North Colorado Medical Center, Inc. v. Committee on Anticompetitive Conduct

• Citation: 914 P.2d 902
• Decision Date: 01 April 1996
• Docket Number: No. 95SC256,95SC256
• Parties: 1996-1 Trade Cases P 71,368 NORTH COLORADO MEDICAL CENTER, INC., a Colorado non-profit corporation; and the Governing Board of Directors of the North Colorado Medical Center, Petitioners, v. THE COMMITTEE ON ANTICOMPETITIVE CONDUCT and William John Nicholas, M.D., Respondents.
• Court: Colorado Supreme Court

Page 902

914 P.2d 902

1996-1 Trade Cases P 71,368

NORTH COLORADO MEDICAL CENTER, INC., a Colorado non-profit

corporation; and the Governing Board of Directors

of the North Colorado Medical Center, Petitioners, v. THE COMMITTEE ON ANTICOMPETITIVE CONDUCT and William John

Nicholas, M.D., Respondents.

No. 95SC256.

Supreme Court of Colorado,

En Banc.

April 1, 1996.

Gorsuch Kirgis L.L.C., Malcolm M. Murray, Ellen Elizabeth Stewart, Denver, for Petitioners.

No appearance on behalf of Respondent The Committee on Anticompetitive Conduct.

Nicholas Law Offices, Philip A. Nicholas, Lillian N. Sharpe, Laramie, Wyoming, for Respondent William John Nicholas, M.D.

Faegre & Benson, Gerald A. Niederman, Natalie Hanlon-Ley, Denver, for Amicus Curiae American Hospital Association.

Yu Stromberg Cleveland, P.C., Frederick Y. Yu, Denver, for Amicus Curiae Colorado Hospital Association.

Chief Justice VOLLACK delivered the Opinion of the Court.

We granted certiorari to review the decision in Nicholas v. North Colorado Medical Center, Inc., 902 P.2d 462 (Colo.App.1995), in which the court of appeals held that the Colorado State Board of Medical Examiners committee on anticompetitive conduct was not bound to adopt federal antitrust law in defining unreasonable anticompetitive conduct and that the proximate cause analysis was appropriate for determining whether unreasonable anticompetitive conduct had occurred. We affirm.

I.

In August of 1989, the respondent, William John Nicholas, M.D., joined the partnership of the Greeley Medical Clinic as an invasive cardiologist. At the same time, Nicholas joined the medical staff of the North Colorado Medical Center (NCMC), an entity unrelated to the Greeley Medical Clinic. NCMC granted Nicholas provisional privileges to work in its cardiac catheterization laboratory, the only laboratory of its kind in Greeley. NCMC also granted Nicholas privileges to perform invasive cardiology procedures.

In September of 1990, Nicholas was terminated from the Greeley Medical Clinic; this termination had no official effect on his independent status as a staff member of NCMC. Nevertheless, during the next several months, a peer review process of Nicholas' practice was conducted at NCMC pursuant to section 12-36.5-104, 5B C.R.S. (1991). The Medical Quality Assessment Committee of NCMC recommended to the Credentials Subcommittee that Nicholas be evaluated by an independent physician to review his records and observe his performance in the cardiac catheterization laboratory. The independent physician filed a report which was critical of Nicholas' basic catheterization skills and clinical judgment. Consequently, in July of 1991, NCMC's Credentials Subcommittee suspended Nicholas' invasive cardiology privileges pending further investigation. In November of 1991, the Credentials Subcommittee recommended that Nicholas be retained on the medical staff of NCMC but not be granted privileges to practice invasive cardiology.

Pursuant to NCMC's bylaws, Nicholas requested and was granted a hearing before a Fair Hearing Panel (Panel); the hearing was conducted in May of 1992. At the conclusion of that hearing, the Panel concluded that many of the allegations of substandard care against Nicholas had not been proven. The Panel determined that although Nicholas had previously been technically deficient with respect to certain invasive procedures, his practice had improved to the point where his judgment and proficiency were within generally acceptable standards. The Panel found that Nicholas was deficient only in his recordkeeping practices, and therefore recommended that his invasive cardiology privileges be reinstated, subject to a one-year period of probation and monitoring to include a review of his recordkeeping practices.

The Panel's report was reviewed by the House Committee of NCMC's Governing Board of Directors (House Committee). The House Committee voted to reject the Panel's recommendations, and instead recommended to the co-petitioner, NCMC's Governing Board of Directors (Board), that Nicholas be retained on the medical staff conditioned upon further review of his practice for a probationary period of up to one year, at which time Nicholas could apply for reinstatement of his invasive cardiology privileges. The Board adopted the House Committee's recommendations.

In June of 1992, Nicholas filed a complaint with the co-respondent, the Colorado State Board of Medical Examiners committee on anticompetitive conduct (Committee), appealing the decision of the Board and alleging that the loss of his invasive cardiology privileges at NCMC resulted from unreasonable anticompetitive conduct in violation of section 12-36.5-106(7), 5B C.R.S. (1991). Nicholas specifically alleged (1) that the anticompetitive conduct was initiated by Dr. James Beckman, another invasive cardiologist who worked at both Greeley Medical Clinic and NCMC; (2) that a number of persons within the Greeley medical community were unwitting accomplices to the anticompetitive conduct which resulted in an unfair peer review process; (3) that Nicholas' invasive cardiology privileges and privileges in the catheterization laboratory were suspended and eventually terminated because of such concerted anticompetitive conduct; and (4) that without such privileges, Nicholas was precluded from practicing cardiology in Greeley, resulting in an adverse impact upon competition within the Greeley area.

A hearing was held before the Committee on May 3, 1993. In its final order, the Committee determined that although the term "unreasonable anticompetitive conduct" is not defined in the Colorado statute, it must be defined with reference to principles of antitrust law as applied to the health care field. The Committee further determined that Nicholas bore the burden of proving, pursuant to section 12-36.5-106(7) & (9), 5B C.R.S. (1991), that the action of the Board resulted from unreasonable anticompetitive conduct. To prove that unreasonable anticompetitive conduct occurred, the Committee stated that Nicholas must establish the following factors: (1) there was a concerted action of two or more entities; (2) such action was intended to create or resulted in an adverse effect upon competition; (3) the anticompetitive conduct was unreasonable; and (4) the final action of the Board resulted from the unreasonable anticompetitive conduct.

The Committee found that all four elements were established by a preponderance of the evidence. The Committee stated that it was convinced by the totality of the circumstances, and by its assessment of the credibility of the witnesses, that Beckman had a plan to eliminate Nicholas from the practice of invasive cardiology in the Greeley area and that other persons within NCMC joined in that plan. The Committee further concluded that Nicholas' ability to compete in the invasive cardiology market was destroyed when NCMC denied him invasive cardiology privileges, that the dominant purpose of the concerted action was not quality assurance, and that the final action of the Board resulted from unreasonable anticompetitive conduct.

On appeal, pursuant to section 12-36.5-201(10)(a) and 24-4-106(11), 5B C.R.S. (1991), the court of appeals affirmed the decision of the Committee. Nicholas v. North Colo. Medical Ctr., Inc., 902 P.2d 462 (Colo.App.1995). NCMC petitioned this court for certiorari review of the court of appeals' decision and we granted certiorari on the following issues: (1) whether the court of appeals erred by failing to give presumptive effect to the record of actions of the Governing Board of Directors of the North Colorado Medical Center; (2) whether the court of appeals erred in its application of standards for, and its definition of, the term "unreasonable anticompetitive conduct" as that term is used in section 12-36.5-106, 5B C.R.S. (1991); and (3) whether the court of appeals erred in utilizing a proximate cause standard in concluding that anticompetitive conduct occurred in this case.

II.

We first determine whether the court of appeals erred by failing to give presumptive effect to the record of actions of NCMC's Board. The court of appeals determined that NCMC was not entitled to a specific presumption that its professional review activities were undertaken for the purpose of assuring quality care and patient safety. However, the court of appeals found that the final decision of NCMC's Board is entitled to a presumption of validity and regularity, a presumption which the court concluded was sufficiently recognized and given appropriate weight by the Committee.

A.

The Colorado Professional Review Act (CPRA) itself does not specifically mandate a presumption that professional review activities are undertaken for the purpose of assuring quality care and patient safety. However, the federal counterpart to the CPRA, the Health Care Quality Improvement Act (HCQIA), 42 U.S.C. §§ 11101 to -52 (1986), expressly contains such a presumption. Nevertheless, we hold that the Colorado statute should not be interpreted to include the federal statute's presumption for two reasons.

First, the federal statute's presumption that professional review action is taken in the furtherance of quality health care arises in a context different from the one before us. Under the HCQIA, the federal presumption is used to determine whether liability limitations for the reviewing entity are triggered, an issue not raised in the current case. Second nowhere in the CPRA does the Colorado legislature incorporate the presumption of the HCQIA. Instead, the CPRA merely indicates that the Colorado statute is intended to be responsive to the federal statute. § 12-36.5-201, 5B C.R.S. (1991). Thus, the court of appeals properly concluded that the CPRA does not include a specific presumption that professional review activities are undertaken for the purpose of assuring quality care and patient safety.

B.

Although NCMC's Board is not entitled to the...