Texas shammed license

DU E PRO C E S S
o r PROF E S S ION A L
AS S AS S I N AT ION?
P E E R R E V I E W

A Texas case brings to light how economic competition is being used to rid the competition
by John Zinconi

Texas physician Roland
Chalifoux believes he has become
the victim of a disturbing
trend in medicine: one
that values money over care quality
and rewards political uniformity over
solo innovation. The young neurosurgeon
believes his financial competitors
used a sham peer-review process in an
attempt to destroy him because he was
making more money and gaining
greater community prestige than any
of the “good old boys.”
Chalifoux, 42, has sued both a
Dallas hospital and three of his peers
who he says trumped up charges
against him and had his privileges revoked
because they were tired of him
dominating spine surgeries in their
highly competitive market.
As a result of what his lawyer called an
attempt of “professional assassination,”
Chalifoux now has both the State of
Texas investigating his medical competency
and a black mark in the controversial
National Practitioner Data Bank. He
was forced to leave the Dallas-Fort
Worth Medical Center in 1999 and move
his practice to two other nearby hospitals
where he says the administration
watches him closely but so far has not
attempted to remove his privileges.
“Most of this comes down to jealousy
and a matter of a turf battle,” Chalifoux
says. “It was a matter of who was going to
be controlling spine care at that hospital.”
Medical industry observers say
Chalifoux’s case is a classic example of
an ugly, yet growing trend in the healthcare
industry. As both HMOs and insurance
companies crack down on the cost
of medical care, physicians in highlycompetitive
markets are finding themselves
competing for an ever-shrinking
slice of the reimbursement pie.
Established physicians who are either
part of a powerful Medical Practice
Organization or entrenched in a hospital’s
political structure are finding it lucrative
to target solo practitioners or colleagues
who question the local pecking
order and eliminate them.
Critics charge that through sham peer
review, hospital hierarchies are successful-
y taking down numerous hardworking
physicians annually. Although statistics do
not exist, they believe as much as 75 percent
of all peer review is called for nonmedical
reasons. Critics claim that physicians
who attempt this kind of professional
assassination often do so with calculated
precision. Worse, due to Congress’
rush during the 1980s to find a way to
expose and punish bad doctors, the practice
has become protected by federal law.
Death of the fraternity
“It is very cold, it is very calculated, and
it is very uncaring,” says Jeffrey Grass,
an attorney who represents not only Dr.
Chalifoux but about two dozen other
physicians who claim to be victims of
sham peer review. “It is not typically
how we think about physicians. But the
old fraternity is gone.
“The brotherhood and the Hippocratic
oath that we are all in this for the patients’
good and we are going to respect
each other as this fraternity of dignified
professionals has kind of gone by the
wayside. It is my personal experience
that doctors are one of the most ruthless
bunch you will ever find. Physicians are
so dispassionate it is amazing. They have
no compunction about ruining someone’s
career,” Grass says.
Chalifoux had his privileges at Dallas-
Fort Worth Medical Center revoked in
the fall of 1999. He soon filed suit in
federal court seeking a jury trial for antitrust
violations.
According to Chalifoux, the hospital
mislabeled a spine surgery he performed,
calling it a four-level vertebrae
fusion instead of three. Hospital rules
banned four-level procedures. The mistake
took place at a time when
Chalifoux was applying to become a
member of the physician staff. Instead of
granting him permanent privileges that
fall, two of his competitors called for an
investigation. They went through his
back charts, found about a dozen other
“questionable” decisions and called for a
peer-review hearing.
According to court documents, the inhouse
peer review panel eventually ex-
Continued
I L L U S T R A T I O N B Y S U S A N L E V A N
A law passed during the Reagan administration that was designed to protect the peer re v i e w
p rocess from over-zealous lawyers has turned into a mechanism by which vengeful or gre e d y
practitioners can attack their competitors with legal impunity, critics say.
onerated Chalifoux and recommended
that the hospital executive committee
restore his privileges. But the executive
committee, which included Chalifoux’s
two accusers—orthopedic surgeons
Jeffrey Carter and James Pollifrone—
exercised its right to reject the panel’s
recommendation and refused to let
Chalifoux return to the hospital.
Chalifoux believes the process was
rigged. Both Carter and Pollifrone were
part of the hospital’s power structure
and were in a position to act not only as
his accuser, but also his judge, jury, and
executioner, he says.
“The whole thing was a joke,”
Chalifoux says. “That is why I am suing
them.”
During the peer-review hearing,
Chalifoux had four neurosurgeons who
were not on staff at the hospital review
his charts and testify he did nothing
wrong. Both Carter and Pollifrone testified
otherwise, but they never sought
independent consultation. Their review
was conducted internally with the aid of
the hospital chief of staff, Robert Snow.
“They should have outside people review
things,” Chalifoux says. “Before
you make any decisions on a physician’s
future, you send the stuff to outside
doctors who don’t have any political ties
to the hospital and let them review it.
What I have a problem with is here we
had the executive committee, who has
already said they don’t want me there,
overruling the fair hearing people who
tell me they want me there. So the fair
hearing has no power at all.”
Carter, Pollifrone, and Snow all declined
comment. Dallas-Fort Worth
Medical Center closed in November.
Repeated calls to its administration went
unanswered.
Attack with impunity
Physicians have been undergoing various
types of peer review for decades.
Believing the non-medical world is incapable
of accurately assessing a physician’s
work, doctors have successfully
lobbied Congress for the latitude to police
themselves. But a law passed during
the Reagan administration that was designed
to protect the peer review
process from over-zealous lawyers has
turned into a mechanism by which
vengeful or greedy practitioners can attack
their competitors with legal impunity,
peer-review critics say.
In 1986, the federal government
passed the Health Care Quality
Improvement Act in response to pressure
from the medical industry to give
both hospitals and peer-review panels
legal immunity from lawsuits. The same
law created the National Practitioner
Data Bank, a federal list of problem
physicians who have not only lost privileges
but who have lost malpractice
cases or had problems with issues like
drug addiction.
The data bank, which came on line in
1990, contains the names of about
161,000 physicians but has nearly
258,000 total entries because many
physicians are listed more than once.
More than 9,500 doctors are listed as a
result of peer review. A total of 1,080
were reported during 2000.
Hospital administrators check the
data bank before granting privileges.
Physicians who have been reported to
the bank often have their privilege requests
denied because hospital officials
don’t want to assume the liability of allowing
a problem doctor to join their
staff. This causes great problems for
physicians who have been the victim of
fraudulent peer review, says Dr. Verner
Waite, a leading critic of peer review.
“If you get reported to the data bank,
you are dead,” says Waite, a retired general
surgeon from California who in 1984 won
a $260,000 court settlement after he was
wrongly accused during peer review. “You
might as well turn in your license. It is a
powerful weapon that is used mercilessly
all over the United States.”
PEER REVIEW
Continued from previous page
“If you get
reported to the
data bank, you are
dead. You might as
well turn in your
license. It is a
powerful weapon
that is used
mercilessly all over
the United States.”
Ve rner Waite is a re t i re d
general surgeon fro m
C a l i f o rnia who in 1984,
won a $260,000 court
settlement after he was
w rongly accused during
peer re v i e w.
Congress’ action was motivated by a
high-profile case in Oregon where a
general surgeon won a $2 million antitrust
lawsuit against his former partners.
Like Chalifoux, Dr. Timothy
Patrick claimed that these other physicians
were competitors who used peer
review to drive him out of business for
purely economic reasons.
When Congress passed the Health
Care Quality Improvement Act it provided
immunity for physicians who
serve on peer-review panels as long as
hospitals provide due process and members
of the panel act in good faith. Prior
to 1986, physicians often challenged
peer-review decisions in court.
Although doctors can still do that, critics
contend that immunity protection,
which allows the hospital to keep all
documents and discussions secret, severely
curtails what a physician can introduce
in court, which has made winning
court cases that challenge peer review
next to impossible.
The Health Care Quality
Improvement Act not only deprives
physicians of their due process rights to
the courts, but also equal protection
under the law, according to critics. By
providing hospital peer reviewers with
immunity, the law singles out physicians
for protection from common-law remedies.
No other profession is granted
such protection, they said.
“The Health Care Quality
Improvement Act is one of the worst
things that ever happened to the medical
profession,” says Robert Meals, a
Seattle attorney who specializes in representing
doctors during peer review. “It
has basically immunized the hospitals
from any sort of antitrust liability, and
most liability period.
“What it was supposed to do is give
doctors who sit on peer review panels
some freedom to not be sued if they are
doing their job in good faith. But it has
not worked out that way. It has basically
become an act which has emboldened
the hospitals to stack the deck against
the doctor and then basically say ‘you
can’t do anything about it.’ ”
Continued
“Most of this comes
down to jealousy
and a matter of a
turf battle. It was a
matter of who was
going to be
controlling spine
care at that
hospital.”
Roland Chalifoux, a
Dallas neurosurgeon,
has sued two of his
competitors for improper
peer review.
PEER REVIEW
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PEER REVIEW
Continued from previous page
Because there are no national standards
that govern peer review, each hospital
is a separate fiefdom with its own
unique set of bylaws, Meals says. And
because federal law calls for the “exhaustion
of administrative remedies”
within the hospital before a physician
can sue in court, most judges believe
they are being asked to step into an
arena where they do not belong, he
says.
“By the time the case ever gets to
court, it has already been largely litigated
through the administrative setting,”
Meals says. “Judges are not doctors. All
they have to hear is a couple of doctors
who seem to have good credentials say
this guy was bad. In my experience,
even if there is a very meritorious problem
with the way the case was handled
in the hospital setting, the courts usually
won’t do anything about it.”
Since the Health Care Quality
Improvement Act was passed, less than
a half dozen physicians who have sued
claiming their peer review was fraudulent
have won, Meals says.
“Since the courts are not really there
for the doctors, the whole game is at the
hospital, which is a setting where the
playing field is not only not level, it is
virtually vertical,” Meals says. “It’s awful.
There are not only no legal principles of
protection, I would say common criminals
have far greater legal rights when
they have been accused of something
than a doctor does in the peer-review
setting. It is a tremendous problem.”
Process has merit
American Medical Association Trustee
Dr. Donald Palmisano makes no apologies
for his organization’s support of
both peer review and immunity. He
does not deny that the system can be
abused, and he is quick to mention that
the AMA does not support hospitals
that let economic competitors make decisions
during review. But what doctors
need to understand is that the peer-review
process was granted legal impunity
for their protection as well as the
protection of those on the hearing
panel.
“The process should be protected,”
Palmisano says. “There may be things
said that the people on the panel conclude
have no merit. Why should that
be available to the press and end up in
the newspaper to hurt a physician’s
reputation? That is why we have always
said that this needs to be protected. We
ought to have this protected because it
will improve patient safety because we
can investigate without any shame and
blame, and get to the root cause of
problems.”
As for economic competitors being
involved during peer review, Palmisano
says they should be allowed to present
evidence at the hearing. But they
should not be involved in the decision
making.
“Medicine recognizes and accepts that
peer review is necessary,” he says. “But it
has to be done ethically and it has to be
done with principles of due process. A
physician should not be deprived of his
privileges solely on the basis of medical
testimony by economic competitors. In
any proceeding that results in the termination
of privileges, there should be testimony
from one or more physicians
who are not economic competitors or
who do not stand to gain economically
by an adverse action.”
The Joint Commission on
Accreditation of Health Organizations
was established about the same time as
the Health Care Quality Improvement
Act. Although technically not a regulatory
or government agency, the Joint
Commission, which contains peer review
standards, assesses nearly every
hospital in the United States, accrediting
more than 95 percent of the nation’s
beds. Hospitals are not required
to seek Joint Commission accreditation,
but institutions that fail come under
great public scrutiny.
Since its founding, the Joint
Commission has only identified the existence
of a peer-review process before
accrediting a hospital. At no time did
surveyors assess the review’s effectiveness.
But after receiving much criticism
in recent years, the Joint Commission
in 2001 changed its standards. As of
January, surveyors now conduct a
“meaningful evaluation” of both a hospital’s
peer review and credentialing
procedures by determining whether the
process is not only designed well, but
that it functions effectively.
“The concern was that the process
might not be set up to the best or most
objective advantage by at least some institutions,”
says Dr. Robert Lee, a
Chicago pathologist who is project development
director at the Joint
Commission. “In some places, the
process was found to be either wanting
or deficient, or really not accomplishing
the mission. There was a concern that
just a call for an organizational structure
meant that one place might do a very
good job and another may not.”
But even under its new standards,
the Joint Commission does not tell a
hospital how it must conduct peer review.
Nor does it prohibit controversial
mechanisms like allowing economic
competitors to sit in powerful seats of
judgment. Instead, it simply puts hospitals
on notice that its peer-review
process will be analyzed to a greater degree
than it was before.
“The attempt was not to define the
details of what has to be done at each
hospital, but to better identify what
should be done while developing a proPEER
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Continued from previous page
gram so those details get addressed,”
Lee says. “So there was a call for doing
something without prescribing
specifics.”
Semmelweis Society
founded to help
Peer-review critics believe this is a step in
the right direction. But without specifics
that prevent the “good old boys” from
controlling the hospital’s power structure
it will do no good, Waite says. To aid
physicians who have been wronged,
Waite in 1986 took part of his $260,000
court award and started the Semmelweis
Society as a way for doctors who believe
they have been shamed to network. Over
the years, the society has had about
4,000 members, Waite says.
Until something is done to ensure that
neither economic competitors, HMO executives,
or leading members of a hospital’s
political structure can attack a physician
without the cover of immunity, nothing
will change, Waite says. Even if organizations
like the Joint Commission can
remove economic competitors from sitting
on review panels, the long arm of the establishment
can ensure that their cronies
do their bidding for them, he says.
“As long as you have absolute immunity
you can deliberately lie about your colleague
during a medical peer review and
you are safe,” Waite says. “So any new
bright young man who comes to town, if
you are the establishment, you can get
your colleagues to gang up on the guy.
“The establishment is the judge and
jury. They hire the lawyers for the hospital,
and they appoint the committees.
If you get caught in their web, you will
have mile-wide support from your fel-
When Dr. Joe Pastorek lost his
tenured professorship at the
Louisiana State University School
of Medicine after what he considered
to be a sham peer review, he
contacted the Semmelweis
Society. The society, which was established
in 1986, allowed him to
network with other doctors who
also believed they had been
wronged.
Pastorek’s case caught the eye
of New Orleans cardiologist Dr.
Bahram Zamanian, who in the
summer of 2000 was awarded a $6
million court settlement after a jury
ruled he was the victim of fraudulent
peer review. Zamanian, who
recently had a judge throw out his
court victory and call for a new trial,
is helping Pastorek get back on
his medical feet.
Fired in 1997, Pastorek, an
ob/gyn, was reported to the
National Practitioner Data Bank.
His termination from LSU, where he
had been a professor since 1981,
also resulted in the loss of his malpractice
insurance. The combination
of this black mark in the data
bank and his lack of insurance
prompted the hospitals where he
practiced to drop him from their
staffs, Pastorek says.
Pastorek claims he was fired
from LSU after he refused to testify
against a colleague who was targeted
for wrongful peer review.
When he did not play ball, university
officials went after him, Pastorek
says.
According to Pastorek, who is
suing LSU, he was professionally
assassinated by both the medical
school’s ob/gyn department chair
Thomas Elkins and LSU chancellor
Mervin Trial. Elkins is now dead.
Calls to Trail’s office were not returned.
“I have been doing clinic work
in a weight reduction clinic,” says
Pastorek, who gets paid by the
hour. “I’m fighting people (in court)
and trying to crawl out of the hole
at the same time.”
Several months ago, Zamanian,
who recently reviewed Pastorek’s
case, put in a good word for him
with the administration of Kenner
Regional Medical Center, a 300-
bed hospital just outside of New
Orleans. Pastorek’s request for
privileges is being reviewed by
Kenner’s medical executive committee
and should be ruled on
soon. If he is granted privileges,
Pastorek says the Semmelweis
Society will deserve much of the
credit.
“It’s a way of networking,”
Pastorek says of the society. “If you
get in a position like I am, you can
find people who can help out.”
The Semmelweis Society was
founded by a California general
surgeon who won a $260,000 court
case against several of his competitors
after they defamed him
through a fraudulent peer-review
process. Dr. Verner Waite used a
portion of his financial award to
start the society, which over the
years has had about 4,000 members.
(On the Web at www.semmelweissociety.
org.)
“After winning our case, I started
to hear from many doctors,” Waite
says. “We had people who were on
the board of governors of their hospital
and members of the American
College of Surgeons tell us fraudulent
peer review is a major problem
and we ought to do something
about it.”
For the cost of room and board,
Waite, who is now retired, travels
the country speaking about peer
review and testifying in court hearings
as an expert witness.
Although statistics do not exist,
Waite says he thinks more than 75
percent of all peer review is done
for economic or political reasons.
“The most common reason
somebody gets peer reviewed is
because he is a successful economic
competitor,” Waite says. The
process was created “to get rid of
bad doctors. But it is almost never
used for that. A bad doctor does
not get peer reviewed if he, or his
friends, are part of the establishment.”
The society was named after Dr.
Ignaz Semmelweis, a Hungarian
obstetrician who in the 1840’s discovered
that the simple antiseptic
treatment of a doctor washing his
hands before delivering a baby
would drastically reduce the rate of
puerperal fever in women.
Semmelweis’ superiors, however,
disliked his personality and
fought him at every turn. The
Viennese medical society rejected
and outcast him, not wanting to
believe his results. Driven from his
job, Semmelweis suffered a breakdown
and died in a mental hospital.
n
Help for Peer Review Vi c t i m s
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low doctors, but I can tell you it is only
about an eighth of an inch deep. If they
speak out, they are the next victim. It is
very dangerous to speak out against the
guys in power. And the good old boys
who run the various committees of the
hospital and who are appointed chief of
staff, they know this. And the hospital
lawyers are aware of this. They have
practically no fear because they are immune,”
Waite says.
New Orleans cardiologist Bahram
Zamanian agrees. In July 2000,
Zamanian won a $6 million jury verdict
after claiming a hospital wrongly suspended
him and that two colleagues defamed
him during peer review. But two
months after his victory, a judge reversed
the jury’s decision, saying the
peer-review process is subject to immunity
under both state and federal laws.
Zamanian, 59, claims Mercy Hospital
officials attacked him for two reasons:
he kept patients in the hospital too long
and questioned some of the hospital’s
billing practices. His reward for “rocking
the boat” was peer review, which lead to
both the suspension of his privileges
and an entry in the National Practitioner
Data Bank. He is appealing the ruling
that overturned his $6 million award.
“Generally, every place is the same: If
you don’t dance to their tune they are
going to come and kick your butt,”
Zamanian says. “I am very skeptical
about what hospitals have to say about
physicians because if you have good
connections within the hospital, you can
do whatever you want and nobody is
going to tell anybody anything. But if
you don’t do what they ask, especially if
you talk and stand up for what you believe,
they come after you.”
This political structure can be deadly
to those who don’t play ball, attorney
Meals says.
“All medical staffs are divided into ins
and outs politically,” Meals says. “For
the ins, a lot gets swept under the rug
and there is a lot of looking in the other
direction. If they do become the subject
of a peer-review hearing, the standard of
care is relaxed. The standard of care for
an out is perfection. If you are not perfect,
which nobody is, you lose.
“It is a vicious system, and because
the doctors are totally focused on clinical
medicine for the most part, except
for the political ones, they don’t even
begin to get an insight into how screwed
the system is until they become involved
in it,” Meals says.
AMA trustee Palmisano says the best
way to safeguard against this is for wellintentioned
physicians to become involved
in their local hospital’s power
structure. HMOs will dictate policy, and
good old boys will assume power only if
the medical staff lets them, he says.
“People need to get involved,”
Palmisano says. “Frequently, we find
people don’t get involved in anything.
Then there is a problem and they want
to lament against the system when they
have never been involved. They don’t
bring their case forward unless they
have a cause. But they did not come forward
when somebody else had a problem
because they always say they are too
busy. They don’t want to serve on a
committee because they are too busy.
“We have to safeguard our own liberties,”
Palmisano says. “If we leave it to
the government and the hospitals, they
may not be protected the way we want.
So we have to become activists, each
one of us... It takes a lot of time. And
when you are at these meetings and debating
these issues, no money is going
to pay your staff. But you have to do it.
It is part of what you give back to the
profession to protect the profession.
People just can’t complain. They have to
do something.” n
John Zicconi, a newspaper reporter in Stowe,
Vermont, is a regular contributor to UO.