In a singular decision that may became a model around the country, the New Mexico Supreme Court has ruled that a hospital violated the law by using confidential information about a physician’s peer review conduct to terminate his employment.  The court affirmed a verdict in favor of the physician and upheld the jury’s award of compensatory and punitive damages.

In Yedidag v. Roswell Clinic Corp., a physician employed by a hospital was terminated for unprofessional conduct during a peer review meeting. The subject of the peer review session was another doctor's treatment of a patient who died following surgery.  The chair of the peer review committee testified that although the plaintiff physician's questioning was “heated,” it was well-directed and brought information to the forefront of discussion.  However, an administrative observer reported to the physician practice manager that the plaintiff verbally attacked the surgeon who was the subject of the peer review.  As a result, the hospital terminated the plaintiff. 

The court explained that the confidentiality of peer review is an important public policy concern.  A primary purpose of peer review is to ensure that patients have received adequate health care and to improve the quality of care provided by physicians.  The greatest obstacle to effective peer review is potential fear felt by reviewers that their participation in an adverse recommendation could lead to a lawsuit against them or negative consequences for their livelihood.  To overcome this obstacle and promote candor in the peer review process, numerous states have passed laws to ensure that the process is kept confidential. 

New Mexico passed the Review Organization Immunity Act (ROIA) to regulate peer review committees in hospitals, health maintenance organizations, local associations of health care providers, nonprofit health care plans, and emergency medical systems.  ROIA grants qualified immunity to peer reviewers and individuals who provide information to review committees.  ROIA also protects the confidentiality of data and information acquired by peer review committees.  Peer review statutes across the country are similar. 

ROIA does not expressly provide a private remedy for individuals who are harmed by a failure to maintain the confidentiality of peer review.  Based on U.S. Supreme Court authority, however, the New Mexico Supreme Court implied a private cause of action.  Thus, the plaintiff could obtain relief for the hospital's decision to terminate him based on his conduct during the peer review meeting. 

The court’s holding also limits the use of peer review information to individuals who are responsible for furthering the purpose of ROIA.  In other words, only the medical staff responsible for peer reviews can discipline evaluators for their conduct during peer review.  In addition, ROIA allows reviewed physicians to bring claims against their evaluators for “malicious” peer review conduct.  On the other hand, hospital administrators, who do not have any substantive role in peer review, cannot use confidential peer review information in making adverse employment decisions. 

This decision may have far-reaching implications if other states follow suit.  Protecting the confidentiality of the peer review process in this way may mean that hospital administrators cannot discipline based solely on conduct during peer reviews, but uncivil conduct in other settings should remain actionable.  Hospitals should consult with counsel about their employment contracts, policies, and codes of conduct to ensure that they include remedies for troublesome physician behavior.