Michael E. Ritchie, M.D. v. Community Howard Regional Health, Inc. , 51 N.E.3d 1212 ( 2016 )

Mar 10 2016, 7:45 am
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEES
Kevin W. Betz COMMUNITY HOWARD
Sandra L. Blevins REGIONAL HEALTH, INC. ET AL.
Jamie A. Maddox Sherry A. Fabina-Abney
Courtney E. Endwright L. Alan Whaley
Betz & Blevins Melanie E. Harris
Indianapolis, Indiana Olga Voinarevich
Ice Miller LLP
Indianapolis, Indiana
ATTORNEYS FOR APPELLEES THE
CLEVELAND CLINIC FOUNDATION
ET AL.
Ronald A. Mingus
Logan C. Hughes
Reminger Co., L.P.A.
Indianapolis, Indiana
ATTORNEY FOR AMICUS CURIAE
THE INDIANA HOSPITAL
ASSOCIATION
Angela M. Smith
Hall, Render, Killian, Heath &
Lyman, P.C.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Court of Appeals of Indiana | Opinion 34A02-1505-PL-385 | March 10, 2016 Page 1 of 16
Michael E. Ritchie, M.D., March 10, 2016
Appellant-Plaintiff, Court of Appeals Case No.
34A02-1505-PL-385
v. Appeal from the Howard County
Superior Court 2
Community Howard Regional The Honorable Brant J. Parry,
Health, Inc., et al. Judge
Appellees-Defendants. Trial Court Cause No.
34D02-1411-PL-952
Bailey, Judge.
Case Summary
[1] The Medical Executive Committee (“the MEC”) of Community Howard
Regional Health, Inc. (“Community”) issued a precautionary suspension of
medical staff privileges1 extended to Michael E. Ritchie, M.D., the President
and CEO of Ritchie Cardiology, P.C. Dr. Ritchie filed suit for breach of
contract, defamation, tortious interference with a business or contractual
relationship, intentional infliction of emotional distress, and breach of fiduciary
duty.2 He sought temporary, preliminary, and permanent injunctive relief. A
1
Section 5.3 of Community’s By-Laws provides for a “precautionary suspension” when “failure to take
action may result in imminent danger to the health or safety of any individual or may disrupt the orderly
operation of the Hospital.” (App. at 189.) Subsection (c) specifies that a precautionary suspension “is an
interim step in the professional review activity, but it is not a complete professional review action in and of
itself.” (App. at 189.)
2
The defendants included Community, Interim Chief Executive Officer Ron Lewis, Techsin Ty, M.D.,
Community staff (Eric O’Banion, M.D., Erika Cornett, M.D., James Downing, M.D., Andrew Mandery,
M.D., Mohammad Nekoomaram, M.D., John Salter, M.D., Carol Sheridan, M.D., Blake Marti, M.D.,
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temporary restraining order was granted but later dissolved and Dr. Richie was
denied a preliminary injunction. He appeals, presenting the sole consolidated
and restated issue of whether the trial court clearly abused its discretion.3 We
affirm.
Facts and Procedural History
[2] For twelve years, Dr. Ritchie, who maintained a private practice, provided
services as an interventional cardiologist at Howard Regional Hospital in
Kokomo. On July 1, 2012, Howard Regional Hospital became part of
Community Health Network (“CHN”), and Community Physicians of Indiana,
Inc. d/b/a Community Physician Network (“CPN”) became the exclusive
provider of cardiovascular services at Community.
[3] In 2013, CHN contacted the Cleveland Clinic Foundation (“Cleveland”) to
discuss a potential CHN affiliation with Cleveland as to the provision of
Ramaroa Yeleti, M.D., Lawrence Gehring, M.D., Lawrence Klein, M.D., Michael Koelsch, M.D., Blaire
McPhail, M.D., Rajesh Mallella, M.D., Jaro Mayda, M.D., Ghaith Nahlawi, M.D., and Dorian Beasley,
M.D.), and Cleveland Clinic defendants (The Cleveland Clinic Foundation, The Cleveland Clinic Health
System Physician Organization, Joseph Cacchione, M.D., Christopher Bajzer, M.D., and Amar
Krishnaswamy, M.D.). The providers were named as defendants individually and in their official capacities.
3
Dr. Ritchie articulates an additional issue, supported by a cursory allegation that the good faith
presumption in Indiana’s peer review statutory scheme “has no connection to a proven fact” and is thus void,
unenforceable, and unconstitutional. Appellant’s Br. at 45. However, he does not assert that he filed a claim
for a declaratory judgment, providing the defendants with an opportunity to respond, or that he gave timely
notice to the Indiana Attorney General to facilitate intervention. See Ind. Code § 34-14-1-11 (providing in
relevant part: “In any proceeding in which a statute, ordinance, or franchise is alleged to be unconstitutional,
the court shall certify this fact to the attorney general, and the attorney general shall be permitted to intervene
for presentation of evidence[.]”). Dr. Ritchie’s bald assertion of unconstitutionality does not properly raise
an issue of alleged trial court error for review.
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cardiovascular services. A services agreement was executed in February of
2014 and CHN agreed to pay Cleveland a consulting fee for a “quality
assessment for cardiovascular product line for the entire network.” (App. at
1182.) After evaluation, Cleveland could determine whether or not CHN
would be offered participation in the Cleveland national cardiac network.
[4] Dr. Ritchie was advised, by a letter dated December 19, 2013, that a provider
not becoming a part of CPN “[as] an employee or independent contractor with
CPN” could exercise clinical privileges up to midnight on December 31, 2013.
(Ex. 102.) Pursuant to a verbal agreement with CPN President Dr. Ramarao
Yeleti, Dr. Ritchie was permitted to continue exercising his medical staff
privileges and performing procedures at Community as an independent
contractor.4 On November 3, 2014, a hand-delivered letter addressed to Dr.
Ritchie advised: “Effective immediately, we are terminating the verbal
agreement with Ritchie Cardiology, PC and you to provide professional
cardiology services to Hospital patients.” (Ex. 8.)
[5] At some point, the MEC requested that Cleveland “do a medical review” of
three procedures at Community. (App. at 1184.) On June 25, 2014, the MEC
imposed a moratorium on three procedures: use of Impella devices,5 balloon
4
Dr. Yeleti explained that a hospital board of directors extends privileges to a physician, but “delivery of the
privileges” requires employment or an independent contractor agreement with the network of physicians
having an exclusivity agreement with the hospital. (Tr. at 337.)
5
Dr. Ritchie described this as a “support device” or “little pump” placed in a heart ventricle. (Tr. at 91.)
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valvuloplasties,6 and percutaneous atrial septal defect closures.7 These
procedures had been performed at Community exclusively or almost-
exclusively by Dr. Ritchie. A peer review letter informed cardiologists and
cardiothoracic surgeons of the moratorium and further advised:
Similar to Community Health Network’s arrangement with the
MD Anderson Cancer Network Affiliation, Community Health
Network is working toward an affiliation with the Cleveland
Clinic for its cardiology service lines. As part of that endeavor,
the Cleveland Clinic has been evaluating the policies, procedures,
and practices of the various cardiovascular programs within the
network including Community Howard Regional Health.
(App. at 114.)
[6] On September 4, 2014, Community’s Medical Audit and Review Committee
concluded an audit sampling 40 of 93 of Dr. Ritchie’s cases and advised Dr.
Richie by written memorandum:
Congratulations are extended as you demonstrated excellent
performance and documentation. We are proud to have you on
our staff.
(App. at 117.)
6
Dr. Ritchie described this as “a balloon that cracks open the valve.” (Tr. at 91.)
7
This was described as something “like an umbrella.” (Tr. at 91.)
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[7] On October 16, 2014, the MEC held a regularly scheduled monthly meeting.
At that meeting, Cleveland presented its evaluation of the cardiovascular
services of Community. The MEC discussed this evaluation and other alleged
complains regarding Dr. Ritchie. After the meeting concluded, the interim
CEO and the Chief of Staff of Community verbally informed Dr. Ritchie of an
adverse recommendation concerning his hospital privileges.
[8] On October 18, 2014, the MEC issued a written “Notice of Precautionary
Suspension and Recommendation to Terminate Membership and Privileges”
with regard to Dr. Ritchie. (App. at 147.) Dr. Ritchie was informed that the
recommendations were based upon results of case reviews conducted by
Cleveland physicians. Allegedly, “a significant number of the cases … were
found to be outside the appropriate standard of care.” (App. at 147.) Dr.
Ritchie was advised that he was entitled to a non-hearing meeting with the
MEC within fourteen days of the suspension, and that he could request a
hearing before a committee of three physicians from the active medical staff
(“the By-Laws hearing”).8 The By-Laws hearing would involve the opportunity
for the MEC and Dr. Ritchie to call, directly examine, and cross-examine
witnesses.
8
Pursuant to Indiana’s Peer Review Act, a physician facing charges that, if sustained, could result in an
action reportable to a medical licensing board, must be afforded one evidentiary hearing before a peer review
committee of the medical staff and one appeal before the governing board of the hospital or a committee
appointed by the governing board. I.C. § 34-30-15-5.
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[9] The MEC held two additional meetings – on October 30 and November 3, 2014
– to “[give] the opportunity for Dr. Ritchie to provide further information[.]”
(Tr. at 208.) Dr. Ritchie appeared, read a statement, and challenged the
process implemented by Cleveland. Dr. Ritchie was advised to submit any
additional patient-care materials for consideration by November 7, 2014.
[10] On November 7, 2014, Dr. Ritchie filed a complaint naming as defendants
Community, CHN, CPN, the Cleveland Clinic Foundation, the Cleveland
Clinic Health System Physician Organization, and various health care providers
and hospital administrators. Dr. Ritchie’s complaint alleged that the peer
review process was a sham proceeding, he had provided appropriate and
independently reviewed cardiology services, the MEC and Cleveland Clinic
defendants had an economic interest in divesting Dr. Ritchie of his patients,
patients were put at risk by the suspension, and the reporting of suspension of
privileges to state and federal entities could irreparably damage Dr. Ritchie’s
professional reputation and practice.
[11] Dr. Ritchie requested a temporary, preliminary, and permanent injunction that
would require Community to restore Dr. Ritchie’s medical staff privileges,
prohibit reporting of the suspension to third parties, and halt the “sham
process” implemented by Community. (App. at 112.) Dr. Ritchie also sought
compensatory and punitive damages and attorney’s fees.
[12] On November 10, 2014, the trial court issued an order granting to Dr. Ritchie a
portion of the temporary injunctive relief he had requested. Although Dr.
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Ritchie did not obtain restoration of his clinical privileges or a moratorium on
the peer review proceedings, the defendants were enjoined from making reports
concerning Dr. Ritchie to: The National Practitioner Data Bank; the Medical
Licensing Board of Indiana; the Indiana Professional Licensing Agency; the
Indiana State Department of Health; the Indiana Department of Insurance; the
Office of the Indiana Attorney General; any other state licensing agency; and
“any other entity to whom the Defendants feel they are obligated by law to
report the suspension or termination of privileges of staff members.” (App. at
386.)
[13] After the commencement of his lawsuit, Dr. Ritchie requested a By-Laws
hearing and provided medical records to the MEC. He also requested a
continuance of the By-Laws hearing, pending the resolution of his petition for
injunctive relief in state court. The medical records were reviewed at a third
special meeting of the MEC on December 3, 2014.
[14] The defendants filed a Motion to Dismiss the Application for Injunctive Relief
and Dissolve the Temporary Restraining Order. The trial court denied the
motion on December 1, 2014. On December 8 and 11, 2014 and on January 8,
2015, the trial court conducted evidentiary hearings on injunctive relief.
[15] On April 20, 2015, the trial court issued an order denying Dr. Ritchie’s request
for a preliminary injunction and dissolving the temporary restraining order of
November 10, 2014. The trial court concluded that Dr. Ritchie failed to
exhaust his administrative remedies available in Community’s peer review
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process, thus foreclosing a review of the likelihood of success on the merits; he
did not show requisite bad faith on the part of the peer review committee to
overcome a peer review anti-injunction statute; and he fell short of establishing
the essential elements for injunctive relief. This appeal ensued.
Discussion and Decision
Standard of Review
[16] The grant or denial of a preliminary injunction rests within the sound discretion
of the trial court, and our review is limited to whether there was a clear abuse of
that discretion. Ind. Family & Soc. Servs. Admin. v. Walgreen Co., 769 N.E.2d 158,
161 (Ind. 2002). An abuse of discretion occurs when the trial court’s decision is
against the logic and effect of the facts and circumstances before the trial court
or when the trial court misinterprets the law. Aberdeen Apartments v. Cary
Campbell Realty Alliance, Inc., 820 N.E.2d 158, 163 (Ind. Ct. App. 2005), trans.
denied. When determining whether or not to grant a preliminary injunction, the
trial court is required, pursuant to Indiana Trial Rule 52(A), to make special
findings of fact and conclusions of law. Id. When findings and conclusions of
law are made, the reviewing court must determine if the trial court’s findings
support the judgment. Id. We will reverse the judgment only when it is clearly
erroneous. Id. Findings of fact are clearly erroneous when the record lacks
evidence or reasonable inferences from the evidence to support them. Id. We
will consider the evidence only in the light most favorable to the judgment and
construe findings together liberally in favor of the judgment. Id.
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[17] Additionally, Dr. Ritchie is appealing from a negative judgment and must
therefore establish that the trial court’s judgment is contrary to law. Pinnacle
Healthcare, LLC v. Sheets, 17 N.E.3d 947, 953 (Ind. Ct. App. 2014). A judgment
is contrary to law if the evidence of record, together with the reasonable
inferences to be drawn from that evidence, is without conflict and leads
unerringly to a conclusion opposite that reached by the trial court. Id.
Analysis
[18] To obtain a preliminary injunction, the moving party bears the burden of
showing by a preponderance of the evidence each of the following: (1) the
movant’s remedies at law were inadequate, causing irreparable harm pending
resolution of the substantive action; (2) the moving party had at least a
reasonable likelihood of success at trial by establishing a prima facie case; (3)
the threatened injury outweighs the potential harm resulting from the granting
of an injunction; and (4) the public interest would not be disserved. Id. A
preliminary injunction is an extraordinary remedy that should be used only in
rare circumstances in which the law and the facts are clearly within the moving
party’s favor. Crossman Communities, Inc. v. Dean, 767 N.E.2d 1035, 1040 (Ind.
Ct. App. 2002).
[19] Additionally, Indiana’s Peer Review Act, Indiana Code Sections 34-30-15-1
through 34-30-15-23, limits the availability of injunctive relief. Indiana Code
Section 34-30-15-18 provides:
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No restraining order or injunction shall be issued against a peer
review committee or any of the personnel thereof to interfere
with the proper functions of the committee acting in good faith in
regard to evaluation of patient care as that term is defined and
limited in IC 34-6-2-44.
[20] Indiana Code Section 34-30-15-23 provides:
In all actions to which this chapter applies, good faith shall be
presumed, and malice shall be required to be proven by the
person aggrieved.
[21] Also, as the defendants point out, “[i]t is fundamental Indiana law that a party
must exhaust his administrative remedies before suit may be brought in a trial
court.” St. Joseph’s Hosp., Inc. of Ft. Wayne v. Huntington Cnty. Dep’t of Pub.
Welfare, 405 N.E.2d 627, 630 (Ind. Ct. App. 1980). Accordingly, to be entitled
to the injunctive relief requested, Dr. Ritchie first had to show that the peer
review anti-injunction provision was inapplicable and that he should be excused
from compliance with exhaustion of administrative remedies, and then he had
to establish the requisite common law elements for a grant of injunctive relief.
[22] The trial court concluded that the MEC was functioning as a peer review
committee, presumptively acting in good faith, and that Dr. Ritchie had not
proven that the MEC acted with malice. Thus, the anti-injunction provision
was applicable. Moreover, the trial court concluded that, if the anti-injunction
provision was inapplicable to some aspects of the relief sought, Dr. Ritchie
established less than all of the requisite criteria for injunctive relief. According
to the trial court, Dr. Ritchie presented evidence that irreparable harm to him
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might ensue (but, based on testimony by Community’s expert, damages for
such were calculable); a reasonable likelihood of success on the merits could not
be determined at such an early stage of proceedings; Dr. Richie’s threatened
harm outweighed the threatened harm from granting an injunction (because the
precautionary suspension removed Dr. Ritchie’s ability to practice on patients);
and the element as to public service was not established.9 Ultimately, the trial
court found “the Plaintiff is asking the Court to substitute its judgment for that
of the MEC and the doctors that it consulted with.” (App. at 85.)
[23] As for exhaustion of administrative remedies, Dr. Ritchie claims that he is
entitled to the benefit of an exception for futility, 10 because the MEC is engaging
in sham proceedings. According to Dr. Ritchie, there are hallmarks of such;
more specifically: The Cleveland Clinic reviewers had a conflict of interest
because there is a financial arrangement between Community and The
Cleveland Clinic; The Cleveland Clinic is motivated to impose its own
protocols; the reviewers acknowledged the need for more information as a
predicate to the issuance of a report with “complete perspective”; the charges
were lodged shortly after Dr. Ritchie was commended by Community reviewers
for his excellent work; and the Cleveland Clinic reviewers stopped short of
9
The trial court misstated Dr. Richie’s burden of proof as requiring him to show that a preliminary
injunction would serve the public interest, as opposed to showing that the public interest would not be
disserved.
10
See Smith v. State Lottery Comm’n, 701 N.E.2d 926, 931 (Ind. Ct. App. 1998) (recognizing an exception to
the exhaustion requirement when the remedy is inadequate or would be futile, or when some equitable
consideration precludes application of the rule).
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clearly proclaiming that the evaluated patients had been placed in danger. (Ex.
6 pg. 4.)
[24] Apparently due to a firm conviction that the peer review proceedings
surrounding the presentation of the Cleveland report were fundamentally
flawed, Dr. Ritchie’s presentation of evidence to the trial court was largely an
attack on the process. He purported to shed light on Community’s true
motivation: diversion of Dr. Ritchie’s patients and consequent financial gain.
Witnesses testified to instances in which they believed insurance considerations
or data collection took precedence over patient care considerations at
Community. Meanwhile, Dr. Ritchie was portrayed as professional, attentive,
even a lifesaver.
[25] With this background, and his insistence that professional reporting of even an
interim suspension would irreparably harm his career, Dr. Ritchie claims that
he has demonstrated the futility of continuing with the By-Laws hearing. We
acknowledge Dr. Ritchie’s frustrations with the lack of fixed time limits in the
By-Laws and his fear of damage to his professional reputation. Nonetheless,
the overwhelming majority rule is that harm to professional
reputation is not the kind of irreparable injury that forms the
basis for equitable relief. Bad publicity generated by revocation
of a license is not deemed to be the type of irreparable injury
contemplated, and injunctions have been almost uniformly
denied to professionals seeking to stop license revocation
hearings because of damage to their reputation.
Thompson v. Medical Licensing Bd., 389 N.E.2d 43, 49 (Ind. Ct. App. 1979).
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[26] Moreover, even if we agree that there is significantly more at stake than
monetary loss, we simply cannot, as a practical matter, reach a well-advised
conclusion on the limited record developed. As the trial court observed, the
lack of finality to the administrative proceedings hampers examination of the
likelihood of success on the merits of Dr. Ritchie’s multiple claims.
[27] By Dr. Ritchie’s own account, more information was needed to form a final
opinion on his compliance with an appropriate standard of patient care.
Indeed, Dr. Ritchie’s application for a temporary restraining order and
preliminary injunction asserted: “because Dr. Ritchie has a separate,
independent practice from the hospital and CPN, the Cleveland Clinic
reviewers did not review 80% of the information they needed to assess Dr.
Ritchie’s performance.” (App. at 158.) However, the By-Laws hearing (with
opportunity for Dr. Ritchie to offer information and conduct cross-
examination) was not concluded before suit and the trial court was asked to
assess merits that would predictably be impacted upon by greater inclusion of
materials. Rather than focusing on whether Dr. Ritchie was likely to prevail on
his claims, the trial court hearings focused upon alleged deficiencies of the peer
review committee. By launching an early attack on the process and members of
the peer review committee, Dr. Ritchie has diverted attention from the
provision of medical services and delayed any ultimate decision.
[28] Dr. Ritchie would suffer greater harm than would Community from
dissemination of adverse reports if Dr. Ritchie did not and does not pose a
danger to patients. The public would not be dis-served, and indeed would be
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served, by allowing a competent interventional cardiologist to exercise his skills.
However, only limited records have been examined. The focus of Dr. Richie’s
expert witness Dr. Huntoon has largely been upon whether a sham process was
in progress. Dr. Ritchie has essentially sought a determination of the adequacy
of peer review proceedings.
[29] But ultimately, the peer review proceedings – and Dr. Ritchie’s expectation of
success on the merits of his claims – concern the adequacy of care provided to
patients. Indeed, Dr. Thomas Forbes executed an affidavit in which he stated
that, “after reviewing the additional documentation from Dr. Ritchie that Drs.
Krishnaswamy and Bajzer should have reviewed before issuing their report and
the MEC should have reviewed before imposing a precautionary suspension,”
he had concluded that Dr. Ritchie “performed his professional duties
appropriately.” (App. at 528.) Noticeably, the “additional documentation”
was not submitted to the MEC in a By-Laws hearing. The By-Laws hearing is
the statutory means of reviewing the adequacy of patient care. It may be
followed by an administrative appeal. See I.C. § 34-30-15-5.
[30] As the trial court observed:
The Indiana General Assembly has specifically created statutes
entrusting the governing boards of hospitals with the “supreme
authority” to control, operate, and manage the hospital, as well
as appoint, reappoint, and assign privileges of the medical staff.
The Legislature has enacted a framework of peer review where
[a] physician’s competence, conduct, and patient care are
reviewed by other medical staff of the hospital. The Legislature
has indicated how important the peer review procedures are by
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establishing immunity for boards and their agents[.] … These
actions by the General Assembly demonstrate the important
public policy aimed at improving the quality of care within our
hospitals.
(App. at 85.) Absent malice, the peer review committee is the legislature’s
choice for dealing with these issues. Courts are ill-equipped to conduct an
independent review of patient care absent evidence from expert witnesses on the
standard of care and any countervailing evidence in opposition thereto.
Because of this limitation, state trial and appellate courts cannot serve as
substitutes for peer review committees and the aggrieved party cannot
circumvent the administrative process.
Conclusion
[31] Dr. Ritchie did not demonstrate his entitlement to extraordinary equitable
relief. Accordingly, the trial court did not clearly abuse its discretion by
denying the request for a preliminary injunction.
[32] Affirmed.
Vaidik, C.J., and Crone, J., concur.
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