Clark v. Columbia/HCA Info. Servs.

• Decision Date: 21 June 2001
• Docket Number: No. 29995.,29995.
• Citation: 117 Nev. 468,25 P.3d 215
• Parties: Kenneth M. CLARK, Appellant, v. COLUMBIA/HCA INFORMATION SERVICES, INC., A Nevada Corporation; Nevada Psychiatric Company, A Nevada Corporation; Ira Pauly; Phillip Rich; Louis Richnak; John Chappel; Neal Cury; Thomas Bittker; and Jerry Howle, Respondents.
• Court: Nevada Supreme Court

25 P.3d 215

117 Nev. 468

Kenneth M. CLARK, Appellant, v. COLUMBIA/HCA INFORMATION SERVICES, INC., A Nevada Corporation; Nevada Psychiatric Company, A Nevada Corporation; Ira Pauly; Phillip Rich; Louis Richnak; John Chappel; Neal Cury; Thomas Bittker; and Jerry Howle, Respondents.

No. 29995.

Supreme Court of Nevada.

June 21, 2001.

Mirch & Mirch, Reno, for Appellant.

Osborne Law Office, Reno, for Respondents Pauly, Rich, Richnak, Chappel, Bittker and Howle.

Lionel Sawyer & Collins and Allen J. Wilt and Richard W. Horton, Reno, for Respondents Nevada Psychiatric Company, Cury and Columbia/HCA Information Services, Inc.

Before the Court En Banc.

OPINION ON REHEARING

SHEARING, J.

This case requires that we interpret the federal Health Care Quality Improvement Act (HCQIA).¹ We must determine whether the immunity provisions of HCQIA apply so as to bar appellant Kenneth M. Clark's underlying tort and contract claims against respondents.² We conclude that Clark has overcome the presumption of respondents' immunity by demonstrating by a preponderance of the evidence that the revocation of his hospital staff privileges was not with the reasonable belief that it was in furtherance of quality health care. Thus, respondents are not immune from liability as a matter of law. Accordingly, we reverse the order of the district court and remand for further proceedings consistent with this opinion.

FACTS

Kenneth M. Clark is a Reno psychiatrist who specializes in child psychiatry. From 1981 to 1993, Clark had intermittent staff privileges at the Truckee Meadows Hospital, now known as West Hills Hospital.

In September 1992, the Truckee Meadows Hospital alleged that Clark was engaging in "activities or professional conduct which are disruptive to Hospital operations" in violation of Section 8.1-1 of the hospital's Medical Staff Bylaws.³ The hospital informed Clark that it would hold a peer review board hearing concerning his conduct. The Statement of Charges specified the conduct in question as: (1) a May 17, 1991, letter to CHAMPUS (a federal insurance provider) regarding Clark's concerns about the hospital's closed staff policy "and other derogatory matters"; (2) a June 3, 1991, letter to Neal Cury explaining the letter to CHAMPUS and expressing concerns of substandard child psychiatric care; (3) September 18, 1991, and November 10, 1991, letters to the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) addressing concerns with the hospital's care; (4) Clark's alleged inquiry regarding another psychiatrist's patient's care; (5) Clark's failure to abide by his agreement of May 7, 1992, to work internally to rectify his grievances and inform the hospital of his external actions; (6) Clark's alleged statements that he would "never relinquish pursuing his vendetta against the hospital"; (7) an August 1992 report to the Nevada State Board of Medical Examiners containing false allegations about another psychiatrist regarding the care of Clark's patient in violation of his May 7, 1992, agreement; and (8) allegedly doing "rounds" when he had no patients.

The reports Clark made dealt primarily with his concerns that the hospital did not follow appropriate procedures in posting random on-call schedules, provided deficient child psychiatric care, and had policies requiring premature patient discharge when patients ran out of insurance to cover their care. Clark also alleged that the hospital diverted patients from him to other psychiatrists. He further alleged that the hospital improperly used his superior credentials to qualify an affiliate hospital for accreditation although he did not work there.

At the peer review board hearing, evidence was presented detailing Clark's letters and reports to outside agencies in 1991. Respondents discussed their concerns that Clark's reporting was having an adverse impact on hospital operations by taking excessive amounts of staff time and was encouraging a distrustful atmosphere.

The hospital also mentioned its concerns with one instance involving patient "KK," who had been admitted for a drug overdose and suicidal tendencies. Clark did not keep KK for observation. Instead, he discharged KK on the day of admission, which the hospital felt was inappropriate. The hospital further stated that Clark's subsequent report to the Nevada Board of Medical Examiners concerning the hospital's response to his treatment of KK violated his agreement to work within internal processes. The hospital also mentioned allegations that Clark had inquired about another psychiatrist's patient in violation of confidentiality. Clark presented testimony rebutting these charges and explaining his actions in discharging KK.⁴ No other evidence was presented of deficient psychiatric care or complaints with Clark's psychiatric practice.

After hearing evidence, the peer review board concluded that Clark's actions in reporting to outside agencies and failing to proceed with internal processes by his report to the Nevada Board of Medical Examiners constituted disruptive conduct in violation of Medical Staff Bylaws section 8.1-1. The board concluded that Clark's disruptive conduct would likely continue in the future and "eventually have an adverse impact on the quality of health care" at the hospital. Hence, the board unanimously recommended revoking Clark's staff membership and clinical privileges at the Truckee Meadows Hospital. Both the Medical Executive Committee and the Board of Trustees agreed, and they affirmed the revocation of Clark's privileges.

Clark filed an action in the United States District Court of Nevada, alleging violations of various federal antitrust provisions and state tort and contract causes of action. Respondents filed a motion for summary judgement. The federal district court granted respondents' motion on the federal antitrust claims, stating that Clark had produced no evidence to support these claims. The court further concluded that

even if Clark had presented evidence of an antitrust conspiracy and antitrust injury sufficient to survive summary judgment, the defendants here are expressly insulated from liability by the Health Care Quality Improvement Act, 42 U.S.C. §§ 11111-11112. The defendants have submitted voluminous evidence supporting their contention that the peer review process in this case complied with the statutory requirements; Clark has not rebutted that presumption.

The federal court declined to maintain supplemental jurisdiction over the pendent state law claims and dismissed them without prejudice.

Clark then filed a complaint in Washoe County District Court in August 1995. In that complaint, he alleged that respondents conspired to commit illegal conduct, divert patients away from him, and improperly terminate his staff privileges. He argued that these actions constituted tortious interference with his psychiatry practice and breached the implied covenant of good faith and fair dealing in the Medical Staff Bylaws and Regulations. Respondents filed a motion for summary judgment, claiming immunity from liability under HCQIA. The district court granted the motions for summary judgment on the basis of HCQIA immunity.⁵ This court, by a three-judge panel, issued an Order of Reversal and Remand on December 22, 2000. Respondents filed a petition for rehearing on January 15, 2001, objecting to this court's conclusions as to the applicability of HCQIA immunity in this case, and the scope of judicial review of peer review board decisions. This court granted the petition for rehearing, and transferred this case for en banc consideration. We now vacate the prior panel order and issue this opinion in place of that order.

DISCUSSION

Jurisdiction

As a preliminary matter, respondents contend that this court lacks jurisdiction to hear this case, citing specifically to this court's 1985 decision in Lakeside Community Hospital v. Levenson⁶ for that proposition. In Lakeside, a private hospital appealed from a district court's preliminary injunction that required the hospital to grant a physician staff privileges after the hospital Board of Trustees had voted to deny those privileges.⁷ In that context, this court held that the district court had no jurisdiction to review the hospital Board's decision.⁸ This court stated: "[t]he weight of judicial authority in this country denies judicial review of decisions of governing boards of private hospitals to appoint or remove members of their medical staffs."⁹

The language of Lakeside, which suggests an absolute prohibition of judicial review of hospital peer review decisions, is overly broad. Although courts may not have jurisdiction to review purely administrative decisions of private hospitals, the courts of this state do have jurisdiction to hear cases alleging torts, breach of contract, violation of hospital bylaws or other actions that contravene public policy.

Most courts now undertake judicial review of hospital peer review board decisions in various contexts, such as claims alleging race or gender discrimination, penalizing a physician for whistleblowing, or other tortious conduct.¹⁰ Courts will not stand idly by if peer review board actions are arbitrary or capricious, contravene public policy, or are contrary to state or federally mandated tort protections; nor will courts decline to review peer review board actions that violate contracts or a hospital's own bylaws.¹¹ Courts are reluctant to interfere in decisions grounded in the review boards' areas of expertise, but the tangential involvement of the peer review process does not foreclose judicial intervention in the types of disputes normally dealt with in the courts.

In his complaint, Clark has alleged tortious conduct by respondents in the peer review board's decision to terminate his staff privileges. He has also alleged that respondents terminated his staff privileges because he reported violations of medical standards— conduct we protect as a matter of...