BY Beth Anne Jackson and Allison D. Shelton, Brown & Fortunato, P.C.
Recently, a 7th Circuit Court of Appeals case, Levitin v. Northwest Community Hospital (Levitin), concluded that a physician whose medical staff privileges were terminated could not sue the hospital for discrimination under Title VII because the hospital was not the physician’s employer. The physician had claimed that the hospital’s use of the peer review process exerted sufficient control to grant it “employer” status. The 7th Circuit disagreed. Because hospitals are granted immunity under the Health Care Quality Improvement Act if they follow the statute’s requirements, physicians who believe they were discriminated against with peer review may try to sue under Title VII for redress. 
In order to do so, they must prove that the hospital is their employer, as Title VII is an employment discrimination statute.
The facts of the Levitin case are not atypical. Levitin, a female, Jewish surgeon of Russian descent, had maintained privileges in good standing for 13 years. After she complained of harassment and her male colleague was reprimanded, other physicians filed complaints concerning her professional judgment. Subsequently, the chair of the surgery department (who was in the harasser’s group practice) began proactively reviewing her scheduled surgeries. He also reviewed prior surgeries and referred 31 cases to the Medical Executive Committee (MEC), four of which were determined to be deviations from the standard of care. Although the MEC initially recommended quarterly reviews, it revisited the issue of Levitin’s privileges after it learned that Levitin had operated on a patient without proper sedation. This time, her privileges were terminated, and the termination was upheld on appeal and confirmed by the hospital board. Levitin regarded the entire peer review process as retaliation for her filing the complaint.
Levitin’s initial lawsuit against the hospital and three physicians, including the chief of the surgery department and his colleague, was dismissed on summary judgment. The only issue on appeal was whether the hospital was Levitin’s employer. Because Title VII does not set forth a specific test for whether an entity is an “employer,” this determination is based on agency law, which looks at (1) the economic realities of the relationship, and (2) the right of the alleged employer to control the alleged employee. Many individual factors go into the analysis based on the circuit in which a case is brought; however, the right to control the details and means by which work is performed is key to the analysis. In almost all cases, subjecting a physician to the peer review process does not grant the hospital sufficient control to create an employment relationship for Title VII purposes. Courts have also held that requiring medical staff membership to fulfill call coverage does not create an employment relationship, even if it requires the physician to treat any and all of the hospital’s patients needing the physician’s attention while on-call.
However, certain levels of control pursuant to the peer review process could potentially create an employment relationship, according to the 2nd Circuit Court of Appeals. In Salamon v. Our Lady of Victory Hospital (Salamon), the appellate court refused to uphold the trial court’s summary judgment that dismissed Salamon’s claims because, given the level of control alleged, there was a genuine issue of material fact regarding the physician’s employment status. According to the opinion, Salamon was repeatedly sexually harassed by another physician in her department and filed a complaint. Subsequently (and, she claimed, in retaliation for the complaint), she was subjected to intense scrutiny including multiple levels of review of her cases, and, ultimately, a three-month “reeducation” and mentoring program. In order to pass her reeducation, she was required to practice medicine consistently as instructed by her hospital mentor. Failure to pass, she was warned, could result in a report to the National Practitioner Data Bank. In the end, the hospital found no physician willing to undertake the “reeducation,” and the restriction on Salamon’s privileges ended when the hospital merged with another hospital. However, the damage to her reputation had been done, and she was unable to find work with other local employers. On remand to the trial court, the burden was on Salamon to prove the requisite level of control.
The lesson to be learned from this line of cases is this: a hospital’s exertion of control over independent medical staff members that extends to the details and means by which medical services are performed can create liability as an “employer” under Title VII in the event of allegations of discrimination. As health care reimbursement and delivery methodologies continue to evolve, with hospitals being more at risk for value-based care, increased control over physicians’ practices within the hospital setting would seem to be inevitable. Hospitals would be well-advised to monitor that level of control as well as peer review proceedings to ensure that they are being utilized properly.