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MATHEWS v. LANCASTER GEN. HOSP.

May 4, 1995

ROBERT S. MATHEWS, M.D., Plaintiff,
v.
LANCASTER GENERAL HOSPITAL, LANCASTER GENERAL HOSPITAL FOUNDATION, COLUMBIA HOSPITAL, COLUMBIA HOSPITAL FOUNDATION, GERALD W. ROTHACKER, JR., M.D., THOMAS R. WESTPHAL, M.D., JOHN H. SHERTZER, J. PAUL LYET, M.D., JAMES P. ARGIRES, M.D., HUGH H. HOKE, JR., M.D., Defendants. ROBERT S. MATHEWS, M.D., Plaintiff, v. ORTHOPEDIC ASSOCIATES OF LANCASTER, Defendant.



The opinion of the court was delivered by: FRANKLIN S. VAN ANTWERPEN

 VAN ANTWERPEN, J.

 May 4, 1995

 These consolidated actions stem from a physician peer review proceeding which eventually led to a curtailment of plaintiff's surgical privileges at the defendant hospitals. The Complaints in both cases allege a conspiracy in restraint of trade in violation of section one of the Sherman Act, 15 U.S.C. § 1, as well as various state law claims. Currently before the court are all defendants' motions for summary judgment. We have subject matter jurisdiction over the antitrust claims pursuant to 28 U.S.C. §§ 1331 and 1337, and 15 U.S.C. §§ 4, 15, and 26 and supplemental jurisdiction over the state claims pursuant to 28 U.S.C. § 1367. *fn1"

 I. FACTUAL BACKGROUND

 No party disputes the following facts.

 A. The parties

 Plaintiff Robert S. Mathews, M.D. is an orthopedic surgeon who specializes in spine trauma and spine diseases. Since 1988, Dr. Mathews has been a corporate partner with another orthopedic surgeon, George M. Kent, M.D., who also performs spine surgery. Dr. Kent is not a party to this suit.

 Dr. Mathews has had active staff privileges at LGH since 1973. His office at 554 North Duke Street is directly across the street from LGH. Dr. Mathews' first association with Columbia occurred in April of 1992, when he was granted temporary privileges there in the Division of Surgery, Orthopedics.

 The six individual physician defendants, Drs. Rothacker, Westphal, Shertzer, Lyet, Argires, and Hoke, are four orthopedic surgeons, a neurosurgeon, and a radiologist, respectively. Drs. Shertzer and Argires are members of LGH's Board of Directors ("the LGH Board"). Dr. Hoke is an ex-officio member of the LGH Board.

 Defendant Orthopedic Associates of Lancaster ("OAL") is a professional corporation located in Lancaster, Pennsylvania. OAL is an orthopedic surgery group which practices at LGH. Drs. Rothacker, Westphal, and Shertzer practice with OAL and are shareholders of the corporation.

 B. The December 1989 incident and investigation

 The chain of events that eventually led to the filing of this lawsuit began on December 27, 1989. That morning, Dr. Kent was performing spinal surgery on a patient at LGH. Dr. Mathews was listed as co-surgeon for the operation. During the procedure, a high-speed drill slipped, causing damage to the patient's esophagus. Dr. Kent attempted to repair the esophagus, but did not seek assistance or a consultation regarding the damage done. According to Dr. Kent, Dr. Mathews was not present in the room at the time of the incident, at least not until after the repair of the esophagal tear had been completed. Later that day, the patient experienced severe problems and had to undergo a second, emergency surgery to repair the tear.

 As a result of these complications, Dr. Kent was suspended for five days, and an Ad Hoc Committee was appointed to investigate the incident. Defendant Hugh H. Hoke, Jr., M.D. was chosen to be the chairman of the committee, which consisted of several other physicians who are not parties to this action ("the Hoke Committee"). After a five-day investigation, the Hoke Committee concluded that Dr. Kent had acted inappropriately by virtue of his failure to seek a consultation once harm had been done to the patient's esophagus. In a report dated January 4, 1990, the committee recommended that "a focused review of all Dr. Kent's cases should be performed by the Quality Assurance Committee of the Department of Surgery for a period of six months."

 The Hoke Committee's report was forwarded to Dr. Kent on the same day it was issued. In response, by way of a letter dated January 5, 1990, Dr. Kent made minor modifications to the report and indicated his agreement with the recommended corrective action, including the focused review of his cases.

 Although recognizing that plaintiff Dr. Mathews may not have been in the operating room during the events in question, in its report the Hoke Committee concluded that as co-surgeon, he bore "some responsibility for the incident." On January 5, 1990, Mr. Michael Young, LGH's Chief Executive Officer, wrote Dr. Mathews a letter informing him of this conclusion.

 C. LGH's focused review of Dr. Kent's cases

 In accordance with the Hoke Committee's recommendation, a focused review of Dr. Kent's cases was indeed performed. However, for reasons that are disputed, the review was not performed by the Quality Assurance Committee of the Department of Surgery as suggested in the report. Rather, it was performed by a second Ad Hoc Committee selected by defendant Department of Surgery Chairman Gerald W. Rothacker, Jr., M.D., and composed of himself and two other board certified orthopedic surgeons, defendants Thomas R. Westphal, M.D. and J. Paul Lyet, M.D. ("the Rothacker Committee").

 The Rothacker Committee reviewed surgical cases covering a period from January 1990 to June 1990 and involving Dr. Kent as either the primary or assisting surgeon. The committee's review encompassed 208 cases and took approximately two years, beginning sometime in March of 1990. At the end of the review, the committee concluded that 27 of the 208 cases evidenced a substandard level of care.

 During the course of its focused review of Dr. Kent, the Rothacker Committee discovered that the medical records in almost every case reviewed identified plaintiff Dr. Mathews as participating in the surgery in some capacity. In particular, it was discovered that 23 of the 27 cases which were found not to meet the standard of care involved spine surgery, and that Dr. Mathews was the primary surgeon in each of those cases.

 Dr. Rothacker reported the findings of the committee by way of a March 19, 1992 letter to then-President of the LGH Medical and Dental Staff Robert P. Johnson, M.D. and a report to the Executive Committee of the Medical and Dental Staff on April 6, 1992. The letter recommended that the 27 files rated substandard by the committee be sent to an outside agency for further review and stated that "if this agency agrees that these cases were not managed in an acceptable fashion, a restriction of privileges would be indicated." Attached to the letter was a list of the cases at issue, with comments as to each.

 Both Dr. Kent and Dr. Mathews were sent copies of Dr. Rothacker's March 19th letter. Subsequently, in a letter dated April 30, 1992, Dr. Johnson wrote to Dr. Mathews, informing him that the review of Dr. Kent's cases had included a review of his work and that the Medical and Dental Staff Executive Committee was going to have an outside consultant review the cases in question. Attached to this letter was a copy of the minutes of the April 6, 1992 meeting of the Executive Committee. The minutes also indicated that the review of Dr. Kent had involved a review of Dr. Mathews' work, and stated that review by an outside review agency "may result in a recommendation regarding Dr. Mathews' clinical privileges."

 D. The independent review

 LGH retained the American Medico-Legal Foundation to select an independent consultant to review the cases deemed substandard by the Rothacker Committee. The Foundation chose Philip D. Wilson, Jr., M.D. of Cornell Medical College.

 Drs. Kent and Mathews were given an opportunity to submit to Dr. Wilson additional information regarding the medical files selected for review, and both submitted some supplementary materials. On March 18, 1993, after reviewing all the information submitted by LGH and Drs. Mathews and Kent, Dr. Wilson issued a report concluding that the quality of care rendered by Drs. Mathews and Kent was inadequate and below acceptable standards in several respects. Dr. Wilson recommended that both doctors' privileges to perform spine surgery be restricted until they were able to "demonstrate a renewed and updated understanding of present day principles and practice of this type of surgery."

 By letter of May 10, 1993 from LGH CEO Mr. Young, Dr. Mathews was informed of Dr. Wilson's conclusions and furnished with a copy of his report.

 E. LGH's restriction of Dr. Mathews' privileges

 On July 29, 1993, Dr. Mathews sent LGH his 1994-95 staff privileges application. For reasons that remain in dispute, in his application Dr. Mathews did not request privileges to perform spine surgery. Also, a letter accompanying the application and addressed to Dr. Hoke stated that "voluntarily I plan to stop doing spinal surgery for medical reasons at Lancaster General Hospital." On November 17, 1993, the LGH Board of Directors granted plaintiff's 1994-95 privileges as requested, i.e., without spine surgery privileges.

 Dr. Mathews was notified of the Board's decision by a letter from Mr. Young dated September 22, 1993. The letter also advised Mathews of the reasons for the proposed restrictions and of his right under the LGH Medical Staff Bylaws to a fair hearing regarding the proposed action. On October 26, 1993, Mathews made a timely request for such a hearing. Subsequently, the Board voted not to impose any restrictions until the fair hearing could be held. The hearing had not yet been scheduled when the first of these two consolidated actions was filed on December 15, 1993, and to date no such hearing has taken place.

 F. Dr. Mathews' staff privileges at Columbia

 Also during the period when the above events were taking place, plaintiff for the first time applied for surgical privileges at defendant Columbia. Effective April 22, 1992, Columbia granted Dr. Mathews "temporary privileges" there in the Division of Surgery, Orthopedics. These privileges were scheduled to expire on September 30, 1992. Approximately two weeks before the expiration date, Columbia's Board of Trustees approved the Medical Staff's recommendation that Dr. Mathews be granted "provisional courtesy privileges" in the Division of Surgery, Orthopedics. As set out in Columbia's Bylaws, all initial appointments to the medical staff are "provisional" for a period of twelve months. On September 15, 1992, Mr. Robert Katana, president and CEO of Columbia Hospital, wrote to Dr. Mathews, informing him of the Board of Trustees' decision.

 Near the end of the twelve month "provisional" period, on August 25, 1993, Columbia's Credentials Committee recommended to Columbia's Medical Executive Committee and its Board of Trustees that Dr. Mathews' status change from "provisional courtesy privileges" to "courtesy privileges" in the Division of Surgery, Orthopedics. The Board of Trustees approved this change on September 13, 1993, and on September 16, 1993 Mr. Katana sent Dr. Mathews a letter informing him of the lifting of his provisional status.

 Meanwhile, Dr. Mathews had submitted a reappointment application to have his privileges renewed for the next year beginning January 1, 1994, as was normal procedure under Columbia's Bylaws. Although Dr. Mathews submitted his reappointment application prior to the September 1, 1993 deadline, on September 24, 1993 Mr. Katana discovered that the application was not complete because it did not include a reappointment reference from LGH. Columbia requires all staff physicians to submit completed reappointment references from any other hospitals where they exercise privileges.

 Despite repeated efforts, Columbia was unable to obtain LGH's completed reappointment reference from either Dr. Mathews' office or directly from LGH. Accordingly, on November 10, 1993, Mr. Katana wrote to Dr. Mathews informing him that his reappointment application was incomplete and that his courtesy staff privileges would therefore automatically expire on December 31, 1993. Mr. Katana also informed Dr. Mathews that he could reapply for those privileges in accordance with the procedures set out in Columbia's Bylaws.

 Dr. Mathews never submitted the reappointment reference from LGH, and his courtesy staff privileges at Columbia expired on December 31, 1993. After that date, however, Columbia again granted Dr. Mathews "temporary privileges," which he continues to exercise.

 G. Procedural history

 All defendants moved for summary judgment in late 1994. On December 1, 1994, the court denied defendants' motions for administrative purposes in order to allow plaintiff an additional discovery period of 60 days which he had requested. After the 60-day period, each defendant renewed its motion for summary judgment, and plaintiff renewed its responses to those motions and submitted a supplementary memorandum addressing materials uncovered during the additional discovery period. It is these summary judgment motions which are currently before the court.

 II. STANDARD OF REVIEW

 Rule 56(c) of the Federal Rules of Civil Procedure provides for summary judgment where the

 
pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.

 "The party moving for summary judgment must demonstrate that, under the undisputed facts, the non-movant has failed to introduce evidence supporting a necessary element of his case." In Re Phillips Petroleum Sec. Litig., 881 F.2d 1236, 1243 (3d Cir. 1989). To defeat summary judgment, the non-moving party must respond with facts of record that contradict the facts identified by the movant and may not rest on mere denials. See Celotex Corp. v. Catrett, 477 U.S. 317, 321 n.3, 106 S. Ct. 2548, 2552 n.3, 91 L. Ed. 2d 265 (1986) (quoting Fed. R. Civ. P. 56(e)); see also First Nat'l Bank v. Lincoln Nat'l Life Ins. Co., 824 F.2d 277, 282 (3d Cir. 1987). The non-moving party must demonstrate the existence of evidence that would support a jury finding in its favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S. Ct. 2505, 2510-11, 91 L. Ed. 2d 202 (1986). "A non-movant's burden in defending against summary judgment in an antitrust case is no different than in any other case." Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert. denied, 122 L. Ed. 2d 659, 113 S. Ct. 1262 (1993).

 III. DISCUSSION

 A. HCQIA Immunity

 Defendants, except for Columbia and Columbia Foundation, contend that they are entitled to immunity under the Health Care Quality Improvement Act ("the HCQIA" or "the Act"), 42 U.S.C. § 11101-11152 (West Supp. 1994). The HCQIA is intended to "provide incentive and protection for physicians engaging in effective professional review" by immunizing them from money damages liability in connection with such proceedings. 42 U.S.C. §§ 11101(5), 11111. It was enacted in part as a response to Congress' finding that "the threat of private money damage liability . . . unreasonably discourages physicians from participating in effective professional peer review." 42 U.S.C. § 11101(4). The Act "essentially immunizes peer review action from liability if the action was taken 'in the reasonable belief that [it] was in furtherance of quality health care.' § 11112(a)." Patrick v. Burget, 486 U.S. 94, 105 n.8, 108 S. Ct. 1658, 1665 n.8, 100 L. Ed. 2d 83 (1988).

 More specifically, to qualify for immunity under the HCQIA, a "professional review action" must be taken:

 
(1) in the reasonable belief that the action was in the furtherance of quality health care,
 
(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 the facts and after meeting the requirements of paragraph (3).

 42 U.S.C. § 11112(a). If a "professional review action" meets all of these standards, then any party covered by the Act "shall not be liable in damages . . . with respect to the action." Id. at § 11111(a)(1).

 1. Which parties are covered by the HCQIA?

 We note that no party has addressed the issue of whether the defendants claiming immunity are persons or entities to whom the protections of HCQIA would extend, provided that the peer review process met the Act's standards. The Act provides protection to:

 
(A) the professional review body,
 
(B) any person acting as a member or staff to the body,
 
(C) any person under a contract or other formal agreement with the body, and
 
(D) any person who participates with or assists the body with respect to the action.

 42 U.S.C. § 11111(a)(1). The term "professional review body" includes "a health care entity and the governing body or any committee of a health care entity which conducts professional review activity." Id. at § 11151(11). "[A] hospital that is licensed to provide health care services by the State in which it is located" is considered a "health care entity." Id. at 11151(4)(A)(i).

 Guided by these definitions, it is clear that LGH and the individual physician defendants all fall within the protected categories listed in section 11111(a)(1). As a "health care entity," LGH is a "professional review body" covered under section 11111(a)(1)(A). The individual doctors, as either members/staff of LGH, persons under contract or formal agreement with LGH, or ...


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