Brandner v. Providence Health & Services - Washington

Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
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THE SUPREME COURT OF THE STATE OF ALASKA
MICHAEL D. BRANDNER, M.D., )
) Supreme Court No. S-15933
Appellant, )
) Superior Court No. 3AN-13-07697 CI
v. )
) OPINION
PROVIDENCE HEALTH & )
SERVICES — WASHINGTON, ) No. 7135 – November 25, 2016
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Patrick J. McKay, Judge.
Appearances: Richard W. Maki and David H. Shoup, Tindall
Bennett & Shoup, P.C., Anchorage, for Appellant. Robert J.
Dickson and Peter A. Scully, Atkinson, Conway & Gagnon,
Anchorage, for Appellee.
Before: Stowers, Chief Justice, Winfree and Bolger, Justices.
[Fabe and Maassen, Justices, not participating.]
WINFREE, Justice.
I. INTRODUCTION
Providence Alaska Medical Center terminated Dr. Michael Brandner’s
hospital privileges without notice and an opportunity to be heard after determining he
had violated hospital policy by failing to report an Alaska State Medical Board order
requiring him to undergo an evaluation of his fitness to practice medicine. Dr. Brandner
unsuccessfully challenged this action through Providence’s internal post-termination
hearing and appeal procedures. Dr. Brandner then sued in superior court, seeking
reinstatement and damages for, in relevant part, alleged due process violations both in
the procedures used and in the substantive standard applied in his termination. The
superior court ruled that Dr. Brandner’s due process rights were not violated, that he was
not entitled to reinstatement, and that under federal law Providence was entitled to
immunity from his damages claims.
We affirmthe superior court’s decision concerning the substantive standard
applied to terminate Dr. Brander; he therefore is not entitled to reinstatement or post-
termination-hearing damages. But Dr. Brandner’s due process rights were violated by
the procedures Providence employed because he was not given the required notice and
a hearing prior to the termination of his hospital privileges; we therefore reverse the
superior court’s decision on the pre-termination notice and hearing claim and its decision
that Providence had damages immunity from this claim, and we remand for further
proceedings.
II. FACTS AND PROCEEDINGS
A. Facts
Dr. Brandner had hospital privileges as a surgeon at Providence from 1995
to 2009, when he took a medical leave of absence because of a cardiac condition. He
returned to work in March 2010 and Providence reinstated his hospital privileges,
excepting hand surgery. Providence also gave Dr. Brandner a six-month exemption from
emergency call duties. In November 2010 Providence reinstated Dr. Brandner’s hand
surgery privileges after reviewing his surgical cases and finding him competent, but kept
in place the emergency call exemption.
In October 2010 the Alaska State Medical Board (State Board) ordered
Dr. Brandner to undergo psychiatric and medical evaluations after receiving a complaint
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that he had contacted someone in the Governor’s office and made a threat involving a
gun. The evaluations were part of the State Board’s investigation into Dr. Brandner’s
“ability to practice medicine in a manner consistent with public safety,” and he was
required to complete them within 45 days. The State Board’s order also stated:
Failure to comply with this order will result in the automatic
suspension of [Dr. Brandner’s] license to practice medicine
in Alaska and it will remain suspended until such time as the
evaluations are completed and the results of the evaluations
are reviewed by the [State] Board, and the [State] Board
determines Dr. Brandner is able to practice medicine in a
manner consistent with public safety.
Dr. Brandner timely complied with the order by undergoing a five-day evaluation in
early December 2010 at the Menninger Clinic in Texas. The clinic found no evidence
indicating he was unfit to practice medicine. Later in December the State Board closed
its investigation without imposing any “further investigation or disciplinary action”; it
sent Dr. Brandner confirmation of its decision in May 2011.
Doctors enjoying Providence hospital privileges are required to comply
with policies set out in the Providence Code of Conduct and Medical Staff Bylaws.
Policy MS 980-150(D) requires doctors to report to the chief of staff or the medical staff
services department manager “any limitations, restrictions[,] or conditions of any sort
imposed by a state board, health care entity[,] or agency with respect to the practitioner’s
practice . . . no later than thirty (30) days after a final order has been issued.” The policy
states that doctors who violate this reporting requirement “will be subject to an automatic
termination” of hospital privileges. Dr. Brandner did not inform Providence’s chief of
staff or medical staff services manager about the State Board order, nor did he disclose
his December 2010 evaluation at the Menninger Clinic.
Procedures for reviewing, investigating, and resolving concerns about
doctors’ clinical proficiency and professional conduct are governed by Providence policy
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MS 980-100, referred to as the Investigation, Hearing, and Appeals Plan (Fair Hearing
Plan). Under this policy the Providence Medical Staff Executive Committee (executive
committee) is responsible for overseeing doctors’ conduct. Concerns about a doctor’s
conduct are first presented to the executive committee; it then has authority to conduct
peer reviews and make recommendations to the Providence Alaska Community Ministry
Board (Providence Board) on granting, limiting, suspending, or terminating hospital
privileges. The executive committee’s recommendations generally do not by themselves
affect a doctor’s hospital privileges; the Providence Board receives the recommendation,
considers the matter independently, and makes the ultimate decision. Some hospital
policies, including the one at issue here, provide for automatic termination of hospital
privileges if a doctor engages in specified conduct. An automatic termination
recommendation triggers a process under MS 980-100 entitling the doctor to a hearing
and an appeal. After the hearing and appeal procedures are exhausted the Providence
Board’s confirmation, modification, or rejection of the hearing bodies’ recommendations
becomes Providence’s final decision.
In January 2011 the executive committee called Dr. Brandner to its monthly
meeting to discuss his emergency call duties. The executive committee was concerned
because Dr. Brandner had listed his name on the emergency call sign-up sheets despite
not yet being authorized to resume those duties. During that meeting the executive
committee was alarmed by Dr. Brandner’s “disjointed” statements. The executive
committee invited him to a second meeting in February to decide whether to investigate
his fitness to practice medicine. At the February meeting Dr. Brandner’s “rambling and
confused” conduct again raised concerns that he might not be “medically fit,” and the
executive committee ordered him to undergo a “fitness for duty” evaluation at the
Menninger Clinic.
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Kim Pakney, Providence’s medical staff services manager, called
Dr. Brandner in March to arrange the evaluation. During this call Dr. Brandner disclosed
to Pakney that he recently had been evaluated at the clinic. Pakney told Dr. Brandner
that he could either undergo another evaluation or allow the executive committee to
obtain the December 2010 evaluation records. Dr. Brandner chose to release his 2010
evaluation. According to Pakney’s later testimony, Dr. Brandner did not mention the
State Board’s order during their conversation and instead indicated he had visited the
clinic at his cardiac surgeon’s suggestion. Dr. Brandner testified that he told Pakney he
had gone to the Menninger Clinic “to pursue some things.” Only when Pakney received
Dr. Brandner’s clinic records did she realize that he had undergone the evaluation
pursuant to an order from the State Board. She immediately notified the Providence
executive committee.
At its next meeting, on June 13 — without notice to or presence by
Dr. Brandner — the executive committee voted to recommend termination of
Dr. Brandner’s hospital privileges for failure to report the State Board’s order requiring
him to submit to an evaluation. The executive committee determined that the order was
a final order imposing a condition on Dr. Brandner’s license, and that his failure to report
the order to the chief of staff or the medical staff services department manager within 30
days constituted a violation of Providence policy MS 980-150(D).
In a June 17 letter Providence’s chief executive officer notified
Dr. Brandner that the executive committee “recommended the automatic termination of
[his hospital] privileges and staff membership,” that he had the right to a hearing, and
that the Providence Board would “not be bound by the adverse recommendation made
thus far.” A few days later the Providence Board affirmed the executive committee’s
recommendation terminating Dr. Brandner’s hospital privileges. Dr. Brandner timely
requested a hearing. At oral argument before us the parties confirmed that
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Dr. Brandner’s privileges effectively were terminated June 17, before any hearing took
place, and that after that date he was not allowed to practice at Providence.
B. Proceedings
1. Providence Fair Hearing Panel proceedings
In November 2011 Dr. Brandner received a one-day hearing before a three-
doctor panel pursuant to Providence’s Fair Hearing Plan. A former superior court judge
presided as the hearing officer. Dr. Brandner was represented by an attorney, presented
evidence, cross-examined Providence’s witnesses, and testified on his own behalf.
Providence’s witnesses testified about the importance of physicians self-reporting
conditions on their licenses because of the potential impact on patient care. Dr. Brandner
argued that the State Board’s order was not a “condition” on his license within the
meaning of the Providence reporting policy. He argued instead that the order was a part
of an “investigation,” and stated that he did not believe the policy required reporting
investigations.
The panel decided that the order did impose a “condition” on
Dr. Brandner’s license because “[t]he plain language of the . . . [o]rder . . . clearly
advised Dr. Brandner that the continued viability of his license was conditioned upon his
timely completion of [] psychiatric and medical evaluations at the Menninger Clinic.”
The panel also found Dr. Brandner’s testimony regarding his interpretation of the
hospital policy “less than credible” because: (1) he testified that he attended the
Menninger Clinic to “pursue some things”; (2) Pakney testified that Dr. Brandner said
he attended the clinic because his cardiac surgeon had recommended it; and (3) it was
undisputed that Dr. Brandner actually attended the clinic because the State Board
required it.
The panel concluded that because the State Board order plainly stated
Dr. Brandner’s license would be suspended if he did not comply, a responsible,
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reasonable doctor would have reported the order or at least asked Providence for
guidance on whether the order triggered Providence’s self-reporting policy. It
unanimously upheld the executive committee’s recommendation and the Providence
Board’s decision terminating Dr. Brandner’s hospital privileges, finding that they were
“not arbitrary, capricious[,] or unsupported by substantial evidence.”
2. Providence Appellate Review Committee proceedings
Dr. Brandner timely appealed the panel’s decision to the Providence
Appellate Review Committee (review committee) pursuant to the Fair Hearing Plan. The
review committee, comprised of five members — none of whom had participated in the
earlier proceedings — convened in March 2012.
The review committee upheld the hearing panel’s decision by a 4-1 vote.
In its decision the review committee noted that Dr. Brandner’s reading of the hospital
policy regarding the scope of “condition” was “plausible” but that the review
committee’s role was not to substitute its judgment for that of the hearing panel or to re­
weigh the evidence. The review committee concluded that the hearing panel’s actions
complied with Providence’s Fair Hearing Plan, were not arbitrary or capricious, and were
supported by substantial evidence. One review committee member dissented, writing
that the State Board’s order was not a “final order” imposing “conditions” under
Providence policy MS 980-150(D) and thus did not trigger the self-reporting
requirement. The dissent expressed concern that the hospital policy was applied based
in part on Dr. Brandner’s fitness to practice and not just his failure to report the State
Board order, and it noted that the failure to self-report alone typically would not result
in automatic termination of privileges. After the review committee issued its report, the
committee chair sent the Providence Board a letter recommending clarifying MS 980­
150(D)’s language by adding some “interpretive guidance to illustrate the types of
limitations, restrictions, and conditions that are intended to be included.”
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In April 2012, after considering the hearing panel’s and the review
committee’s decisions upholding the executive committee’s recommendation, the
Providence Board affirmed the termination of Dr. Brandner’s hospital privileges.
3. Superior court proceedings
In June 2013 Dr. Brandner filed suit in superior court against Providence,
the doctors who made up the hearing panel, and the doctors on the executive committee
who testified at his hearing. Dr. Brandner alleged breach of contract, due process
violations, defamation, and other contract claims. He sought both declaratory and
injunctive relief restoring his hospital privileges and substantial money damages.
Providence and the doctors moved for summary judgment, asserting peer review
immunity under both Alaska law1 and the federal Health Care Quality Improvement Act
(HCQIA).2 Dr. Brandner opposed and cross-moved for partial summary judgment,
arguing that Providence and the doctors were not entitled to immunity under either state
or federal law and that his due process rights were violated. In February 2014 the
superior court granted summary judgment in favor of the individual doctors, concluding
that AS 18.23.020 immunized them from suit.3 The court also granted summary
1
See AS 18.23.020 (limiting review proceedings participants’ liability for
damages or other relief if their review actions were not motivated by malice, were taken
after reasonable efforts to ascertain the facts, and were taken with the reasonable belief
that they were warranted).
2
42 U.S.C. §§ 11101-11152 (2012). Congress passed HCQIA in an effort
to “restrict the ability of incompetent physicians to move from State to State without
disclosure or discovery of the physician’s previous damaging or incompetent
performance” by encouraging physicians to engage in “effective professional peer
review.” 42 U.S.C. § 11101. In pursuit of this aim the HCQIA limits damages on
professional review actions. 42 U.S.C. § 11111.
3
We later affirmed this decision in Brandner v. Bateman, concluding that
(continued...)
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judgment in Providence’s favor on Dr. Brandner’s contract claims. The court denied
Dr. Brandner’s cross-motion for summary judgment on his due process claims against
Providence.
Dr. Brandner’s due process claims were tried without a jury. The superior
court found that Dr. Brandner intentionally misled Providence by consciously hiding the
State Board order that he undergo an evaluation, and that his “blatant dishonesty” and
“lack of candor” raised substantial patient care issues. The court also concluded that
when a hospital policy requires self-reporting a condition placed on a physician’s state
license, due process does not require a pre-termination hearing for failure to report in
violation of that policy. Finally, the court concluded that Providence was entitled to
immunity under HCQIA.
Dr. Brandner appeals, arguing that: (1) Providence’s termination of his
hospital privileges without pre-termination notice or hearing is a due process violation;
(2) the post-hearing termination violated due process because it was based on an
ambiguous policy applied arbitrarily and capriciously; and (3) Providence is not entitled
to HCQIA immunity from his due process claims. Providence responds that: (1) the
automatic termination of Dr. Brandner’s hospital privileges is not a due process
violation; (2) its hospital policy is not unduly ambiguous; and (3) under HCQIA it is
immune from damages even if Dr. Brandner succeeds in his due process claims.
3
(...continued)
“the executive committee and hearing panel reasonably interpreted the policy” and
“enforced the sanction explicitly indicated in the policy.” 349 P.3d 1068, 1076 (Alaska
2015).
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III. STANDARD OF REVIEW
We review due process claims de novo, “adopting the rule of law most
persuasive in light of precedent, reason, and policy.”4 Whether the HCQIA immunizes
Providence from Dr. Brandner’s due process claims is a question of law that we also
review de novo.5
IV. DISCUSSION
A. Dr. Brandner’s Due Process Rights Were Violated When His Hospital
Privileges Were Terminated Without Pre-Termination Notice Or
Hearing.
Although the parties dispute what process was due at certain points in the
termination process, they agree that Dr. Brandner’s admitting privileges trigger some
form of due process protection.6
1. Dr. Brandner did not waive his right to a pre-termination
hearing.
Providence argues that Dr. Brandner waived his right to a pre-termination
hearing by agreeing to be bound by MS 980-150, triggering an “automatic termination”
without providing for a pre-termination hearing. The right to a pre-termination hearing,
Providence argues, may be waived if a sufficient post-termination grievance procedure
4
Alyeska Pipeline Serv. Co. v. State, Dep’t of Envtl. Conservation, 145 P.3d
561, 564 (Alaska 2006).
5
Bryan v. James E. Holmes Reg’l Med. Ctr., 33 F.3d 1318, 1332 & n.24
(11th Cir. 1994); see also Maness v. Daily, 307 P.3d 894, 900 (Alaska 2013)
(articulating the de novo standard of review in the federal qualified immunity context).
6
See Storrs v. Lutheran Hosps. & Homes Soc’y of Am., Inc., 609 P.2d 24, 28
(Alaska 1980) (holding quasi-public hospitals cannot violate due process standards in
denying staff privileges).
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is afforded.7 We previously have held that a waiver of constitutional rights must be
knowing and voluntary, and even in civil cases “courts must indulge every reasonable
presumption against their waiver.”8 And although constitutional rights are subject to
contractual waiver, such waiver must be clear.9 Courts have found clear waiver, for
example, in collective bargaining agreements representing “a reciprocal negotiation
between forces with strengths on both sides, reflecting the reconciled interests of
employer and employees, voluntarily entered into.”10 But here Dr. Brandner had not
entered into a reciprocal negotiation with Providence for his hospital privileges; the
requirement of abiding by the hospital’s policy to obtain privileges is more akin to a
contract of adhesion.
Providence cites Whitaker v. Houston County Hospital Authority to support
its proposition that a doctor can waive the right to a pre-termination hearing and, if
waived, the automatic termination of hospital privileges would not violate the doctor’s
due process right.11 But in Whitaker the doctor “expressly waive[d] any procedural due
7
See Storrs v. Municipality of Anchorage, 721 P.2d 1146, 1150 (Alaska
1986) (providing collective bargaining agreement may alter covered employees’ pre­
termination rights in limited circumstances); Antinore v. State, 371 N.Y.S.2d 213, 217
(N.Y. App. Div. 1975) (finding collective bargaining agreements made by “a reciprocal
negotiation between forces with strengths on both sides, reflecting the reconciled
interests of employer and employees, voluntarily entered into” can waive due process
rights).
8
Lynden Transp. v. State, 532 P.2d 700, 717 (Alaska 1975).
9
Bowen v. N.C. Dep’t of Human Res., 710 F.2d 1015, 1018 (4th Cir. 1983).
10
Antinore, 371 N.Y.S.2d at 217.
11
613 S.E.2d 664, 671-72 (Ga. App. 2005).
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process rights” through a contract entered into directly with the hospital.12 Here neither
Providence policy MS 980-150 nor the document Dr. Brandner signed for his 2009
reinstatement at the hospital specifically mentioned waiving due process rights. Thus
there is no evidence of a “conspicuous and unequivocal” intent by Dr. Brandner to waive
his right to a pre-termination hearing. The superior court rejected Providence’s waiver
argument, finding “no language in [Dr. Brandner’s application for privileges] referencing
a general right to due process or dealing specifically with a physician’s right to . . . a pre­
termination hearing in professional review actions.”
Like the superior court, we conclude that Dr. Brandner did not knowingly
and clearly waive his due process rights merely by signing his reappointment application
for hospital privileges. Thus Dr. Brandner maintained a protected property interest in
his hospital privileges subject to due process if terminated.
2. Due process required that Dr. Brandner receive notice and an
opportunity to be heard prior to the termination of his hospital
privileges.
Dr. Brandner contends that due process requires a hearing before
deprivation of a constitutionally protected property interest in employment.13 “We have
consistently held that before the state may deprive a person of a protected property
interest there must be a hearing . . . .”14 The only exceptions to this pre-termination
hearing requirement are in emergency situations or when “public health, safety, or
12
Id. at 667.
13
See City of N. Pole v. Zabek, 934 P.2d 1292, 1297 (Alaska 1997).
14
Graham v. State, 633 P.2d 211, 216 (Alaska 1981) (first citing Etheredge
v. Bradley, 502 P.2d 146 (Alaska 1972); then citing Frontier Saloon, Inc. v. Alcoholic
Beverage Control Bd., 524 P.2d 657 (Alaska 1974)).
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welfare require[s] summary action.”15 Other courts have agreed that medical staff
privileges are a valuable property interest and that notice and hearing should precede
termination of these privileges absent an “extraordinary situation where a valid
government or medical interest is at stake.”16
Providence argues that Dr. Brandner was not entitled to a pre-termination
hearing because the Providence policy contains explicit language that a violation of
MS 980-150(D) results in “an automatic termination” and because of “Providence’s
compelling interest” in ensuring patient safety and the highest quality in medical care.
Providence contends that Dr. Brandner received all the process to which he was entitled
because: (1) he had full and fair opportunity to make his arguments to a neutral hearing
panel; (2) he had full and fair opportunity to appeal the hearing panel recommendation
to a separate, neutral review committee and to the Providence Board, and both upheld
the hearing panel’s decision; and (3) Providence followed the policies and procedures
Dr. Brandner had agreed to abide by. But Providence’s procedures after terminating a
doctor’s privileges do not remedy its failure to provide procedures before termination.
We previously confirmed the importance of a hearing before suspending
or terminating a doctor’s staff privileges because summary action amounts to “a stigma
of medical incompetence” affecting the doctor’s ability to maintain income and
reputation, both during the period between the deprivation of privileges and a hearing
as well as after the hearing.17 This stigma is compounded because federal law now
15
Id. (quoting Frontier Saloon, 524 P.2d at 661).
16
Ne. Ga. Radiological Assocs., P.C. v. Tidwell, 670 F.2d 507, 511 (5th Cir.
Unit B 1982); accord Shahewy v. Harrison, 875 F.2d 1529, 1533-34 (11th Cir. 1989);
Osuagwu v. Gila Reg’l Med. Ctr., 850 F. Supp. 2d 1216, 1223 (D.N.M. 2012).
17
McMillan v. Anchorage Cmty. Hosp., 646 P.2d 857, 864 (Alaska 1982).
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requires that all terminations be reported to a national data bank.18 Acknowledging the
competing interests between a doctor’s capacity to maintain employment and a health
care entity’s interest in maintaining safe and qualified patient care, we have previously
held that terminating hospital privileges before a hearing is “justified only where there
is evidence that a physician’s conduct poses a realistic or recognizable threat to patient
care which would require immediate action by the hospital.”19
Providence contends that Dr. Brandner’s deceitfulness posed a realistic or
recognizable threat to patient care; when a physician is dishonest and actively conceals
licensing conditions, a hospital cannot address the undisclosed problems because it
“simply does not know what it does not know” and thus cannot assess whether there
might be a “realistic and recognizable threat” to patient care. Providence maintains, as
a patient safety matter, that physicians must comply with Providence’s self-reporting
policy and that failure to do so is “cause for deep concern.”
Providence has a policy expressly authorizing an immediately effective
“precautionary suspension” when a doctor presents an imminent danger to the health or
safety of an individual or to the hospital’s orderly operations, but this was not the policy
followed when terminating Dr. Brandner’s privileges. As Pakney noted at the November
2011 hearing, there was no precautionary suspension because there was no determination
that Dr. Brandner was an imminent danger to health or public safety. The executive
committee was aware that the Menninger Clinic had evaluated Dr. Brandner and found
he was fit to practice. Although this evaluation might not have considered other factors
bearing on whether Dr. Brandner was an imminent threat to patient care, it is relevant to
whether Providence actually terminated Dr. Brandner because it found that he posed a
18
42 U.S.C. §§ 11133, 11136; 45 C.F.R. § 60.1 (2013).
19
McMillan, 646 P.2d at 866.
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threat to patient care. And the June 17, 2011 letter notifying Dr. Brandner of the
executive committee’s recommendation that his privileges be terminated made no
mention of patient safety concerns.
It is possible, as Providence argues, that a physician’s dishonesty might in
some circumstances be sufficient cause for emergency termination. But here this
speculative possibility — raised as a post hoc rationalization rather than a demonstrated
contemporaneous concern in Dr. Brandner’s case — does not rise to the level of a
“realistic or recognizable threat” requiring an emergency termination of hospital
privileges. We therefore disagree with the superior court and conclude that Providence
violated Dr. Brandner’s right to due process by terminating his hospital privileges
without pre-termination notice and hearing.
B. Dr. Brandner’s Due Process Rights Were Not Violated Through
Arbitrary And Capricious Application Of An Ambiguous Hospital
Policy.
Dr. Brandner further claims that his due process rights were violated
because Providence policy MS 980-150(D) is vague and ambiguous, and that Providence
terminated his privileges in an arbitrary and capricious manner without regard to his
reasonable policy interpretation or to whether terminating his hospital privileges was
commensurate with the harm caused by breaching the policy.
Although we do not interfere with hospital policy determining the medical
training and experience necessary to qualify for hospital privileges, courts may determine
whether a hospital has followed its own policies and whether a decision regarding
hospital privileges was made in accordance with basic principles of fairness and due
process of law.20 These principles require that: (1) the procedures employed are fair;
(2) the standards are reasonable; and (3) the standards have not been applied in an
20
Kiester v. Humana Hosp. Alaska, Inc., 843 P.2d 1219, 1223 (Alaska 1992).
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arbitrary and capricious manner.21 Due process further requires that “criteria established
for granting or denying privileges not be vague and ambiguous, and that as established,
they be applied objectively.”22 “A statute, rule, or policy may be deemed impermissibly
vague for either of two discrete reasons: It fails to provide people of ordinary
intelligence a reasonable opportunity or fair notice to understand what conduct it
prohibits; or, it authorizes or encourages arbitrary and discriminatory enforcement.”23
Accordingly the inquiry before us is not whose policy interpretation is more reasonable,
but whether the policy itself is so vague or ambiguous that it is susceptible to an arbitrary
and capricious application.
1. The policy’s application was clear.
The superior court concluded that Providence policy MS 980-150 is “clear
enough.” Dr. Brandner nonetheless contends that he found it ambiguous because its key
terms could be interpreted differently by reference to state law. MS 980-150’s operative
provision requires doctors to report to Providence “any limitations, restrictions, or
conditions of any sort imposed by a state board, health care entity or agency with respect
to the practitioner’s practice.” Dr. Brandner argues that state law does not construe the
State Board’s order as a “disciplinary action” or a “condition,” because such actions
would have required that the State Board hold a hearing and none occurred in his case.24
21
Id.22
Id. at 1225.
23
Roberts v. Titus Cty. Mem’l Hosp., 129 Fed. Appx. 82, 86 (5th Cir. 2005)
(citing Chicago v. Morales, 527 U.S. 41, 56-57 (1999)).
24
See AS 08.64.326(a) (requiring a hearing before imposing sanctions);
AS 08.64.331(a)(6) (describing sanctions State Board may impose, including “limitations
or conditions on the practice of a licensee”). Dr. Brandner’s argument rests on the theory
(continued...)
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Thus Dr. Brandner argues that under state law his practice was never limited in any way
and that he cannot be faulted for his interpretation, especially when the State Board
investigator had confirmed in his case’s proceedings that his license “was not
conditioned, limited, or restricted by the [State] Board.”
Surviving a vagueness challenge requires “fair notice” of what is and what
is not prohibited.25 And here the superior court found that Dr. Brandner had more than
“fair notice” of what MS 980-150 required; he had actual knowledge that the policy
required him to report the conditions the State Board placed on his license. The superior
court found that Dr. Brandner knew the self-reporting policy applied to his circumstances
and knew he had an obligation to report the conditions placed on his license, and thus he
knowingly violated the policy. Dr. Brandner does not challenge that finding. We
therefore affirm the superior court’s determination that the policy’s application was clear
to Dr. Brandner.
24
(...continued)
that Providence must interpret the word “conditions” in MS 980-150 exactly, and only,
as the word is used by the State Board in AS 08.64.331(a). We find this argument
unpersuasive — “limitations” and “conditions” do not necessarily have the same
meaning under MS 980-150, a Providence hospital policy, as they do under
AS 08.64.331(a)(6), a statute setting out State Board procedures. And the hospital policy
does not mention the statute.
25
Roberts, 129 Fed. Appx. at 86; see Gottschalk v. State, 575 P.2d 289, 290
(Alaska 1978).
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2. The policy was not applied arbitrarily or capriciously.26
When concerns are raised about a hospital policy giving enforcing
authorities excessive discretion, the policy should not be found impermissibly vague
absent evidence that it has been arbitrarily applied.27 And on the facts of this case, the
hospital policy was not arbitrarily or capriciously applied. Dr. Brandner suggests that
the ambiguity of the policy allowed Providence to enforce it in an arbitrary and
capricious manner. As evidence that Providence had impermissibly broadened the scope
of the policy and enforced it in an arbitrary and capricious manner, he points to
testimony before the hearing panel from an executive committee member who took the
view that the policy required reporting “investigations.” Dr. Brandner’s argument has
no merit. The executive committee member’s testimony did not persuade the hearing
panel to conclude that investigations, as well as limitations, restrictions, and conditions,
must be reported. The hearing panel in fact concluded that Dr. Brandner’s hospital
privileges were terminated because of his failure to report a “condition” the State Board
imposed on his license, not because of his failure to report an investigation.
Dr. Brandner also points to the superior court’s consideration of his other
conduct violations as evidence that MS 980-150 is ambiguous about what constitutes a
“condition,” arguing that the policy’s fundamental ambiguity allowed it to be applied
arbitrarily. Specifically, Dr. Brandner argues that it was improper for the superior court
to consider the fact that he signed up for emergency call duty when he was restricted
26
See Roberts, 129 Fed. Appx. at 86 (holding a rule may be deemed
impermissibly vague if “it authorizes or encourages arbitrary and discriminatory
enforcement” (citing Chicago v. Morales, 527 U.S. 41, 56-57(1999))); see also Morales,
527 U.S. at 60 (defining an arbitrary and discriminatory application as one that
“necessarily entrusts lawmaking to the moment-to-moment judgment” of the enforcer).
27
See Stock v. State, 526 P.2d 3, 8, 12 (Alaska 1974).
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from doing so. But the superior court stated that Dr. Brandner’s alleged misconduct was
not the basis for the Providence executive committee’s recommendation to terminate his
privileges and that the hearing panel gave the misconduct evidence “no weight” in
upholding the decision. We therefore affirm the superior court’s determination that the
policy was not applied arbitrarily or capriciously.
3. There is no history of arbitrary and capricious application.
In the context of due process challenges to statutes and regulations, we will
not invalidate a statute for vagueness absent “a history or pattern of arbitrary
enforcement.”28 Although we do not need to consider whether this standard is applicable
beyond that context, we nevertheless note that Dr. Brandner failed to identify a pattern
of Providence arbitrarily enforcing MS 980-150. And the Providence review committee,
in its letter to the Providence Board recommending review of the policy, wrote that the
review committee had no reason to believe Providence had interpreted MS 980-150(D)
differently for different physicians in the past or was likely to do so in the future.
4. Summary
Because Providence policy MS 980-150 was not vague or ambiguous with
respect to Dr. Brandner or on its face, and because it was not applied in an arbitrary and
capricious manner to Dr. Brandner or historically, we cannot conclude that Providence
applying the policy in terminating Dr. Brandner’s hospital privileges violated his due
process rights. Dr. Brandner therefore is not entitled to reinstatement or post-
termination-hearing damages.
28
Storrs v. State Med. Bd., 664 P.2d 547, 552 (Alaska 1983) (refusing to
invalidate a statute when the defendant physician could not identify any instances of
arbitrary enforcement by the State Board); see also Stock, 526 P.2d at 12 (“While we
may be able to conceive of instances in which the statute could be arbitrarily and
capriciously enforced, we cannot on the basis of such mere hypothesis, in the absence
of any history of actual arbitrary application, invalidate the statute.”).
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C. Providence Does Not Qualify For HCQIA Immunity With Respect To
The Termination Of Dr. Brandner’s Privileges Without Notice And A
Hearing.
Congress enacted HCQIA to improve the quality of health care and reduce
the number of incompetent physicians.29 Congress determined that both goals could be
attained through “effective professional peer review.”30 Accordingly HCQIA eliminates
some deterrents to effective professional peer review of physician competence by
providing immunity from damages to “professional review bodies” and individuals
acting in support of those bodies.31 Immunity under the act covers only liability for
damages; it does not shield covered defendants from lawsuit or from other forms of
relief.32
For HCQIA to immunize Providence from damages resulting from a
professional review action, the hospital must satisfy all four elements set forth in
42 U.S.C. § 11112(a), providing:
For purposes of the protection set forth in section 11111(a) of
this title, a professional review action must be taken —
(1) in the reasonable belief that the action was in the
furtherance of quality health care,
29
See 42 U.S.C. § 11101.
30
Id.31
See id. § 11111(a)(1)-(2); see also 42 U.S.C. § 11151(11) (defining
“professional review body” as “health care entity”), § 11151(4)(A) (defining “health care
entity” as licensed hospital); Decker v. IHC Hosps., Inc., 982 F.2d 433, 436 (10th Cir.
1992) (exploring scope of immunity provided by § 11111(a)).
32
42 U.S.C. § 11111(a)(1) (specifying immunity from damages only and not
mentioning other relief); Singh v. Blue Cross/Blue Shield of Mass., Inc., 308 F.3d 25, 35
(1st Cir. 2002).
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(2) after a reasonable effort to obtain the facts of the
matter,
(3) after adequate notice and hearing procedures are
afforded to the physician involved or after such other
procedures as are fair to the physician under the
circumstances, and
(4) in the reasonable belief that the action was
warranted by the facts known after such reasonable
effort to obtain facts and after meeting the requirement
of paragraph (3).
A professional review action shall be presumed to have met
the preceding standards necessary for the protection set out
in section 11111(a) of this title unless the presumption is
rebutted by a preponderance of the evidence.[33]
Federal courts have granted hospitals immunity under the Act when they clearly establish
that “a full and fair peer review process was used” in connection with denying hospital
privileges to a physician.34 Under HCQIA “a professional review body (including a
hospital), its members, its staff, and others under contract with it are immune from
damages liability with respect to the body’s actions.”35 Here there is no dispute that
Providence is a “health care entity” contemplated by HCQIA,36 and its claim for
protection arose from a peer review process for the purpose of furthering quality
33
42 U.S.C. § 11112(a).
34
Ezekwo v. Am. Bd. of Internal Med., 18 F. Supp. 2d 271, 277 (S.D.N.Y.
1998), aff’d 174 F.3d 844 (2d Cir. 1999).
35
Sobel v. United States, 571 F. Supp. 2d 1222, 1229 (D. Kan. 2008); see also
Rodgers v. Columbia/HCA of Cent. La., Inc., 971 F. Supp. 229, 233 (W.D. La. 1997)
(finding the hospital immune because it is a health care entity engaged in a professional
review activity).
36
See 42 U.S.C. § 11151(4)(A)(ii) (using the term “health care entity” to
describe an organization like Providence).
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healthcare. Dr. Brandner argues that Providence did not satisfy the notice and hearing
prerequisite for immunity because he was not given notice or hearing prior to his
termination.37
Dr. Brandner’s rebuttal of Providence’s HCQIA immunity presumption
focuses on § 11112(a)(3), requiring that a professional review action be taken “after
adequate notice and hearing procedures are afforded to the physician involved or after
such other procedures as are fair to the physician under the circumstances.” The superior
court found Providence met § 11112(a)(3)’s requirement by providing Dr. Brandner
“post-suspension, but pre-termination” fair hearing. But Dr. Brandner contends
Providence did not provide him “adequate notice and hearing procedures” prior to
terminating his hospital privileges, and thus HCQIA immunity cannot attach to
Providence’s initial termination action.
Providence claims that prior to its terminating Dr. Brandner’s hospital
privileges he had waived his right to notice and hearing because he had agreed to be
bound by hospital bylaws. But waivers cannot release a hospital from HCQIA
requirements to achieve immunity. A Colorado Court of Appeals case is instructive. In
Peper v. St. Mary’s Hospital & Medical Center a hospital took final action adverse to a
doctor without providing notice that his conduct was under review.38 The hospital gave
“no opportunity to be heard before revoking his privileges and reporting him to the state
medical board and the national data bank,” and it never claimed any health emergency
requiring the immediate suspension of his privileges.39 The hospital argued that because
the doctor had agreed to be bound by its bylaws and because the bylaws did not provide
37
See id. § 11112(a)(3), (b).
38
207 P.3d 881, 888 (Colo. App. 2008).
39
Id.-22- 7135
for notice and hearing prior to a final decision, the hospital had adequately met HCQIA’s
notice and hearing requirement.40 But the court disagreed, holding that a hospital’s
compliance with its bylaws may nonetheless be insufficient as a matter of law to meet
HCQIA immunity requirements.41 Immunity attaches when the professional review
action satisfies HCQIA requirements, regardless of the hospital’s own procedures.42
Signing hospital bylaws did not waive the doctor’s right to adequate notice and hearing
under HCQIA statutory provisions.43 The court concluded that the hospital failed to
provide the doctor adequate notice and hearing under § 11112(a)(3), and thus it denied
the hospital HCQIA immunity from the doctor’s claims.44
The facts here are similar. Providence did not provide notice and hearing
to Dr. Brandner before the executive committee considered and recommended
terminating his hospital privileges at its June 13, 2011 committee meeting. Although
notice, a hearing, and an appeal took place after the actual June 17 termination of
Dr. Brandner’s privileges, these procedures are insufficient to satisfy § 11112(a)(3)’s
requirement that adequate notice and hearing procedures must be afforded to the
physician before the professional review action is taken. Providence could have
provided some kind of notice and an opportunity for Dr. Brandner to be heard before
June 17, 2011, but it did not.
40
Id. at 884, 888.
41
Id. at 888.
42
Id. at 889.
43
Id. at 888.
44
Id. at 886-89.
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Providence asserts that it nevertheless met § 11112(a)(3)’s requirements
because Dr. Brandner was afforded “other procedures as are fair” under the
circumstances when he received a hearing and an appeal after the termination of his
privileges. But HCQIA specifies that a professional review action must be taken “after
such other procedures as are fair to the physician under the circumstances.”45 The
professional review action at issue is the June 17, 2011 termination of Dr. Brandner’s
hospital privileges. This action took place before the hearing panel and the review
committee proceedings. As in Peper, Dr. Brandner did not waive his right to the
adequate notice and hearing required under HCQIA.46 Thus the hearing and the appeal
provided after the termination cannot be construed as “other . . . fair” procedures
satisfying § 11112(a)(3)’s notice and hearing requirement. And Providence conceded
at oral argument that if it had violated Dr. Brandner’s due process rights in this context
it was not entitled to HCQIA immunity. Accordingly, Dr. Brandner rebutted the
presumption that this element of the four statutory requirements was met.
We therefore reverse the superior court’s conclusion that HCQIA immunity
applies to the due process violation arising from terminating Dr. Brandner’s hospital
privileges without proper notice and opportunity to be heard.47 We remand for further
proceedings on Dr. Brandner’s claim for damages with respect to this due process
violation.48
45
42 U.S.C. § 11112(a)(3) (emphasis added).
46
See Peper, 207 P.3d at 889.
47
Because of this decision we do not need to address other HCQIA issues
Dr. Brandner raised on appeal.
48
See City of N. Pole v. Zabek, 934 P.2d 1292, 1299 (Alaska 1997) (awarding
damages for period between wrongful termination and curative post-termination
(continued...)
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V. CONCLUSION
We AFFIRM the superior court’s termination claim decision; we
REVERSE the pre-termination notice claim decision and REMAND to the superior court
for further proceedings consistent with this decision.
48
(...continued)
hearing).
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