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Brandner v. Providence Health & Services - Washington

Supreme Court of Alaska

November 25, 2016

MICHAEL D. BRANDNER, M.D., Appellant,
v.
PROVIDENCE HEALTH & SERVICES - WASHINGTON, Appellee.

         Appeal from the Superior Court of the State of Alaska No. 3AN-13-07697 CI, Third Judicial District, Anchorage, Patrick J. McKay, Judge.

          Richard W. Maki and David H. Shoup, Tindall Bennett & Shoup, P.C., Anchorage, for Appellant.

          Robert J. Dickson and Peter A. Scully, Atkinson, Conway & Gagnon, Anchorage, for Appellee.

          Before: Stowers, Chief Justice, Winfree and Bolger, Justices. [Fabe and Maassen, Justices, not participating.]

          OPINION

          WINFREE, Justice.

         I. INTRODUCTION

         Providence Alaska Medical Center terminated Dr. Michael Brandner's hospital privileges without notice and an opportunity to be heard after determining he had violated hospital policy by failing to report an Alaska State Medical Board order requiring him to undergo an evaluation of his fitness to practice medicine. Dr. Brandner unsuccessfully challenged this action through Providence's internal post-termination hearing and appeal procedures. Dr. Brandner then sued in superior court, seeking reinstatement and damages for, in relevant part, alleged due process violations both in the procedures used and in the substantive standard applied in his termination. The superior court ruled that Dr. Brandner's due process rights were not violated, that he was not entitled to reinstatement, and that under federal law Providence was entitled to immunity from his damages claims.

         We affirm the superior court's decision concerning the substantive standard applied to terminate Dr. Brander; he therefore is not entitled to reinstatement or post-termination-hearing damages. But Dr. Brandner's due process rights were violated by the procedures Providence employed because was not given required notice and a hearing prior to the termination of his hospital privileges; we therefore reverse the superior court's decision on the pre-termination notice and hearing claim and its decision that Providence had damages immunity from this claim, and we remand for further proceedings.

         II. FACTS AND PROCEEDINGS

         A. Facts

         Dr. Brandner had hospital privileges as a surgeon at Providence from 1995 to 2009, when he took a medical leave of absence because of a cardiac condition. He returned to work in March 2010 and Providence reinstated his hospital privileges, excepting hand surgery. Providence also gave Dr. Brandner a six-month exemption from emergency call duties. In November 2010 Providence reinstated Dr. Brandner's hand surgery privileges after reviewing his surgical cases and finding him competent, but kept in place the emergency call exemption.

         In October 2010 the Alaska State Medical Board (State Board) ordered Dr. Brandner to undergo psychiatric and medical evaluations after receiving a complaint that he had contacted someone in the Governor's office and made a threat involving a gun. The evaluations were part of the State Board's investigation into Dr. Brandner's "ability to practice medicine in a manner consistent with public safety, " and he was required to complete them within 45 days. The State Board's order also stated:

Failure to comply with this order will result in the automatic suspension of [Dr. Brandner's] license to practice medicine in Alaska and it will remain suspended until such time as the evaluations are completed and the results of the evaluations are reviewed by the [State] Board, and the [State] Board determines Dr. Brandner is able to practice medicine in a manner consistent with public safety.

         Dr. Brandner timely complied with the order by undergoing a five-day evaluation in early December 2010 at the Menninger Clinic in Texas. The clinic found no evidence indicating he was unfit to practice medicine. Later in December the State Board closed its investigation without imposing any "further investigation or disciplinary action"; it sent Dr. Brandner confirmation of its decision in May 2011.

         Doctors enjoying Providence hospital privileges are required to comply with policies set out in the Providence Code of Conduct and Medical Staff Bylaws. Policy MS 980-150(D) requires doctors to report to the chief of staff or the medical staff services department manager "any limitations, restrictions[, ] or conditions of any sort imposed by a state board, health care entity [, ] or agency with respect to the practitioner's practice... no later than thirty (30) days after a final order has been issued." The policy states that doctors who violate this reporting requirement "will be subj ect to an automatic termination" of hospital privileges. Dr. Brandner did not inform Providence's chief of staff or medical staff services manager about the State Board order, nor did he disclose his December 2010 evaluation at the Menninger Clinic.

         Procedures for reviewing, investigating, and resolving concerns about doctors' clinical proficiency and professional conduct are governed by Providence policy MS 980-100, referred to as the Investigation, Hearing, and Appeals Plan (Fair Hearing Plan). Under this policy the Providence Medical Staff Executive Committee (executive committee) is responsible for overseeing doctors' conduct. Concerns about a doctor's conduct are first presented to the executive committee; it then has authority to conduct peer reviews and make recommendations to the Providence Alaska Community Ministry Board (Providence Board) on granting, limiting, suspending, or terminating hospital privileges. The executive committee's recommendations generally do not by themselves affect a doctor's hospital privileges; the Providence Board receives the recommendation, considers the matter independently, and makes the ultimate decision. Some hospital policies, including the one at issue here, provide for automatic termination of hospital privileges if a doctor engages in specified conduct. An automatic termination recommendation triggers a process under MS 980-100 entitling the doctor to a hearing and an appeal. After the hearing and appeal procedures are exhausted the Providence Board's confirmation, modification, or rej ection of the hearing bodies' recommendations becomes Providence's final decision.

         In January 2011 the executive committee called Dr. Brandner to its monthly meeting to discuss his emergency call duties. The executive committee was concerned because Dr. Brandner had listed his name on the emergency call sign-up sheets despite not yet being authorized to resume those duties. During that meeting the executive committee was alarmed by Dr. Brandner's "disjointed" statements. The executive committee invited him to a second meeting in February to decide whether to investigate his fitness to practice medicine. At the February meeting Dr. Brandner's "rambling and confused" conduct again raised concerns that he might not be "medically fit, " and the executive committee ordered him to undergo a "fitness for duty" evaluation at the Menninger Clinic.

         Kim Pakney, Providence's medical staff services manager, called Dr. Brandner in March to arrange the evaluation. During this call Dr. Brandner disclosed to Pakney that he recently had been evaluated at the clinic. Pakney told Dr. Brandner that he could either undergo another evaluation or allow the executive committee to obtain the December 2010 evaluation records. Dr. Brandner chose to release his 2010 evaluation. According to Pakney's later testimony, Dr. Brandner did not mention the State Board's order during their conversation and instead indicated he had visited the clinic at his cardiac surgeon's suggestion. Dr. Brandner testified that he told Pakney he had gone to the Menninger Clinic "to pursue some things." Only when Pakney received Dr. Brandner's clinic records did she realize that he had undergone the evaluation pursuant to an order from the State Board. She immediately notified the Providence executive committee.

         At its next meeting, on June 13 - without notice to or presence by Dr. Brandner - the executive committee voted to recommend termination of Dr. Brandner's hospital privileges for failure to report the State Board's order requiring him to submit to an evaluation. The executive committee determined that the order was a final order imposing a condition on Dr. Brandner's license, and that his failure to report the order to the chief of staff or the medical staff services department manager within 30 days constituted a violation of Providence policy MS 980-150(D).

         In a June 17 letter Providence's chief executive officer notified Dr. Brandner that the executive committee "recommended the automatic termination of [his hospital] privileges and staff membership, " that he had the right to a hearing, and that the Providence Board would "not be bound by the adverse recommendation made thus far." A few days later the Providence Board affirmed the executive committee's recommendation terminating Dr. Brandner's hospital privileges. Dr. Brandner timely requested a hearing. At oral argument before us the parties confirmed that Dr. Brandner's privileges effectively were terminated June 17, before any hearing took place, and that after that date he was not allowed to practice at Providence.

         B. Proceedings

         1. Providence Fair Hearing Panel proceedings

         In November 2011 Dr. Brandner received a one-day hearing before a three-doctor panel pursuant to Providence's Fair Hearing Plan. A former superior court judge presided as the hearing officer. Dr. Brandner was represented by an attorney, presented evidence, cross-examined Providence's witnesses, and testified on his own behalf. Providence's witnesses testified about the importance of physicians self-reporting conditions on their licenses because of the potential impact on patient care. Dr. Brandner argued that the State Board's order was not a "condition" on his license within the meaning of the Providence reporting policy. He argued instead that the order was a part of an "investigation, " and stated that he did not believe the policy required reporting investigations.

         The panel decided that the order did impose a "condition" on Dr. Brandner's license because "[t]he plain language of the . . . [o]rder . . . clearly advised Dr. Brandner that the continued viability of his license was conditioned upon his timely completion of [] psychiatric and medical evaluations at the Menninger Clinic." The panel also found Dr. Brandner's testimony regarding his interpretation of the hospital policy "less than credible" because: (1) he testified that he attended the Menninger Clinic to "pursue some things"; (2) Pakney testified that Dr. Brandner said he attended the clinic because his cardiac surgeon had recommended it; and (3) it was undisputed that Dr. Brandner actually attended the clinic because the State Board required it.

         The panel concluded that because the State Board order plainly stated Dr. Brandner's license would be suspended if he did not comply, a responsible, reasonable doctor would have reported the order or at least asked Providence for guidance on whether the order triggered Providence's self-reporting policy. It unanimously upheld the executive committee's recommendation and the Providence Board's decision terminating Dr. Brandner's hospital privileges, finding that they were "not arbitrary, capricious[, ] or unsupported by substantial evidence."

         2. Providence Appellate Review Committee proceedings

         Dr. Brandner timely appealed the panel's decision to the Providence Appellate Review Committee (review committee) pursuant to the Fair Hearing Plan. The review committee, comprised of five members -none of whom had participated in the earlier proceedings - convened in March 2012.

         The review committee upheld the hearing panel's decision by a 4-1 vote. In its decision the review committee noted that Dr. Brandner's reading of the hospital policy regarding the scope of "condition" was "plausible" but that the review committee's role was not to substitute its judgment for that of the hearing panel or to re-weigh the evidence. The review committee concluded that the hearing panel's actions complied with Providence's Fair Hearing Plan, were not arbitrary or capricious, and were supported by substantial evidence. One review committee member dissented, writing that the State Board's order was not a "final order" imposing "conditions" under Providence policy MS 980-150(D) and thus did not trigger the self-reporting requirement. The dissent expressed concern that the hospital policy was applied based in part on Dr. Brandner's fitness to practice and not just his failure to report the State Board order, and it noted that the failure to self-report alone typically would not result in automatic termination of privileges. After the review committee issued its report, the committee chair sent the Providence Board a letter recommending clarifying MS 980-150(D)'s language by adding some "interpretive guidance to illustrate the types of limitations, restrictions, and conditions that are intended to be included."

         In April 2012, after considering the hearing panel's and the review committee's decisions upholding the executive committee's recommendation, the Providence Board affirmed the termination of Dr. Brandner's hospital privileges.

         3. Superior court proceedings

         In June 2013 Dr. Brandner filed suit in superior court against Providence, the doctors who made up the hearing panel, and the doctors on the executive committee who testified at his hearing. Dr. Brandner alleged breach of contract, due process violations, defamation, and other contract claims. He sought both declaratory and injunctive relief restoring his hospital privileges and substantial money damages. Providence and the doctors moved for summary judgment, asserting peer review immunity under both Alaska law[1] and the federal Health Care Quality Improvement Act (HCQIA).[2] Dr. Brandner opposed and cross-moved for partial summary judgment, arguing that Providence and the doctors were not entitled to immunity under either state or federal law and that his due process rights were violated. In February 2014 the superior court granted summary judgment in favor of the individual doctors, concluding that AS 18.23.020 immunized them from suit.[3] The court also granted summary judgment in Providence's favor on Dr. Brandner's contract claims. The court denied Dr. Brandner's cross-motion for summary judgment on his due process claims against Providence.

         Dr. Brandner's due process claims were tried without a jury. The superior court found that Dr. Brandner intentionally misled Providence by consciously hiding the State Board order that he undergo an evaluation, and that his "blatant dishonesty" and "lack of candor" raised substantial patient care issues. The court also concluded that when a hospital policy requires self-reporting a condition placed on a physician's state license, due process does not require a pre-termination hearing for failure to report in violation of that policy. Finally, the court concluded that Providence was entitled to immunity under HCQIA.

         Dr. Brandner appeals, arguing that: (1) Providence's termination of his hospital privileges without pre-termination notice or hearing is a due process violation; (2) the post-hearing termination violated due process because it was based on an ambiguous policy applied arbitrarily and capriciously; and (3) Providence is not entitled to HCQIA immunity from his due process claims. Providence responds that: (1) the automatic termination of Dr. Brandner's hospital privileges is not a due process violation; (2) its hospital policy is not unduly ambiguous; and (3) under HCQIA it is immune from damages even if Dr. Brandner succeeds in his due process claims.

         III. STANDARD OF REVIEW

         We review due process claims de novo, "adopting the rule of law most persuasive in light of precedent, reason, and policy."[4] Whether the HCQIA immunizes Providence from Dr. Brandner's due process claims is a question of law that we also review de novo.[5]

         IV. DISCUSSION

         A. Dr. Brandner's Due Process Rights Were Violated When His Hospital Privileges Were Terminated Without Pre-Termination Notice Or Hearing.

         Although the parties dispute what process was due at certain points in the termination process, they agree that Dr. Brandner's admitting privileges ...


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