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Reliance on hospital peer review report—inadmissible hearsay—dooms disciplinary decision

A decision by the Pennsylvania Bureau of Professional and Occupational Affairs to rely on a hospital peer review report as the basis for its expert's testimony was improper, causing a subsequent disciplinary decision to be overturned  by the Pennsylvania Commonwealth Court February 28.

(Ives vs. Bureau of Professional and Occupational Affairs).

Because the licensee at issue in the case objected to the use of the report, the document was considered inadmissible hearsay, and could not be the basis of an administrative decision.

After a patient died of blood loss that began when physician William Ives operated to remove a colon tumor, the board began a disciplinary case, alleging that Ives’s treatment of the patient fell below the standard of care. An expert witness retained by the Bureau, after reviewing medical and hospital records—including a peer review report on the incident—concluded that Ives erred by disregarding the concerns of other members of his operating team, by continuing the surgery when he should have stopped, and by leaving the patient in the care of another physician following the conclusion of the surgery.

Oddly, there were some discrepancies in that report: the expert reviewer seemingly failed to discover that Ives left the patient because Ives had been called to a different emergency, and the reviewer did not review Ives’s orders during the surgery.

The expert’s conclusion was contested by Ives, who, during testimony in defense, explained his responses to his surgical team’s concerns and noting that the patient had an undiagnosed bleeding disorder, which meant that her bleeding could only be stopped with the use of platelets, which Ives ordered but which were never delivered.

Following the hearing, the board publicly reprimanded Ives and ordered him to complete a remedial clinical competency skills assessment. Ives appealed, and the case went up to the Pennsylvania Commonwealth Court.

Ives made several arguments on appeal. First, he argued that both the board and its expert reviewer erred by relying on a transcript of the peer review proceeding—conducted by the hospital after the incident—since the earlier procedure was conducted for a specific purpose with different goals than a disciplinary investigation, by a group of physicians rather than an official with legal consequences in mind.

Ives argued that the board should have conducted its own evidentiary hearing, having the witnesses cited in the report testify directly, instead of relying on the statements contained in the review, which he contended were inadmissible hearsay.

The judges of the Commonwealth Court agreed. Although the rules of evidence are relaxed in administrative proceedings, Judge Mary Hannah Leavitt explained in her written opinion for the court, under Pennsylvania law if an affected party objects to introduction of a piece of evidence, such evidence cannot be the basis of a board decision.

The board claimed an exception to the hearsay rule which allows for the introduction of previous testimony, but the court noted that the exception is only available if the witness cannot testify. Further, the peer review report was not admissible under hearsay exceptions for business and medical records, the court explained, because those exceptions require certifications from employees who prepared and maintained custody of the documents, a step the board did not take before it used the report as evidence.

Ives also challenged the use of the peer review by the board’s expert, arguing that his reliance on that inadmissible document when preparing his own report tainted the analysis. Although expert witnesses are permitted to rely on otherwise inadmissible documents, those documents must be of the sort that experts in their field regularly rely on in the practice of their profession. A peer review, Ives argued, was not such a document, as a doctor would not normally have the need to rely on one in their regular practice.

The court agreed. “The Peer Review transcript goes far beyond Patient’s records, laboratory tests, and the observations of attending nurses,” and the Bureau presented no evidence that surgeons rely on such reports in their regular work, Judge Leavitt wrote. “Simply, the record does not establish that, as a general rule, surgeons rely on transcripts from peer review proceedings to formulate their medical opinions . . . Absent that proof, [the expert’s] opinion lacked a foundation, which was necessary to the formation of a competent expert opinion.”

Because the testimony of its expert was the board’s primary evidence that Ives had violated the standard of care, and because that testimony had been accepted in error, the board’s decision to discipline Ives was thus not based on sufficient evidence. It could not stand, therefore, and the court reversed.