Larsen v. Provena Hosps. – Feb. 2015 (Summary)

PEER REVIEW, WHISTLEBLOWER

Larsen v. Provena Hosps., Nos. 4-14-0255, 4-14-0261 (Ill. App. Ct. Feb. 26, 2015)

The Appellate Court of Illinois affirmed a lower court’s dismissal of claims for breach of contract and violation of the state’s Whistleblower Act, brought by a physician, against a hospital. In upholding the dismissal, the appellate court found that the hospital was immune from liability under the peer review provision of the hospital licensing statute because the physician had not alleged physical harm. The court also found that the hospital was not subject to the provisions of the Whistleblower Act because it was not funded by the state as required by the Act.

The physician had clinical privileges to practice at the hospital for over 30 years. The physician alleged that the hospital denied his application to renew his medical staff appointment and clinical privileges, without a hearing, in violation of the bylaws and in retaliation for reports he had made to governmental agencies about the hospital. The lower court dismissed the claims, holding that the physician had only pled that the hospital had harmed his reputation, not his person, as is required for an exception to the peer review immunity provisions in the licensing statute. The lower court also found that the hospital did not fall within the purview of the Whistleblower Act because it did not receive state funding. Both parties appealed.

Citing the hospital licensing act, the appellate court found that the hospital is entitled to immunity for credentialing decisions except for decisions involving willful or wanton conduct. The terms “willful or wanton” are defined by the act to mean “a course of action that shows actual or deliberate intention to harm or that…shows an utter indifference to, or conscious disregard for, a person’s own safety….” In an earlier case, the court had interpreted “willful or wanton” to mean “physical harm” or a conscious disregard for the aggrieved physician’s safety. Thus, in light of the peer review protection in the hospital licensing act, a physician cannot recover from a hospital for a credentialing decision resulting in reputational harm. Finding that there was no allegation of physical harm, the appellate court concluded that the hospital was entitled to immunity for the breach of contract claim.

In addressing the claim under the Whistleblower Act, the appellate court found that this act supersedes the peer review immunity in the hospital licensing act. However, the court also found that the Whistleblower Act was not applicable because, as required by that act, the hospital was not funded by the state. Specifically, the court found that receiving payments from Medicaid is not the same thing as being funded by the state.