Peper v. St. Mary's Hos. and Medical Center

• Decision Date: 11 December 2008
• Docket Number: No. 07CA2491.,07CA2491.
• Citation: 207 P.3d 881
• Parties: Eric Anthony PEPER, MD, Plaintiff-Appellant, v. ST. MARY'S HOSPITAL AND MEDICAL CENTER, a Colorado nonprofit corporation; Frances Raley, MD; John C. Beeson, MD; and Robert Ladenburger, Defendants-Appellees.
• Court: Colorado Court of Appeals

207 P.3d 881

Eric Anthony PEPER, MD, Plaintiff-Appellant, v. ST. MARY'S HOSPITAL AND MEDICAL CENTER, a Colorado nonprofit corporation; Frances Raley, MD; John C. Beeson, MD; and Robert Ladenburger, Defendants-Appellees.

No. 07CA2491.

Colorado Court of Appeals, Div. II.

December 11, 2008.

Robinson Waters & O'Dorisio, P.C., Anthony L. Leffert, Denver, Colorado, for Plaintiff-Appellant.

McConnell, Siderius, Fleischner, Houghtaling & Craigmile, LLC, Linda L. Siderius, Troy R. Rackham, Robert W. Steinmetz, Denver, Colorado, for Defendants-Appellees.

Opinion by Judge CONNELLY.

This appeal raises issues under the Health Care Quality Improvement Act of 1986 (HCQIA), 42 U.S.C. §§ 11101-11152. Plaintiff, Eric Anthony Peper, M.D. (Dr. Peper), sued defendants, St. Mary's Hospital and Medical Center (St. Mary's) and three of its officers, for revoking his hospital privileges. Another division of this court previously issued an unpublished opinion reversing summary judgment for defendants. On remand, the district court again granted summary judgment. Again we reverse. Defendants are not entitled to HCQIA immunity because Dr. Peper was denied notice and a hearing ("statutory due process") prior to the revocation, and he never waived his right to statutory due process.

I. Background

Dr. Peper is a cardiothoracic surgeon. St. Mary's is a hospital in Grand Junction, Colorado. The individual defendants who signed the letter revoking Dr. Peper's privileges are Frances Raley, M.D., as Chairman of St. Mary's Credentials Committee; John C. Beeson, M.D., as St. Mary's Vice President of Medical Affairs; and Robert Ladenburger, as St. Mary's President/CEO.

In spring 2002, Dr. Peper applied for and was granted medical staff privileges at St. Mary's. The hospital's letter stated the "appointment is to the Provisional Active Staff and to the Surgery Department for 2002." Then, in a December 2002 letter, St. Mary's congratulated Dr. Peper on his "reappointment" to the medical staff through December 2004. The letter stated this reappointment was to the "Prov Active Medical Staff" and was subject to the terms of the initial appointment and to hospital and medical staff bylaws.

In December 2002, without informing Dr. Peper, St. Mary's decided to review nineteen of his cardiothoracic cases (out of eighty-four procedures Dr. Peper had performed at St. Mary's). Dr. Peper alleges this decision was made after he told the hospital's president he planned to establish a competing medical practice.

St. Mary's submitted "charts" of the nineteen cases to an external reviewer. After reviewing those charts, the reviewer described an apparent "pattern of prolonged cross clamp and cardiopulmonary bypass times, and an excessive amount of blood usages," suggesting "there may be a problem with surgical technique and/or judgment." The reviewer's report also noted several cases of "misadventure," including "patients who were questionable candidates for mitral valve repair who underwent excessively long procedures" and "three patients who died." It stated, "Many of the complications noted were ones that any good cardiothoracic surgeon will encounter at one time or another," but there would be "cause for concern" in a data pool consisting of only one hundred total procedures at the hospital.

The external reviewer requested films on five of the patients for further review. St. Mary's did not provide this additional information to the reviewer.

On February 13, 2003, without prior notice, St. Mary's revoked Dr. Peper's privileges and staff membership "effective immediately." The letter notified Dr. Peper of the already-concluded review process and stated the external reviewer's "in-depth analysis demonstrated a pattern of consistently excessive cross-clamp times as well as several cases of care falling below generally accepted standards of practice." It added that St. Mary's credentials committee had "carefully reviewed these reports, discussed the findings, and found them to have merit."

The February 13 letter stated the signatories' "review of the Bylaws indicate [sic] that provisional privileges, when revoked, are not afforded a hearing or appeal [sic]." It informed Dr. Peper that the revocation would be reported to the National Practitioner Data Bank and the Colorado Board of Medical Examiners.

In August 2004, Dr. Peper brought a federal lawsuit and filed an administrative appeal to the state Committee on Anticompetitive Conduct (CAC). Both were dismissed. The court dismissed Dr. Peper's federal constitutional challenge after concluding St. Mary's was not a state actor, and it dismissed pendent state claims without prejudice. The CAC dismissed Dr. Peper's administrative challenge as untimely. Dr. Peper did not appeal either dismissal.

In September 2004, Dr. Peper filed this state lawsuit. His complaint, as amended, seeks monetary damages based on eight claims sounding in contract and tort. The district court dismissed the complaint, concluding defendants were entitled to immunity from damages. A division of this court reversed. Peper v. St. Mary's Hospital and Medical Center, 2006 WL 2024109 (Colo.App. No. 05CA1099, July 20, 2006) (not published pursuant to C.A.R. 35(f)) (Peper I).

Peper I construed the dismissal as a summary judgment because both sides had attached materials outside the pleadings. The majority concluded three of the four HCQIA immunity prerequisites were met: the first because defendants acted in the reasonable belief their action was in the furtherance of quality health care; the second because they acted after a reasonable effort to obtain the facts; and the fourth because they acted in the reasonable belief the action was warranted by the known facts. Peper I, at 5-11, 16-17 (discussing 42 U.S.C. §§ 11112(a)(1), (2) & (4)); but see id. at 22-29 (Roy, J., concurring in part and dissenting in part) (disagreeing that second requirement was met).

Peper I reversed based on the third requirement for immunity, involving adequate notice and hearing procedures. See 42 U.S.C. § 11112(a)(3). Defendants relied on a HCQIA provision deeming this requirement to be met where the statutory procedures were "waived voluntarily by the physician," id. § 11112(b). The waiver, according to defendants, occurred when Dr. Peper applied for provisional status and agreed to be bound by medical staff bylaws that did not give rise to hearing and appeal rights for provisional staff.

The division unanimously held this third requirement had not been satisfied based on the then-existing record. It noted "a dearth of authority interpreting waiver under the HCQIA," and referenced "the general principle that waivers of statutory rights are disfavored." Peper I, at 12, 15 (citation omitted). It ultimately concluded "the record [was] not sufficiently developed to ascertain [Dr. Peper's] hearing rights" under the bylaws. Id. at 12. It cited an "apparent conflict" between the medical staff and the hospital bylaws regarding whether provisional staff members had hearing rights, and wrote that any bylaw ambiguity "would have to be resolved against the hospital, as the drafter." Id. at 14-15.

Peper I held "the requirements of § 11112(a)(3) were not adequately established to permit summary judgment on the basis of HCQIA immunity at this stage of the proceedings" and reversed as to this third factor but otherwise affirmed. Peper I, at 15. It "remanded for further proceedings consistent with this opinion, which may include a renewed summary judgment motion by defendants upon further record development concerning the possible bylaw conflict." Id. at 20.

The district court granted summary judgment on remand. It accepted defendants' arguments that: "[u]nder the terms of the Medical Staff Bylaws in effect at the time, provisional appointees clearly and unambiguously were not entitled to a hearing or appeal in the event of an adverse action against them during the provisional period"; and "[b]y accepting a provisional appointment, [Dr. Peper] thereby waived any right to a hearing on the action taken against him while he was still in the provisional period."

The court concluded "the purported [bylaws] conflict that concerned the court of appeals" no longer existed. It explained the undisputed facts developed on remand showed the conflicting provisions cited in the first appeal had not actually been in effect during the relevant time period.

Finding no bylaws conflict, the court defined the relevant issue as "whether [Dr. Peper's] express agreement to abide by the Hospital Bylaws and Medical Staff Bylaws constituted a voluntary waiver of the conditions placed upon St. Mary's notice and hearing procedures by 42 U.S.C. § 11112(b)." It answered this issue affirmatively, holding defendants entitled to HCQIA immunity.

II. Discussion

The HCQIA provides immunity if four statutory standards, including the third one requiring due process, are met. Because Dr. Peper never received any notice or hearing, we must decide whether he waived statutory due process rights when he applied for provisional hospital privileges. Dr. Peper argues his application was legally insufficient to waive his statutory rights and contends there remain bylaw conflicts that preclude summary judgment. Defendants disagree and also argue there is no subject matter jurisdiction under Colorado law because Dr. Peper failed to exhaust state administrative remedies.

We first hold there is subject matter jurisdiction over this lawsuit. On the merits, we hold defendants are not entitled to HCQIA immunity because any agreement to be bound by hospital bylaws was legally insufficient to waive statutory due process rights under the third HCQIA standard. This holding obviates the need to consider Dr. Peper's arguments regarding bylaw conflicts or to consider his arguments that new evidence demonstrates the other three HCQIA standards were not met.

A. Subject Matter Jurisdiction Under Colorado Law

The prior...