Illinois Court of Appeals Supports a High Bar for Overcoming State Statute’s Peer Review Immunity for Hospital

Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families. She also has significant experience in representing providers in regulatory matters.

Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families. She also has significant experience in representing providers in regulatory matters.

By Mary Holloway Richard, JD, MPH

An Illinois appellate court recently upheld a trial court decision granting summary judgment in favor of a hospital in a case where the plaintiff sought to limit a hospital’s statutory peer review immunity.1 Upholding a stringent standard imposed by the trial court, the appeals court ruled that the Illinois peer review statute requires pleading and proof of actual or deliberate intent to harm, or clear indifference to or disregard for, the peer-reviewed physician, along with resulting physical harm to the physician, and that mere harm to reputation is not enough. In this case, OB/GYN Dr. Valfer alleged merely that Evanston Northwest Healthcare (ENH) had failed to follow the proper procedures in dealing with him and that this failure had caused him reputational harm. The appeals court held that this fell short of the showing required to overcome the state law peer review immunity.

Valfer’s medical staff privileges at ENH were renewed in November 2000 for one year and for an additional nine months in September 2001. He re-applied for privileges and was informed that issues had arisen requiring a review of his surgical procedures for the preceding 12 months. In June 2002, Valfer agreed to stop scheduling surgeries at ENH, and his operating privileges were suspended pending resolution of patient safety issues involving unnecessary procedures. Valfer was notified by the service chief that he would not recommend Valfer’s reappointment. In July 2002, the medical executive committee agreed with that recommendation and provided Valfer with written notice of its decision not to reappoint him and also notified him of his hearing rights.

In 2004, an ad hoc hearing was held in which the service chief and another competing physician testified against Valfer. The decision not to appoint was upheld. Valfer appealed the decision to the appellate review committees; the ad hoc committee’s decision was upheld and was affirmed by the Board. Valfer continued to admit patients until the decision not to reappoint became final in March 2005. During the three-year period from Valfer’s final application for reappointment to the effective date of non-reappointment, no changes were made in ENH credentialing software, and he continued to be listed in “good standing” and to admit patients.

In 2007, Valfer sued for civil damages resulting from ENH’s decision not to reappoint him. ENH filed a summary judgment motion seeking to dismiss the breach of contract claim. ENH argued there was no breach as ENH had followed relevant procedures and was immune under both the state statute2 and the federal Health Care Quality Improvement Act (HCQIA).3 The summary judgment motion was granted.

On appeal, Valfer argued that there was, in effect, a reappointment by virtue of his continuing patient admissions and that this raised a question of fact as to ENH’s allegedly improper reliance on reappointment, rather than peer review, procedures. Valfer also characterized HCQIA immunity as limited to peer review and therefore not applicable because of ENH’s alleged reliance upon reappointment, rather than peer review, procedures. He argued that there was no peer immunity because of its willful or wanton denial of his privileges because of peer review by competitors. ENH responded in part that immunity under the Illinois peer review statute applied by virtue of the “willful or wanton” language and in the face of Valfer’s failure to allege physical harm to himself from the decision not to reappoint, and that the four statutory requirements for HCQIA immunity had been met.

In upholding the lower court’s decision the appellate court focused on legislative intent and the clear and unambiguous language of the statute. By giving effect to all statutory language, the court concluded that Illinois statutory immunity exists in the absence of willful or wanton misconduct. The plaintiff’s allegations of breach of contract by ENH for failure to follow the proper bylaws did not satisfy the statutory requirement of willful or wanton misconduct. The court cited precedent for overriding peer review immunity for civil damages where a defendant’s course of action demonstrates actual or deliberate intent to harm others or clear indifference to or disregard for a person and concluded that physical harm must necessarily be alleged and proved in order for a party to be civilly liable for peer review activities.4 According to the court, to require anything less, such as allowing damage to business or reputation to suffice, would make the peer review immunity meaningless and discourage such activities.

While parties often focus on HCQIA as the primary source of peer review immunity, this case illustrates that hospital counsel should not overlook the robust and vital protections that often co-exist under companion state law peer review privileges.


1 Valfer v. Evanston Northwest Healthcare, No. 1-14-2284, IL App (1st) 2015.
2 Ill. Hospital Licensing Act 210 ILCS 85/1 et seq (West 2012).
3 42 U.S.C. 11101 (2012).
4 Valfer at par. 29 citing Larsen v. Provena Hospitals, 2015, IL App (4th) 140255.