospital.

"I agreed, convinced that we'd get this all settled," he said.

Another report issued by the hospital in 2019 also indicated elevated mortality rates associated with some of Smith's surgeries, although the document differed from the first report, according to the lawsuit. Smith says he was ignored when he pointed out problems with the data, including a lack of appropriate risk stratification in the report, departure from Society of Thoracic Surgeons data rules, and improper inclusion of his cases in the denominator of the ratio when a comparison was made of his outcomes to those hospitalwide. A subsequent report from Methodist in March 2019 indicated Smith's surgery outcomes were "within the expected parameters of performance," according to court documents.

The surgery accusations were dropped, but the peer review proceeding against Smith wasn't over. The hospital next requested that Smith undergo a competency evaluation.

"When they realized the data was bad, they then changed their argument in the peer review proceeding and essentially started to argue that Dr Smith had some sort of cognitive disability that prevented him from continuing to practice," said Pullen, the San Antonio-based attorney. "The way I look at it, when the initial basis for the peer review was proven false, the hospital found something else and some other reason to try to keep Dr Smith from practicing."

Thus began a lengthy disagreement about which entity would conduct the evaluation, who would pay, and the type of acceptable assessment. An evaluation by the hospital's preferred organization resulted in a finding of mild cognitive impairment, Smith said. He hired his own experts who conducted separate evaluations, finding no impairment and no basis for the former evaluation's conclusion.

"Literally, the determinant as to whether I was normal or below normal on their test was one point, which was associated with a finding that I didn't draw a clock correctly," Smith claims. "The reviewer said my minute hand was a little too short and docked me a point. It was purely subjective. To me, the gold standard of whether you are learned in thoracic surgery is the American Board of Thoracic Surgery's test. The board's test shows my cognitive ability is entirely in keeping with my practice. That contrasts with the one point off I got for drawing a clock wrong in somebody's estimation."

Conflict Leads to Legal Case

In September 2020, Smith filed a lawsuit against Methodist Healthcare System of San Antonio, alleging business disparagement by Methodist for allegedly publishing false and disparaging information about Smith and tortious interference with business relations. The latter claim stems from Methodist refusing to provide documents to other hospitals about the status of Smith's privileges at Methodist, Pullen said.

Because Methodist refused to confirm his status, the renewal process for Baptist Health System could not be completed and Smith lost his privileges at Baptist Health System facilities, according to the lawsuit.

Notably, Smith's legal challenge also asks the court to take a stance against alleged amendments by Methodist to its Unified Medical Staff Bylaws. The hospital allegedly proposed changes that would prevent physicians from seeking legal action against the hospital for malicious peer review, according to Smith's lawsuit.

The amendments would make the peer review process itself the "sole and exclusive remedy with respect to any action or recommendation taken at the hospital affecting medical staff appointment and/or clinical privileges...," according to an excerpt of the proposed amendments included in Smith's lawsuit. In addition, the changes would hold practitioners liable for lost revenues if the doctor initiates "any type of legal action challenging credentialing, privileging, or other medical peer review or professional review activity," according to the lawsuit.

Smith's lawsuit seeks a declaration that the proposed amendments to the bylaws are "void as against public policy," and a declaration that the proposed amendments to the bylaws cannot take away physicians' statutory right to bring litigation against Methodist for malicious peer review.

"The proposed amendments have a tendency to and will injure the public good," Smith argued in the lawsuit. "The proposed amendments allow Methodist to act with malice and in bad faith in conducting peer review proceedings and face no legal repercussions."

Regardless of the final outcome of the peer review proceeding, Pullen said the harm Smith has already endured cannot be reversed.

"Even if comes out in his favor, the damage is already done," he said. "It will not remedy the damage Dr Smith has incurred."

Fighting Sham Peer Review Is Difficult

Battling a malicious peer review has long been an uphill battle for physicians, according to Huntoon. That's because the Health Care Quality Improvement Act (HCQIA), a federal law passed in 1986, provides near absolute immunity to hospitals and peer reviewers in legal disputes.

The HCQIA was created by Congress to extend immunity to good faith peer review of doctors and to increase overall participation in peer review by removing fear of litigation. However, the act has also enabled abuse of peer review by shielding bad faith reviewers from accountability, said Huntoon.

"The Health Care Quality Improvement Act presumes that what the hospital did was warranted and reasonable and shifts the burden to the physician to prove his innocence by a preponderance of evidence," he said. "That's an entirely foreign concept to most people who think a person should be considered innocent until proven guilty. Here, it's the exact opposite."

The HCQIA has been challenged numerous times over the years and tested at the appellate level, but continues to survive and remain settled law, adds Richard B. Willner, DPM, founder and director of the Center for Peer Review Justice, which assists and counsels physicians about sham peer review.

In 2011, former Rep. Joe Heck, DO, (R-Nevada) introduced a bill that would have amended the HCQIA to prohibit a professional review entity from submitting a report to the National Practitioner Data Bank (NPDB) while the doctor was still under investigation and before the doctor was afforded adequate notice and a hearing. Although the measure had 16 co-sponsors and plenty of support from the physician community, it failed.

In addition to a heavy legal burden, physicians who experience malicious peer reviews also face ramifications from being reported to the NPDB. Peer review organizations are required to report certain negative actions or findings to the NPDB.

"A databank entry is a scarlet letter on your forehead," Willner said. "The rules at a lot of institutions are not to take anyone who has been databanked, rightfully or wrongfully. And what is the evidence necessary to databank you? None. There's no evidence needed to databank somebody."

Despite the bleak landscape, experts say progress has been made on a case-by-case basis by physicians who have succeeded in fighting back against questionable peer reviews in recent years.

In January 2020, Indiana OB-GYN Rebecca Denman, MD, prevailed in her defamation lawsuit against St Vincent Carmel Hospital and St Vincent Carmel Medical Group, winning $4.75 million in damages. Denman alleged administrators failed to conduct a proper peer review investigation after a false allegation by a nurse that she was under the influence while on the job.

Indianapolis attorney Kathleen A. DeLaney, who represented Denman, said hospital leaders misled Denman into believing a peer review had occurred when no formal peer review hearing or proceeding took place.

"The CMO of the medical group claimed that he performed a peer review 'screening,' but he never informed the other members of the peer review executive committee of the matter until after he had placed Dr Denman on administrative leave," DeLaney said. "He also neglected to tell the peer review executive committee that the substance abuse policy had not been followed, or that Dr Denman had not been tested for alcohol use — due to the 12-hour delay in report."

Denman was ultimately required to undergo an alcohol abuse evaluation, enter a treatment program, and sign a 5-year monitoring contract with the Indiana State Medical Association as a condition of her employment, according to the lawsuit. She claimed repercussions from the false allegation resulted in lost compensation, out-of-pocket expenses, emotional distress, and damage to her professional reputation.

She sued the hospital in July 2018, alleging fraud, defamation, tortious interference with an employment relationship, and negligent misrepresentation. After a 4-day trial, jurors found in her favor, awarding Denman $2 million for her defamation claims, $2 million for her claims of fraud and constructive fraud, $500,000 for her claim of tortious interference with an employment relationship, and $250,000 for her claim of negligent misrepresentation.

A hospital spokesperson said Ascension St Vincent is pursuing an appeal, and that it looks "forward to the opportunity to bring this matter before the Indiana Court of Appeals in June."

In another case, South Dakota surgeon Linda Miller, MD, was awarded $1.1 million in 2017 after a federal jury found Huron Regional Medical Center breached her contract and violated her due process rights. Miller became the subject of a peer review at Huron Regional Medical Center when the hospital began analyzing some of her surgery outcomes.

Ken Barker, an attorney for Miller, said he feels it became evident at trial that the campaign to force Miller to either resign or lose her privileges was led by the lay board of directors of the hospital and upper-level administration at the hospital.

"They began the process by ordering an unprecedented 90-day review of her medical charts, looking for errors in the medical care she provided patients," he said. "They could find nothing, so they did a second 90-day review, waiting for a patient's 'bad outcome.' As any general surgeon will say, a 'bad outcome' is inevitable. And so it was. Upon that occurrence, they had a medical review committee review the patient's chart and use it as an excuse to force her to reduce her privileges. Unbeknown to Dr Miller, an external review had been conducted on another patient's chart, in which the external review found her care above the standards and, in some measure, 'exemplary.'"

Miller was eventually pressured to resign, according to her claim. Because of reports made to the NPDB by the medical center, including a patient complication that was allegedly falsified by the hospital, Miller said she was unable to find work as a general surgeon and went to work as a wound care doctor. At trial, jurors awarded Miller $586,617 in lost wages, $343,640 for lost future earning capacity, and $250,000 for mental anguish. (The mental anguish award was subsequently struck by a district court.)

Attorneys for Huron Regional Medical Center argued the jury improperly awarded damages and requested a new trial, which was denied by an appeals court.

In the end, the evidence came to light and the jury's verdict spoke loudly that the hospital had taken unfair advantage of Miller, Barker said. But he emphasized that such cases often end differently.

"There are a handful of cases in which physicians like Dr Miller have challenged the system and won," he said. "In most cases, however, it is a 'David v Goliath' scenario where the giant prevails."

What to Do if Faced With Malicious Peer Review

An important step when doctors encounter a peer review that they believe is malicious is to consult with an experienced attorney as early as possible, Huntoon said.

"Not all attorneys who set themselves out to be health law attorneys necessarily have knowledge and expertise in sham peer review. And before such a thing happens, I always encourage physicians to read their medical staff bylaws. That's where everything is set forth, [such as] the corrective action section that tells how peer review is to take place."

Barker adds that documentation is also key in the event of a potential malicious peer review.

"When a physician senses [the] administration has targeted them, they should start documenting their conversations and actions very carefully, and if possible, recruit another 'observer' who can provide a third-party perspective, if necessary," Barker said.

Huntoon recently wrote an article with advice about preparedness and defense of sham peer reviews. The guidance includes that physicians educate themselves about the tactics used by some hospitals to conduct sham peer reviews and the factors that place doctors more at risk. Factors that may raise a doctor's danger of being targeted include being in solo practice or a small group, being new on staff, or being an older physician approaching retirement as some bad-actor hospitals may view older physicians as being less likely to fight back, says Huntoon.

Doctors should also keep detailed records and a timeline in the event of a malicious peer review and insist that an independent court reporter record all peer review hearings, even if that means the physician has to pay for the reporter him or herself, according to the guidance. An independent record is invaluable should the physician ultimately issue a future legal challenge against the hospital.

Willner encourages physicians to call the Center for Peer Review Justice hotline at (504) 621-1670 or visit the website for help with peer review and NPDB issues.

As for Smith, the Texas cardiothoracic surgeon, his days are much quieter and slower today compared with the active practice he was accustomed to for more than half his life. He misses the fast pace, the patients, and the work that always brought him great joy.

"I hope to get back to doing surgeries eventually," he said. "I graduated medical school in 1972. Practicing surgery has been my whole life and my career. They have taken my identity and my livelihood away from me based on false numbers and false premises. I want it back."

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