Hospital says surgeon’s libel claim poses an ‘urgent’ threat to public welfare

Can individuals and hospitals be sued for libel after reporting suspected physician misconduct to state licensing officials?

That’s one of the questions facing the Iowa Supreme Court in a case involving an Iowa surgeon fired from a Hamilton County hospital for alleged patient-care issues.

Thirteen months ago, an Iowa judge ruled that Dr. Mark Andrew could have his lawsuit against the hospital heard by a jury. The hospital appealed that decision to the Iowa Supreme Court, and is now arguing the case presents “fundamental and urgent issues of broad public importance” that require a ruling by the state’s highest court.

The hospital argues that if the court doesn’t rule that physicians and others are immune from lawsuits that arise from confidential complaints to the Iowa Board of Medicine, there will be a “chilling effect” to the complaint process and the public welfare will be put at risk.

The case sheds new light on a medical-oversight process normally shrouded in secrecy. Court records show the dispute between Andrew and Hamilton County Public Hospital, also known as Van Diest Medical Center, dates back to November 2016, when a Hy-Vee pharmacist contacted the hospital to express concern with the amount of hydrocodone Andrew was prescribing for one of his patients.

The hospital investigated and produced a physician’s report that alleged the patient appeared to have “filled duplicate or multiple prescriptions, written on the same day, by Dr. Andrew, for large quantities of opioid medication.” The report also stated, according to court records: “This raises questions about whether the patient was fraudulently manipulating prescriptions or if the physician was providing multiple, large quantity prescriptions.”

The hospital’s then-administrator, Lori Rathbun, would later testify she was “extremely alarmed about the level of opiate prescriptions that were — painkillers that were being prescribed to this patient,” partly because Andrew was a surgeon, not a pain-management physician, but also because other pharmacies had called Andrew, without response, to express similar concerns about opioid prescriptions.

Within a week of the investigation being completed, Rathbun fired Andrew, informing him in writing that “this action is being taken due to significant concerns about prescribing practices and patient-care issues.”

Andrew sued, alleging breach of contract, defamation and libel. He claimed that when the hospital fired him, it did so without cause and without having his patient care examined by a peer-review panel as would normally be the case.

He also alleged the hospital libeled him and defamed him by making false and malicious claims about him in a complaint filed with the Iowa Board of Medicine, the panel that licenses and disciplines Iowa’s physicians.

The hospital’s lawyers say the concerns expressed in the complaint are “constitutionally protected opinions,” and that the confidential nature of complaints to the board — as well as state laws requiring doctors to report suspected wrongdoing by their colleagues — make such complaints more likely to be categorized as opinion.

They also point out that Iowa law says a person “shall not be civilly liable as a result of filing a report or complaint with a licensing board” — although, as Andrew’s lawyers point out, the law goes on to say that immunity “shall not apply if such act is done with malice.”

According to court records filed by attorneys on both sides of the case, the complaint the hospital filed with the state board questioned Andrew’s care of two patients, one of whom was allegedly prescribed 12,000 to 15,000 Hydrocodone tablets over four years.

The confidential complaint, reproduced in public court filings, states in part: “Volume of narcotic prescribing appears to be well beyond acceptable under any circumstances. It raises questions of marked naiveté, gross incompetence, and/or collusion with the patient for self-use, dealing and/or distribution. Under any of those circumstances, should this physician’s prescribing authority be reconsidered?”

The court records indicate the board investigated the matter and concluded in April 2018 that the hospital’s complaint “did not warrant any disciplinary action” and closed the file.

“There is no evidence whatsoever to support the idea that Dr. Andrew was using prescription drugs illegally or colluding with his patient to sell drugs illegally,” Andrew’s lawyers argue in one of their briefs before the Supreme Court. They say the gist of the complaint was the hospital’s “verifiable and unfounded allegations of criminal conduct,” and as such “it is not protected opinion.”

District Court Judge James A. McGlynn ruled in late 2019 that the issue of whether the hospital had acted in good faith or with malice was a factual question to be decided by a jury.

As for the hospital’s failure to have Andrew’s care undergo peer review, McGlynn found that the hospital “did not provide Dr. Andrew the slightest opportunity to be heard prior to terminating his employment … It may be that the hospital administrator was reasonably relying upon information which she thought to be credible and accurate, and that her motivation was only the health, safety and welfare of the patients in the hospital. On the other hand, the hospital administrator is alleged to have told Dr. Andrew she thought he was overpaid and then insisted on modifications to his pay and his duties because she thought he was not productive enough.

“It appears that Dr. Andrew believes that the hospital administrator was a vindictive bean counter who was looking for a quick and dirty method of pruning the hospital staff. The truth may be somewhere in the middle and the court finds it is for the jury to decide the good faith and lack of malice of the hospital administrator.”

The Iowa Supreme Court has yet to schedule oral arguments on the hospital’s appeal of McGlynn’s ruling.