Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

McCord v. HCA Health Services of Tennessee, Inc.

Court of Appeals of Tennessee, Nashville

April 27, 2015


Session November 21, 2014

Appeal from the Circuit Court for Davidson County No. 13C291 Carol Soloman, Judge.

C. Bennett Harrison, Jr., Jennifer M. Lankford, and Dan Warlick, Nashville, Tennessee, for the appellant, David H. McCord, M. D.

C. J. Gideon, Jr., Nashville, Tennessee, for the appellee, HCA Health Services of Tennessee, Inc., d/b/a Centennial Medical Center.

Richard H. Dinkins, J., delivered the opinion of the court, in which Andy D. Bennett and W. Neal McBrayer, JJ., joined.



I. Factual Background[1]

This appeal arises from a suit filed by Dr. David McCord, an orthopedic surgeon who held spinal surgery privileges at Centennial Medical Center ("Centennial"), against HCA Health Services of Tennessee, Inc. ("HCA"), which owns and operates Centennial, to redress the revocation of his surgical privileges. Dr. McCord was granted privileges to perform spinal surgery at Centennial in 1991, and by 2010, received privileges to perform surgery to implant hardware into patients to secure the bony structures of the spine.

In 2010, Ilene Marshall, an administrative quality coordinator for the departments of surgery, anesthesia and ophthalmology, was assigned to collect data regarding patients who had spinal hardware removed within one year of placement and to look for any "hardware failure" in connection with the removals. The data she collected showed that Dr. McCord had 19 patients whose spinal hardware was removed within one year of implantation and that none of the patients had any "hardware failure." Dr. Michael Schlosser, the Chief of Surgery at Centennial, was subsequently asked to review the patient files to determine the appropriateness, propriety and necessity of the 19 surgeries.

In May 2011, Dr. McCord met with Dr. F. J. Campbell, Centennial's Chief Medical Officer, who told him that the 19 cases "represented and divulged problems with [his] practice"; the renewal of Dr. McCord's surgical privileges was also discussed. Centennial then sent the files to a physician in Oregon for outside review; at Dr. McCord's request, the files were also sent to an orthopedic surgeon in California.

Thereafter, pursuant to its Medial Staff Bylaws[2], Centennial's Medical Executive Committee ("MEC") appointed an ad hoc committee comprised of Dr. Schlosser, Dr. Roger Passmore, an orthopedic surgeon specializing in foot and ankle surgery, and Dr. Brandon Downs, Chief of Orthopedic Surgery, to investigate Dr. McCord.[3] On June 6, 2011, the MEC met with Dr. McCord and informed him that his "hardware removal rate within one year of implantation was 7.5% and that the next highest rate of the approximately one dozen surgeons who performed the same or similar surgery at Centennial was 1.5%."

On October 13, 2011, pursuant to Section 6.3 of the bylaws, Dr. John Wilters, President of the Medical Staff and Chairman of the MEC, sent Dr. McCord a letter reporting that the MEC had met and reviewed the ad hoc committee's report and recommendation regarding his privileges; the letter stated that Dr. McCord's privileges were suspended and that a follow-up letter would provide a summary of his rights under the fair hearing process. On October 19, Dr. Wilters sent a letter to Dr. McCord which detailed his rights under the bylaws and the reasons for the adverse action. On October 27, Dr. McCord sent a letter to Thomas L. Herron, CEO of Centennial, requesting a hearing to contest the suspension and recommendation for permanent revocation of his privileges; on December 9, Centennial notified Dr. McCord by letter that a hearing would be held on January 9, 2012.[4]

On January 4, 2012, Dr. McCord, through his counsel, sent a letter to counsel for Centennial memorializing their conversation on January 3, wherein his counsel was advised of the names of the hearing panel members; the letter questioned the impartiality of the hearing panel and asked that the hearing be postponed due to insufficient time to prepare for Centennial's witnesses.[5] On January 9, counsel for Dr. McCord sent a letter to Dr. Geoffrey Smallwood, the chairman and presiding officer of the hearing panel, stating in pertinent part:

After serious consideration, Dr. McCord has determined that he would not want to practice at Centennial based upon what he perceives to be a hostile environment toward him.
Dr. McCord further is of the opinion that he simply cannot get a "fair" hearing based upon information we have obtained in preparation for tonight's hearing, and he does not wish to incur the extra expense of going through the charade of presenting a case when the conclusion has already been agreed upon by the MEC. Accordingly, you are advised that Dr. McCord will not attend or participate in the fair hearing process at Centennial Medical Center. I wanted to let you know as soon as possible following his decision so that you could make whatever arrangements or inform those individuals involved to avoid further disruption of their schedules.

The hearing proceeded as scheduled before a panel consisting of Dr. Smallwood, Dr. Mark Christoferson, a pediatric orthopedic surgeon, and Dr. Mark Flora, a urologist[6]; Dr. McCord did not attend. Centennial presented the testimony of Dr. Schlosser, Ms. Marshall, and Dr. Michael Metzman, a neuroradiologist, along with several exhibits; the panel approved the MEC's recommendation to suspend and permanently revoke Dr. McCord's surgical privileges.[7] Centennial's Board of Trustees affirmed the MEC's recommendation on February 23. On March 2, Centennial submitted an "Adverse Action Report" to the National Practitioner Data Bank ("NPDB"), which reported the following relative to Dr. McCord:

Practitioner first came under scrutiny in June 2011 after evaluation of the practitioner's professional performance revealed concerns over the number of spinal surgery patients returning to the operating room within twelve months of the date of their original fusion procedure. An investigation was conducted by an ad hoc committee and the findings presented to the Medical Executive Committee. The MEC decided to summarily suspend the practitioner's privileges as of October 13, 2011 and recommend termination of the practitioner's medical staff membership. A fair hearing was conducted to consider the practitioner's appeal of the MEC's recommendation. The hearing committee found that the practitioner had a pattern of performing spine surgeries on patients for whom surgery is not indicated. The hearing committee approved the MEC's recommendation after affirming that the recommendation had a substantial factual basis and it was not arbitrary, unreasonable, or capricious. The Board of Trustees affirmed the MEC's recommendation on February 23, 2012.

On January 18, 2013, Dr. McCord filed a complaint against Centennial[8] asserting causes of action for breach of contract for violating the bylaws and failing to follow them in good faith, defamation, common law and statutory disparagement, and intentional interference with existing and prospective business relationships. He also sought a declaration that Centennial unjustifiably revoked his privileges and injunctive relief, specifically, reinstatement of his privileges and that Centennial be required to report his reinstatement to the NPDB.

Centennial moved to dismiss Dr. McCord's claims on the ground that the complaint failed to state a claim for relief pursuant to Tenn. R. Civ. P. 12.02(6). On May 10 and 21, 2013, the court held a hearing on Centennial's motion and on June 27 entered an order dismissing the breach of contract claims; the court denied the motion as to the remaining claims, stating that it needed more information before ruling.

Centennial thereafter filed a motion to dismiss the remaining claims for lack of subject matter jurisdiction pursuant to Tenn. R. Civ. P. 12.02(1) on the ground that Dr. McCord failed to exhaust his administrative remedies prior to filing the action or, alternatively, for summary judgment; the court granted the Rule 12.02(1) motion. The court also denied Centennial's motion for summary judgment on the basis that there was a genuine issue of material fact as to whether the NPDB report was false and made with knowledge of its falsity. On appeal, Centennial argues that, if we determine that dismissal under Rule 12.02(1) was inappropriate, it is entitled to summary judgment on Dr. McCord's remaining claims.

Dr. McCord raises the following issues on appeal:

1. Whether the trial court improperly made findings of fact in granting Centennial's motion to dismiss on the pleadings and therefore erred in dismissing Dr. McCord's breach of contract claims by finding that Dr. McCord waived those claims as a matter of law?
2. Whether the trial court erred in dismissing Dr. McCord's claims of defamation, common law disparagement, disparagement under the Tennessee Consumer Protection Act, and intentional interference with business relationships for lack of the subject matter jurisdiction by finding that Dr. McCord must exhaust certain administrative remedies in order to advance those claims against Centennial?

II. Discussion

A.) Breach of Contract Claims

The trial court dismissed the breach of contract claims, Counts I and II, pursuant to Tenn. R. Civ. P. 12.02(6), the purpose of which is to determine whether the complaint states a claim upon which relief can be granted. In Count I, Dr. McCord alleged that Centennial violated its bylaws, thus breaching its contract with him, by: not following the proper procedures prior to suspending his privileges and doing so without sufficient information that there was a quality of care concern or harm to any of his patients; failing to state the reasons for his suspension with enough specificity to allow a response; allowing counsel for the MEC to select the hearing panel, represent the MEC at the hearing, and act as a "legal consultant" to Centennial; failing to respond to his challenges to the hearing panel's composition and to his request to postpone the hearing; giving inadequate time to prepare for additional witnesses at the hearing; failing to send the hearing committee report within 30 days of the hearing; "raising the issue as to previous hearings that were confidential under the bylaws"[9]; acting in bad faith during the peer review process; and acting in bad faith by revoking his privileges without due process. Count II alleged that Centennial failed to carry out its obligations under the bylaws in good faith.[10]

Centennial moved to dismiss Dr. McCord's complaint on the grounds that Centennial was immune from liability under the Health Care Quality Improvement Act ("HCQIA"), 42 U.S.C. § 11101, et seq.; that Dr. McCord voluntarily waived his claims by failing to attend the fair hearing on January 9, 2012; that the claim for breach of contract was time-barred and "fail[ed] to plead facts demonstrating substantial non-compliance with the applicable bylaws"; that the claim for defamation was time-barred and failed to plead facts sufficient to state a claim; that the claims for common law disparagement and statutory disparagement pursuant to Tenn. Code Ann. § 47-18-104(b)(8), were time-barred and failed to assert a recognizable cause of action in Tennessee; and the claim for intentional interference with business relationships failed to plead facts sufficient to state a claim. The court granted the motion as to the breach of contract claims, holding:

This Court finds that Dr. McCord waived his procedural right to a Fair Hearing when he notified the Chairperson of the Hearing Panel pursuant to correspondence dated January 9, 2012 and attached to the complaint as Exhibit 9, that he intended to withdraw his request for a Fair Hearing and by then failing to appear at the Fair Hearing. For this reason, this Court grants the defendant's Motion to Dismiss the plaintiff's breach of contract claims, Counts I and II of the Complaint.

Citing Section 7.5.1 of the bylaws, Dr. McCord contends that the court erred in determining that he waived his right to a hearing because he had "good cause" for not attending the hearing.[11] Section 7.5.1 of the bylaws provides:

The personal presence of the practitioner who requested the hearing shall be required. A practitioner who fails without good cause to appear and proceed at such hearing shall be deemed to have waived his/her rights in the same manner and with the same consequence as provided in Section 7.3.4.[12]

He argues that the term "good cause" is ambiguous and that the determination of whether he had "good cause" to not attend the hearing is a "question of fact inappropriate for resolution by the trial court." In effect, Dr. McCord is asking this court to interpret the bylaws and make an independent determination of whether he had good cause not to attend the hearing. Our analysis of the issue of waiver, however, is not based on the manner in which that term is used in the bylaws; rather, it is in a broader context, one which involves the effect of Dr. McCord's conduct relative to his rights under the bylaws as well as his claim that those rights were breached.

In resolving whether Dr. McCord waived his rights under the bylaws, we are guided by the following statement from Regions Bank v. Thomas:

[W]aiver is an intentional relinquishment of a known right and is a doctrine of very broad and general application. It concedes a right, but assumes a voluntary relinquishment of it. Our courts have held that there must be clear, unequivocal and decisive acts of the party of an act which shows determination not to have the benefit intended in order to constitute a waiver.

422 S.W.3d 550, 561 (Tenn. Ct. App. 2013) (quoting Collins v. Summers Hardware and Supply Co., 88 S.W.3d 192, 201–02 (Tenn. Ct. App. 2002)).

Centennial's October 19, 2011 letter set forth Dr. McCord's rights under the bylaws. Specifically, the letter stated that he had the right to request a hearing to contest the MEC's recommendation and the penalty if he failed to request a hearing; the letter also included a copy of the hearing procedures contained at Article 7 of the bylaws. Dr. McCord exercised his right to request a hearing, which was set for January 9, 2012. On the day of the hearing, Dr. McCord's counsel sent the letter to Dr. Smallwood stating that Dr. McCord "would not want to practice at Centennial, " that he did not want to "incur the extra expense of going through the charade of presenting a case when the conclusion has already ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.