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Pinkard v. HCA Health Services of Tennessee, Inc.

Court of Appeals of Tennessee, Nashville

June 21, 2017

JOHN F. PINKARD, M.D.
v.
HCA HEALTH SERVICES OF TENNESSEE, INC. D/B/A SUMMIT MEDICAL CENTER

          Session April 11, 2017

         Appeal from the Circuit Court for Davidson County No. 08C1708 Joseph P. Binkley, Jr., Judge

         We granted this interlocutory appeal to determine whether Tenn. Code Ann. § 68-11-272(c)(1) of the Healthcare Quality Improvement Act ("HCQIA"), as applied to the facts of this case, violates the separation of powers provisions in the Tennessee Constitution. Plaintiff, a physician whose medical staff privileges were terminated by Summit Medical Center, sued the hospital, alleging, inter alia, that it acted in bad faith and with malice during the peer review process. Following a lengthy discovery process, the hospital filed a motion for summary judgment asserting, inter alia, that Plaintiff's anticipated evidence was confidential, privileged, and inadmissible under the HCQIA because it was derived from the activity of a Quality Improvement Committee ("QIC"). At the same time, the hospital filed a motion in limine to exclude all records of quality improvement activity pursuant to the evidentiary privilege under Tenn. Code Ann. § 68-11-272(c)(1). After ascertaining that Plaintiff intended to rely on QIC evidence, the trial court ruled that the peer review privilege could not be waived, and that Tenn. Code Ann. § 68-11-272(c)(1) violated the separation of powers provisions because it deprived the court of its inherent authority to make evidentiary decisions affecting "the heart of this case." This Tenn. R. App. P. Rule 9 interlocutory appeal followed. We agree with the trial court's ruling that the privilege cannot be waived. However, we disagree with the trial court's ruling that Tenn. Code Ann. § 68-11-272(c)(1), as applied to the facts of this case, violates the separation of powers provisions in the Tennessee Constitution. This is because the General Assembly created the evidentiary privilege to effectuate one of its powers, the enactment of legislation that promotes the safety and welfare of our citizens. To that end, the primary concern of the challenged legislation is not to create court rules, but to promote candor within a hospital's quality improvement process to ensure effective evaluation measures. Furthermore, Tenn. Code Ann. § 68-11-272(c)(2) provides an "original source" exception to the privilege whereby documents not produced specifically for use by a QIC, and are otherwise available from original sources, are both discoverable and admissible into evidence even if the information was presented during a QIC proceeding. Thus, the privilege is reasonable and workable within the framework of evidentiary rules already recognized by the judiciary. For these reasons, we reverse and remand for further proceedings.

         Tenn. R. App. P. 9 Interlocutory Appeal; Judgment of the Circuit Court Reversed

          Dixie W. Cooper and Kaycee L. Weeter, Nashville, Tennessee, for the appellant, HCA Health Services of Tennessee, Inc. d/b/a Summit Medical Center.

          Herbert H. Slatery III, Attorney General and Reporter; Joseph F. Whalen, Associate Solicitor General; and Stephanie A. Bergmeyer, Assistant Attorney General, Nashville, Tennessee, for the intervenor-appellant, the State of Tennessee.

          C. Bennett Harrison, Jr., Sean C. Wlodarczyk, and John D. Kitch, Nashville, Tennessee, for the appellee, John F. Pinkard, M.D.

          Frank G. Clement, Jr., P.J., M.S., delivered the opinion of the Court, in which Andy D. Bennett and John W. McClarty, JJ., joined.

          OPINION

          FRANK G. CLEMENT, JR., P.J., M.S.

         The plaintiff, John Pinkard, M.D. ("Dr. Pinkard") held medical staff privileges at HCA Health Services of Tennessee, Inc., d/b/a Summit Medical Center ("Summit") from 1999 to 2006. On November 21, 2006, the Chief of the Medical Staff and the Chief of the Department of Surgery summarily suspended Dr. Pinkard's medical staff privileges because of patient safety concerns. After conducting an investigation, the hospital's Medical Executive Committee ("MEC") upheld the suspension and terminated Dr. Pinkard's privileges.

         On May 30, 2008, Dr. Pinkard commenced this action against Summit alleging, in pertinent part, that Summit acted in bad faith and with malice during the peer review process that concluded with the termination of his hospital privileges. Summit timely filed its answer denying it breached any duty and denying it acted in bad faith or with malice. We summarize the relevant facts and proceedings leading to the initiation of this appeal below.

         Dr. Pinkard is a board-certified thoracic surgeon. He gained the privilege to practice thoracic and vascular surgery at Summit in 1999, and by 2001, he practiced almost exclusively at Summit. Summit contends that in 2002, Dr. Pinkard's relationship with the nursing staff became contentious, and the staff's morale declined. These "behavioral issues" culminated in 2003 when Dr. Pinkard confronted an emergency room physician about that physician's medical treatment of a patient. Summit claimed that Dr. Pinkard was "verbally abusive and personally degrading, " and that the "incident disrupted the flow of patient care." Dr. Pinkard alleged that the physician incompetently performed a procedure on the patient, causing a harmful complication. This incident led to an agreement between Dr. Pinkard and Summit that any further complaints about Dr. Pinkard's behavior would go to arbitration. In May 2006, Summit received two complaints about Dr. Pinkard's disruptive behavior with the nursing staff. The hospital set arbitration concerning one of those complaints for January 2007.

         In October 2006, Dr. Pinkard received a letter from a physician at Summit relaying the recent findings of Summit's peer review committee. The letter stated that, after a review of Dr. Pinkard's performance at the hospital, the committee found that his complication and mortality rates were consistently below the expected rates for vascular surgeons. However, a month later, Summit's view of Dr. Pinkard's competency as a vascular surgeon changed following a surgery he performed on a patient known as J.E.F. for confidentiality purposes. J.E.F. suffered significant blood loss during the operation, and Dr. Pinkard and Summit vehemently disagreed as to the cause of that complication. Despite the patient's blood loss, the patient not only survived the operation but made a full recovery.

         An anesthesiologist present during the surgery claimed that Dr. Pinkard improperly pulled a filter from the patient's vena cava which caused the patient to hemorrhage. Dr. Pinkard argued that the anesthesiologist did not have the necessary vantage point during the surgery to make that determination. To the contrary, Dr. Pinkard claimed that the patient's blood loss resulted from an aorto-caval fistula, a rare structural abnormality in which the aorta adheres to the vena cava. Summit suspended Dr. Pinkard's privileges in accordance with its bylaws, and the MEC conducted an investigation. After reviewing the patient's medical record and radiological reports, the MEC upheld the suspension and voted to revoke Dr. Pinkard's privileges. It determined that a pre-operative angiogram did not reveal the presence of an aorto-caval fistula as Dr. Pinkard reported in the patient's medical record. Thus, the MEC found that Dr. Pinkard falsified that record. Shortly thereafter, Dr. Pinkard expressed his desire to appeal the committee's decision, and Summit scheduled a fair hearing.

         Prior to the fair hearing, Dr. Pinkard and his attorney requested access to the system Summit used to store J.E.F.'s CT scan along with a special projector to display the image for the fair hearing panel. Dr. Pinkard intended to use it to support his contention that J.E.F. had an aorto-caval fistula. However, hospital employees informed him that he could not have access to the projector because he was no longer a member of the medical staff. Summit argued that Dr. Pinkard could have presented an image of the CT scan as maintained on a CD-ROM or plain filed film. However, Summit's own expert witness, a physician and chair of Vanderbilt Vascular, testified before the fair hearing panel that the multiple-layered CT scan angiogram was the best way to ascertain the presence of a pre-operative aorto-caval fistula, not plain film or CD-ROM images. Thus, Dr. Pinkard argued that this evidence was crucial to his case, and the fact that Summit would not allow him to present it to the fair hearing panel strongly suggested bad faith on Summit's part. Though the fair hearing panel agreed to review the CT scan angiogram during its deliberations, there was no evidence that it did so.

         Dr. Pinkard explained that not only did Summit place him at a disadvantage regarding J.E.F.'s surgery, the hospital also used the hearing to rehash past behavioral issues that had already been resolved. Moreover, it selected and addressed eight of the over 1, 000 surgeries Dr. Pinkard performed at the hospital, each of which had been subjected to peer review without adverse consequences. Dr. Pinkard argued that Summit never notified him that the panel would be considering the past behavioral issues or the other eight surgeries, and thus, he felt ill-prepared to defend himself. Dr. Pinkard contended these actions further demonstrated malice in the peer review process.

         After reviewing the evidence, the fair hearing panel agreed with the MEC, but it decided to make an alternative recommendation that the MEC revoke only Dr. Pinkard's vascular surgical privileges and reinstate his general thoracic surgical privileges. Despite this recommendation, the MEC decided unanimously to revoke all of Dr. Pinkard's hospital privileges.

         Dr. Pinkard alleged that Summit issued its revocation purely for financial reasons and not in the interest of patient safety. He explained that in 2005, another vascular surgeon entered into a contract with Summit. The contract between Summit and this new surgeon stipulated that the hospital would advance the new physician's income for one year with a payback of that income beginning in August 2006. At the time of Summit's initial decision to suspend Dr. Pinkard's privileges, this new physician was entering the payback phase of his agreement with Summit. Since Dr. Pinkard and this physician were the only vascular surgeons practicing at Summit, this physician's practice increased when Dr. Pinkard left. Thus, it allowed the new vascular surgeon to pay back the money Summit advanced him.

         After exhausting his appeals within Summit's peer review process, Dr. Pinkard commenced this action alleging, inter alia, that Summit conducted its peer review in bad faith and with malice. After filing its answer, Summit filed its first motion for summary judgment relying, in part, on the Tennessee Peer Review Law ("TPRL"), Tenn. Code Ann. § 63-6-219, which was in effect when Dr. Pinkard commenced this action. Summit argued that the TPRL afforded it immunity from a claim for damages if it acted in good faith and without malice throughout the peer review process. It also noted that the TPRL created a presumption that it acted in good faith and without malice, and that Dr. Pinkard had no evidence to overcome the presumption. Summit supported its motion by attaching a redacted version of the fair hearing transcript along with numerous other exhibits from the fair hearing. Dr. Pinkard responded in opposition with several affidavits and deposition testimony.

         The trial court denied Summit's motion, outlining three main facts that, if presented to a jury, could lead the jury to conclude that Summit conducted its peer review in bad faith and with malice. First, the court found that a jury could infer malice from the fact that Summit denied Dr. Pinkard access to the system which stored the CT scan angiogram of J.E.F. and also denied him access to a projector to show that image to the fair hearing panel. The trial court found the CT scan to be a "crucial" piece of evidence, and it further noted that the record of the fair hearing panel did not show that it actually viewed the CT scan angiogram slides in its deliberations. Second, the court agreed with Dr. Pinkard that a reasonable jury could infer malice from Summit's introduction of eight "stale" surgical cases and previously resolved behavioral issues. Third, the court found that a reasonable jury could infer malice from the MEC's refusal to consider the fair hearing panel's secondary recommendation, since the fair hearing panel heard more evidence and conducted a more thorough investigation than the MEC.

         Effective April 12, 2011, the legislature repealed and replaced the TPRL with the enactment of Tenn. Code Ann. § 68-11-272, the Healthcare Quality Improvement Act ("HCQIA"). Under Tenn. Code Ann. § 68-11-272(c)(1), which is similar to the TPRL, records of a Quality Improvement Committee ("QIC") and statements by hospital officers, directors, healthcare providers, or employees relating to the activities of a QIC are confidential, privileged, and inadmissible in evidence. Further, under Tenn. Code Ann. § 68-11-272(c)(2), documents not produced specifically for use by a QIC, and are otherwise available from original sources, are not immune from discovery or admission into evidence even if the information was presented during a QIC proceeding.

         On July 1, 2015, Summit filed a second motion for summary judgment in which it relied on the HCQIA instead of the TPRL. At the same time, it filed a motion in limine, a motion to strike, and a motion for a protective order. Summit noted that the HCQIA, like the TPRL, established a presumption that hospitals have complied with the required standards in the quality improvement process and are entitled to immunity from monetary damages unless the plaintiff overcomes the presumption.[1] Further, Summit contended that Dr. Pinkard could not produce admissible evidence to overcome the presumption because evidence derived from the fair hearing and the MEC was privileged and inadmissible under the HCQIA.

         Dr. Pinkard opposed the motion for summary judgment arguing that Summit waived the privilege when it submitted the fair hearing transcript and other exhibits from the hearing with its first summary judgment motion. He also argued that not all evidence he relied on constituted records derived from a QIC; thus, this evidence was not privileged. Specifically, Dr. Pinkard contended that a QIC "'evaluates the safety, quality, processes, costs, appropriateness or necessity of healthcare services'" and Summit's fair hearing panel did not act as a safeguard for patient safety. Instead, he argued that the fair hearing panel operated as a "quasi-appellate safeguard" to protect physicians from the unfair actions of QIC's. Therefore, the fair hearing panel was not a QIC as defined by the HCQIA. In the alternative, Dr. Pinkard argued that the HCQIA violated the separation of powers provisions in the Tennessee Constitution, because it interfered with the court's discretion to make evidentiary decisions.

         The trial court ruled that the fair hearing proceeding was not a QIC within the meaning of the statute; nevertheless, the MEC did meet the statutory definition. Therefore, all evidence derived from the activities of the MEC would be inadmissible. The court also took note of the "original source" exception to the statute, which exempts from the privilege documents not produced specifically for use by a QIC and are obtainable from an original source. Based on these rulings, the court ordered Dr. Pinkard to file a list of all admissible evidence in support of the material facts in accordance with the trial court's interpretation of the statute. With regard to Dr. Pinkard's claim that the HCQIA violated the separation of powers doctrine, the court declined to rule on the issue.

         Summit then filed a motion to reconsider. In response to the motion, the trial court altered its ruling by holding that the MEC was a QIC; therefore, any information presented to the fair hearing panel that had been derived from the MEC was privileged and inadmissible under the HCQIA. The court also ruled the QIC privilege could not be waived by Summit; therefore, the privilege remained intact despite the fact that Summit submitted privileged evidence to support its first summary judgment motion.

         Because the trial court's revised ruling precluded the admissibility of evidence in accordance with Tenn. Code Ann. § 68-11-272(c)(1), the court concluded that "the statutory prohibition of the admissibility of this evidence in this case would effectively deny this plaintiff his access to the courts of this state as this statute . . . is being applied." The court went on to rule:

The Court, therefore, finds that the provisions of T.C.A. § 68-11-272(c)(1) as applied to the facts of this case is unconstitutional as a violation of the Tennessee separation of powers doctrine. Specifically, the Court finds that the statute - T.C.A. § 68-11-272(c)(1) - is unconstitutional as applied because it deprives the Court of its inherent authority to make evidentiary decisions that affect the heart of this case. The Court relies upon authority cited by the plaintiff in his "as applied" challenge, including Mansell v. Bridgestone Firestone N. Am. Tire, LLC, which stated as follows:
While there are no precise lines of demarcation in the respective roles of our three branches of government, the traditional rule is that "the legislative [branch] [ha]s the authority to make, order, and repeal [the laws], the executive ... to administer and enforce, and the judicial ... to interpret and apply." Underwood v. State, 529 S.W.2d 45, 47 (Tenn. 1975) (quoting Richardson v. Young, 122 Tenn. 471, 125 S.W. 664, 668 (1910)). By the terms of our constitution, "[o]nly the Supreme Court has the inherent power to promulgate rules governing the practice and procedure of the courts of this state, and this inherent power 'exists by virtue of the [Constitution's] establishment of a Court and not by largess of the legislature.'" State v. Mallard, 40 S.W.3d 473, 480-81 (Tenn. 2001) (citations omitted) (quoting Haynes v. ...

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