Minn. Appellate Court Upholds Application of Peer Review Immunity Statute - Finding that Physician Failed to Establish Suspension Based on Malice

Dr. Sherr, a neurosurgeon, filed suit against HealthEast Care System and a number of physician defendants based on a decision to impose an immediate summary suspension approved by the Medical Executive Committee after reviewing a number of surgical outcomes which were identified via different internal sources. The decision provides a detailed summary of how the cases were identified and reviewed as per the existing Peer Review Policy.

Although the Judicial Review Committee determined that "the evidence as relied on cannot justify imposition of summary suspension as endorsed by the MEC,” and even though the Hospital renewed his employment contract for another year, he decided to resign and subsequently filed a lawsuit claiming that the Hospital and a competing neurosurgical group, which also had a Hospital contract, made defamatory statements against him throughout the process as well as statements made outside of the peer review process and that they tortiously interfered with his prospective economic advantage and contractual arrangements.

The trial court ruled that the defendants were entitled to immunity protections under both Minnesota law and the Health Care Quality Improvement Act for actions taken during the peer review process. His claims of defamation outside this process were dismissed for failure to meet pleading requirements under Minnesota law including a lack of specificity. Dr. Sherr appealed.

On appeal, the Court pointed out that a plaintiff must establish that a party "was motivated by malice" in order to defeat immunity protections under Minnesota law which in turn, is dependent upon whether "peer reviewers abided by their own established procedures." Dr. Sherr made a number of arguments that the Peer Review Policy was not followed. The principal one was that the review of his cases was initiated by a physician who was one of his main competitors who had complained previously to the Hospital that it was referring too many cases to Dr. Sherr thereby resulting in lower compensation to her and her group because of reduced surgical case volumes.

Despite the Court's apparent acknowledgment that Dr. Sherr's perception of bias was legitimate it determined that the Peer Review Policy was followed and therefore the trial court's dismissal was affirmed.