May 30, 2007Client Alert

Wisconsin Court of Appeals Expands Peer Review Protection to Outside Addiction Treatment

The Wisconsin Court of Appeals recently issued a decision in Rechsteiner v. Hazelden, Appeal No. 2006 AP 1521, ___ WI App ___ (publication recommended), that expands the protection provided to health service providers and others who participate in statutory peer review under Section146.37 of the Wisconsin Statutes. In particular, the Court held that Hazelden, a private rehabilitation and addictionology treatment center, was properly considered part of the overall peer review process initiated against a surgeon by the Spooner Health System, which operates a hospital in Spooner, Wisconsin and is entitled to civil immunities granted under Section 146.37.

Facts of the Case

The peer review process began after the surgeon, Dr. Rechsteiner, was involved in a snowmobile accident with a blood-alcohol concentration of 0.06% while he was on call. Following the accident, the sheriff’s department sent a copy of the accident report to Spooner Hospital. Because Dr. Rechsteiner had been admonished previously for alcohol use (particularly in public) while on call, Spooner began a formal review process under the "Corrective Action Procedures and Fairing Plan Addendum" of its Medical Staff Bylaws (the "Addendum"). As part of its review process, Spooner referred Dr. Rechsteiner to Hazelden for a five-day assessment, at the hospital’s expense. Following the assessment, Hazelden concluded that Dr. Rechsteiner was alcohol dependent, resulting in a 28 day inpatient course of treatment, followed by a twelve-week follow up program. Hazelden later amended its diagnosis to alcohol abuse.

Dr. Rechsteiner brought suit, contending that had the initial diagnosis been alcohol abuse rather than dependence, he would not have had to complete the 28 day inpatient course and would not have lost a month’s income. Dr. Rechsteiner also alleged that defamatory comments were made that lowered his reputation in the community and harmed his business.

Hazelden moved for summary judgment, asserting that it was entitled to statutory immunity from Dr. Rechsteiner’s claims under Section 146.37 of the Wisconsin Statutes which provides immunity for participation in peer review of a physician.

The Court’s Conclusions

The question before the Court was whether Hazelden was indeed part of a "peer review process." Based on the facts of the case, the Court concluded that it was appropriate to consider Hazelden part of the overall review process.

Based on the procedures set forth in the Medical Staff Bylaws, it was determined that Dr. Rechsteiner’s actions warranted corrective action. Under the Bylaws, Dr. Rechsteiner was not allowed to return to practice until he had undergone an assessment "through a recognized addictionology center," followed the center’s recommendations and been cleared to resume practice by the hospital’s Medical Staff and board. The corrective action process also required Dr. Rechsteiner to consent to the release of information between Spooner and the addictionology center.

Because the Bylaws specifically contemplated assessment and treatment as a precondition to Dr. Rechsteiner’s return to practice, which signaled that it was part of the overall review process – not just the outcome. Accordingly, the Court of Appeals held that Hazelden’s activities were part of the peer review process. Therefore, statements made to Hazelden by Dr. Rechsteiner’s colleagues, and statements made by Hazelden about Dr. Rechsteiner were covered by the immunity provisions of Wis. Stat. § 146.37, which shields peer review participants from civil liability.

Applications of this Case

For other hospitals and health care entities, the Rechsteiner case is important because it promotes the use of a peer review process that specifically contemplates outside assessment and treatment of providers who may show signs of impairment. The case is also important because the peer review shield will, presumably, also apply to statements made by the provider during the course of treatment and/or assessment that might not otherwise be confidential.

Finally, hospitals and other health care entities whose Medical Staff Bylaws do not expressly provide for outside assessment and treatment as part of their statutory peer review process, should consider adopting or amending Medical Staff Bylaws to take advantage of the protections recognized in the Rechsteiner case.

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