Lees v. Asante Health Sys.

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

M.D. BONNIE J. LEES,

Plaintiff,

No. CV 04-1804-MO

ORDER

ASANTE HEALTH SYSTEMS, et al.,

Defendants.

MOSMAN, J.,

Before the court are defendants’ motions for summary judgment. Defendants argue they

are immune from liability on all counts of plaintiff’s complaint under the Federal Health Care

Quality Improvement Act (“HCQIA”) (42 U.S.C. §§ 11101-11152). At the oral argument on

October 14, 2005, the court reserved judgment as to whether the defendants’ conduct on April 7,

2003, and February 16, 2004, constituted “actions” subject to the due process requirements of 42

U.S.C. § 11112(a). For the reasons set forth below, the court finds that the April 7, 2003, Notice

of Adverse Action constitutes an “action” for which defendants are not entitled to immunity

because it was not taken after a reasonable effort to obtain the facts of the matter.

Summary Judgment Standard

Section 11112(a) of the HCQIA creates a reable presumption that the professional

review action in question meets the requirements necessary for § 11111(a) immunity. 42 U.S.C.

§ 11112(a). Thus, the statute modifies and creates a somewhat unusual standard for summary

judgment: “Might a reasonable jury, viewing the facts in the best light for [the plaintiff],

conclude that he has shown, by a preponderance of the evidence, that the defendants’ actions are

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outside the scope of § 11112(a)?” Austin v. McNamara, 979 F.2d 728, 734 (9th Cir. 1992).

II.

HCQIA Immunity

Under the HCQIA, a peer review participant is immune from private damages claims

associated with the peer review action, provided that the review action is taken:

(1) in the reasonable belief that the action was in the furtherance of

quality health care,

(2) after a reasonable effort to obtain the facts of the matter,

(3) after adequate notice and hearing procedures are afforded to the

physician involved or after such other procedures as are fair to the

physician under the circumstances, and

(4) in the reasonable belief that the action was warranted by the

facts known after such reasonable effort to obtain facts and after

meeting the requirements of paragraph (3).

42 U.S.C. § 11112(a). The court held that plaintiff did not show, by a preponderance of the

evidence, that defendants’ actions are outside the scope of prongs (1), (3) or (4). In other words,

Asante Health Systems (“Asante”) did act in the reasonable belief that the action was in

furtherance of quality health care and adequate notice and hearing procedures were afforded to

plaintiff. In particular, the court found that it was reasonable for the hospital Board to be

concerned with a physician’s disruptive behavior, and this could even be the sole reason for

believing an action furthered quality health care.

The court reserved judgment on prong (2), action taken “after a reasonable effort to

obtain the facts.” Resolving this issue turns on how “action” is defined, and in this case, whether

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there are “actions” other than the August 27, 2003, Notice of Adverse Action that are subject to

the requirement of being taken “after a reasonable effort to obtain the facts.” Complicating the

analysis is the fact that plaintiff’s hospital privileges automatically lapsed on June 30, 2002,

during the process leading up to the ultimate denial of her hospital privileges.

A “professional review action” is defined broadly as:

an action or recommendation of a professional review body which
is taken or made in the conduct of professional review activity,
which is based on the competence or professional conduct of an
individual physician (which conduct affects or could affect
adversely the health or welfare of a patient or patients), and which
affects (or may affect) adversely the clinical privileges, or
membership in a professional society, of the physician. Such term
includes . . . professional review activities relating to a
professional review action.

42 U.S.C. § 11151(9). In contrast, a “professional review activity” is defined as:

an activity of a health care entity concerning a particular physician

(A) to determine whether the physician may have clinical
privileges with respect to, or membership in, the entity,

(B) to determine the scope or conditions of such privileges or
membership, or

42 U.S.C. § 11151(10).

The April 7, 2003, Notice of Adverse Action is an “action” as that term is defined by the

HCQIA. The Notice informs plaintiff that the Board revoked her medical privileges and

reappointment to the medical staff at Rogue Valley Medical Center (“RVMC”). This constitutes

“an action or recommendation of a professional review body . . . which is based on the

competence or professional conduct of an individual physician” which affected or may have

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affected adversely plaintiff’s clinical privileges. Nothing in the statutory language or in the

caselaw suggests that events subsequent to April 7, 2003, such as the Fair Hearing Committee

(“FHC”) process, operate to make this Notice of Adverse Action something other than an

“action.” This does not mean that an event can never be taken out of being classified as an

“action” by subsequent events. An “action,” for example, that is automatically stayed or nullified

by an appeals process, might not retain its status as an action pending appeal. See, e.g.,

Gabaldoni v. Wash. County Hosp. Assoc., 250 F.3d 255, 262-263 (4th Cir. 2001) (Board did not

take “action” until it voted on physician’s privileges after reviewing the Hearing Committee

findings regarding the Board’s initial vote to terminate physician’s privileges). But nothing like

that happened here.

Additionally, the fact that plaintiff’s privileges had already lapsed by April 7, 2003, does

not somehow remove it from the category of “action.” This April 7, 2003, Notice of Adverse

Action, independent of the preceding lapse, “affect[ed] (or may affect) adversely [plaintiff’s]

clinical privileges” and her ability to practice medicine at RVMC. As such, it satisfies the

statutory definition of “action.”

Having concluded that the April 7, 2003, Notice of Adverse Action constitutes an

“action,” the court must next analyze the defendants’ entitlement to HCQIA immunity by

examining defendants’ compliance with the four due process elements enumerated by 42 U.S.C.

§ 11112(a). On the first prong, defendants took this action based primarily on plaintiff’s

disruptive behavior and this satisfies the requirement that the action be taken in the reasonable

belief that it is in furtherance of quality health care. On the second prong, viewing the facts in

the light most favorable to the plaintiff, a reasonable jury might conclude that she has shown by

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a preponderance of the evidence that defendants did not take this action after a “reasonable effort

to obtain the facts.” Significantly, the FHC report from August 2003 rejected the Board’s April

decision on the grounds that the evidence considered by the Board was too one-sided. The FHC

found that “the evidence presented by the administration to the MEC and the Asante Board in the

deliberations prior to the filing of the adverse action failed to equally recognize the considerable

body of support for Dr. Lees.” Def.’s Mot. Summ. J., Ex. 36 at 4.

The court’s own analysis is in agreement with the conclusions of the FHC. Defendants

issued the April 7, 2003, Notice of Adverse Action without having undertaken a reasonable

effort to obtain the facts. Thus, defendants are not entitled to HCQIA immunity from damages

insofar as the April 7, 2003, “action” is concerned. Accordingly, the court denies defendants’

motion for summary judgment regarding the April 7, 2003, action.

Finally, the court must decide whether the Board’s February 16, 2004, rejection of

plaintiff’s application for privileges is a “professional review action.” This wholesale rejection of

privileges occurred shortly after the Appellate Review Committee recommended that the Board

affirm it’s August 27, 2003, eight tenet conditional reappointment. As such, this seems to be part

of the same overall decision to limit plaintiff’s privileges, but is largely different in the degree to

which they were limited – 8 tenet conditional versus complete denial. Because of its impact on

her privileges, the Board’s February 16, 2004, revocation best classified as a “professional

review action.” The court finds, however, that defendants satisfied the HCQIA due process

requirements and thus are entitled to immunity. Given that the February 2004 decision took

place after the FHC hearing, this decision meets the first and second prongs of HCQIA immunity

as it was made in furtherance of quality health care and after a reasonable effort to obtain the

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facts. As to the third prong requiring adequate notice and hearing, although the February 2004

decision, taken in isolation, was abrupt, plaintiff has failed to meet the heightened standard to

survive summary judgment by overcoming the presumption that Asante met the requirements of

HCQIA immunity. Plaintiff was afforded a Fair Hearing, and an Appellate Review Committee

heard her appeal. The fact that the Board’s ultimate rejection of her application for privileges

was a more extreme action than recommended by the Appellate Review Committee does not

render it unfair under the circumstances. Therefore, the court grants defendants’ motion for

summary judgment regarding the February 16, 2004, denial of privileges.

Because the court already determined that the defendants are entitled to HCQIA

immunity as to the August 27, 2003, action, the court grants defendants’ motion for summary

judgment as to that action. The court denies defendants’ motion for summary judgment

regarding the April 7, 2003, Notice of Adverse Action. Defendants’ motions for summary

judgment (#21 and #27) are GRANTED in part and DENIED in part.

IT IS SO ORDERED.

DATED this 22nd day of November, 2005.

/s/ Michael W. Mosman
MICHAEL W. MOSMAN
United States District Judge

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