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Brandner v. Providence Health & Services Washington

Supreme Court of Alaska

May 19, 2017


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

          Appearances: 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.]


          WINFREE, Justice.


         Providence Alaska Medical Center terminated Dr. Michael Brandner's hospital privileges without 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 he was not given any opportunity to be heard prior to the termination of his hospital privileges; we therefore reverse the superior court's decision on the pre-termination hearing claim and its decision that Providence had damages immunity from this claim, and we remand for further 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 subject 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 rejection 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 later 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 as of June 17, before any hearing took place, Dr. Brandner 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 June 2011 recommendation and the Providence Board's June 2011 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. It recommended that the Providence Board "confirm" the executive committee's June 2011 recommendation that Dr. Brandner's privileges be terminated. 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. And 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 a pre-termination opportunity to be heard is a due process violation; (2) the post-hearing termination confirmation 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.


         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]


         A. Dr. Brandner's Procedural Due Process Rights Were Violated When His Hospital Privileges Were Terminated Without A Pre-Termination Opportunity To Be Heard.

         Although the parties dispute what process was due at certain points in the termination process, they agree that Dr. Brandner's admitting privileges trigger some form of due process protection.[6] The specific issue presented involves the due process right to an opportunity to be heard prior to terminating hospital privileges. Although the parties consistently describe this as "pretermination hearing" and we use that language throughout our opinion, we do not mean to suggest that the opportunity to be heard necessarily involves a formal hearing like that set forth in Providence's Fair Hearing Plan and made available to Dr. Brandner after his hospital privileges were terminated. This dispute does not raise the question of what kind of pretermination hearing - more specifically what kind of opportunity to be heard - must be provided to meet due process concerns.

         1. Dr. Brandner did not waive his right to a pre-termination opportunity to be heard.

         Providence argues that Dr. Brandner waived his right to a pre-termination hearing by agreeing to be bound by MS 980-150, triggering an "automatic termination" without providing for a pre-termination hearing. The right to a pre-termination hearing, Providence argues, may be waived if a sufficient post-termination grievance procedure is afforded.[7] We previously have held that a waiver of constitutional rights must be knowing and voluntary, and even in civil cases "courts must indulge every reasonable presumption against their waiver."[8] And although constitutional rights are subject to contractual waiver, such waiver must be clear.[9] Courts have found clear waiver, for example, in collective bargaining agreements representing "a reciprocal negotiation between forces with strengths on both sides, reflecting the reconciled interests of employer and employees, voluntarily entered into."[10] But here Dr. Brandner had not entered into a reciprocal negotiation with Providence for his hospital privileges; the requirement of abiding by the hospital's policy to obtain privileges is more akin to a contract of adhesion.

         Providence cites Whitaker v. Houston County Hospital Authority to support its proposition that a doctor can waive the right to a pre-termination hearing and, if waived, the automatic termination of hospital privileges would not violate the doctor's due process right.[11] But in Whitaker the doctor "expressly waive[d] any procedural due process rights" through a contract entered into directly with the hospital.[12] Here neither Providence policy MS 980-150 nor the document Dr. Brandner signed for his 2009 reinstatement at the hospital specifically mentioned waiving due process rights. Thus there is no evidence of a "conspicuous and unequivocal" intent by Dr. Brandner to waive his right to a pre-termination hearing. The superior court rejected Providence's waiver argument, finding "no language in [Dr. Brandner's application for privileges] referencing a general right to due process or dealing specifically with a physician's right to... a pre-termination hearing in professional review actions."

         Like the superior court, we conclude that Dr. Brandner did not knowingly and clearly waive his due process rights merely by signing his reappointment application for hospital privileges. Thus Dr. Brandner maintained a protected property interest in his hospital privileges subject to due process if terminated.

         2. Due process required that Dr. Brandner receive an opportunity to be heard prior to the termination of his hospital privileges.

         Dr. Brandner contends that due process requires a hearing before deprivation of a constitutionally protected property interest in employment.[13] "We have consistently held that before the state may deprive a person of a protected property interest there must be a hearing . . ., "[14] The only exceptions to this pre-termination hearing requirement are in emergency situations or when "public health, safety, or welfare require[s] summary action."[15] Other courts have agreed that medical staff privileges are a valuable property interest and that notice and hearing should precede termination of these privileges absent an "extraordinary situation where a valid government or medical interest is at stake."[16]

         Providence argues that Dr. Brandner was not entitled to a pre-termination hearing because the Providence policy contains explicit language that a violation of MS 980-150(D) results in "an automatic termination" and because of "Providence's compelling interest" in ensuring patient safety and the highest quality in medical care. Providence contends that Dr. Brandner received all the process to which he was entitled because: (1) he had full and fair opportunity to make his arguments to a neutral hearing panel; (2) he had full and fair opportunity to appeal the hearing panel recommendation to a separate, neutral review committee and to the Providence Board, and both upheld the hearing panel's decision; and (3) Providence followed the policies and procedures Dr. Brandner had agreed to abide by. But Providence's procedures after terminating a doctor's privileges do not remedy its failure to provide procedures before termination.

         We previously confirmed the importance of a hearing before suspending or terminating a doctor's staff privileges because summary action amounts to "a stigma of medical incompetence" affecting the doctor's ability to maintain income and reputation, both during the period between the deprivation of privileges and a hearing as well as after the hearing.[17] This stigma is compounded because federal law now requires that all terminations be reported to a national data bank.[18] Acknowledging the competing interests between a doctor's capacity to maintain employment and a health care entity's interest in maintaining safe and high quality patient care, we have previously held that terminating hospital privileges before a hearing is "justified only where there is evidence that a physician's conduct poses a realistic or recognizable threat to patient care which would require immediate action by the hospital."[19]

         Providence contends that Dr. Brandner's deceitfulness posed a realistic or recognizable threat to patient care; when a physician is dishonest and actively conceals licensing conditions, a hospital cannot address the undisclosed problems because it "simply does not know what it does not know" and thus cannot assess whether there might be a "realistic and recognizable threat" to patient care. Providence maintains, as a patient safety matter, that physicians must comply with Providence's self-reporting policy and that failure to do so is "cause for deep concern."

         Providence has a policy expressly authorizing an immediately effective "precautionary suspension" when a doctor presents an imminent danger to the health or safety of an individual or to the hospital's orderly operations, but this was not the policy followed when terminating Dr. Brandner's privileges.[20] As Pakney noted at the November 2011 hearing, there was no precautionary suspension because there was no determination that Dr. Brandner was an imminent danger to health or public safety. The executive committee was aware that the Menninger Clinic had evaluated Dr. Brandner and found he was fit to practice. Although this evaluation might not have considered other factors bearing on whether Dr. Brandner was an imminent threat to patient care, it is relevant to whether Providence actually terminated Dr. Brandner because it found that he posed a threat to patient care. And the June 17, 2011 letter notifying Dr. Brandner of the executive committee's recommendation that his privileges be terminated made no mention of patient safety concerns.

         It is possible, as Providence argues, that a physician's dishonesty might in some circumstances be sufficient cause for emergency termination. But here this speculative possibility-raised as a post hoc rationalization rather than a demonstrated contemporaneous concern in Dr. Brandner's case - does not rise to the level of a "realistic or recognizable threat" requiring an emergency termination of hospital privileges. We therefore disagree with the superior court's determination that the connection between Dr. Brandner's "dishonesty" and patient safety was sufficient to override Dr. Brandner's due process right, and we conclude that Providence violated Dr. Brandner's right to due process by terminating his hospital privileges without a pre-termination opportunity to be heard.

         B. Dr. Brandner's Substantive Due Process Rights Were Not Violated Through Arbitrary And Capricious Application Of An Ambiguous Hospital Policy.

         Dr. Brandner further claims that his substantive due process rights were violated because Providence policy MS 980-150(D) is vague and ambiguous, and that Providence terminated his privileges in an arbitrary and capricious manner without regard to his reasonable policy interpretation or to whether terminating his hospital privileges was commensurate with the harm caused by breaching the policy.

         Although we do not interfere with hospital policy determining the medical training and experience necessary to qualify for hospital privileges, courts may determine whether a hospital has followed its own policies and whether a decision regarding hospital privileges was made in accordance with basic principles of fairness and due process of law.[21] These principles require that: (1) the procedures employed are fair; (2) the standards are reasonable; and (3) the standards have not been applied in an arbitrary and capricious manner.[22] Due process further requires that "criteria established for granting or denying privileges not be vague and ambiguous, and that as established, they be applied objectively."[23] "A statute, rule, or policy may be deemed impermissibly vague for either of two discrete reasons: It fails to provide people of ordinary intelligence a reasonable opportunity or fair notice to understand what conduct it prohibits; or, it authorizes or encourages arbitrary and discriminatory enforcement."[24]Accordingly the inquiry before us is not whose policy interpretation is more reasonable, but whether the policy itself is so vague or ambiguous that it is susceptible to an arbitrary and capricious application.

         1. The policy's application was clear.

         The superior court concluded that Providence policy MS 980-150 is "clear enough." Dr. Brandner nonetheless contends that he found it ambiguous because its key terms could be interpreted differently by reference to state law. MS 980-150' s operative provision requires doctors to report to Providence "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." Dr. Brandner argues that state law does not construe the State Board's order as a "disciplinary action" or a "condition, " because such actions would have required that the State Board hold a hearing and none occurred in his case.[25]Thus Dr. Brandner argues that under state law his practice was never limited in any way and that he cannot be faulted for his interpretation, especially when the State Board investigator had confirmed in his case's proceedings that his license "was not conditioned, limited, or restricted by the [State] Board."

         Surviving a vagueness challenge requires "fair notice" of what is and what is not prohibited.[26] And here the superior court found that Dr. Brandner had more than "fair notice" of what MS 980-150 required; it found he had actual knowledge that the policy required him to report the conditions the State Board placed on his license. The superior court found that Dr. Brandner knew the self-reporting policy applied to his circumstances and knew he had an obligation to report the conditions placed on his license, and thus he knowingly violated the policy. Dr. Brandner does not ...

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