Kiester v. Humana Hosp. Alaska, Inc.

Decision Date24 December 1992
Docket NumberNo. S-4361,S-4361
PartiesW. Scott KIESTER, Appellant, v. HUMANA HOSPITAL ALASKA, INC., a Delaware Corporation; David M. Dietz, M.D., John Snyder, M.D., David D. Anderson, M.D., Patrick M. Nolan, D.O., Roland E. Gower, M.D., and Peter D. Marbarger, M.D., Appellees.
CourtAlaska Supreme Court

John J. Eufemio, Law Office of John J. Eufemio, Kodiak, for appellant.

Sanford M. Gibbs, Hagans, Brown, Gibbs & Moran, Anchorage, for appellees.

Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.

OPINION

COMPTON, Justice.

W. Scott Kiester contends that he is entitled to damages resulting from the allegedly wrongful denial of his application for surgical privileges by Humana Hospital Alaska, Inc. (Humana). According to Kiester, Humana failed to follow its bylaws in denying Kiester's application, thereby violating his right to due process of law. The superior court dismissed Kiester's claims on Humana's motion for summary judgment. We reverse.

I. FACTUAL AND PROCEDURAL BACKGROUND

In December 1984 Kiester applied for medical and surgical privileges at Humana. Humana's Medical Staff Bylaws (bylaws) set forth detailed procedures which an applicant and Humana are to follow in the review of an application for privileges. As part of his application, Kiester acknowledged receipt of the bylaws.

Dr. Roland Gower, Chief of Staff of Humana, interviewed Kiester on January 11, 1985, at the request of the Chairman of the Department of Surgery. In the interview, Dr. Gower questioned Kiester about his past surgical experience. He also asked Kiester a variety of questions regarding "surgical indication and treatment." Dr. Gower's memorandum, which apparently is a fair synopsis of Dr. Gower's questions and Kiester's responses, indicates that the following discussion took place at the end of the interview:

The applicant inquired of me as to what my opinion was. I told him I thought his fund of knowledge was lacking and that I was very concerned about the fact that he had practiced at many different places over the last 25 years and that these reasons for moving on from his practice would have to be checked out. For these reasons I told him that for the time being I would not recommend to Dr. Lehman that he be given temporary surgical privileges, however, I did say that I would recommend to Dr. Lehman to get a second opinion from another general surgeon.

The memorandum does not indicate in what respects Kiester's responses were inadequate or incorrect, or his "fund of knowledge ... lacking."

In April 1985 Dr. Thomas Harrison recommended that Kiester be granted "temporary medical staff privileges until a formal review [could] be made by the Credentials Committee." This recommendation was approved. Kiester disputes the nature and duration of the privileges granted, contending that Dr. Harrison granted him "associate membership" for a one year period.

On June 18 Dr. Peter D. Marbarger, the "second opinion ... general surgeon," interviewed Kiester. Dr. Marbarger also assisted as Kiester performed surgical procedures at Humana. In a letter to the Credentials Committee dated October 27, Dr. Marbarger stated in part:

We had a rather lengthy discussion and, without trying to sound presumptuous, I believe the interview was rather similar to an oral board exam. We discussed several hypothetical situations as well as many specific patient presentations. I am suspicious of both the depth and breadth of his surgical knowledge. Specifically, I believe he would have failed if this had been an actual oral board exam. He does have moderate technical ability operatively but I question his judgment.

Again, the letter does not indicate in what respects Dr. Kiester's responses were inadequate or incorrect, or the "depth and breadth of his surgical knowledge" suspicious.

In November Humana's Credentials Committee recommended that Kiester's application for surgical privileges be denied. In December the Executive Committee notified Kiester of the denial of privileges.

Kiester appealed the denial and an Ad Hoc Committee convened to review the decision in January 1986. 1 During the lengthy hearing, committee members asked Kiester detailed questions regarding surgical treatment required for various medical problems. The Ad Hoc Committee affirmed the denial of privileges.

Kiester appealed again. Humana's governing body appointed an Appellate Review Committee (ARC), which convened in April. The ARC affirmed the denial of privileges.

In April 1988 Kiester filed a complaint in superior court, alleging that in rejecting his application Humana had violated its bylaws and his rights to due process of law under the Alaska Constitution. Kiester also alleged harm to his reputation as well as conspiracy and violation of anti-trust laws.

Superior Court Judge Karen L. Hunt granted Humana partial summary judgment dismissing all but two of Kiester's claims. Judge Hunt found that issues of material fact remained with regard to Kiester's anti-trust claims. Judge Hunt also found that the ARC had failed to make a determination of whether the Executive Committee's decision to deny privileges was arbitrary and capricious, thereby violating Article VIII, Section 6(f) of the bylaws. A partial remand was ordered.

On remand a second ARC reviewed the record, made specific findings and, citing the letters of Drs. Gower and Marbarger as well as the conclusions of the Ad Hoc Committee, determined that the Executive Committee's denial of Kiester's application was not arbitrary and capricious. The case returned to superior court and on cross motions for summary judgment, Judge Hunt dismissed all of Kiester's claims.

This appeal followed. Kiester contends generally that in denying his application, Humana violated its bylaws and his right to due process of law. Kiester does not ask that Humana be directed to reconsider his application and grant him privileges. Rather, he contends that he is entitled to damages because of Humana's wrongful denial of his application.

II. STANDARD OF REVIEW

"When reviewing a grant of summary judgment, this court must determine whether there is a genuine issue of material fact and whether the moving party is entitled to judgment on the law applicable to the established facts. All reasonable inferences of fact from proffered materials must be drawn against the moving party ... and in favor of the non moving party...." Sea Lion Corp. v. Air Logistics of Alaska, 787 P.2d 109, 116 (Alaska 1990) (citations omitted).

III. ALLEGED VIOLATIONS OF HOSPITAL BYLAWS AND KIESTER'S RIGHT TO DUE PROCESS OF LAW

As we consider Kiester's diverse arguments, a common theme appears. Kiester believes that a physician who submits an application for hospital privileges stands in need of great protection from the courts, because of the better bargaining position of the hospital. Kiester argues that courts must vigorously enforce hospital bylaws and ensure that applications are fairly considered so that applicants are not denied privileges based on arbitrary or discriminatory considerations. Before turning to Kiester's specific concerns, we must address the role of courts in reviewing a hospital's decision to deny an application for hospital privileges.

A. Judicial review of hospital privileges applications.

Courts are in general agreement that the decisions of a hospital governing body regarding applications for hospital privileges are to be accorded great deference, and that judicial review should be limited to factors which are within the expertise of courts. See, e.g., Laje v. R.E. Thomason Gen. Hosp., 564 F.2d 1159, 1162 (5th Cir.1977), cert. denied, 437 U.S. 905, 98 S.Ct. 3091, 57 L.Ed.2d 1134 (1978).

We have recognized that it is not within the expertise of courts to determine whether a physician has the medical training and experience to qualify for membership on a hospital staff or to qualify for specific medical or surgical privileges:

Courts have recognized that the evaluation of the medical qualifications of physicians is a factual determination properly committed to the expert judgment of the hospital authorities:

No court should substitute its evaluation of such matters for that of the Hospital Board.... The evaluation of professional proficiency of doctors is best left to the specialized expertise of their peers, subject only to limited judicial surveillance.

Eidelson v. Archer, 645 P.2d 171, 177 (Alaska 1982) (omission in original) (quoting Sosa v. Bd. of Managers of the Val Verde Mem. Hosp., 437 F.2d 173, 177 (5th Cir.1971)).

However, courts are equipped to determine whether a hospital governing body has followed its bylaws and whether a decision regarding an application for privileges was made in accordance with basic principles of fairness and due process of law. 2 Courts may "require that the procedures employed by the hospital are fair, that the standards set by the hospital are reasonable, and that they have been applied without arbitrariness and capriciousness." Laje, 564 F.2d at 1162. This type of limited review does not intrude upon a hospital's recognized expertise regarding evaluation of medical qualifications, yet it affords protection to an applicant against arbitrary denial of privileges in violation of an applicant's rights to substantive and procedural due process of law.

B. Denial of privileges based on a subjective process.

Kiester challenges virtually every step of the process through which Humana evaluated his application for privileges. 3 Kiester contends that he was never given notice of the "charges" against him so he could prepare for the hearing before the Ad Hoc Committee. He also argues that the Ad Hoc Committee did not conduct its hearing according to the bylaws and that the committee instead subjected him to an unprecedented prolonged oral examination. Kiester contends that the bylaws do not provide for oral examinations and that such examinations are unsound...

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