Shannon v. Testen — Oct. 2015 (Summary)

PEER REVIEW

Shannon v. Testen
No. COA15-64 (N.C. Ct. App. Oct. 6, 2015)

The North Carolina Court of Appeals affirmed the dismissal of an ophthalmologist’s claims that a social worker, a counselor, and a state-sponsored peer review agency breached their statutory duties and violated his statutory due process rights under federal and state peer review statutes. The court held that the ophthalmologist failed to show that any of the defendants acted in bad faith, as well as holding that neither the state nor the federal peer review statutes provided a private cause of action.

The hospital where the ophthalmologist practiced temporarily suspended his privileges and referred him to a psychiatrist and psychologist in response to two incidents at the hospital. After this initial evaluation, the hospital referred the ophthalmologist to a state-sponsored peer review agency. The ophthalmologist met with a social worker and a counselor, both employees of the peer review agency. After meeting, the social worker and counselor both wrote a letter to the state medical board and the hospital recommending that the ophthalmologist immediately receive further professional evaluation. This letter allegedly contained factual errors and omissions regarding the two incidents with the ophthalmologist. In a second letter written a few months later, both repeated their call for the ophthalmologist to receive further evaluation, noting they had received information from the ophthalmologist’s earlier psychiatric evaluations and found the information to be “informative and concerning.” After receiving the second letter, the hospital informed the ophthalmologist that his privileges would not be reinstated. Also, the ophthalmologist surrendered his medical license to the state medical board.

The court held the ophthalmologist had failed to show the defendants acted in bad faith by allegedly failing to include certain facts and interview certain witnesses, noting that such actions were more akin to carelessness, not “willfulness” required for a showing of bad faith. The court also held that neither the Health Care Quality Improvement Act nor the state peer review statute provided the ophthalmologist with a private cause of action. The court also noted that even if the state peer review statute did give the ophthalmologist a private cause of action, the memorandum of understanding between the hospital and the state medical board indicated the activities of the peer review agency would be carried out “in accordance with due process,” thereby satisfying their statutory obligation.