Attorney on Law

Want to Know if Peer Review Works for Members?

Value of peer review process is borne out in case that played out over two years in downstate New York.

Lance Plunkett, J.D., LL.M.

A Council on Ethics member recently reported that an Association member was refusing to participate in a peer review case. Naturally, such refusal will lead to a referral on ethics charges and the likely expulsion of the doctor from membership in the tripartite system. The case will undoubtedly end up in court and in the Office of Professional Discipline (OPD). What a great bargain—trading your membership for a lifetime expulsion, a malpractice lawsuit and an OPD action. As an old song says: “Who could ask for anything more?”

Some members see peer review as an imposition or attack rather than the binding arbitration that, win or lose, prevents malpractice litigation, where damages can far exceed the dental fees at issue in peer review—and in a malpractice case, the patient won’t pay any outstanding fees owed either to get into court.

Does peer review really work? A recent court case decided on Dec. 15, 2020, (Klein v. New York County Dental Society) says it works just fine. A summary of the court case and a good explanation of peer review follows, based primarily on the court’s own words.

How the Case Unfolded

On Feb. 2, 2020, the plaintiff, proceeding pro se (that is, representing herself), commenced a small claims action for breach of contract and “unpaid business practices.” (Note: This filing was in response to a peer review case that had concluded in 2019.) In this most recent action, the plaintiff was seeking $2,200 in damages from the New York County Dental Society. A virtual trial was held on Dec. 7, 2020. The plaintiff and her witness, an attorney, testified at the trial. Through her testimony and documentary evidence introduced at trial, the plaintiff established that she received treatment from a dentist for temporomandibular joint dysfunction (TMJ), but was unhappy with the results and sought a refund from that dentist in the amount of $11,030. To that end, the plaintiff agreed to resolve her complaint with the dentist through binding arbitration before a panel established by the New York County Dental Society and governed by the rules and procedures of the New York State Dental Association.

In connection with this arbitration proceeding, the plaintiff executed an Agreement to Submit to Peer Review (the Peer Review Agreement). The Peer Review Agreement provided, in relevant part:

1. This is a legally binding contract to enter into binding arbitration as an alternative dispute resolution process for the purpose of finally resolving the stated dispute between the parties. Each party to this contract specifically agrees that they waive the right to subsequently sue the other party, on the facts or issues that are the subject of this binding arbitration before the Peer Review Committee in any court action or proceeding, including but not limited to any malpractice action or collection action, except to bring an action or proceeding to enforce this binding arbitration contract and/or the award of the Peer Review Committee.

4. Each party to this contract specifically agrees that the decision and award of the Peer Review Committee shall be binding as a binding arbitration.

8. We agree not to make any claims against any members of the Peer Review Committee for their acts while performing their duties as members of the Peer Review Committee. Peer Review Committee members enjoy immunity from liability as arbitrators.

10. Appeal of the decision of the Peer Review Committee must be made in writing within thirty days of the date of the decision letter. The Council on Peer Review and Quality Assurance of the New York State Dental Association shall decide any such appeal. We agree further that the grounds for appeal of the Peer Review Committee’s decision are limited to significant procedural irregularities or the discovery of significant new evidence not available at the time of the hearing. The original Peer Review decision shall remain in full force and effect until after a new, final decision is made following a rehearing.

The plaintiff testified at trial that she reviewed the Peer Review Agreement with her counsel prior to signing it and fully understood its terms. The Agreement provided that the peer review committee proceedings would be conducted under the rules set forth in the NYSDA Peer Review Manual. As relevant here, the Peer Review Manual provides as follows:

4.2 Peer Review Hearing Arrangements

The chairperson of the component society Peer Review committee shall appoint three (3) members of the standing Peer Review committee to hear the case, and one additional member to serve as chairperson. The chairpersons of the Peer Review hearing committees do not vote or enter into the discussion in Peer Review; they act solely as presiding officers to ensure that NYSDA procedures are followed and the rights of all parties are protected.

4.3 Clinical Examinations

Each hearing committee’s members shall independently conduct a clinical assessment of the patient and record his/ her findings on the appropriate NYSDA forms. Hearing committee members shall conduct clinical examinations as they would in any doctor-patient treatment situation. At a Peer Review hearing, patients must be treated in accordance with the same standards of professional conduct, including ethical and clinical considerations, as well as the same level of courtesy and consideration; they would be afforded in the dentists’ own offices.

4.4 The Hearing

Clinical Examination of Patient

The clinical examination should only take place after a patient has completed and signed a health survey form and it has been ascertained that no medical contra indications to the examination are present. Clinical examinations shall be carried out only by the three (3) members of the hearing committee individually and in a professional manner. The examiners must be objective in their judgment.

How the Case Ended

After an arbitration hearing on Oct. 22, 2018, the plaintiff was awarded a refund of $10,450 by the panel of arbitrators. However, the dentist appealed to NYSDA alleging that a procedural irregularity occurred during the proceeding in that the chairperson of the hearing was involved in the clinical examination of the plaintiff, in violation of the Peer Review Manual. After review of the papers submitted by both sides on appeal, NYSDA granted the appeal and vacated the award.

Accordingly, a new arbitration hearing was held on May 30, 2019, and at the conclusion of this hearing, the plaintiff was awarded $8,250. The plaintiff acknowledged that she was paid this amount by her dentist. She subsequently commenced action against the New York County Dental Society seeking $2,200 (i.e., the difference between the amounts awarded in the first and second arbitration hearings). The plaintiff argued that the vacatur of the first arbitration proceeding was due solely to the defendant’s errors in: 1) allowing the chairperson of the first arbitration hearing to participate in the clinical examination of the plaintiff; and 2) permitting the dentist to use this procedural irregularity as grounds for an appeal when the dentist had failed to raise an objection to it during the hearing itself and, therefore, the defendant should pay her the difference between the awards in the first and second arbitration hearings.

After the plaintiff’s case-in-chief, the defendant (New York County Dental Society) moved for a directed verdict, asking the court to rule that the plaintiff had failed to introduce adequate proof to sustain her case without the defendant needing to present its side of the case. The court granted the defendant’s motion and dismissed the proceeding.

The court stated that to the extent the action sought to vacate or modify the arbitration award, it was barred by the plain terms of the Peer Review Agreement, which provided that the determination of the peer review committee shall be binding on the plaintiff and that the only avenue for disputing the decision of the peer review committee is by a timely appeal to the NYS- DA Council on Peer Review and Quality Assurance. The plaintiff made no such appeal and may not seek such relief here, as arbitration clauses, as contractual agreements, must be enforced according to their terms. The court noted that, in any event, the action is barred by paragraph 8 of the Peer Review Agreement and the doctrine of arbitral immunity. Under this doctrine, arbitrators in contractually agreed upon arbitration proceedings are absolutely immune from liability in damages for all acts within the scope of the arbitral process.

The doctrine of arbitral immunity protects arbitrators, and their organizations, from civil liability for all acts performed in their arbitral capacity. The actions of the peer review committee members at both hearings were indisputably performed in their capacity as arbitrators. The court added that, as such, even if these acts were in error, they were protected by arbitral immunity and, accordingly, as the doctrine of arbitral immunity barred the action, it was thereby dismissed with prejudice.

Because of the due process fairness afforded equally to both parties in the peer review procedure, the court had no problem upholding the action of the New York County Dental Society Peer Review Committee. The court also made clear that the immunity granted the peer review arbitrators personally extended equally to the component dental society that organizes their arbitral functioning. The component was not liable for the additional monies the patient sought in court. But the dentist could not be sued in court for those additional monies because the binding peer review arbitration prevented that option for the patient. Who could ask for anything more?

The material contained in this column is informational only and does not constitute legal advice. For specific questions, dentists should contact their own attorney.