308 F.3d 25 (1st Cir. 2002), 01-2586, Singh v. Blue Cross/Blue Shield of Massachusetts, Inc.

Docket Nº:01-2586.
Citation:308 F.3d 25
Party Name:Kunwar S.P. SINGH, M.D. Plaintiff, Appellant, v. BLUE CROSS/BLUE SHIELD OF MASSACHUSETTS, INC. and Benjamin W. White, M.D., Defendants, Appellees.
Case Date:August 27, 2002
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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308 F.3d 25 (1st Cir. 2002)

Kunwar S.P. SINGH, M.D. Plaintiff, Appellant,


BLUE CROSS/BLUE SHIELD OF MASSACHUSETTS, INC. and Benjamin W. White, M.D., Defendants, Appellees.

No. 01-2586.

United States Court of Appeals, First Circuit

August 27, 2002

         Heard April 1, 2002.Page 26

[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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        William A. Curry for appellant.

        Nicholas J. Nesgos, with whom Posternak, Blankstein & Lund, LLP was on brief, for appellees.

        Before TORRUELLA and LIPEZ, Circuit Judges, and McAULIFFE, District Judge [*]

         LIPEZ, Circuit Judge.        In a case of first impression in this circuit, we must review the application of the Health Care Quality Immunity Act (HCQIA), 42 U.S.C. §§ 11101-11152, to the contention of Dr. Kunwar Singh that defendants Blue Cross/Blue Shield of Massachusetts, Inc. ("Blue Cross") and Dr. Benjamin White (as Blue Cross's auditor) violated Dr. Singh's rights in numerous ways during their review of his treatment record. Blue Cross and Dr. White counter that in actions stemming from such peer reviews, HCQIA provides immunity from liability for money damages. After analyzing the summary judgment record, we conclude that Dr. Singh could not establish before a reasonable jury that Blue Cross was not entitled to HCQIA immunity, thereby precluding his recovery of damages. Dr. Singh's claims also fail on the merits, thereby precluding any relief. Thus we affirm the district court's grant of summary judgment to Blue Cross and Dr. White.

        I. Background

        We describe the background of the case here, adding more detail below as it becomes relevant to the legal analysis. Since we are reviewing the grant of a motion for summary judgment, we view the facts "in the light most favorable to the nonmovant." Carroll v. Xerox Corp., 294 F.3d 231, 237 (1st Cir. 2002).

        Dr. Singh is a physician specializing in internal medicine. Before 1992, he provided health care for members of the Bay State Health Care, Inc. ("Baystate") and Blue Cross insurance plans. Dr. Singh provided services for two types of patients insured by Blue Cross: those insured under HMO Blue, a managed care plan, and those insured under traditional fee-for-service or "indemnity" plans.

        After Baystate merged with Blue Cross in 1992, Blue Cross offered a "Bay State

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Health Care" line of coverage to former Bay State subscribers. Blue Cross denied several physicians participation in the Bay State Healthcare Network "due to utilization review reasons." According to a letter sent on September 30, 1993, by Susan Gretkowski of Blue Cross's legal department, Dr. Singh "was denied participation because of excessive utilization rates1 in the former Bay State Health Care." Gretkowski's letter explained:

The former Medical Director of Bay State Health Care . . . met with Dr. Singh on July 29, 1992 to discuss the excessive utilization rates. Bay State then began an investigation of Dr. Singh's practice, but the investigation was never completed. Blue Cross and Blue Shield offers at this time to complete that audit, and then re-evaluate Dr. Singh's practice based on the results of that audit.

Dr. Singh and Blue Cross then negotiated the terms and scope of the audit. According to an Audit Agreement signed by both parties on October 10, 1994, Blue Cross agreed to "consider admitting [Dr. Singh] into its Bay State Product if the results of the audit [were] positive." In return for this opportunity, Dr. Singh also released Blue Cross and its employees from liability for claims arising out of the audit.

        The Agreement set forth a procedure for conducting the audit. First, Blue Cross would randomly select twenty-five patients from Dr. Singh's HMO Blue practice. Next, Dr. Singh was to turn over both the medical and the claims files of these patients. Within fifteen days after Blue Cross received the relevant records from Dr. Singh, both parties were to select a mutually acceptable peer reviewer. After he or she received the records, the reviewer would then have sixty days to evaluate them. Blue Cross promised to offer Dr. Singh a "one year non-self renewing contract" if the review was positive.

        The parties initially could not agree on a peer reviewer, with Dr. Singh refusing to accept any of the physicians nominated by Blue Cross. Although the physician nominated by Dr. Singh worked at the same hospital as Dr. Singh, Blue Cross agreed to permit him to conduct the review. However, when that physician received the relevant paperwork, he decided not to conduct the review. After Dr. Singh failed to respond to Blue Cross's request that he nominate another physician, Blue Cross appointed Dr. Walter Clayton to perform the review.2

        Dr. Clayton's review (the "first audit") was based on the random sample of twenty-five of Dr. Singh's patient files from 1992-1994. Dr. Clayton found an "excessive use of pain medication for chronic problems." Dr. Clayton also identified unduly lengthy regimens of antibiotic treatment and overutilization of lab tests and office visits. Dr. Clayton concluded his report with some positive remarks, praising Dr. Singh's careful treatment of low-income patients and his holistic approach to diagnosis. However, Dr. Clayton indicated that the "documented treatment showed evidence of care somewhat below the recognized standard of care."

        On the basis of Dr. Clayton's findings, the five members of the Blue Cross Remedial

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Action Committee ("RAC"), all physicians, decided that Dr. Singh should not be offered a Baystate contract and that there should be a second audit to determine whether Dr. Singh was fit to continue as a provider in Blue Cross's HMO Blue and indemnity plans. Pending the results of the audit, to be conducted by Dr. Benjamin W. White, the RAC also recommended that Blue Cross "freeze" Dr. Singh's "HMO Blue panel"—that is, prevent him from accepting new HMO Blue patients. Blue Cross did not implement that last recommendation, even though the RAC never voted to rescind it.

        Dr. White's review (the "second audit") concentrated on patients to whom Dr. Singh had prescribed narcotics. Joan Downey, Peer Review Coordinator at Blue Cross, requested records from Dr. Singh's office for cases from January 1, 1995 to mid-1996. The RAC ordered her to include all of the patient files which contained prescriptions for narcotics. Twenty-one of the ninety-seven did so. Downey also included a random selection of sixteen of the remaining seventy-six patient files, forwarding a total of thirty-seven patient files for Dr. White's review.

        Dr. White's audit was much more critical of Dr. Singh than Dr. Clayton's audit. Dr. White concluded that "[c]ompetent expert care is rarely seen;" he found substandard care in thirty-three of the thirty-seven cases that he reviewed. However, the second audit contained two flaws. First, Dr. White assumed incorrectly that the patient files were selected randomly. Downey failed to inform him that the RAC ordered her to include all the files of patients to whom Dr. Singh had prescribed narcotics in the sample. In addition, Blue Cross included four patients who were not patients of Dr. Singh, all of whom were prescribed narcotics, and were included in Dr. White's list of patients to whom Dr. Singh gave substandard care.

        Through Joan Downey of Blue Cross, Dr. White submitted two documents to the RAC: a letter identifying broad areas of concern with Dr. Singh's practice, and a "special report" detailing Dr. White's concerns about particular cases handled by Dr. Singh. He insists that he did not discuss the report with anyone else. The RAC considered both documents on September 12, 1996, and reviewed approximately fifteen of the thirty-seven patient files reviewed by Dr. White. After discussing the matter, the RAC unanimously recommended termination of Dr. Singh's participation in all Blue Cross plans.

        In a letter from Blue Cross notifying Dr. Singh of the termination decision on October 16, 1996, he was advised that he would be afforded a "fair hearing" review of the decision if he requested one by a certain deadline. Dr. Singh did so, and Blue Cross accordingly refrained from acting on the RAC's vote pending the decision of the Fair Hearing Panel. This panel, consisting of two independent physicians and one attorney, held hearings on five days between June and December, 1997. At their conclusion, the Panel reversed the RAC's recommendation to terminate Dr. Singh, and Blue Cross did not take any further action against him. Thus, Dr. Singh's indemnity and HMO contracts were never terminated by Blue Cross.

        Dr. Singh brought this action in federal court against Blue Cross in 1998 for harm resulting from the peer review process, alleging defamation, tortious interference with advantageous business relations, breach of contract and violation of Mass. Gen. Laws ch. 93A. In addition, he filed suit against Dr. White for defamation.

        Blue Cross and Dr. White moved for summary judgment, arguing that the HCQIA and the Massachusetts Peer Review

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Statute (Mass. Gen. Laws ch. 111, § 203(c)) immunize them from liability for damages stemming from Blue Cross's peer review process. They also argued that, even if they were not eligible for such immunity, Dr. Singh could not prevail on the merits. Granting summary judgment, the district court agreed with the defendants on their immunity and merits arguments. We review the grant of summary judgment de novo.

        II. Blue Cross's Immunity Under the HCQIA

        A. The HCQIA

        When Congress passed the HCQIA in 1986, it was responding to a crisis in the monitoring of health care professionals. Although state licensing boards had...

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