Costa v. Leavitt

• Citation: 442 F.Supp.2d 754
• Decision Date: 26 July 2006
• Docket Number: No. 4:05CV3248.,4:05CV3248.
• Parties: Christopher COSTA, M.D., Plaintiff, v. Michael O. LEAVITT, Secretary, U.S. Department of Health and Human Services, and his Successors; United States Department of Health and Human Services; and the National Practitioner Data Bank, an Entity of and Run by the U.S. Department of Health and Human Services, Defendants.
• Court: U.S. District Court — District of Nebraska

442 F.Supp.2d 754

Christopher COSTA, M.D., Plaintiff, v. Michael O. LEAVITT, Secretary, U.S. Department of Health and Human Services, and his Successors; United States Department of Health and Human Services; and the National Practitioner Data Bank, an Entity of and Run by the U.S. Department of Health and Human Services, Defendants.

No. 4:05CV3248.

United States District Court, D. Nebraska.

July 26, 2006.

Sally A. Rasmussen, Knudsen, Berkheimer Law Firm, Lincoln, NE, for Plaintiff.

Duane N. Bruce, Department of Health & Human Services, Kansas City, MO, Paul D. Boeshart, Assistant United States Attorney, Lincoln, NE, for Defendants.

MEMORANDUM AND ORDER

KOPF, District Judge.

This is an action under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 et seq., for judicial review of a final decision issued by the Secretary of the United States Department of Health and Human Services ("HHS") on August 24, 2005, denying the plaintiff's request that the Secretary void an adverse action report concerning him that was filed with the National Practitioner Data Bank on April 6, 2005, by Gothenburg Memorial Hospital ("GMH"), located in Gothenburg, Nebraska. The matter is submitted to the court for determination on cross-motions for summary judgment (filings 26, 28). Based upon the undisputed facts as established by the pleadings (filings 1, 11) and the administrative record (sealed filing 21, hereinafter "AR"), and after careful consideration of the arguments presented in the parties' briefs (filings 27, 29, 34, 35, 38, 39), I conclude that the plaintiff's motion should be granted, and that the defendants' motion should be denied, because the Secretary's decision is arbitrary and capricious. See 5 U.S.C. § 706(2)(A).

I. BACKGROUND

The Health Care Quality Improvement Act of 1986 ("HCQIA"), Title IV, Pub.L. 99-660, as amended, requires each health care entity which accepts the surrender of clinical privileges of a physician while the physician is under an investigation by the entity relating to possible incompetence or improper professional conduct, or in return for not conducting such an investigation or proceeding, to report the surrender to the state board of medical examiners. See 42 U.S.C. §§ 11133(a)(1)(B); 45 C.F.R. § 60.9(a)(1)(ii). The state board must then forward this information to the Secretary of Health and Human Services by submitting a report to the National Practitioner Data Bank ("NPDB"). See 42 U.S.C. §§ 11133(b) and 11134; 45 C.F.R. §§ 60.4, 60.5(c), and 60.9(b). According to current HHS guidelines, however, a reportable surrender of a physician's clinical privileges is to be reported directly to the NPDB by the health care entity, and a copy of the report is to be sent to the appropriate state licensing board. See National Practitioner Data Bank Guidebook at E-17 (available on the Internet at http:// www.npdb-hipdb.hrsa.govInpdbguidebook.html).

Information reported to the NPDB is accessible to state licensing boards and to any health care entity where the physician is employed or affiliated or is seeking employment or affiliation. See 42 U.S.C. §§ 11137(a); 45 C.F.R. §§ 60.11. In fact, hospitals are required to request information from the NPDB whenever a physician applies for a position on its medical staff or for clinical privileges, and also every two years to check the status of each physician who currently is on its medical staff or has clinical privileges. See 42 U.S.C. §§ 11135(a); 45 C.F.R. §§ 60.10. A person or entity reporting information as required by the HCQIA is immune from civil liability unless the information was known to be false. See 42 U.S.C. §§ 11137(c).

A physician who is the subject of an inaccurate report has 60 days to notify the Secretary and the reporting entity, whereupon the report will be placed in "disputed status." See 45 C.F.R. §§ 60.14(b). If the reporting entity does not revise the reported information, the Secretary, upon request, will resolve the dispute by reviewing written submissions from both parties. See 45 C.F.R. §§ 60.14(c). "The Secretary reviews disputed reports only for accuracy of factual information and to ensure that the information was required to be reported." NPDB Guidebook, at F-3.

The plaintiff in this case, Christopher Costa, M.D., is a family practitioner who held hospital staff privileges at GMH from March 1996 until July 2004, when he resigned from the hospital's medical staff. The resignation followed a vote by the medical staff to recommend to the hospital board that Dr. Costa's application for renewal of staff privileges be denied. The hospital's CEO, John H. Johnson, falsely reported to the NPDB on July 21, 2004, that Dr. Costa had surrendered his staff privileges while he was under investigation by the Nebraska Department of Health and Human Services.¹ Dr. Costa promptly disputed the report, but it was not changed until April 6, 2005, when Mr. Johnson filed a "correction" report² stating:

Dr. Costa's competence and professionalism were under review at the Gothenburg Memorial Hospital at the time he withdrew his medical staff application for re-appointment and surrendered his privileges. The medical staff had concerns regarding recent obstetrical cases in which Dr. Costa was the primary physician, as well as concerns regarding his professionalism to nursing and administrative staff. Dr. Costa surrendered his privileges one and one half hours after the medical staff unanimously voted to reject his application for reappointment and prior to that recommendation being forwarded to the board of directors for further action.

(AR 88 (original all in uppercase type).) Dr. Costa also sought to have the correction report voided, but the Secretary found "no basis on which to conclude that the [correction] report should not have been filed or that it is not accurate." (AR 193.) Specifically, the Secretary decided there was a reportable event because "[t]he record reflects that [Dr. Costa] voluntarily surrendered [his] clinical privilege(s), while under investigation." (AR 194.) Dr. Costa challenges this decision.

A. Standard of Review

Under the APA, an agency administrative decision may be set aside only if it is "arbitrary, capricious, and an abuse of discretion, or otherwise not in accordance with law," 5 U.S.C. § 706(2)(A), "in excess of statutory . . . authority," id. § 706(2)(C), or "without observance of procedure required by law," id. § 706(2)(D). Friends of Boundary Waters Wilderness v. Bosworth, 437 F.3d 815, 821 (8th Cir. 2006).

"When reviewing an agency's construction of a statute, the court first considers whether the intent of Congress is clear; if so, the court's inquiry is over, `for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.'" [Friends of the Boundary Waters Wilderness v. Dombeck, 164 F.3d 1115, 1121 (8th Cir.1999)] (quoting Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)); see also Cuadra v. Gonzales, 417 F.3d 947, 950 (8th Cir. 2005).

Where Congress has explicitly or implicitly left a gap in a statute to be filled by a particular agency, the agency's interpretations of the statute having the force of law are entitled to substantial deference under Chevron. United States v. Mead Corp., 533 U.S. 218, 230, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Chevron deference requires courts to give "considerable weight . . . to an executive department's construction of a statutory scheme it is entrusted to administer." Chevron, 467 U.S. at 844, 104 S.Ct. 2778,81 L.Ed.2d 694. This considerable weight has been interpreted by the Eighth Circuit to mean controlling weight unless "arbitrary, capricious, or manifestly contrary to the statute." In re Old Fashioned Enters., Inc., 236 F.3d 422, 425 (8th Cir.2001).

Even where an agency is accorded deference, the "agency must provide a satisfactory explanation for its actions based on relevant data." Niobrara River Ranch, L.L.C. v. Huber, 373 F.3d 881, 884 (8th Cir.2004). This requires an analysis of whether the decision was "based upon consideration of the relevant factors and whether there has been a clear error of judgment." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). If an agency's decision to which deference is afforded may be supported on any rational basis, we must uphold it. Voyageurs Nat'l Park Ass'n, 381 F.3d at 763; Sw. Bell Tel. Co. v. Fed. Comm. Comm'n, 153 F.3d 523, 554 (8th Cir.1998) ("If an agency ... does not attempt either to close itself off from informed opinion or to extend its reach beyond the scope of permissible authority, then it is our duty to accept that judgment if it is rational and not unreasonable."). Therefore, even if the agency's underlying data are flawed, substantial deference requires the ruling be reversed only if "`there is a significant chance that but for the errors the agency might have reached a different result.'" Cent. S.D. Co-op. Grazing Dist. v. Sec'y of the United States Dep't of Ag., 266 F.3d 889, 899 (8th Cir.2001) (quoting Dombeck, 164 F.3d at 1129).

Because an agency's choice of methodology is typically borne out of the agency's expertise, we defer to an agency's choice of methodology so long as it is not arbitrary or without foundation. See Dombeck, 164 F.3d at 1130 (citing Minn. Pub. Interest Res. Group v. Butz, 541 F.2d 1292, 1302 (8th Cir.1976)). A decision is arbitrary or capricious if the agency relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs contrary to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983).

Id...