FILE REFERENCE 0001252-2.opn
Charles J. Carlini, M.D. v. Highmark
d/b/a Blue Cross Blue Shield and
Keystone Health Plan West, Inc.
Preliminary Injunction-Procedural Due Process-Pennsylvania Professional Health
Services Plan Corporation Act
1. A preliminary injunction preserves the status quo and prevents
imminent and irreparable harm which might occur before the merits of a cause of
action are decided.
2. All four elements of a preliminary injunction must be established
before injunctive relief can be granted.
3. Elements of preliminary injunction to be proved are: That relief is
necessary to thwart immediate irreparable harm which could not be remedied by
monetary damages, that greater injury will result by refusing the injunction
rather than granting it, the injunction will restore the parties status quo
existing prior to the alleged misconduct, and that injunction is reasonably
suited to abate such activity.
4. Pennsylvania Professional Health Services Plan Corporation Act 40,
Pa.C.S. 6301, controls procedure under which a physician may be excluded from
participation under a Plan.
5. The independent medical review committee established to review and
evaluate a physician's qualifications for participation under a Professional
Health Services Plan is subject to the same due process review as an
administrative agency, as the committee is "a creature of the state".
6. Physician's due process rights are abrogated when health care plan
rejects findings of panel of independent expert physicians supporting
physician's fitness to practice without cause.
7. Hearing forum must be fair and impartial to protect due process
rights of physician subject to review.
8. Contract of adhesion will not be upheld where plaintiff physician
would be required to forfeit substantial rights to a meaningful and unbiased
appeal to protect that physician's ability to engage in livelihood and protect
professional reputation.
(Patricia A. Nixon)
David R. Johnson for Charles J. Carlini, M.D.
Vincent Scaglione for Highmark d/b/a Blue Cross Blue Shield.
No. G.D. 98-8555. In the Court of Common Pleas of Allegheny County, Civil
Division.
OPINION
Jaffe, J., October 15, 1999-Defendants, Highmark d/b/a Highmark Blue Cross Blue
Shield (hereinafter "Highmark"), and Keystone Health Plan West, Inc.
(hereinafter "KHPW") appeal from this Court's Order dated July 6, 1999 which,
inter alia, reaffirmed its prior Order enjoining Highmark from decertifying
Plaintiff, Charles J. Carlini, M.D. (hereinafter "Plaintiff") and reinstating
him as a participating physician in any and all of Defendants' plans1 in which
he had previously participated.
BACKGROUND
Plaintiff is a licensed and practicing physician, specializing in obstetrics
and gynecology, with his principal office located in Mt. Lebanon, Pennsylvania.
He is a member of the medical staff at the St. Clair Hospital and maintains
staff privileges at several area hospitals. Additionally, Plaintiff is an
Assistant Clinical Professor for the University of Pittsburgh Medical School at
Magee Women's Hospital and holds adjunct professorships at St. Francis Hospital
and Duquesne University. At the time this action was commenced, he served as
Chairman of the Quality Review Board for the Obstetrics and Gynecology
Department of St. Clair Hospital and was Division Chief of the Obstetrics and
Gynecology Department at Jefferson Hospital.
Plaintiff has participated in managed care programs sponsored by Defendant and
its predecessors since 1980. Presently, Defendant's Keystone Health Plan West
accounts for nearly sixty (60)% of Plaintiff's practice.
Since his medical career began in 1972, Plaintiff has never been the subject of
any disciplinary action through the Pennsylvania State Medical Board or at any
medical institution with which he has been associated. Prior to Defendant's
actions in this case, Plaintiff had never been rejected or removed from any
hospital staff or managed care panel.
By letter dated August 4, 1997 from Dr. Carey Vinson, Defendant's Medical
Director, Plaintiff was advised that Defendant's Credentialing Committee had
denied his application for re-credentialing "due to the excessive number of
malpractice claims filed against [him] and that this action would be reported
to the National Practitioner Data Bank." Plaintiff was further advised of his
right to appeal this action.
Significantly, this letter was written on a letterhead bearing the names and
logos: Highmark Blue Cross Blue Shield and Keystone Health Plan West A Highmark
Company. The two logos are identical.
Plaintiff timely exercised his appellate rights and a hearing was scheduled for
January 5, 1998 in Erie, Pennsylvania before a panel of three (3) out-of-town
ob/gyn physicians. On that date, the hearing was held as scheduled. However,
only two (2) of the three (3) physician/panel members attended. Also in
attendance were Dr. Vinson and Defendant's counsel. A stenographer transcribed
this hearing.
The hearing consisted of Dr. Vinson's presentation of Defendant's reasons for
its decision not to re-credential Plaintiff which include an analysis of
Plaintiff's malpractice history along with the written opinion of one of the
members (an ob/gyn specialist) of the Credentials Committee that Plaintiff had
engendered dissatisfaction in its members. Plaintiff, who was not represented
by counsel, discussed each of the malpractice actions and submitted an
affidavit and letter from the Vice President of Medical Affairs of the St.
Clair Hospital.
The panel, after reviewing all of the evidence presented, concluded that "the
decision for termination was unjust and should be overturned." They found "no
clear-cut case of malpractice or inadequate service by [Plaintiff]" and that
"no evidence was presented one way or the other that members were not satisfied
with [Plaintiff's] service."
By letter dated February 11, 1999, on the same letterhead, Plaintiff was
advised by Dr. Vinson that the hearing panel had indeed recommended to the
Credentials Committee that its decision to terminate Plaintiff's participation
in the Keystone Health Plan West network be reversed. Notwithstanding this
recommendation, Plaintiff was further advised that the Credentials Committee
decided to uphold its prior decision to terminate his participation in the
Keystone West program "based on high malpractice history" and that this
decision would be reported to the National Practitioner Data Base.
Defendant, at Plaintiff's request stayed the effective date of the
decertification pending a review of this action by its board of directors. At
its May 21, 1998 meeting, Defendant's board took no action, thereby permitting
the decision of the Credentials Committee to stand.
Plaintiff then filed the instant Complaint in Equity and Petition for
Special/Preliminary Injunction without a hearing. After reviewing the pleadings
and documents submitted by the parties as well as considering the arguments
presented, this Court, on June 11, 1999, denied Plaintiff's request for a
Preliminary Injunction and transferred the case to the law side of the Court.
Plaintiff filed a Motion for Partial Reconsideration, which, after argument and
due consideration, was granted on September 1, 1998. On that date, this Court
granted Plaintiff's request for a Preliminary Injunction against Defendant,
Highmark, Inc., directed Highmark, Inc. to reinstate Plaintiff and retract any
decertification notice submitted to the National Practitioners Data Bank.
Then, by Order dated July 6, 1999, this Court overruled Defendant's Preliminary
Objections and denied Defendant's Motion for Reconsideration and Motion to
dissolve. Additionally, Plaintiff's Motion to Strike was granted and the prior
Order transferring this case to the law side was vacated.
This appeal followed.2
DISCUSSION
In its Concise Statement of Matters Complained of on Appeal filed pursuant to
Pa.R.A.P. 1925(b), Defendant raises numerous issues. However when closely
examined, it appears to contain many variations on the same theme: the granting
of the injunction was erroneous. We disagree.
The purposes of a preliminary injunction are to preserve the status quo and
prevent imminent and irreparable harm, which might occur before the merits of
the case may be heard and determined. Township of Clinton v. Carmat, Inc., 432
A.2d 238 (Pa.Super. 1981). An injunction is an extraordinary remedy and may be
granted only if the plaintiff establishes a clear right to the relief
requested. Soja v. Factoryville Sportsmen's Club, 522 A.2d 1129 (Pa.Super.
1987). The following elements must be established: (1) that the relief is
necessary to thwart immediate and irreparable harm which could not be remedied
by damages (2) that greater injury will result by refusing the injunction than
by granting it (3) that the injunction will restore the parties to their status
as existing prior to the alleged misconduct and (4) that the injunction is
reasonably suited to abate such activity. Schaeffer v. Frey, 589 A.2d 752
(Pa.Super. 1991). In this case, the granting of the preliminary injunction was
necessary to preserve the status quo as it existed prior to Defendants'
decision to decertify Plaintiff. The reporting of this decision to the National
Practitioner's Data Bank will undoubtedly have a devastating impact upon
Plaintiff's professional reputation. Additionally, as at least sixty (60)% of
Plaintiff's practice consisted of Defendants' members, this Court believes that
this injunction will prevent imminent and irreparable harm from occurring to
Plaintiff.
More importantly, this Court believes that Plaintiff has established a clear
right to relief under both state and federal law as well as on due process
grounds as set forth by the Pennsylvania Supreme Court in Rudolph v.
Pennsylvania Blue Shield, 717 A.2d 508 (Pa. 1998) and Lyness v. State Board of
Medical Examiners, 605 A.2d 1204 (Pa. 1992). Even though Defendants afforded
Plaintiff notice and a hearing, by disregarding the recommendations of the
impartial peer review panel, Defendants, who acted as prosecutor, adjudicator
and sentencer, violated Plaintiff's statutory rights as well as his rights to
due process of law.
Defendants are Professional Health Services Plan Corporations and are thus
governed by the Pennsylvania Professional Health Services Plan Corporation Act
(hereinafter "The Act"), 40 Pa.C.S. 6301 et seq. Accordingly, Defendants'
attempt to decertify Plaintiff is governed by the provisions of that Act.
6324 of the Professional Health Services Plan Corporations Act is entitled
"Rights of health service doctors" and provides, in pertinent part:
"(a) Admission to plan.-Every health service doctor practicing within the area
covered by any professional health service corporation shall have the right, on
complying with such regulations as the corporation may make with the approval
of the Department of Health, to register with such corporation for such general
or special professional health services as he may be licensed to practice,
within that area, but the corporation may, with the approval of the Department
of Health, refuse to place the name of any health service doctor on its
register. Any professional health service corporation may, with the approval of
the Department of Health, remove from its register the name of any health
service doctor after due notice and opportunity for hearing for cause
satisfactory to the corporation. (Emphasis added)-
(c) Disputes.-All matters, disputed, or controversies relating to the
professional health services rendered by the health service doctors, or any
questions involving professional ethics, shall be considered and determined by
only health service doctors as selected in a manner prescribed in the bylaws of
the professional health service corporation."3
Under Rudolph v. Pennsylvania Blue Shield, supra, this Court believes that
Plaintiff is entitled to due process review of the hearing procedure. Rudolph
involved a disputed claim for payment of services between a participating
physician and Pennsylvania Blue Shield. Pursuant to 6324(c) of The Act and the
contract between the physician and Blue Shield, this claim was submitted to a
medical review committee appointed by Blue Shield. This committee denied the
physician's claim and the physician subsequently filed a contract action. The
trial court directed that the matter be heard by a panel of physician
arbitrators which ultimately found in favor of the physician. The trial court
confirmed this award. On appeal, the Superior Court vacated this award holding
that the physician was not entitled to a de novo review of the review
committee's decision.
The Supreme Court, in reversing the Superior Court and reinstating the trial
court's judgment, held that the medical review committee was in effect "a
creature of the state" and "like an administrative agency, is subject to due
process review." 717 A.2d at 510.
While the dispute in Rudolph involved a monetary claim for fees for services
performed, certainly the right to participate in Defendants' program in today's
health care environment which is monopolized by entities such as Defendant and
the protection of Plaintiff's professional reputation, see Board of Regents v.
Roth, 408 U.S. 564, 92 S.Ct. 2701 (1972), are likewise worthy of due process
protection.
Defendants contend that they satisfied these statutory requirements as well as
their contractual obligation to provide Plaintiff with notice and a hearing.
Further, they assert that under the terms of their contract with Plaintiff,
Plaintiff agreed to the provisions that the decision of this impartial hearing
panel would not be binding upon the Defendant.
In Rudolph, the Supreme Court stated that "it is axiomatic that due process
also requires that the forum be fair and impartial. Without that, the guarantee
of notice, a hearing and the right to be heard would be no more than an
illusion." 717 A.2d at 510. The impartial review process to which Plaintiff was
statutorily entitled was, in the instant case, indeed illusory.
It appears that regardless of the outcome of this peer review, Plaintiff's fate
had been predetermined. The hearing process proved little more than a hollow
and futile exercise. The hearing, therefore, was a nullity.
Accordingly, this Court does not believe that this process comports with due
process. In support of this conclusion, we find the Pennsylvania Supreme
Court's decision in Lyness, supra, to be particularly instructive.
Lyness involved a physician's appeal of the revocation of his license to
practice medicine by the State Board of Medicine. The Supreme Court held that
when an administrative board, such as the State Board of Medicine, initiates
disciplinary proceedings and then acts as the ultimate fact finder in
determining whether a violation occurred, "such a commingling is inconsistent
with the notion of due process embodied in the Pennsylvania Constitution." 605
A.2d at 1204.
In the instant case, Defendants initially determined that Plaintiff should not
be re-certified. This decision was conveyed to Plaintiff by letter from
Defendant, KHPW's Director of Medical Services, Dr. Carey Vinson. This
determination triggered the statutorily and contractually mandated impartial
peer review hearing process. At this hearing before a panel of ob/gyn
specialists, Dr. Vinson appeared on behalf of KHPW and acted essentially as
prosecutor, presenting KHPW's reasons for its decision. The impartial panel,
after hearing and considering all of the evidence, found in Plaintiff's favor
and determined that KHPW's decision should be reversed.
Nevertheless, KHPW rejected the decision of the impartial peer review panel and
decided to terminate Plaintiff's participation in its network. This decision
was again conveyed to Plaintiff by letter from Dr. Vinson.
This process, and KHPW's multi-dimensional role in it, is remarkably similar to
the process found to have been violative of due process in Lyness. Accordingly,
this Court finds that Plaintiff's due process rights were abridged.
As to Defendants' arguments that under the contract between the parties,
Plaintiff had agreed to this procedure and the non-binding nature of the
impartial peer review panel's decision, we note the concurring opinion of
Justice Nigro in Rudolph. Justice Nigro correctly characterized that contracts
between physicians and monopolistic health care providers were contracts of
adhesion in that the parties were not of equal bargaining power. Justice Nigro
further found the particular contract provision whereby a physician would agree
to accept Blue Shield's Medical Review Committee as the final adjudicatory
authority to be "oppressive and therefore unconscionable since meaningful
review is merely illusory." 717 A.2d at 512.
Similarly, this Court believes that any contractual provision whereby Plaintiff
would be required to, in effect, forfeit rights to a meaningful and unbiased
appeal regarding his ability to engage in his livelihood and protect his
professional reputation would also be unconscionable.
For these reasons, the granting of the preliminary injunction was the proper
and just result.
BY THE COURT
/s/Jaffe, J.
1 Defendants make much of the supposed separateness of these entries. It
appears that Highmark is the principal entity under which all of its
subsidiaries such as Keystone operate. This relationship can best be analogized
with the auto industry whereby General Motors Corporation is the principal
entity under which Chevrolet and Oldsmobile are subsidiaries.
The exact relationship between Highmark and Keystone remains to be determined
and indeed it would appear that extensive discovery still needs to be conducted
on this issue. However, for the purposes of this proceeding they would appear
to be one and the same.
2 On September 4, 1998, pursuant to the agreement of the
parties, this Court entered an Order tolling the appeal time from its September
1, 1998 Order. The parties agreed that Defendants would retain the right to
appeal from said Order for thirty (30) days after the entry of an Order on
their Motion for Reconsideration.
3 In addition to the Pennsylvania Professional Health Services Corporations
Act, the Federal Health Care Quality Improvement Act of 1986, U.S.C.A. 11101
et seq., Pub.L. 99-660, Nov. 14, 1986, also governs relationships between
health service corporations and health service providers. The purposes of this
Act are to provide for effective peer review and interstate monitoring of
incompetent physicians, and to grant immunity from damages for those who
participate in peer review activities. Austin v. McNamara, 979 F.2d 728, C.A.9
(Cal.) 1992.
This Act establishes standards for professional review actions in which doctors
are afforded due process protections including notice and the opportunity for a
hearing before an impartial person or panel. 42 U.S.C.A. 11112. Further, the
Act mandates that health care entities report certain professional review
actions, including decertifications such as occurred in this case, to the
National Practitioners Data Bank. 42 U.S.C.A. 11133.