Done right, peer review is one of the best ways to improve physician performance and patient care. Done wrong, it can result in a costly lawsuit and damaging publicity. As you'll see, an external peer review program is your best bet to re-credential surgeons and reduce the risk of a claim against your facility.

Go outside
As you know, state and federal laws, as well as the JCAHO, require peer review of physician performance by practitioners of the same or similar training and experience. Historically, other members of the medical staff have carried out peer review. Some observers may wonder whether a fair and objective review is possible when either competitors or professional colleagues with pre-established relationships review one another. External peer review will remove the perception of a possible conflict of interest among payers, regulators and the public.

If you haven't already done so, amend your medical staff bylaws to include language that lets you appoint an external physician as a temporary member of the medical staff for administrative consultation. Taking this seemingly minor step will ensure that the governing board has properly approved the individual. It will also bind him to your requirements for confidentiality and entitle him to all legally available protections (peer review is generally considered privileged information).

To be airtight
Your external review policy should cover:

• circumstances for and scope of peer review;
• who'll coordinate and pay for the review;
• a draft contract for the review;
• a timeline for completion of the reviews;
• requirement that you appoint the reviewing physician as a consulting member of the medical staff;
• approval of the consultant by the medical staff committee requesting the review;
• provision for the review subject to object to the consultant and to be included in the process; and
• indemnification review language.

Selecting the reviewer
Steps to ensure that you properly select a reviewer:

• Document every step of the selection so that you can show the reviewer wasn't biased against the physician under review.
• The reviewer shouldn't know or have any financial interest with the physician under review.
• Pick someone who has no pre-formed ideas about the physician or procedure at issue.
• The reviewer should be willing to sign a no-conflict statement, discuss findings with your committees and testify at a hearing.

You don't want to get to a hearing and learn for the first time that the physician under review objects to the reviewer. Keep the affected physician apprised of whom the reviewer will be and how long he has to file an objection.

A final word: Your risk manager should obtain indemnification for all parties. The risk manager should notify the carrier of every review to determine whether you need to place reserves for possible litigation. It also permits evaluation of any medical malpractice claims that may arise as a result of that practitioner's performance and consideration of early resolution.