Hospitals argue state law protects them from fraud accusations

ABERDEEN — Hospitals do not have to turn over documents related to doctor performance even when there’s evidence they committed fraud against patients, lawyers for two hospitals and several physicians argued before the South Dakota Supreme Court on Tuesday.

South Dakota law is absolute that peer review materials are not discoverable to those who sue doctors for medical malpractice, nor are they admissible in trials against doctors.

“The language is absolute in its terms,” said Ed Evans, one of the lawyers who argued the case on behalf of Avera Sacred Heart, the Lewis & Clark Specialty Hospital and about a dozen doctors who have been sued for granting privileges to a spine surgeon who is accused of performing dozens of unnecessary surgeries on unsuspecting patients.

At issue is a court finding from last year, in which Circuit Court Judge Bruce Anderson said that plaintiffs suing the doctors and hospitals should have access to certain materials used by hospital peer review committees to review the performance of physicians. Anderson ruled that the peer review statute that protects those materials from disclosure can be breached under a crime-fraud exception. He also ruled that plaintiffs should have access to outside materials – such as applications for medical licenses – that were used by peer review committees.

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Evans and attorney Roger Sudbeck argued that if the Legislature intended for there to be a crime-fraud exemption then lawmakers would have written it into the law. Absent that explicit language, it would be wrong for the judiciary to create an exemption when there wasn’t legislative intent.

Anderson is overseeing more than 30 lawsuits filed against Dr. Allen Sossan, a convicted burglar turned spine surgeon who changed his name from Alan Soosan to evade detection as a convicted felon. Sossan practiced in Yankton for about four years between 2008 and 2012. During that time he was accused of maiming and killing patients while subjecting them to unnecessary spine surgeries.

Plaintiffs in the lawsuits allege that the hospitals gave Sossan credentials even though they knew he was a menace to patient safety. They contend that Sossan was allowed to perform surgeries because spine surgery is one of the most lucrative sources of profit in medicine for hospitals and doctors.

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Sossan fled the United States for his native Iran as the cases against him piled up. He was subsequently indicted by a grand jury for lying on his application to get a South Dakota medical license.

Anderson’s ruling established a path for plaintiffs to get access to peer review materials if there is evidence that hospitals committed a fraud or a crime in their decision to grant credentials to a physician. Examples of such materials might include meeting minutes, performance evaluations and critiques from other physicians.

Leslie Brueckner, a lawyer who argued on behalf of the patients Tuesday, said they had been operated on by a “crazy madman.”

“Tragically, leaving many of them permanently injured and in chronic pain,” said Brueckner, who is a lawyer with the national organization Public Justice.

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In order to prove the hospitals committed fraud, patients need access to materials that are otherwise not available under the state’s peer review law. Without access, patients would be deprived of due process.

“You have to show what the hospitals knew and when they knew it,” she said.

Chief Justice David Gilbertson told Brueckner that she was making a “compelling argument,” but he questioned whether she was making the argument to the wrong body and instead should have been addressing lawmakers who can change the peer review statute.

Brueckner replied that the South Dakota Supreme Court had in the past added a crime exemption to spousal privilege, and that it could do so with regard to medical peer review, particularly because the Legislature’s intent was to protect public safety.

Gilbertson also asked both Brueckner and Evans what they thought about judges performing in-camera reviews of peer review materials. In-camera reviews are performed by judges in their chambers, outside of public. Some states allow judges to perform in-camera reviews of peer review materials in order to determine whether plaintiffs should have access.

Brueckner said she would be fine with in-camera reviews. Evans responded that it would require detailed instructions from the state’s high court for how the circuit courts would deal with in-camera reviews. “I’m not against it, but I want to know where we go next,” he said.

The court, which normally holds hearings in Pierre, was at Northern State University this week. Three of the high court’s five justices did not participate in the Sossan hearing. Justices Steven Zinter, Lori Wilbur and Janine Kern were replaced by Circuit Court Judges Scott Myren, Rodney Steele and Joni Cutler. A decision could come later this fall.