• IL Supreme Court Outlines Doctor’s Remedies Against Hospital for Termination of Practice Privileges
  • July 26, 2016 | Author: Richard Hunsaker
  • Law Firm: Heyl, Royster, Voelker & Allen Professional Corporation - Edwardsville Office
  • In Steven Valfer, M.D. vs. Evanston Northwestern Healthcare, 2016 IL 119220, the Illinois Supreme Court has further outlined what is necessary to enforce actions of a hospital in revoking practice privileges or disciplining a staff physician.


    Dr. Steven Valfer brought an action against Evanston Northwestern Healthcare in connection with the non-renewal and revocation of privileges to practice. The Hospital’s “non-renewal” decision followed a peer review which was conducted pursuant to the Illinois Hospital Licensing Act (201 ILCS 85/1 et seq). The peer review was comprised of an analysis by two other physicians, one of whom was chairman of the Hospital’s OB-GYN department. In general, the review resulted in a finding that of Dr. Valfer’s 21 surgical cases from the previous year, over 50 percent of those cases “lacked demonstrable indications for surgical intervention.” Valfer, 2016 IL 119220, ¶5. Thereafter, the Hospital’s Executive Committee determined that it would recommend to the Hospital’s Board of Directors that Dr. Valfer not be reappointed to the staff. Dr. Valfer, pursuant to the Hospital’s bylaws, requested a hearing on the matter. Dr. Valfer was represented by counsel and was given the opportunity to present evidence. After a hearing, where the two physicians who had conducted the peer review testified as witnesses, the Hearing Committee upheld the decision of the Executive Committee to deny the request for renewal of surgical privileges and staff reappointment. An appeal was requested by Dr. Valfer and the Hospital’s Appellate Review Committee upheld the decision of both the Hearing Committee and the Executive Committee to deny the requested renewal of privileges and staff reappointment. The hearing and review process was reportedly conducted in compliance with the Hospital’s bylaws.

    Following the hearing and review, Dr. Valfer sued the Hospital in the Circuit Court of Cook County claiming that it acted improperly in deciding not to renew privileges.

    The civil lawsuit brought by Dr. Valfer in Cook County was decided in favor of the Hospital following an evidentiary hearing. The trial court held that the Hospital was statutorily immune from suit based upon the language contained in Illinois’ Licensing Act. On review, the trial court’s decision was upheld by the First District Appellate Court.

    Legal Issues

    In its analysis of the case, the Illinois Supreme Court addressed two central issues. Is a hospital, which follows its own bylaws, immune from suit as a result of the Licensing Act, 210 ILCS 85/10.2? And, was there a basis in Dr. Valfer’s case to conclude that the hospital engaged in “willful and wanton misconduct” which is set out in the Licensing Act as an exception to statutory immunity?

    The Illinois Supreme Court’s decision clarifies a number of issues which have been the subject of some debate among lawyers, physicians and hospital administrators. First, the Supreme Court clearly states that hospitals do not enjoy absolute immunity for their staffing decisions. The court notes, without hesitation, that “sham peer review” is not condoned. Having said that, the Illinois Supreme Court held that the Licensing Act immunizes a hospital and those involved in its quality reviews from civil damages where the review was undertaken to maintain or improve the quality of health care. Second, the Illinois Supreme Court explored the scope of statutory immunity available to hospitals. In doing so, the court noted that physicians would always have the right to legally challenge the manner in which the hospital’s bylaws were being applied or interpreted by way of a declaratory judgment action or through an action seeking injunctive relief. In Dr. Valfer’s case, it was significant to the Supreme Court that there was no question raised of whether the hospital’s bylaws were improperly applied or interpreted during the re-appointment process. Third, the Illinois Supreme Court addressed the concept of willful and wanton conduct as a statutory exception to hospital immunity. In assessing this exception, the Supreme Court held that a physician may be able to avail himself of the exception to the immunity provision where the purpose of the discipline was not based on internal quality control or enhancing patient care and treatment but was a sham. The court did not identify what might constitute a “sham peer review.” Finally, in analyzing the “willful and wanton act” immunity exception, the Supreme Court determined that “willful and wanton” conduct, as applied in the context of the Licensing Act, is an exception which requires that the action produce “physical harm” to the plaintiff. The court very clearly held that harm to one’s reputation or economic well-being are not sufficient to invoke the “willful and wanton” exception.


    In outlining what is necessary to enforce actions of a hospital in revoking practice privileges or disciplining a staff physician, the Illinois Supreme Court has determined that the process must be based on the objective of enhancing the quality of medical care. And, the credentialing process must be clearly set forth in hospital bylaws and conducted in conformity with those written bylaws. If these requirements are met, it is very likely that the hospital will qualify for immunity from under section 10.2 of the Licensing Act.

    Any credentialing process which does not involve evidence or conduct which touches upon quality of care issues could seriously undermine any later attempts to invoke the immunity protection should the hospital be sued by a disgruntled physician.

    From the perspective of the individual physician, the Supreme Court has outlined the proper approach to challenging a process where the physician’s privileges are disciplined, revoked or not renewed. First, the physician cannot allow the process to proceed where there is a factual basis to argue that the hospital bylaws are unclear, improperly applied or ignored. In those settings, the physician should seek immediate relief from the court either through a declaratory judgment action or an equitable action seeking injunctive relief. And, if the willful and wanton exception to the statutory immunity provision is to be invoked, the physician must have a basis in fact to allege conduct establishing a course of action on the part of the hospital that demonstrates an actual or deliberate intention to harm or an utter indifference to or conscious disregard for a person’s own safety and the safety of others. Though quite difficult to establish, the physician must also demonstrate that the conduct produced physical harm in order to invoke the willful and wanton immunity exception.

    Based upon the Supreme Court’s analysis, it would appear that the best alternative for a physician challenging the process is to assert that the hospital engaged in a “sham peer review.” To make that argument, it is apparent from the court’s opinion that the physician must have compelling evidence of an improper motive on the part of the hospital and support from competent experts establishing that the care which is the subject of the peer review was reasonable and appropriate.