Opposition Brief — Nicholas v. North Colorado Medical Center, Inc.

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In The

Supreme Court of the United States

WILLIAM JOHN NICHOLAS, M.D.,

Petitioner, — DEC 5 2001

| ; CLERK

NORTH COLORADO MEDICAL CENTER, INC.,a_.:

Colorado corporation and its Governing Board of

Directors; RICHARD H. STENNER, its President;

KARL B. GILLS, its Executive Vice-President; ALYCE

KANTNER, its former Director of Medical Services;

and PAT (WILSON) KERN, its Director of

Cardiovascular Services,

Respondents.

oe @

On Petition For Writ Of Certiorari

To The Colorado Supreme Court

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Jerome M. RENAN

Counsel of Record

2150 W. 29th Ave., 5th Floor

Denver, CO 80211

Telephone: (303) 894-0383

Fax number: (303) 894-0384

Counsel for Respondents

COCKLE LAW BRIEF PRINTING CO., (800) 225-6966

OR CALL COLLECT (402) 342-2832

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TABLE OF CONTENTS

Page

OPINIONS BELOW...........cccccececeeccececseeee 1

CONSTITUTIONAL PROVISIONS AND STATUTES

WIEN fics ccsacaceccevscosdvcesstiesec cuca: 2

STATEMENT OF THE CASE............-.--. ae 3

Pt, MEMO SAEED I I ee REN OT 10

THE COLORADO SUPREME COURT’S RULING

ON NICHOLAS’S § 1983 CLAIMS IS NEITHER AN

IMPORTANT FEDERAL QUESTION NOR IN

CONFLICT WITH RELEVANT DECISIONS OF

SE GAPE 0 ee dcepccnseiverseeusesouonssvewes 10

“STATE ACTION” UNDER THE CPRA IS NOT

STATE ACTION SUFFICIENT TO SUPPORT A

SOND CRAIN os ciscacccsceenisindcie 14

THE IMMUNITY PROCEDURE REQUIRED BY

THE HCQIA WAS CORRECTLY INTERPRETED

BY THE COLORADO SUPREME COURT ........ 18

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| ‘

TABLE OF AUTHORITIES

Page

Feperat Cases

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) .... 20

Blum v. Yaretsky, 457 U.S. 991 (1982) ............- 13, 18

Brader v. Allegheny General Hospital, 167 F.3d 832

GBod Cle. 1908). . cccccccccccesscvcccevsccsdscces 19, 20

Bryan v. James E. Holmes Regional Medical Center, 33

Foe 1916 (12th Cir. 1998)......2- cs cvcece \eaweee 17, 19

Burten v. Wilmington Parking Authority, 365 U.S.

715, 81 S. Ct. 856, 6 L. Ed. 2d 45 (1961) ....... 11, 13

California Retail Liquor Dealers Ass'n v. Midcal Alu-

ssineen., Dne., 465 US. BF CSG) oc ccvcevdscoccesces 15

Ezpeleta v. Sisters of Mercy Health Corp., 800 F.2d

BOO CU Ce FI kc csns tn veceeecsuscvscves cence 15

FTC v. Ticor Title Ins. Co., 504 U.S. 621 (1992)....... 14

Gabaldoni v. Washington County Hospital Ass’n, 250

F.3d 255 (4th Cir. 2001)...... ETI i HER 17, 19, 20

Harlow v. Fitzgerald, 457 U.S. 800 (1982)...........-- 19

Jatoi v. Hurst-Euless-Bedford Hosp. Auth., 807 F.2d

S2EG Gs Ce TOO ED. oc cntn cd dias ci deesdsce rues des 13

Lehman Bros. v. Schein, 416 U.S. 386 (1974) .......... 14

Lugar v. Edmondson Oil Company, Inc., 457 U.S. 922,

102 S. Ct. 2744, 73 L. Ed. 2d 482 (1982)....11, 13, 15

Milo vo. Cushing Mun. Hosp., 861 F.2d 1194 (10th

Ge Se 6 vin ncn 6k066sd0 cr de Chedourtsees & 11, 14, 13

Parker v. Brown, 317 U.S. 341 (1943)............-...- 14

| Patrick v. Burget, 486 U.S. 94, 100 L. Ed. 2d 83, 108

Dy Se Co bncayn bes edcnddbccdvsudecesuana 15

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ili

TABLE OF AUTHORITIES - Continued

Rendell-Baker v. Kohn, 457 U.S. 830 (1982)........

Sugarbaker v. SSM Health Care, 190 F.3d 905 (8th

Se SOOOT 0 ves neddreccoatsacranestes n6000e4 av,

Tarabishi v. McAlester Regional Hospital, 827 F.2d

GOD COGN Ge. TOGF i oc civic ccccsccvecciavesessss

Withrow v. Larkin, 421 U.S. 35 (1975).........---

Wong v. Stripling, 881 F.2d 200 (Sth Cir. 1989)...

State Cases

Berg v. Shapiro, 948 P.2d 59 (Colo. App. 1997)...

Moore v. Wyoming Medical Center, 825 F.Supp. 1531

(DD. Wye. 1985) 2. vtecaccdecsesceseccscvecesns

FepEeRAL STATUTES

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Oe TR, © TANS hia hire ne edad cickeuraranctay

State STATUTES

CARS. § 12-36.5-101, a6 606 .. 02 ccccstecsveceseses

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TABLE OF AUTHORITIES - Continued

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OrHer AUTHORITIES

Frederick W. Yu, Tut Commirree ON ANTICOMPETITIVE

Conpucr: New AGENCY ON THE Bock, Vol. 21,

Colorado Lawyer, 31 (January, 1992).............. 15

ME DP en esbsteanedeeod sadeesss toasenceseaess 10

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OPPOSITION TO WRIT OF

PETITION FOR CERTIORARI

Respondents North Colorado Medical Center, Inc., a

Colorado corporation and its Governing Board of Direc-

tors; Richard H. Stenner, its President; Karl B. Gills, its

Executive Vice-President; Alyce Kantner, its former Direc-

tor of Medical Services; and Pat (Wilson) Kern, its Direc-

tor of Cardiovascular Services (herein “Respondents”),

respectfully pray that the Court deny the Petition for Writ

of Certiorari to review the final judgment and decision of

the Supreme Court of the State of Colorado entered in the

above proceedings on August 6, 2001.

OPINIONS BELOW

The final opinion of the Colorado Supreme Court

decided June 25, 2001, as modified on denial of rehearing

on August 6, 2001, was reported at 27 P.3d 828, and is

reprinted in the Appendix to the Petition for Certiorari at

App. 1-37. The August 6, 2001 Order of the Court modify-

ing the June 25, 2001 opinion, and denying Petitioner’s

Petition for Rehearing is reprinted in the Petition for

Certiorari, App. 79-80. The Colorado Supreme Court

reversed the opinion of the Colorado Court of Appeals

decided on December 9, 1999, as modified on Denial of

Rehearing and reported at 12 P.3d 280, reprinted in the

appendix to the Petition for Certiorari, App. 38-58. The

Order Granting Partial Summary Judgment in favor of

Respondents on the claim for relief pursuant to 42 U.S.C.

§ 1983 is reprinted in the appendix hereto, App. 1-2. The

trial court’s order denying reconsideration of its Order

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pursuant to 42 U.S.C. § 1983 is reprinted in the appendix

hereto, App. 3-5. The Findings of Facts, Conclusions of

Law and Order of Immunity issued by the trial court is

reprinted in the appendix hereto, App. 6-15.

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

In addition to those constitutional provisions and

statutes cited in the Petition, the following pertinent lan-

guage contained in the Health Care Quality Improvement

Act of 1986, found at 42 U.S.C. § 11111 through 11115

(herein “HCQIA”) is:

§ 11112(a) In general

For purposes of the protection set forth in sec-

tion 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,

(2) after a reasonable effort to obtain the facts

of the matter,

(3) after adequate notice and hearing pro-

cedures 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 reason-

able 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

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for the protection set out in section 11111(a) of

this title unless the presumption is rebutted by a

preponderance of the evidence.

STATEMENT OF THE CASE

Respondent North Colorado Medical Center, Inc.

(herein “NCMC”) is a 326 bed general acute hospital

situated in Greeley, Colorado. At all times relevant it has

been incorporated as a private, not for profit corporation

pursuant to 26 U.S.C. § 501(c)(3). The individually-named

Respondents, Richard H. Stenner, Karl B. Gills, Alyce B.

Kantner and Pat (Wilson) Kern were at times relevant

employees and executives of NCMC who participated in

Nicholas’s professional review process. For the sake of

brevity, Respondents will be collectively referred to as

“NCMC” or “the hospital” unless otherwise noted.

RAB i soe baat tees tas fhe

Me Os eee

Petitioner William John Nicholas, M.D. (herein

“Nicholas”) is an invasive and interventional cardiolo-

gist, specially trained to place catheters into the human

heart to prevent or terminate heart attacks and to conduct

invasive studies of the vessels of the heart.

In 1989, Nicholas, who had just completed his inva-

sive cardiology training, accepted employment with the

Greeley Medical Clinic (herein “GMC”), an association of

physicians in Greeley, Colorado. At the time, there were

three other invasive cardiologists employed by GMC.

Since GMC did not have a cardiac catheterization labora-

tory on site, Nicholas sought and obtained provisional

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privileges! to practice at NCMC, which owned and oper-

ated a cardiac catheterization laboratory.

Shortly after Nicholas’s arrival, the hospital’s Medi-

cal Quality Assurance Committee (Q.A. Committee)

began to receive reports of adverse incidents associated

with Nicholas’s cases. During the pendency of the inves-

tigation of Nicholas’s practice, his privileges in the car-

diac catheterization lab were summarily suspended by

Nicholas’s cardiology proctor. (Record, Vol. 2, p. 326; Vol.

11, p. 2973) At the same time, Nicholas’s employment

with GMC was terminated by unanimous ccnsent of its

cardiology department, based upon serious concerns over

Nicholas’s practice. (Record, Vol. 2, p. 315; p. 323)

Contrary to the allegations made by Nicholas in his

Brief, the record demonstrates that it was Nicholas’s ter-

mination from GMC, his suspension from the cardiac

catheterization laboratory and the gravity of the cases

already under review by the Quality Assurance Commit-

tee that led the committee to seek an independent, out-

side review of Nicholas’s practice. (App. 16-18; Record,

Vol. 2, pp. 315, 323, 326; Vol. 11, p. 2973) A well-regarded

expert from California was retained for this review.

1 As per NCMC’s medical staff bylaws, all new staff

appointees at NCMC were required to undergo a proctorship

with an active member of the medical staff and remain on

provisional status for one year. At the end of the year, the

provisional staff member could request advancement to the

active or courtesy staff as per the bylaws. In no case could a

provisional staff member remain on the provisional staff for

more than two years.

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Following a site visit, staff interviews, an interview with

Nicholas and a review of relevant medical records and cathe-

terization films, the outside expert concluded that Nicholas

demonstrated severe deficiencies in his invasive cardiology

practice. (Record, Vol. 26, pp. 1653-56)

On July 2, 1991, NCMC’s Credentials Subcommittee —

which is charged with making recommendations as to

physician privileges — reviewed Nicholas’s request for

advancement to active status on the medical staff. In so

doing, it considered and received the concerns of the QA

Committee, the report of the outside reviewer, and a

response from Nicholas.

Following deliberation and review, the Credentials

Subcommittee determined that Nicholas’s continued

invasive cardiology practice posed a risk to the health

and welfare of the patients of NCMC and directed

Respondent Stenner, President of NCMC, to summarily

suspend Nicholas’s invasive cardiology privileges pend-

ing further investigation and review as per the hospital’s

bylaws. (Record, Vol. 11, p. 2974; Vol. 32, T. 1, Appendix

A, July 2, 1991 Minutes)

The Credentials Subcommittee thereafter retained

three additional independent cardiologists to review

Nicholas’s practice. The Credentials Subcommittee also

interviewed numerous witnesses from the medical and

nursing staff, including Nicholas. The three outside

reviewers returned criticisms of Nicholas’s practice that

equaled - if not exceeded - those made by the first

expert. Among other things, one reviewer found

Nicholas’s approach to a particular case “dangerous and

irresponsible” while another reviewer found Nicholas’s

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practice to be “below accepted standards of care,” with

his documentation of the case “extremely poor, and in

fact, inaccurate....” The third reviewer concluded that

Nicholas prescribed a contraindicated drug for one of his

patients, causing her death. (Record, Vol. 26, pp. 1555-73)

The investigation by the Credentials Subcommittee

revealed additional concerns regarding Nicholas’s prac-

tice, including personality conflicts with staff and allega-

tions of dishonesty.

The Credentials Subcommittee recommended that

NCMC suspend Nicholas’s invasive cardiology privileges

pending further review. This recommendation triggered

NCMC’s Fair Hearing Plan, which entitled Nicholas to a

hearing before an impartial panel of three physicians not

in competition with Nicholas. The Fair Hearing Panel met

in March, 1992, and received testimony, argument and

exhibits from Nicholas, through his attorney, and also

from the Credentials Subcommittee, through its attorney.

The Fair Hearing Panel concluded, inter alia, that

Nicholas continued to exhibit “a definite inability to form

a rational treatment plan based on a logical progression

of thought.” It recommended that Nicholas receive inva-

sive cardiology privileges, but that he be proctored for a

period of time and that his cases continue to be mon-

itored by another physician, at Nicholas’s expense.

(Record, Vol. 11, p. 2974; Vol. 36, pp. 145-6)

Both Nicholas and the Credentials Subcommittee

appealed the Fair Hearing Panel’s recommendations to

the House Committee of the Board of Directors. In May,

1992, the House Committee met to determine the appeals.

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The process included receiving the report of the Creden-

tials Subcommittee, the report of the Fair Hearing Panel,

the transcript of the Fair Hearing, all exhibits introduced

at the Fair Hearing, the written appeals of Nicholas and

the Credentials Subcommittee, and argument of counsel

for both parties.

Following extensive deliberation, the House Commit-

tee found that the Fair Hearing Panel and the Credentials

Subcommittee had reached essentially the same conclu-

sion, namely, that Nicholas exhibited deficiencies in both

medical judgment and documentation. However, the

House Committee determined that a more appropriate

remedy was continued suspension of Nicholas’s invasive

cardiology privileges with the ability to apply for rein-

statement of his privileges after one year. (Record, Vol.

11, p. 2975; Vol. 36, p. 153)

The House Committee felt that this remedy was suffi-

cient for Nicholas to maintain his non-invasive privileges

at NCMC while seeking additional training in invasive

cardiology. The Board of Directors of NCMC? approved

the House Committee’s recommendation.

Following the board action, Nicholas filed an anti-

competitive conduct complaint with the Committee on

2 Nicholas alleges, at p. 8, that “[mJembers of the

investigative subcommittee were also members of the Board of

Directors. This is an inaccurate implication. Only one member

of the Credentials Subcommittee ~ Ken Lind - actually

participated in the decision of the Board of Directors. The other

joint member, Dr. Paul Hiratzka, recused himself from the

Board’s deliberations.

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Anticompetitive Conduct (herein “CAC”)> and a separate

civil damages suit in the Weld County District Court.

The instant civil damages suit includes numerous

claims for relief, including a claim under 42 U.S.C. § 1983.

On December 4, 1997, the trial court granted summary

judgment in favor of the Respondents on Nicholas’s

§ 1983 claim. (App. 1-3) Nicholas petitioned the trial

court for reconsideration of its decision on the § 1983

claims, arguing that the court had improperly found

NCMC to be a private hospital, in derogation of Milo v.

Cushing Mun. Hosp., 861 F.2d 1194 (10th Cir. 1988). In its

January, 1998 order denying the motion for reconsidera-

tion, the trial court further explained its ruling on the

§ 1983 claims. (App. 4-7)

The court noted that there was “no dispute” as to the

fact that NCMC was a private hospital. (App. 5) The

decision was based upon voluminous documents filed

with the Court, including documents attached to

Nicholas’s Petition at App. 81-144, affidavits and deposi-

tion transcripts untraversed by Nicholas.

From January 26 through February 6, 1998, the trial

court held a hearing to determine whether Defendants

were entitled to iminunity pursuant to C.R.S.

§ 12-36.5-101, et seq. and 42 U.S.C. § 11111, et seq. Both

sides presented evidence, called witnesses and argued

the law in support of their positions. During the course of

3 As discussed in Petitioner’s brief, the CAC is the

Committee on Anticompetitive Conduct, which was created by

the Colorado Professional Review Act (herein “CPRA”), C.R-S.

§ 12-36.5-106.

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9 —E

the hearing, Nicholas stipulated that the conduct of the

hospital’s Medicine QA Committee, Credentials Subcom-

mittee and Fair Hearing committees was reasonable,

appropriate, and undertaken in good faith. (App. 10-11)

The remaining issues to be determined by the trial

court were whether the conduct of the NCMC House

Committee and Board of Directors fell within the immu-

nity standards set forth under the CPRA and HCQIA. On

June 5, 1998, the trial court made detailed findings and

fact and conclusions of law and entered summary judg-

ment in favor of Defendants and against Plaintiff under

the immunity provisions of CPRA and HCQIA. (App.

8-28)

Nicholas appealed the trial court’s dismissal of the

§ 1983 claims as well as the court’s June 5, 1998 order of

summary judgment. In its modified decision of April 13,

2000, the Colorado Court of Appeals reversed the trial

court on all issues, and remanded for further proceed-

ings.

In its decision rendered August 6, 2001, the Colorado

Supreme Court reversed the Colorado Court of Appeals.

It held, inter alia, that professional peer review conducted

by private medical facilities does not constitute state

action for the purposes of 42 U.S.C. § 1983. It further held

that, as a matter of law, the conduct of the Respondents

and their various committees satisfied the immunity pro-

visions of the CPRA and HCQIA thereby conferring stat-

utory immunity from suit and damages. Nicholas now

seeks this Court’s writ of certiorari.

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ARGUMENT

S. Ct. Rule 10 illustrates some of the considerations

governing review on certiorari. It states, inter alia, that, “a

petition for a writ of certiorari will be granted only for

compelling reasons.” It further states that “a petition for

writ of certiorari is rarely granted when the asserted error

consists of erroneous factual findings or the misapplica-

tion of a properly stated rule of law.”

The reasons for review advanced by Nicholas in his

petition are neither compelling nor indicative of a misap-

plication of existing law by the Colorado Supreme Court.

Rather, Nicholas argues that the Colorado Supreme Court

made erroneous factual findings and/or misapplied the

law in his case.

Respondents contend that apart from lack of a com-

pelling issue, this Court should deny the petition because

the Colorado Supreme Court correctly followed estab-

lished state and federal law, and its decision does not

conflict with the decisions of this Court or the decisions

of federal circuit courts of appeal deciding similar issues.

’ Be

THE COLORADO SUPREME COURT’S RULING ON

NICHOLAS’S § 1983 CLAIMS IS NEITHER AN

IMPORTANT FEDERAL QUESTION NOR IN CON-

FLICT WITH RELEVANT DECISIONS OF THIS

COURT

The Colorado Supreme Court’s determination that

NCMC is a private hospital, as a matter of law, is not a

“compelling” issue or a finding inconsonant with deci- e

sions of this Court. The decision was correct in light of

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the record, and the best Nicholas can argue is that the

decision misapplies the law, as opposed to conflicts with

federal case law.

Nicholas argues that the Court should not have

analyzed NCMC’s “private/public” status under the “fair

attribution” test of Lugar v. Edmondson Oil Company, Inc.,

457 U.S. 922, 102 S. Ct. 2744, 73 L. Ed. 2d 482 (1982)

because NCMC was a public or quasi-public entity. He

contends that the Court should have applied the “public

function” test under Burton v. Wilmington Parking Author-

ity, 365 U.S. 715, 81 S. Ct. 856, 6 L. Ed. 2d 45 (1961) and

Milo v. Cushing Mun. Hospital, 861 F.2d 1194 (10th Cir.

1988). Nicholas’s legal analysis is incorrect.

The Colorado Supreme Court applied the proper test

under Lugar, supra, and as discussed below, the outcome

would have been the same even if the “public function”

test been employed.

The “public function” test is improper in the case at

bar because it presupposes a relationship between the

state and the private entity so intertwined that the actions

of the private entity are deemed to be those of the state.

For example, the private hospital in Milo - the facts of

which form the basis of Nicholas’s argument - was gov-

erned by a Board of Trustees established under 60 Ox a.

St. ANN. § 176. Under that statute, the board was com-

prised of state officials clothed with the same authority

and responsibility as elected public officials. See, Tarabishi

v. McAlester Regional Hospital, 827 F.2d 648 (10th Cir.

1987). In fact, the trustees were public officials who were

required to take an oath of office. Id.

Gaver

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As a result of this enabling statute, the court held, as

a matter of law, that such facilities in Oklahoma are public

hospitals because the management of state and hospital

are significantly intertwined. Milo at 1196. By compari-

son, the “enabling statute” in the instant matter, C.R.S.

§ 25-3-302(1), requires the opposite result. That statute

provides that hospital trustees shall not be “elective or

appointed state, county or city officials,” and thus not

clothed with state authority.

The hospital in Milo, supra, is also structurally distin-

guishable from NCMC. In Milo, the city continued to

maintain a significant amount of control over the hospi-

tal’s operations, whereas Weld County has no authority

over NCMC. In Milo, the city was entitled to take the

profits of the hospital, and the five-person board of

trustees was comprised of a majority of city commission-

ers. The hospital was supported by city mill levies, and i

the hospital was ultimately accountable to the city.

None of those factors are present at NCMC. At all

relevant times, NCMC’s board was comprised of a major-

ity of non-trustees.* (Record, Vol. 7, p. 1639) The minority

trustee members were independent from the county com-

missioners, and by law, were not state officials. Weld

County did not take profits from NCMC, and NCMC was

not required to report to Weld County. (Record, Vol. 7, p.

* Although Nicholas argues that the trustees constituted a

“majority” of the NCMC Board in 1991, the record reflects that

as of 1992 — when the final board action was entered — a minority

of the members of the NCMC Board were Trustee members.

(Petitioner’s App. 111-112).

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1638) Weld County had no authority over NCMC’s man-

agement, and took no part in its credentialing decisions.

(Record, Vol. 6, pp. 1193-1257; pp. 1511-13; (Petitioner’s

App. 9-10). Although the hospital had previously

received county tax dollars, by the time of the final board

action in 1992, NCMC no longer collected tax levies from

Weld County’®. (Vol. 6, p.1485)

The Court therefore properly applied the tests set

forth in Lugar and Blum ov. Yaretsky, 457 U.S. 991 (1982).

However, even if the Court had followed the test annun-

ciated in Milo, supra, and Burton, supra, the same result

would have been reached.

Under the “public function” test, the Court should

consider three factors in determining whether a private

hospital is a state actor for purposes of § 1983: (1)

whether the County receives a “direct financial benefit”

from the private lessee; (2) whether the County “benefit-

ted” from the actual complained of violation(s); and (3)

whether the County retained “control [of] and respon-

sibility” for the hospital; Moore v. Wyoming Medical Center,

825 F.Supp. 1531 (D. Wyo. 1993), relying upon Milo, supra,

and Jatoi v. Hurst-Euless-Bedford Hosp. Auth., 807 F.2d 1214

(Sth Cir. 1991).

Nicholas cannot proffer any evidence that Weld

County somehow “benefitted” from the restriction of

5 The document upon which Nicholas relies to demonstrate

that NCMC received county tax support shows mill levies spent

in 1989 and 1990, long before the final board action in the instant

matter, and before NCMC restructured the composition of its

Board of Directors. (Petitioner’s App. 109).

Givav

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Nicholas’s privileges. He is similarly unable to demon-

strate that the County exercised control of or respon-

sibility over the hospital and its credentialing function.

As a result, the Court’s supposed misapplication of the

law had no effect on the outcome of the case, and is

therefore a reason insufficient to seek this Court's review.

II.

“STATE ACTION” UNDER THE CPRA IS NOT STATE

ACTION SUFFICIENT TO SUPPORT A § 1983 CLAIM

Nicholas next argues that the Colorado Supreme

Court misapplied the law when it determined that “active

State supervision” for the purpose of antitrust immunity

is different than “state action” under § 1983. Nicholas is

incorrect. In addition, the meaning of the CPRA involves

an interpretation of state law, which makes it a less

compelling issue for this Court’s review. See, ¢.g., Lehman

Bros. v. Schein, 416 U.S. 386 (1974).

The doctrine of state action immunity originated with

Parker v. Brown, 317 U.S. 341 (1943). It provides that a

private entity’s activity is insulated from antitrust lia-

bility if its anticompetitive conduct furthers an important

state interest. State action immunity requires that the

activity be clearly articulated and affirmatively expressed

as state policy, and the state must actively supervise the

activities of the private entity. FTC v. Ticor Title Ins. Co.,

904 U.S. 621, 633 (1992).

“State action” under § 1983 is an entirely different

concept. § 1983 requires that the activity performed by

the private entity has been “traditionally the exclusive

prerogative of the state,” Rendell-Baker v. Kohn, 457 U.S.

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830 (1982), and must also be “fairly attributable to the

state.” Lugar, supra.

Contrary to Nicholas’s assertions, the CPRA does not

transform professional review at private hospitals into

§ 1983 “state action.” As correctly expressed by the Colo-

rado Supreme Court, “the Sherman Act was directed

toward ‘individual and not state action,’ and that state

regulatory schemes cannot violate it.” (Petitioner’s App.

13, citing California Retail Liquor Dealers Ass’n 0. Midcal

Aluminum, Inc., 445 U.S. 97, 104 (1980)). Moreover, the

enactment of the CPRA does not change the fact that

professional review by private hospitals “has not been

viewed as the prerogative of the state.” (Petitioner’s App.

11, citing Berg v. Shapiro, 948 P.2d 59, 61 (Colo. App.

1997)). See also, Wong v. Stripling, 881 F.2d 200, 202 (Sth

Cir. 1989).

The Court was also correct in its holding that “state

action” for the purposes of § 1983 is different than state

action for the purposes of antitrust immunity. “Similar

sounding phrases often have different meanings when

applied in different legal contexts. This is such a case. . ..

(T]he elements required for a cause of action under section

1983 differ from the elements required for state action under

the antitrust laws.” (Petitioner’s App. 14, citing Ezpeleta ov.

Sisters of Mercy Health Corp., 800 F.2d 119, 122 (7th Cir. 1986)).

The CPRA was created in response to this Court's

decision in Patrick v. Burget, 486 U.S. 94 (1998). See,

Frederick W. Yu, THe Commerres ON ANTICOMPETITIVE Con-

puct: New AGENCY ON THE BLOck, 21 Colo. Law. 31 (Janu-

ary, 1992). The CPRA creates a system of active

supervision of the credentialing activities of all hospitals

wWves

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via the Committee on Anticompetitive Conduct (herein

“CAC”), an independent committee of the Colorado

Board of Medical Examiners. C.R.S. § 12-36.5-106(1). The

CAC’s sole purpose is to oversee any professional review

proceeding which was allegedly the result of “anticom-

petitive conduct.” C.R.S. § 12-36.5-106(9)(f).

Under the CPRA, a physician affected by a creden-

tialing decision allegedly resulting from anticompetitive

conduct has as his sole and exclusive remedy a proceeding

before the CAC. The CAC does not have the power to

award damages, but rather has the power to disapprove,

set aside or modify any professional review action that

resulted from anticompetitive conduct. C.R.S.

§ 12-36.5-106(9)(k).6 Physicians aggrieved by the creden-

tialing process may therefore pursue claims for civil dam-

ages in a parallel state court action, but may not bring an

antitrust claim in that action. § 106(7).

The CPRA does not impose any standards on profes-

sional reviewers. It merely grants immunity to reviewers

who act in good faith and provide the physician with

proper notice and hearing procedures. See, §§ 104, 105. It

6 The CPRA also provides “safe harbor” immunity which

essentially parrots the immunity provisions of the Federal

Health Care Quality Improvement Act (herein “HCQIA”), 42

U.S.C. § 11111, et seq. Under the CPRA, hospitals engaging in

peer review, as well as the members and participants in the peer

review process are granted immunity from suit, so long as they

follow the prescribed notice, hearing and factfinding

requirements. C.R.S. § 12-36.5-104. Those individuals and

entities are also afforded “good faith” immunity under the

statute. § 105.

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is designed to shield and immunize peer review organi-

zations meeting its requirements. It is not, as Nicholas

suggests, a sword for use by aggrieved physicians to

require notice, hearing and factfinding procedures of pri-

vate hospitals.

The CPRA does not require, as a condition of immu-

nity,” that a hospital fully and completely insulate its

adjudicatory process from its investigative processes. As

the Colorado Supreme Court correctly noted, “there is no

logical or legal inconsistency in a certain mixing of inves-

tigative and adjudicative roles in administrative proceed-

ings.” (Petitioner’s App. 34, citing Withrow v. Larkin, 421

U.S. 35 (1975)).

There is also no requirement that the NCMC Board

blindly adopt the conclusions and recommendations of

the Fair Hearing Panel. Several circuit courts facing simi-

lar facts have ruled in favor of immunity for hospital

boards that have modified, ignored or otherwise failed to

adopt the credentialing recommendations made by a phy-

sician hearing panel. Sec, c.g., Bryan v. James E. Holmes

Regional Medical Center, 33 F.3d 1318, 1332-33 (11th Cir. :

1994); Gabaldoni v. Washington County Hospital Ass’n, 250

F.3d 255 (4th Cir. 2001); and Sugarbaker v. SSM Health

Care, 190 F.3d 905 (8th Cir. 1999).

{

eT < ~

Finally, “decisions that take place during the peer

review process in a private hospital ‘ultimately turn on

medical judgments made by private parties according to

7 In Sugarbaker, Bryan, and Gabaldoni, supra, circuit courts

upheld immunity in cases where there was clear commingling

of the investigative and adjudicative processes.

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professional standards that are not established by the

State.’” (Petitioner’s App. 11, citing Blum v. Yaretsky,

supra, 457 U.S. at 1008). The decision to suspend

Nicholas’s invasive cardiology privileges was based upon

medical criteria developed by the physicians on NCMC’s

professional review committees, and was “not compelled

or even influenced by any state regulation.” (Petitioner’s

App. 12, citing Rendell-Baker, supra at 841). As a result, the

CPRA does not transform professional review by private

hospitals into state action for the purposes of § 1983.

In short, Nicholas asks this Court to review the Colo-

rado Supreme Court's interpretation of state law govern-

ing peer review. This is in and of itself sufficient reason

for this Court to decline certiorari on this issue.

To the extent that the Court’s interpretation of the

CPRA touches on federal law, this Court should decline

review because the Colorado Supreme Court applied

legal standards consistent with the decisions of this

Court.

IIl.

THE IMMUNITY PROCEDURE REQUIRED BY THE

HCQIA WAS CORRECTLY INTERPRETED BY THE

COLORADO SUPREME COURT

Nicholas’s final argument is that the Colorado

Supreme Court misapplied the legal standard for statu-

tory immunity under the HCQIA. In support of this posi-

tion, Nicholas argues that the Court erred in deciding

immunity issues de novo, and as a matter of law, in the

face of disputed factual matters. The procedure proposed

by Nicholas ~ that any “disputed fact” be decided by a

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jury - is untenable and contrary to the letter and spirit of

HCQIA.

42 U.S.C. § 11112(a) gives NCMC a presumption of

immunity. That presumption can be rebutted only if

Nicholas demonstrates, by a preponderance of the evi-

dence, that NCMC did not undertake the action in the

furtherance of quality health care; that it didn’t act to

reasonably obtain the facts; that it didn’t provide ade-

quate notice and hearing; or that it didn’t act in the

reasonable belief that the action was warranted by the

facts.

Courts are empowered to determine issues of immu-

nity after the record has been sufficiently developed. See,

e.g., Harlow v. Fitzgerald, 457 U.S. 800 (1982). The purpose

underlying the prompt judicial determination of immu-

nity is to prevent defendants trom being subjected to the

prohibitive costs of defending meritless claims. Id.

HCQIA clearly authorizes (and even encourages)

courts to determine immunity issues prior to trial. See,

¢.g., Bryan v. James E. Holmes Regional Medical Center, 33

F.3d 1318, 1332-33 (11th Cir. 1994); Gabaldoni v. Washing-

ton County Hospital Ass'n, 250 F.3d 255 (4th Cir. 2001); see

also, Sugarbaker v. SSM Health Care, 190 F.3d 905 (8th Cir.

1999); Brader v. Allegheny General Hospital, 167 F.3d 832

(3rd Cir. 1999).

In ruling on HCQIA immunity, the court must utilize

“an unconventional standard in determining whether

[the peer reviewer] was entitled to summary judgment —

whether a reasonable jury, viewing all facts in a light

most favorable to [the physician], could conclude that he

had shown, by a preponderance of the evidence, that [the

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peer reviewer's] actions fell outside the scope of

§ 11112(a).” Gabaldoni, supra; see also, Sugarbaker, supra;

Brader, supra. “Only disputes over facts that might affect

the outcome of the suit under the governing law will

properly preclude the entry of summary judgment. Fac-

tual disputes that are irrelevant or unnecessary will not

be counted.” Anderson v. Liberty Lobby, Inc., 477 US. 242,

248 (1986).

The Colorado Supreme Court correctly followed

these precepts in determining that Respondents are enti-

tled to immunity from damages as a matter of law. It

determined, notwithstanding Nicholas’s arguments that

the CAC found the existence of anticompetitive motives,®

that NCMC reasonably believed that the restriction of

Nicholas’s invasive privileges “would restrict incompe-

tent behavior or would protect patients.” (Petitioner’s

App. 20).

The Court properly determined that NCMC had

restricted the privileges only after extensive investiga-

tion, hearing and factfinding had taken place, including

the review by four independent physicians; investigation

by the QA Committee and Credentials Subcommittee; an

evidentiary hearing before the Fair Hearing Panel; and a

review of the entire matter by the House Committee. The

8 Nicholas argues that the Colorado Supreme Court erred

in not adopting the findings and conclusions of the CAC.

However, the CAC is limited, by statute, to an eight-hour

hearing on the sole issue of anticompetitive conduct. C.R.S.

§ 12-36.5-106. The findings and conclusions of the CAC are

therefore not binding precedent under the theories of collateral

estoppel or res judicata, and do not alter the requirement that

the court rule upon HCQIA immunity as a matter of law.

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Court noted that “Nicholas has introduced no evidence to

suggest that NCMC did not make reasonable efforts to

obtain the facts prior to the decision of the Board of

Directors.” (Petitioner’s App. 22).

The Colorado Supreme Court also correctly con-

cluded that NCMC complied with all notice and hearing

procedures required by HCQIA. In particular, it held a

Fair Hearing in which Nicholas was allowed, with the

assistance of counsel, to call witnesses, offer exhibits and

make argument in support of his position. Nicholas was

informed as to his rights throughout the review, and was

provided written decisions at all stages of the proceeding.

Based upon these undisputed facts, the Court concluded

“(tJhere is no evidence in the record to suggest that

Nicholas was not afforded adequate notice or was denied

a fair hearing.” (Petitioner’s App. 23). Finally, the Court

reached the proper conclusion that NCMC had a factual

basis for its decision, based upon the voluminous mate-

rials, testimony, reports and exhibits reviewed by NCMC

prior to making its decision.

The power of the Colorado Supreme Court to confer

immunity upon NCMC is undisputed. This Court should

therefore decline to review the Colorado Supreme Court's

determination of HCQIA immunity based upon the lack

of a compelling issue and because the Court properly

applied federal law in reaching its conclusions.

CONCLUSION

Nicholas has failed to demonstrate a compelling

issue upon which certiorari should be granted. At best,

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he has argued that the Colorado Supreme Court misap-

plied the law in his case. As such, he has failed to

advance any reason why this Court should grant ce:-

tiorari.

Respondents therefore pray that this Honorable

Court deny the Petition for Writ of Certiorari.

Respectfully submitted,

Jerome M. ReINAN

2150 W. 29th Ave., 5th Floor

Denver, CO 80211

Telephone: (303) 894-0383

Fax number: (303) 894-0384

Counsel for Respondents

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DISTRICT COURT, COUNTY OF WELD,

STATE OF COLORADO

Case No. 93 CV 329 Division I

ORDER GRANTING PARTIAL SUMMARY JUDGMENT

IN FAVOR OF DEFENDANTS ON PLAINTIFF'S

ELEVENTH CLAIM FOR RELIEF PURSUANT TO

42 U.S.C. § 1983

(Filed Dec. 4, 1997)

WILLIAM JOHN NICHOLAS,

Plaintifé,

NORTH COLORADO MEDICAL CENTER,

INC., a Colorado corporation, commonly

referred to as NCMC, and its Board of

Directors; Richard H. Stenner, its President;

Karl B. Gills, its Executive Vice-President;

Alyce Kantner, its former Director of Medical

Services; Pat (Wilson) Kern, its director of

Cardiovascular Services; and Defendants Doe

1 and 15,

Defendants.

THIS MATTER comes before the court on Defen-

dant’s Motion for Summary Judgment. In this Order, the

Court will only address Plaintiff’s Eleventh Claim for

Relief under 42 U.S.C. § 1983.

This suit arises out of the suspension of Plaintiff, Dr.

William John Nicholas, from certain hospital privileges at

North Colorado Medical Center. The hospital suspended

his privileges after a professional review process, which

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App. 2

included investigation by the hospital’s Quality Assur-

ance Committee, its House Subcommittee, its House

Committee, and a Fair Hearing Panel. Nicholas is alleging

that the members of these panels and certain other hospi-

tal administrators ousted him from the hospital without

due process, in bad faith, and with an anticompetitive

intent.

In order to bring a claim under 42 U.S.C. § 1983, the

defendants’ actions must qualify as “state action.” Thus,

the question here is whether the hospital’s peer review

process qualifies as “state action.”

The Berg cases speaks directly to this issue. Berg v.

Shapiro, 95 CA 1899 (Colo. App. Div. I), 1997 WL 184000

(April 17, 1997). In that case, the Court of Appeals held

that professional peer review at a private hospital did not

qualify as “state action” for purposes of 42 U.S.C. § 1983.

NCMC is a private, non-profit corporation. Thus, its

actions are not “state actions” for purposes of 42 U.S.C.

§ 1983. Therefore, Plaintiff cannot bring a claim against

Defendants pursuant to this statute.

The Court would like to note that the above analysis

does not mean that Defendants’ actions do not qualify for

immunity under C.R.S. 12-36.5-101, et seq. or 42 U.S.C.

§ 11111, et seq. While the Berg court held that a private

hospital’s peer review action is not “state action” for

purposes of § 1983, that same court indicated that profes-

sional peer review at a private hospital is “clothed with

the status of a state agency” concerning issues of anti-

competitive conduct under CRS 12-36.5-106. Thus, the

immunity issues in this case are still alive and will be

decided by the court at a later date.

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App. 3

IT IS ORDERED:

Plaintiff’s eleventh claim for relief based on 42 U.S.C.

§ 1983 is DISMISSED with prejudice.

DATED: DEC 04 1997

/s/ William L. West

William L. West

District Court Judge

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App. 4

DISTRICT COURT, COUNTY OF WELD,

STATE OF COLORADO

Case No. 93 CV 329

ORDER

(Filed Jan. 17, 1998)

JOHN NICHOLAS, Plaintiff,

Vv.

NORTH COLORADO MEDICAL

CENTER, INC., et. al., Defendant,

This matter comes before the Court on the Plaintiff's

Motion to Reconsider the Court’s Order Dismissing Plain-

tiff’s § 1983 claim (Plaintiff’s 11th Claim for Relief).

Admittedly, the court did not address a number of Plain-

tiff’s arguments in its short decision. The Court cited Berg

v. Shapiro (Colo. App. 1997) 948 P.2d 59 (95 CA 1899), for

the proposition that a private hospital’s use of a peer

review committee does not make the actions of the hospi-

tal state action for purposes of § 1983. At the time of the

Court’s Order, certiorari was pending in Berg. Since then

certiorari has been denied, and is binding on this Court in

the absence of any other state court decision.

The Berg case dealt with a private hospital. I did not

discuss in my prior Order Plaintiff's argument that

NCMC is a public hospital. The issue in this case is

whether the denial of Dr. Nicholas’ privileges was state

action. In order for Plaintiff to establish his § 1983 claims

he must show that Weld County exercises such dominion

and control over the Hospital’s physician credentialling

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App. 5

functions that the revocation of Dr. Nicholas’s privileges

constitutes state action.

It is not disputed that the Hospital is a private entity.

Therefore, in order to assert a § 1983 claim the Plaintiff

must show a nexus between the state and the challenged

action sufficient to establish that the action should fairly

be treated as that of the state. Blum v. Yaretsky (1982) 457

U.S. 991, 102 Sup. Ct. 2777. The conduct complained of

must have been caused by the state’s exercise of “coercive

power” or must have been caused by the state’s provision

of “such significant encouragement, either overt or cov-

ert, that the choice must in law be deemed to be that of

the state.” Blum, 457 U.S. 1004, 102 Sup.Ct. 2786.

In Lo-Seng Yo v. Cibola General Hospital, (10th Cir.

1983) 706 F2d 306, the court held that probationary sanc-

tions against a doctor did not constitute state action. The

court also noted that the hospital’s receipt of government

funds for construction and operation plus the fact that

the hospital was the only hospital within a 60-mile radius

were insufficient facts to establish state action. Rather, a

substantial nexus must exist between the governmental

contro] alleged and the specific conduct which purpor-

tedly constitutes state action.

Tunca v. Lutheran General Hospital (7th Cir. 1988) 844

F2d 411, involved the termination of a doctor’s privileges

and the Court held that mere ownership of the hospital’s

land by the county was insufficient to establish state

action. As in the instant case, the lease between the

county and the hospital did not reserve to the county any

right to exercise any management or operational control

over the hospital.

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App. 6

The presence of public officials, or the appointment

of members to the board of directors of the hospital, does

not render decisions of the board state action. Crowder v.

Conlan (6th Cir. 1984) 740 F2d 447. In Crowder, the court

held that the facts that the county owned the facility,

provided financing for the construction, and had two

public officials on the board were insufficient to establish

a nexus between the state and the hospital in regard to its

credentialling decisions.

Having reviewed the voluminous materials provided

by both parties, I conclude that NCMC was a private

hospital and that the County did not retain or exercise

any control over the operations and management of the

Hospital, and particularly with regard to the Hospital’s

credentialling decisions.

Plaintiff relies on cases that have applied a “Public

Function” test. Milo v. Cushing Memorial Hospital (10th Cir

1988) 861 F2d 1194; Carnes ov. Parker (10th Cir. 1991) 922

F2d 1506; Moore v. Wyoming Medical Center (D. Wyo. 1993)

825 F. Supp. 1531; Burton v. Wilmington Parking Authority

(1961) 356 U.S. 715. Plaintiff’s reliance on these cases is

misplaced. They all assume that the hospital involved

had a pre-existing relationship with the county sufficient

to find that the hospital acted in the place of the county.

Those are not the facts of the instant case. Rather, in the

instant case the County and the Hospital are independent

entities, neither having the ability to contro] the other.

Further, the public function test considers three ques-

tions: 1) whether the County receives a direct financial

benefit from the lessee, 2) whether the County benefited

from the action complained of, and 3) whether the

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App. 7

County retained control of and responsibility for the Hos-

pital. There is no evidence that the County benefited from

the restriction of Dr. Nicholas’s privileges. The Plaintiff

argues that one reason for his discipline was that he did

not keep patients in the hospital long enough, thereby

depriving the Hospital of income. Without commenting

on the strength of that argument, it does not address how

the County might benefit. The loss of income may affect

the profits of the Hospital, but it does not affect the

County.?

The third question is also answered in the negative.

The County has not retained or exercised any control

over the Hospital.

In addition, the cases cited by Plaintiff can be factu-

ally distinguished from the instant case.

For the reasons set forth,

IT IS ORDERED:

The Motion for Reconsideration is denied.

_ Dated: January 17, 1998

/s/ William L. West

William L. West

District Court Judge

1 Under the lease, if gross income of the Hospital was

sufficiently affected, it could conceivably affect the Hospital’s

rent payment. Besides being highly speculative, it is highly

unlikely.

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App. 8

EXHIBIT “A”

DISTRICT COURT, COUNTY OF WELD,

STATE OF COLORADO

Case No. 93 CV 329

FINDINGS OF FACT, CONCLUSIONS OF LAW,

AND ORDER

(Filed JUN. 05, 98)

JOHN NICHOLAS, Plaintiff,

NORTH COLORADO MEDICAL CENTER, INC.;

RICHARD H. STENNER; KARL B. GILLS;

ALYCE KANTNER; PAT (WILSON) KERN;

and Defendants Doe 1-15, Defendants,

This matter came on for hearing on Defendants’

Motion for Summary Judgment on Immunity January 26,

1998 through February 6, 1998. The Plaintiff appeared by

Philip A. Nicholas, Esq., W. J. Nicholas, Esq., and Jason

Tangeman, Esq. Defendants appeared by Jay M. Reinan,

Esq. The Court heard the testimony, received the exhibits,

heard the arguments of counsel, and took the matter

under advisement. The Court has received both parties’

closing briefs.

Background

Plaintiff is a licensed physician specializing in cardi-

ology. He came to Greeley in approximately 1989 and

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App. 9

received credentials to practice at North Colorado Medi-

cal Center (NCMC). In 1992, the Board of Governors of

NCMC revoked his level three privileges to practice inva-

sive cardiology. Plaintiff then filed a complaint under

C.R.C.P. 106 for judicial review of the Hospital’s adminis-

trative decision. (92 CV 447). At the same time, the Plain-

tiff appealed the Hospital’s revocation of Plaintiff’s level

three privileges to the State Board of Medical Examiners

Committee on Anticompetitive Conduct pursuant to CRS

12-36.5-106(7). Proceedings in 92 CV 447 were stayed

pending the decision of the State Committee. The Com-

plaint in the instant action was filed July 2, 1993. On July

12, 1993 the State Committee reversed the Hospital

Board’s decision and ordered Plaintiff’s privileges reins-

tated. That decision was affirmed by the Court of Appeals

(Nicholas v. Northern Colorado Medical Center, Inc.

(Colo.App. 1995) 902 P2d 462) and the Supreme Court

(North Colorado Medical Center, Inc. v. Committee on Anti-

competitive Conduct (Colo.1996) 914 P2d 902). The 92 CV

447 case was dismissed on October 7, 1996.

In the present action, the Third Amended Complaint

set fourth [sic] 15 claims for relief. First, Declaratory

Judgment; Second, Injunctive Relief; Third, Negligence;

Fourth, Breach of Contract; Fifth, Wilful Breach of Con-

tract; Sixth, Defamation; Seventh, Intentional Infliction of

Mental Suffering; Eighth, Tortious Interference With Con-

tract; Ninth, Fraud and Misrepresentation; Tenth, breach

of Duty of Good Faith and Fair Dealing; Eleventh, Viola-

tion of Civil Rights under 42 USC 1983; Twelfth, Anticom-

petitive Conduct; Thirteenth, Outrageous Conduct;

Fourteenth, Abuse of Process; Fifteenth, Arbitrary, Capri-

cious and Unreasonable Conduct.

Wve

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Several of these claims are no longer at issue. By

Order dated October 7, 1996, the Court dismissed the

Claims for Declaratory Judgment and Injunctive Relief.

By Order dated December 4, 1997, the Court dismissed

the §1983 Claim. During the course of the Hearing on

Immunity, the Plaintiff voluntarily dismissed the action

against Richard Stenner and Pat Kern. In addition, the

appeal to the State Committee on Anticompetive Conduct

provides the exclusive remedy for Plaintiff's Twelfth

Claim for Relief.

Nature of the Hearing

Defendants moved for Summary Judgment on the

remaining claims on the grounds that they are immune

from suit and liability under The Colorado Professional

Review Act CRS 12-36.5-101 et seq. and the Federal Health

Care Quality Improvement Act 42 USC 11111 ef seq.

Immunity is a question of law to be decided by the court.

Trinity Broadcasting v. Westminster (Colo.1993) 898 P2d

916, 924; Bryan v. Holmes Regional Med. Ctr. (11th Cir.

1994) 33 F3d 1318, 1332.1 During the course of the hearing

the Plaintiff acknowledged that he was not challenging

the actions or conduct of the Quality Assurance Commit-

tee, the Credentials Committee, or the Fair Hearing

1 Under section 105 of the Colorado Act, immunity presents

an issue of subject matter jurisdiction under CRCP 12(b). Under

the Federal Act, the Court must first determine whether the

Plaintiff has overcome the presumption. If the Court determines

that has met the minimum standards of the Act, summary

judgment is appropriate.

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App. 11

Panel.2 The federal and state acts are similar in some

respects, but they are not identical. Both have as their

purposes the assurance of quality health care, the protec-

tion of people from unprofessional conduct, and the pro-

tection of those people who participate in professional

peer review activities. In one section, the Colorado Act

provides immunity from suit. CRS 12-36.5-105. In another

section, it provides immunity from damages. CRS

12-36.5-203. On the other hand, the Federal Act provides

a rebuttable presumption of immunity from damages.

The Colorado Act does not contain any such presump-

tion, North Colorado Medical Center v. Committee on Anti-

competitive Conduct, supra, although the Governing

Board’s decision is entitled to a presumption of validity

and regularity. Both the Federal Act and §203 of the

Colorado Act require the participants in the review proc-

ess to act reasonably. In addition, section 105 of the

Colorado Act requires the participants to act in “good

faith.” Both acts require that the professional review

activities be conducted in accord with certain procedural

guidelines.

2 Plaintiff stated he was not arguing bad faith. He was not

saying anyone had an evil motive. He was not challenging the

actions of the Credentials Subcommittee, he was not

challenging the actions of the Fair Hearing Panel. He was only

challenging the action of the House Committee and the Board of

Directors.

aavee

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Ill

The Statutes

A. The Colorado Professional Review of Health

Care Providers Act. CRS 12-35.5-101 et seq.

(PRHCP)

Section 105(1) of the PRHCPA provides immunity

from suit to any person who participates in the profes-

sional review process so long as such person made a

reasonable effort to obtain the facts of the matter, acted in

the reasonable belief that the action was warranted by the

facts, and otherwise acted in good faith. Section 105(2)

provides immunity from suit for damages to the govern- :

ing board and its individual members and to the entity so

long as they act in good faith.

“Good faith” includes reliance on the recommenda- -

tions of the review committee and requires consideration

of any facts not previously available to the peer review

committee and that the board act in the reasonable belief

that the action taken was warranted by the facts.

“Governing Board” means any governing body or

duly authorized subcommittee with final authority under

written bylaws, policies, or procedures to take final

action regarding the recommendation of any authorized

review committee. §12-36.5-102(2).

“Professinoal Review Committee” means any com-

mittee authorized under the provisions of this article to

review and evaluate the professional conduct and quality

of practice of a licensed physician. §12.36.5-102(3).

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“Records” includes any and all written or verbal

communications by any person, professional review com-

mittee, governing board, or staff arising from the activ-

ities of a professional review committee.

CRS 12-36.5-104(2) provides that a professional

review committee must be composed of a majority of

- physicians. Subsection (7) provides certain minimum

requirements: (a) the physician is entitled to a hearing,

(b) a person who was a member of the investigating

committee may not be a member of the hearing commit-

tee, (c) the physician has a right to reasonable notice,

right to be present, right to be represented by counsel,

and the right to offer evidence, (d) the hearing committee

shall make recommendations to the governing board, and

(e) the physician must be given a copy of the recommen-

dations, and shall have a right to appeal the findings and

recommendations to the governing board. Subsection (8)

provides that the governing board must adopt written

bylaws, policies or procedures that provide for a right of

appeal, reasonable notice, right to counsel, and the right

to appear and offer argument. The bylaws may provide

that the appeal be heard by a committee of the governing

board.

3 There appears to be an exception created for committees

created by governing boards that have a professional review

comumnittee established pursuant to article 36 of title 12. There is

no current reference to professional review committees in article

36 that I can find.

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B. CRS 12-36.5-201 et seq.

Section 201 essentially adopts the Federal Health

Care Quality Improvement Act of 1986, discussed later. It

provides immunity from damages for virtually everyone

involved in a professional review action, so long as the

action taken relates to the competence or professional

conduct of a physician.

C The Federal Health Care Quality Improvement

Act of 1986. 42 USC §11111, et seq. (HCQIA)

Although the chapter of the U.S.C. containing the

Federal Act is entitled “Encouraging Good Faith Profes-

sional Review Activities,” the Federal Act does not actu-

ally use the term “Good Faith.” It provides broad

immunity for persons involved in professional review

activity so long as certain standards are met. Section

1112(a) provides that the professional review action must

be taken (1) in the reasonable belief that the action was in

the furtherance of quality health care, (2) after a reason-

able effort to obtain the facts, (3) after adequate notice

and fair hearing procedures are afforded the physician,

and (4) in the reasonable belief that the action was war-

ranted by the facts. Subsection (b) specifies the notice and

hearing requirements, which are substantially the same as

required by the Colorado statute.

NCMC Procedures

There are essentially three groups associated with the

operation of the hospital: the Board of Directors, the

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App. 15

Administration, and the Medical Staff. The Board of

Directors is the governing board and is at the top of the

organizational chart. It appoints the President and CEO,

who is in charge of the administration. The Chief of the

Medical Staff is elected by the Medial Staff. The Medical

Staff has bylaws that govern review of patient charts and

care and a Quality Assurance Committee that reviews

complaints and charts appearing to reflect deficiencies or

variances from the norm.* The Quality Assurance Com-

mittee performs some review and investigation and, if it

determines that there is a problem with a physician, it

makes recommendations to the Credentials Subcommit-

tee. The Credentials Subcommittee is charged with the

responsibility of investigating and making recommenda-

tions regarding whether new physicians will be accepted

to practice in the hospital and whether physicians alrez dy

on staff will have privileges suspended, revoked, or lim-

ited in some other manner. If a physician receives an

adverse finding or recommendation from the Credentials

Subcommittee, he or she may request a hearing before a

“Fair Hearing Panel,” pursuant to the hospitals Correc-

tive Action/Fair Hearing Plan. Under the Plan, either the

physician or the Credentials Subcommittee may appeal

the findings and recommendations of the Fair Hearing

Panel to the House Committee. The House Committee

makes its recommendations to the Board of Directors,

which makes the final decision and takes the final action.

* The Medical Staff bylaws refer to the Quality Assessment

Comumittee. During the hearing it was consistently referred to as

the Quality Assurance Committee.

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App. 16

The Administration supplies staff to support all of

the various committees. The Quality Assurance Commit-

tee is made up primarily of physicians. It may have one

member of the Board of Directors, although it did not

during the investigation of the Plaintiff. It may also con-

tain members from the Administration. The Medical Staff

members must constitute a majority of the voting mem-

bers. The Credentials Subcommittee is appointed by the

House Committee and is made up of eight physicians

representing each of the Hospital departments, one mem-

ber from the House Committee, and one member of the

Administration. In this case, the House Committee mem-

ber was also a physician. The House Committee is

appointed by and made up of members of the Board of

Directors. The Board of Directors appoints its own mem-

bers. It contains representatives from the community,

physicians, and the President/CEO, who is a ex officio

member.

Facts

Plaintiff joined the NCMC staff in August 1989. In

1990 the Quality Assurance Committee received one or

more reports of incidents or variances that caused the QA

Committee to review a number of medical charts of Plain-

tiff’s patients. The QA Committee initially recommended

that Plaintiff be proctored by for a period of time. Dr.

Marsh, the proctoring doctor, reported in December of

5 The vice-chair of each of the hospitals 8 medical de-

partments.

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App. 17

1990 that he felt that Plaintiff was competent to continue

without further proctorship. Previously, Dr. Marsh who

was head of the Cath Lab, had suspended Plaintiff’s Cath

Lab privileges. However, the QA Committee continued to

have concerns and decided to have an outside review

performed. The review, which was conducted by Dr. G.

David Jang, was critical of Plaintiff. Following Dr. Jang’s

report and after giving Dr. Nicholas an opportunity to

reply to the report, the QA Committee reported to the

Credentials Subcommittee and offered three options:

1. Suspend Dr. Nicholas’ invasive cardiology privi-

leges until the resolution of all QA concerns,

Enroll Dr. Nicholas in a one-year training course

in invasive cardiology at an accredited training

program, or,

Obtain an independent evaluation from a Colo-

rado cardiologist, Roy Thompson, M.D., to evalu-

ate the appropriateness of onsite proctoring

versus formal retraining.

The QA Committee ultimately recommended the

third option.

Then, the Credentials Subcommittee met and dis-

cussed the report of the QA Committee. Dr. Nicholas was

allowed to address the Subcommittee regarding the rec-

ommendations and the quality assurance issues. The Sub-

committee concluded that allowing Dr. Nicholas to

continue with invasive cardiology privileges posed a risk

to patient health, safety, and welfare and threatened to

* A copy of Dr. Jang’s report was furnished to Dr. Nicholas

as soon as it was received.

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“avs

App. 18

interfere with the medical center’s ability to provide

quality patient care.” Based on this conclusion, the Sub-

committee directed the president of the Hospital to sum-

marily suspend Dr. Nicholas’ invasive cardiology

privileges, pending further investigation and review by

the Subcommittee. Richard Stenner, the president, noti-

fied the Plaintiff of the suspension by letter the same day.

Over the following couple of weeks the Subcommut-

tee interviewed several doctors and nurses and hired

three additional doctors to conduct reviews of certain of

Dr. Nicholas’s patient charts. Those reviews were also

critical of Dr. Nicholas. Following receipt of these reports,

Dr. Nicholas individually contacted each of the reviewing

doctors and represented that because of their reports, his

privileges were being revoked. He also furnished infor-

mation outside of his charts and patient notes. As a result

of Dr. Nicholas’s contact, the doctors softened their criti-

cisms to some degree.

The Credentials Subcommittee, after receiving Dr.

Nicholas’s responses to the outside reviews, found that

Dr. Nicholas was deficient in a number of categories.

Based on those findings, the Credentials Subcommittee

determined to suspend Dr. Nicholas’s invasive cardiology

privileges.

Pursuant to the by-laws and the corrective action

plan, Dr. Nicholas was provided with notice of his right

to request a Fair Hearing.

7 The Subcommittee made a number of factual findings

leading up to its conclusion. The record supports the

Subcommittee findings and its conclusion.

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App. 19

Subsequently, a Fair Hearing Panel was appointed

and a hearing was held. The Fair Hearing Panel found

that Dr. Nicholas had a number of deficiencies. Of partic-

ular note, the Panel found:

11.

17.

18.

Nicholas lacks insight into the purpose and

process of creating a valid and useful medical

record. He operates under the false impression

that detailed dictation of the procedure notes

substitutes for current and complete entries in

the progress notes. Nicholas’ paucity of initial

documentation in the progress notes and his

constant need to recreate the record in light of

new findings leads the panel to the conclusion

that he had a definite inability to form a rational

treatment plan based on a logical progression of

thought. His entries in the progress notes are

inadequate to communicate his reasoning and

treatment plan without additional information

to nurses and other professionals. This continu-

ing deficiency is, in out [sic] opinion, at the root

of Nicholas’ problems as it causes others to per-

ceive (a) a lack of judgment, (b) a lack of plan-

ning or coherent treatment plan, (c) the use of

unnecessary or unindicated treatment and (d)

unethical behavior.

That Nicholas seems to now recognize his

responsibility for any technical and judgmental

errors or deficiencies. Nicholas continues, how-

ever, to lack insight into his documentation defi-

ciencies and their impact on patient care or

interpersonal and interprofessional relation-

ships.

That the summary suspension of the cardiac

catheterization laboratory privileges by the Cre-

dentials Subcommittee was reasonable and

ee ee a Tr ee eB ms

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App. 20

appropriate in light of the information available

to it.

The Hearing Panel then made recommendations that

Dr. Nicholas be closely supervised and monitored and

that if he continued to evidence deficiencies that his

privileges be modified, limited or revoked.

Both Dr. Nicholas and the Credential Subcommittee

appealed to the House Comunittee. The House Committee

considered the Report of the Fair Hearing Panel, together

with the Credential Subcommittee Report.. The record

before the Fair Hearing Panel included the Credential

Subcommittee’s Report, reports from the Quality Assur-

ance Committee, and the reports of Drs. Jang, Greenberg,

Molk, and Cohen.

The House Committee determined that the findings

of the Fair Hear Panel and those of the Credential Sub-

committee, although worded differently were substan-

tially similar. The House Committee agreed with the

Credentials Subcommittee that the deficiencies were

more serious than perceived by the Fair Hearing Panel

and recommended more stringent sanctions. Rather than

allowing Dr. Nicholas to continue invasive cardiology

under supervision, the House Committee recommended

that his invasive privileges be revoked znd that he be

placed on probation for a year. The recommendation left

open the possibility that Dr. Nicholas could re-apply for

invasive cardiology privileges. The Board of Directors

ratified the House Committee recommendations.

8 The House Committee did not find that Dr. Nicholas had

been untruthful or that he lacked candor.

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App. 21

Conclusions

As earlier noted, Plaintiff does not challenge any of

the actions taken, except the actions of the House Com-

mittee and the Board of Directors, which Plaintiff chal-

lenges on the basis of procedural errors and non-

compliance with the immunity statutes.

I conclude that the policies and by-laws of NCMC

substantially comply with both the provisions of CRS

12-36.5-101 et seq. and with 42 USC 11101 et seq. I further

conclude that the hospital substantially complied with its

by-laws and requirements and with the requirements of

both the federal and statute [sic] statutes.

I conclude that the fact members of the House Com-

mittee were also members of the Credential Subcommit-

tee does not violate either statute.

I conclude that CRS 12-35.5-105(1) provides immu-

nity from suit for all participants in the professional

review process. I conclude and find by a preponderance

of the evidence that Karl Gills and Alyce Kantner acted in

good faith. The evidence persuades me that their primary

concern was the welfare of patients of the hospital. Plain-

tiff attempts to infer that Ms. Kantner was acting in bad

faith because she wanted Dr. Nicholas out of the hospital.

It may be true that she wanted Nicholas out, but she was

privy to information that would justify that belief. In

addition, Plaintiff presented no evidence that she sup-

plied false or misleading information. The evidence about

“wyyey

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App. 22

the “altered film” was not entirely clear. Counsel for

Plaintiff seems to assert that Ms. Kantner received a film

with blue writing on it. However, Dr. Nicholas testified

that he wrote in blue ink on a copy of the film and then

made a photocopy of that to deliver to Ms. Kantner.

Therefore, the copy Kantner received was entirely -black

and white. In any event that was not a matter of import in

the final analysis.

I'm hard put to find any evidence that Karl Gills did

not act in good faith. He may have delivered some docu-

ments outside the charts and patient notes to the inde-

pendent review doctors in Denver, but by itself that is not

bad faith. There was more than sufficient evidence to

show that Gills and Kantner acted in the reasonable belief

that their actions were warranted by the facts.

CRS 12-36.5-105(2) provides immunity “from suit for

any damages in a civil or criminal action. . .. ” (emphasis

added) I reject Plaintiff’s argument that this section

grants only immunity from liability. The statute is clear,

unambiguous and immunity from suit is consistent with

the purposes of the statute.

Plaintiff assumes that an appeal from the Fair Hear-

ing Panel is like an appeal from a trial to an appellate

court; that the governing board is bound by the facts and

conclusions of the Panel and cannot go beyond that. I

disagree. The Fair Hearing procedure is to make sure that

the Doctor has a full opportunity to develop his position.

The Fair Hearing Panel does not make a “decision” that

the governing board must either accept or reject. It makes

a recommendation. I conclude that the statute leaves to

the governing board the ultimate authority as to what

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App. 23

action should be taken. Further, I conclude that in making

its decision the Board is not limited to either to [sic) the

findings of fact or the recommendation of the Fair Hear-

ing Panel.

In this case, however, the governing board did not

reject the findings of the Fair Hearing Panel. Rather,

based on those findings, the Board reached a different

result. I conclude that while the House Committee and

the Board are required to consider the Fair Hearing Panel

Report, they are not prohibited from considering other

information, so long as Dr. Nicholas had notice and

opportunity to respond. Dr. Nicholas had such an oppor-

tunity at all stages of the proceedings. I conclude and

find by a preponderance of the evidence that the House

Committee and the Board acted in good faith. Further, I

conclude that they relied on the recommendations of a

professional review committee, albeit it [sic] the Creden-

tials Subcommittee, and that there is no evidence that any

member had knowledge that made such reliance unwar-

ranted. Further, I find by a preponderance of the evidence

that the House Committee and Board acted in the reason-

able belief that the action taken was warranted by the

facts.

I conclude that the fact that Ken Lind was on the

Board of Directors, the House Committee and the Cre-

dential Subcommittee does not violate the statutes nor

impair the validity of the proceedings.

The parties have devoted some time to whether

“good faith” is determined by a subjective or objective

test, and who has the ultimate burden of proof. I don’t

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App. 24

resolve those issues. Under either a subjective or objec-

tive test, and regardless of who has the burden of proof, I

find by a preponderance of the evidence that Defendants

individually and collectively acted in good faith.?

The Federal Act provides immunity for damages for

virtually all participants in the peer review process.}°

Immunity under the Federal Act is clearer than under the

State statute. If there is compliance with section 1112(a)

then the participants are not liable in damages. In addi-

tion, no person who supplies information shall be liable

unless such information is false and the person providing

it knew that such information was false.

Section 11112((a) [sic] requires that the action must

be taken:

(1) in the reasonable belief that the action was in the

furtherance of quality health care, (2) after a

reasonable effort to obtain the facts of the mat-

ter, (3) after adequate notice and hearing pro-

cedures are afforded to the physician .. ., (4) in

the reasonable belief that the action was war-

ranted by the facts. . . .

* Although I don’t decide the issues, my inclination is that

good faith under Section 105 of the Colorado Statute means

subjective good faith, and that Defendant bears the burden of

proving good faith. I believe the standard under the Federal Act

is objective good faith and that Plaintiff bears the burden of

~ overcoming the presumption.

10 As noted, the only claims remaining are damage claims.

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App. 25

Even without the presumption contained in the stat-

ute, the evidence establishes by a preponderance of the

evidence that Defendants met each of the four criteria. In

addition I agree with Defendant that Bryan v. James E.

Homes Regional Medical Center (11th Cir. 1994) 33 F3d 1318

is directly in point and resolves most, if not ali, of Plain-

tiff’s procedural objections.

Vil

Summary

Essentially the plaintiff argues that the hospital is not

entitled to immunity because (1) the investigatory and

adjudicatory functions were intermingled; and, (2)

because the House committee and Board considered the

reports of the Quality Assurance Committee and the Cre-

dentials Subcommittee. As previously noted I find that

both the QA Committee and the Credentials Subcommit-

tee meet the requirements of the statute as an authorized

Professional Review Committee. Pursuant to CRS

35-5-102 the governing board may “take final action

regarding the recommendations of any authorized profes-

sional review committee.” My view of the statute, as a

whole and considering its purposes, is that the Board of

Directors may appoint an authorized professional review

committee. I believe that the construction is even more

clear with regard to the Federal Act and section 203 of the

Colorado Act.

In summary, I find that Dr. Nicholas received the

minimum procedural and substantive due process rights

required by the statutes. I find that the fact that members

of the Board and House Committee were also on the

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App. 26

Credentials Subcommittee did not deprive Plaintiff of

due process.

By definition the findings and recommendations of

the Fair Hearing Panel are not a “decision.” The Fair

Hearing Panel makes recommendations. The “appeal” is

not an appeal in the traditional sense in which an appel-

late court reviews the record and either accepts or rejects

a trial court decision. Rather, the House Committee

makes a final decision, subject to ratification by the Board

of Directors, based on the findings and recommendations

of the Fair Hearing Panel. Had the House Committee and

Board rejected the findings of the Fair Hearing Panel a

different issue would be presented. In this case, however,

the House committee accepted the findings. It reached a

different result only with regard to the corrective action.

This does not impugn good faith.

The Board of Directors has the ultimate responsibility

for ensuring that patients receive competent and quality

health care (not to mention avoiding potential mal-prac-

tice actions). The totality of the evidence persuades me by

a preponderance of the evidence that the Board acted in

good faith in the interests of the public health and safety.

I conclude that Defendants are immune from liability

for damages under the Federal statute. It follows from

this that Defendants are immune from liability for dam-

ages under §203 of the Colorado Act.

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App. 27

Vil

Judgment and Order |

Defendant’s Motion for Summary Judgment is |

granted and this action is dismissed, with prejudice.

IT IS ORDERED:

The trial set to begin October 13, 1998 is vacated.

Plaintiff’s Motion to Set Aside Summary Judgment

Dismissing Plaintiff's 1983 Claim (lltH Claim) is

DENIED.

Plaintiff's Motion to Amend the Finding of the

Court’s December 4, 1997 and January 17, 1998 Orders is

DENIED.

Plaintiff’s Motion to Revisit and Reconsider the

Defendant’s Motion for Summary Judgment is DENIED.

Plaintiff's Motion to Grant Leave to Supplement the

Plaintiff's Responses to the Motions and this Motion is

DENIED. |

Plaintiff's Motion to Defer Final Rulings and Orders

until the Hospital has Fully Responded to Outstanding

Discovery Requests is DENIED.

Plaintiff's Motion to Grant Partial Summary Judg-

ment in Plaintiff's Favor Concerning the Defendant's

1983 Liability is DENIED.

Defendant’s Motion to Strike is DENIED.

Plaintiff’s Motion to Fix Time to Respond is MOOT.

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App. 28

All other outstanding motions are either moot or

denied.

Dated: June 5, 1998

/s/ William L. West

William L. West

District Judge

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ARTICLE 36.5

Professional Review of

Health Care Providers

PART I

PROFESSIONAL REVIEW

PROCEEDINGS - PHYSICIANS

12-36.5-101. Legislative declaration.

12-36.5-102. Definitions.

12-36.5-103. Use of professional review committees.

12-36.5-104. Establishment of professional review com-

mittees — function.

12-36.5-105. Immunity from liability.

12-36.5-106. Committee on anticompetitive conduct.

PART 2

CONFORMANCE WITH FEDERAL

LAW AND REGULATION

12-36.5-201. Legislative declaration.

12-36.5-202. Rules and regulations - compliance with

reporting requirements of federal act.

12-36.5-203. Limitations on liability relating to profes-

sional review actions.

PART I

PROFESSIONAL REVIEW

PROCEEDINGS - PHYSICANS

12.36.5-101. Legislative declaration. (1) The general

assembly hereby finds, determines, and declare that the

. 2 o

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Colorado state board of medical examiners created pur-

suant to article 36 of this title acts for the state in its

sovereign capacity to govern licensure, discipline, and

professional review of persons licensed to practice medi-

cine in this state. The general assembly further finds,

determines, and declare that the authority to practice

medicine in this state is a privilege granted by the legisla-

tive authority of the state and that it is necessary for the

health, safety, and welfare of the people of this state that

the board of medical examiners exercise its authority to

protect the people of this state from the unauthorized

practice of medicine and from unprofessional conduct by

persons licensed to practice medicine under article 36 of

this title.

(2) The general assembly recognizes that: Many

patients of persons licensed to practice medicine in this

state have restricted choices of physicians under a variety

of circumstances and conditions; many patients lack the

knowledge, experience, or education to properly evaluate

the quality of medical practice or the professional con-

duct of those licensed to practice medicine; and it is

necessary and proper that the board of medical examiners

exercise its regulatory authority to protect the health,

safety, and welfare of the people of this state.

(3) The general assembly recognizes that, in the

proper exercise of its authority and responsibilities under

this article, the board of medical examiners must, to some

extent, replace competition with regulation and that such

replacement of competition by regulation particularly

with regard to physicians, is related to a legitimate state

interest in the protection of the health, safety, and welfare

of the people of this state.

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12-36.5-102. Definitions. As used in this article,

unless the context otherwise requires:

(1) “Board of medical examiners” means the Colo-

rado state board of medical examiners created pursuant

to section 12-36-103.

(2) “Governing board” means any board, board of

trustees, governing board, or other body, or duly autho-

rized subcommittee thereof, of any organization of health

care providers, which board or body has final authority

pursuant to such organization’s written bylaws, policies,

or procedures to take final action regarding the recom-

mendations of any authorized professional review com-

mittee.

(3) “Professional review committee” means any

committee authorized under the provisions of this article

to review and evaluate the professional conduct of and

the quality and appropriateness of patient care provided

by any physician licensed under article 36 of this title.

(4) “Records” means any and all written or verbal

communications by any person, any member of an inves-

tigative body, or any professional review committee or

governing board, or the staff thereof, arising from any

activities of a professional review committee authorized

by this article, including the complaint, response, corre-

spondence related thereto, recordings or transcripts of

proceedings, minutes, formal recommendations, deci-

sions, exhibits, and other similar items or documents

typically constituting the records of administrative pro-

ceedings.

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12-36.5-103. Use of professional review commit-

tees. (1) The general assembly recognizes that the board

of medical examiners, while assuming and retaining ulti-

mate authority for licensure and discipline in accordance

with article 36 of this title and in accordance with this

article, cannot practically and economically assume

responsibility over every single allegation or instance of

purported deviation from the standards of quality for the

practice of medicine, from the standards of professional

conduct, or from the standards of appropriate care and

that an attempt to exercise such oversight would result in

extraordinary delays in the determination of the legit-

imacy of such allegations and would result in the inap-

propriate and unequal exercise of its authority to license

and discipline physicians. It is therefore the intent of the

general assembly that the board of medical examiners

utilize and allow professional review committees and

governing boards to assist it in meeting its respon-

sibilities under article 36 of this title and under this

article.

(2) All physicians are encouraged to serve upon

such professional review committees when called to do so

and to study and review in good faith the professional

conduct of physicians, including the quality and appro-

priateness of patient care.

(3)(a) The use of professional review committees is

declared to be an extension of the authority of the board

of medical examiners. However, except as otherwise pro- is

vided in this article, nothing in this article shall limit the

authority of professional review committees properly

constituted under this article.

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(b) Professional review committees, the members

who constitute such committees, governing boards, and

persons who participate directly or indirectly in profes-

sional review proceedings are granted certain immunities

from liability arising from actions which are within the

scope of their activities and taken in good faith as pro-

vided in section 12-36.5-105. Such grants of immunity

from liability are declared to be necessary to ensure that

professional review committees and governing boards

can exercise their professional knowledge and judgment.

12-36.5-104. Establishment of professional review

committees — function. (1) A professional review com-

mittee may be established pursuant to this section to

review and evaluate the quality and appropriateness of

patient care provided by and the professional conduct of

any physician licensed under article 36 of this title.

(2) Persons licensed to practice medicine under arti-

cle 36 of this title who are actively engaged in the practice

of medicine in this state shall constitute a majority of any

professional review committee established pursuant to

this section, except for those boards authorized by para-

graph (g) of subsection (4) of this section.

(3) A utilization and quality control peer review

organization, as defined pursuant to 42 U.S.C. sec.

1320c-1, or any other organization performing similar

review services under federal or state law shall be an

approved professional review committee under this arti-

cle.

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(4) Any professional review committee established

by any of the following organizations, entities, or profes-

sional societies shall be an approved professional review

committee under this article if it operates pursuant to

written bylaws, policies, or procedures which are in com-

pliance with this article and which have been approved

by its governing board:

(a) The medical staff of a hospital licensed pursuant

to part 1 of article 3 of title 25, C.R.S., or certified pur-

suant to section 25-1-107 (1)(1)(II), C.R.S.;

(b) The medical staff of a hospital-related corpora-

tion. For the purposes of this paragraph (b), a corporation

is “hospital-related” if the licensed or certified hospital or

holding company of such hospital has ownership or con-

trol of such corporation.

membership includes not less than one-third of the doc-

tors of medicine or doctors of osteopathy licensed to

practice and residing in this state, if the physician whose

services are the subject of the review is a member of such

society or association;

(d) A society or association of physicians licensed to

practice and residing in this state and specializing in a

specific discipline of medicine, whose society or associa-

tion has been designated by the board of medical exam-

iners as the specialty society or association representative

~ of physicians practicing such specific discipline of medi-

cine, if the physician whose services are the subject of the

review is a member of such specialty society or associa-

tion;

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(e) An individual practice association or a preferred

provider organization comprised of at least twenty-five

physicians or a medical group which predominantly

serves members of a health maintenance organization

licensed pursuant to article 17 of title 10, C.R.S. A profes-

sional review committee established pursuant to this

paragraph (e) shall have jurisdiction to review only phy-

sicians who are members of the association or organiza-

tion creating and authorizing that committee; except that

such professional review committee may review the care

provided to a particular patient referred by a member of

such association or organization to another physician

who is not a member of such association or organization.

(f) A Colorado corporation authorized to insure

physicians pursuant to article 3 of title 10, C.R.S., or any

other corporation authorized to insure such physicians in

this state when designated by the board of medical exam-

iners under subsection (5) of this section;

(g) Governing boards of any entity which has a

professional review committee established pursuant to

article 36 of this title;

(h) Any peer review committee established or cre-

ated by a combination or pooling of any of the organiza-

tions authorized by this section to have a professional

review committee;

(i)(I) A nonprofit corporation or association com-

prised of representatives from a statewide medical soci-

ety and a statewide hospital association. Such association

shall be comprised of physicians, hospital administrators,

and hospital trustees, with a majority of such representa-

tives being physicians. The association may establish, or

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contract for, one or more peer review committees to

review the care by hospital staff physicians, with priority

given to small rural medical staffs. Such peer review

services shall be available statewide on a fee-for-service

basis to licensed or certified hospitals at the joint request

of the governing body and the medical staff of the hospi-

tal or at the sole request of the governing body of the

hospital. If a physician being reviewed specializes in a

generally recognized specialty of medicine, at least one of

the physicians on the peer review committee shall be a

physician practicing such specialty.

(II) For purposes of the introductory portion to this

subsection (4), the bylaws, policies, and procedures shall

be in compliance with this article and be approved by the

nonprofit corporation or association.

(5) The board of medical examiners may establish

by rule or regulation procedures necessary to authorize

other health care or physician organizations or profes-

sional societies to establish professional review commit-

tees.

(6) a professional review committce acting pursuant

to this part I may investigate or cause to be investigated:

The qualifications of any physician licensed under article

36 of this title who seeks to subject himself to the author-

ity of any organization, entity, or professional society

listed in subsection (4) of this section; or the quality or

appropriateness of patient care rendered by or the profes-

sional conduct of any physician licensed under article 36

of this title who is subject to the authority of such organi-

zation, entity, or professional society. Such investigation

shall be conducted in conformity with written bylaws,

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policies, or procedure adopted by such organization,

entity, or professional society.

(7) The written bylaws, policies, or procedures of

any professional review committee shall provide for at

least the following:

(a) If the findings of any investigation indicate that

the physician who is the subject of the investigation is

lacking in qualifications, has provided substandard or

inappropriate patient care, or has exhibited inappropriate

professional conduct, the professional review committee

shall hold a hearing, unless the physician waives his right

to a hearing, to consider the findings: except that, if the

professional review committee is submitting its findings

to another professional review committee for review, only

one hearing shall be necessary prior to any appeal before

the governing body.

(b) Any person who has participated in the course

of any investigation shall be disqualified as a member of

the committee at any hearing held pursuant to paragraph i

(a) of this subsection (7), but such person may participate

as a witness in such hearing.

ORL ATI

gation shall be given reasonable notice of such hearing '

and shall have a right to be present, to be represented by

legal counsel at such hearing, and to offer evidence in his

own behalf.

(d) After such hearing, the professional review

committee shall make any recommendations it deems

necessary to the governing board unless provided by

federal law or regulation.

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(e) A copy of such recommendations shall be given

to the subject physician who then shall have the right to -

appeal the findings and recommendations of the profes- ‘

sional review committee to the governing board to which

the recommendations are made.

(8)(a) All governing boards shall adopt written

bylaws, policies, or procedures which provide that a phy-

sician who is the subject of an adverse recommendation

by a professional review committee may appeal to the

governing board. Such bylaws, policies, or procedures

shall provide that the physician shall be given reasonable

notice of his right to appeal and, unless waived by the

physician, shall have the right to appear before the gov-

erning board, to be represented by legal counsel, and to

offer such argument on the record as he deems appropri-

ate.

(b) The bylaws may provide that a committee of not

fewer than three members of the governing board may

hear the appeal. Such bylaws may also allow for an

appeal to be heard by an independent third party desig-

nated by the board.

(9) All governing boards which are required to

report their final actions to the board of medical exam-

iners are not otherwise relieved of such obligations by

virtue of any provision of this article.

(10)(a) The records of a professional review commit-

tee, a governing board, or the committee on anticompeti-

tive conduct shall not be subject to subpoena or discovery

and shall not be admissible in any civil suit brought

against a physician who is the subject of such records.

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(b) Notwithstanding the provisions of paragraph (a)

of this subsection (10), such records shall be subject to

subpoena and available for use:

(I) By the committee on anticompetitive conduct;

(Il) By either party in any appeal or de novo pro-

ceeding brought pursuant to this part 1;

(I) By a physician in a suit seeking judicial review

of any action by the governing board;

(IV) By a governing board seeking judicial review.

(11) At the request of the board of medical exam-

iners, a governing board shall provide the board of medi-

cal examiners with the complete record of all professional

review proceedings, including, but not limited to, the

findings, recommendations, and actions taken.

(12) Investigations, examinations, hearings, meet-

ings, or any other proceedings of a professional review

committee or governing board conducted pursuant to the

provisions of this part 1 shall be exempt from the provi-

sions of any law requiring that proceedings he conducted

publicly or that the minutes or records be open to public

inspection.

(13) All proceedings, recommendations, records,

and reports involving professional review committees or

governing boards shall be confidential.

(14) a professional review committee or governing

board which is constituted and conducts its reviews and

activities pursuant to the provisions of this part I is

ma Ves

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declared not to be an unlawful conspiracy in violation of

section 6-4-102, C.R.S.

12-36.5-105. Immunity from liability. (1) A member

of a professional review committee, a witness before a

professional review comunittee, or any person who files a

complaint or otherwise participates in the professional

review process shall be immune from suit in any civil or

criminal action, including antitrust actions, brought by a

physician who is the subject of the review by such profes-

sional review comumittee, if such member made a reason-

able effort to obtain the facts of the matter as to which he

acted, acted in the reasonable belief that the action taken

by him was warranted by the facts, and otherwise acted

in good faith within the scope of such professional review

committee process and if such witness or participant

acted in good faith within the scope of such professional

review committee process.

(2) The governing board, the individual members of

such board, and the entity which has established a peer

review committee pursuant to section 12-36.5-104 shall be

immune from suit for any damages in a civil or criminal

action, including antitrust actions, brought by a physician

who is the subject of any action taken by such board or

members if such board or its members, acting as individ-

uals, act in good faith. Good faith shall include reliance a

upon the recommendations of the review committee, but

good faith shall not be presumed if the board or a mem-

ber has knowledge concerning the review in question

which would cause such reliance to be unwarranted. -

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’

;

App. 41

Good faith shall also require that the board otherwise

acted in good faith, including the consideration of any

facts not previously available to and considered by the

peer review committee, and that the board acted in rea-

sonable belief that the action taken was warranted by the

facts.

12-36.5-106. Committee on anticompetitive con-

duct. (1) There shall be established a permanent, indepen-

dent committee of the board of medical examiners to be

known as the committee on anticompetitive conduct

referred to in this section as “the committee”.

(2) The committee shall be composed of five per-

sons, none of whom shall be a member of the board of

medical examiners. Four members of the committee shall

be licensed to practice medicine and actively engaged in

the practice of medicine in this state and shall be appoin-

ted by the board of medical examiners. No member shall

practice in the same medical subspeciality as any other

member nor conduct his primary practice in the same

county as any other member. One member shall be

appointed by the governor and shall be an attorney :

licensed to practice in this state who has particular exper- '

tise and experience in the area of antitrust law. ;

A A FN OTN S AME RE OF De I Ee

(3) Each member of the committee shall serve for a

term of three years and may be reappointed for one

additional term. The initial committee shall be appointed

as follows: Two members, including the attorney member,

for terms of three years; two members for terms of two

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years; and one member for a term of one year. All subse-

quent appointments shall be for terms of three years.

(4) Any member of the committee may be removed

by his appointing authority for neglect of duty, inca-

pacity, or misconduct. Any vacancy shall be filled by the

appointing authority for the remainder of the vacated

term.

(5) The committee shall annually elect a chairman

from among its members. Any three members of the

committee shall constitute a quorum. Any action of a

majority of those present comprising such quorum shall

be the action of the committee. Committee members shall

be compensated as provided in section 24-34-102(13),

C.R.S. The committee may, in its discretion, utilize the

expertise of consultants, including, but not limited to,

legal, medical, and business specialists. The costs of such

consultants shall be assessed and collected as provided in

subsection (11) of this section.

(6) The committee shall adopt procedural rules,

including emergency rules, pursuant to the rule-making

provisions of the “State Administrative Procedure Act”,

article 4 of title 24, C.R.S., including rules related to the

disqualification of a committee member, which rules shall

be guided by section 24-4-105(1), C.R.S.

(7) Any physician who is the subject of a final

action by a governing board, which action results in the

denial, termination, or restriction of privileges at or mem-

bership in or participation in an organization, and who

believes that such action resulted from unreasonable anti-

competitive conduct shall have, as his sole and exclusive

remedy, direct review of the record by the committee.

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Such review shall be limited to the sole issue of whether

such final board action resulted from unreasonable anti-

competitive conduct. Failure to exhaust this administra-

tive remedy before the committee shall preclude the right

of de novo review on the merits of the issue of unreason-

able anticompetitive conduct.

(8) Nothing in this article shall preclude a physician

or health care provider otherwise aggrieved by the final

action of a governing board from seeking other remedies

available to them by law, except as provided in subsec-

tion (7) of this section.

(9) Review by the committee shall be in accordance

with the following procedures and, to the extent practica-

ble, in accordance with the procedures used in the district

courts of this state:

(a) Review shall be initiated by filing a verified

complaint with the committee, no later than thirty days

after receipt of a notice of final action by the governing

board, alleging, with specificity, all facts disclosed in the

record and all additional facts known to the complainant

which would support his allegation that the final action

taken by the governing board resulted from unreasonable

anticompetitive conduct.

(6) The committee shall mail a copy of such com-

plaint to the governing board and the professional review

committee by certified mail, return receipt requested,

within five days of the receipt of such complaint by the

committee, advising them of their right to file a verified

answer to the allegations stated therein. Receipt of such

complaint by mail shall make the recipients thereof a

party to these proceedings.

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committee shall have thirty days after receipt of the com-

plaint to file their verified answer.

(d) Within thirty days of receipt of the complaint,

unless the committee, for good cause shown, extends the

time period not to exceed an additional thirty days, the

committee shall determine whether the complaint alleges

sufficient facts which, if true, would substantiate a find-

ing of probable cause that the final action taken by the

governing board resulted from unreasonable anticompeti-

tive conduct.

(e) If the committee finds no such probable cause

exists, it shall dismiss the complaint, which dismissal

shall constitute final administrative action.

(f) If the committee finds such probable cause

exists, it shall schedule a hearing. At such hearing the

committee shall review the record below on the sole issue

of whether the final action of the governing board

resulted from unreasonable anticompetitive conduct and

shall take evidence only with regard to the additional

facts specifically alleged in the complaint or answer

regarding unreasonable anticompetitive conduct, except

when, in the discretion of the committee, the interests of a

fair hearing demand otherwise.

(g) The attendance of witnesses and the production

of books, patient records, papers, and other pertinent

documents at the hearing may be summoned by sub-

poenas issued by the chairman of the committee or his

designee, which shall be served in the manner provided

by the Colorado rules of civil procedure for service of

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subpoenas. Any subpoena issued pursuant to this para-

graph (g) shall be enforceable in the district court.

(h) No evidentiary hearing shall last more than

eight hours, unless the committee, in its discretion, deter-

mines that additional time is necessary in the interests of

a fair hearing. Except as provided otherwise in this sec-

tion, any evidentiary hearing shall be conducted in accor-

dance with section 24-4-105(4) and (7), C.R.S.

(i) An evidentiary hearing shall be scheduled

within a reasonable time after a finding that probable

cause exists.

(j) Within a reasonable time after the completion of

its hearing, the committee shall issue its written findings

and final order.

(k) If the committee finds by a preponderance of

evidence that the final action of the governing board

resulted from unreasonable anticompetitive conduct, it

shall issue its final order disapproving and setting aside

such action or modifying the action taken by the govern-

ing board in whole or in part, which final order shall be

binding on the parties. A copy of such order shall be '

mailed by certified mail, return receipt requested, to the ,

parties.

(I) If the committee fails to find that the final action

of the governing board resulted from unreasciabie anti-

competitive conduct as provided in paragraph ‘*) wf this

subsection (9), it shall issue its order dismissing the com-

plaint, and the final action of the governing board shall

stand.

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(m) If the committee finds that the record of the

governing board is insufficient to permit the committee to

reach appropriate findings with regard to unreasonable

anticompetitive conduct, it may remand the case for fur-

ther review by the governing board.

(mn) In any case presented to the committee where

the medical practice of the complainant constitutes a clear

and present danger to patients, the committee shall refer

the case to the board of medical examiners for such action

as the board deems appropriate.

(10)(a) Following final administrative action by the

committee, such action of the committee may be reviewed

only by the court of appeals through appropriate pro-

ceedings brought pursuant to section 24-4-106(11), C.R.S.

(b) Following final administrative action by the

committee, any party aggrieved by the final action of a

governing board who wishes to challenge the action of

such governing board, rather than the committee’s

review of such action, shall have the right to seek de novo

review on the merits in a district court in Colorado. In no

event shall the board of medical examiners or the com-

mittee be made parties to such a district court action.

graph (a) of subsection (9) of this section, the complain-

ant shall post a cash bond or equivalent liquid security of

three thousand dollars to cover anticipated costs which

may be assessed against him. Within thirty days of

receipt of service of a complaint on a governing board, or

concurrently with the filing of an answer, whichever is

earlier, the governing board shall post a cash bond or

equivalent liquid security of three thousand dollars to

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cover anticipated costs which may be assessed against it

as a party. The committee may enforce this latter require-

ment through the district court.

(11) The committee shall assess and collect all costs

associated with its activities, including attorney fees

incurred by the committee, the per diem and reasonable

expenses of each committee member, and other reason-

able expenses, from the losing party or as the committee

deems appropriate.

(12) The committee shall promulgate such rules and

regulations as may be necessary for the implementation

of this section, including mechanisms to secure the pay-

ment of costs as provided in paragraph (c) of subsection

(10) and subsection (11) of this section.

(13) any member of the committee shall be immune

from suit in any civil action based upon any proceedings

or other official actions performed in good faith. Any

witness, consultant, or staff member participating in good

faith in the making of a report or any person participat-

ing in good faith in any investigative or administrative

proceeding pursuant to this section shall also be immune

from suit in any civil action.

PART 2

CONFORMANCE WITH FEDERAL

LAW AND REGULATION

12-36.5-201. Legislative declaration. The general

assembly hereby finds, determines, and declares that the

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enactment of this part 2 is necessary im order for the state

to comply with the provisions of the federal “Health Care

Quality Improvement Act of 1986”, as amended. It is the

intent of the general assembly that the provisions of this

part 2 are to be interpreted as being complementary to

the provisions of part 1 of this article. The provisions of

this part 2 are intended to be responsive to specific

requirements of the federal “Health Care Quality

Improvement Act of 1986”, as amended. If the provisions

of this part 2 conflict with the provisions of part 1 of this

article, other than with respect to the specific require-

ments of the federal “Health Care Quality Improvement

Act of 1986”, as amended, the provisions of part 1 of this

article shall prevail.

12-36.5-202. Rules and regulations — compliance

with reporting requirements of federal act. Upon imple-

mentation of the federal “Health Care Quality Improve-

ment Act of 1986", as amended, 42 U.S.C. secs. 11101

through 11152, and upon implementation of the federal

data bank, the board of medical examiners shall promul-

gate rules and regulations to comply with such act, which

rules and regulations are consistent with the standards

and the reporting requirements of such act.

12-36.5-203. Limitations on liability relating to

professional review actions. (1) The following persons

shall not be liable for damages in any civil action with

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respect to their participation in, assistance to, or report-

ing of information to a professional review body in con-

nection with a professional review action in this state,

and such persons shall not be liable for damages in any

civil action with respect to their participation in, assis-

tance to, or reporting of information to a professional

review body which meets the standards of and is in

conformity with the provisions of the federal “Health

Care Quality Improvement Act of 1986”, as amended, 42

U.S.C. secs. 11101 through 11152, upon implementation of

such act by the federal government:

(a) The professional review body;

(b) any person acting as a member of or staff to the

professional review body;

agreement with the professional review body;

(d) any person who participates with or assists the

professional review body with respect to the professional

review action.

(2) Notwithstanding any other provision of law, no

person, whether as a witness or otherwise, who provides

information to a professional review body regarding the

competence or professional conduct of a physician shall

be held, by reason of having provided such information,

liable in damages in any civil action unless such informa-

tion is false and the person providing it knew that such

information was false.

(3) For the purposes of this section, unless the con-

text otherwise requires:

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(a) “Professional review action” means an action or

recommendation of a professional review body which is

taken or made in the conduct of professional review

activity and which is based on the competence or profes-

sional conduct of an individual physician, which conduct

affects or may affect adversely the clinical privileges of or

membership in a professional society of the physician. -

“Professional review action” includes a formal decision

by the professional review body not to take an action or

make a recommendation as provided in this p \ragraph

(a) and also includes professional review activities relat-

ing to a professional review action. an action shall not be

considered to be based upon the competence or profes-

sional conduct of a physician if the action is primarily

based on:

(I) The physician's association or lack of association

with a professional society or association;

(II) The physician’s fees or his advertising or engag-

ing in other competitive acts intended to solicit ore retain

business;

(II) The physician’s association with, supervision

of, delegation of authority to, support for, training of, or

participation in a private group practice with a member

or members of a particular class of health care practi-

tioners or professionals;

(IV) The physician’s participation in prepaid group

health plans, salaried employment, or any other manner

of delivering health services whether on a fee-for-service

basis or other basis;

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(V) Any other matter that does not relate to the

competence or professional conduct of a physician.

(b) “Professional review body” means a health care

entity and the governing body or any committee of a

health care entity which conducts professional review

actions and includes any committee of the medical staff

of such an entity when assisting the governing body in a

professional review activity.

ave

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DISTRICT COURT, WELD COUNTY, COLORADO

Case No. 92 CV 447, Division I

AFFIDAVIT OF RICHARD H. STENNER, PRESIDENT,

NORTH COLORADO MEDICAL CENTER

WILLIAM JOHN NICHOLAS,

Plaintiff,

vs.

NORTH COLORADO MEDICAL CENTER, a Colorado

not for profit corporation, and the GOVERNING BOARD

OF THE NORTH COLORADO MEDICAL CENTER,

Defendants.

STATE OF COLORADO )

) ss

COUNTY OF WELD )

COMES NOW, Richard H. Stenner, after being first

duly sworn and upon his oath, states as follows:

1. That I am Richard H. Stenner, President of North

Colorado Medical Center, Inc.

2. That North Colorado Medical Center, Inc., is a

private not for profit corporation created and operating

under the laws of the State of Colorado.

3. That North Colorado Medical Center, Inc., is a tax

exempt organization pursuant to the provisions of

§ 501(c)(3) of the Internal Revenue Code of 1986, as

amended; its real and personal property are exempt from

taxation pursuant to C.R.S. §§ 39-3-108, 39-3-109, as

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amended; and its income is exempt from state taxation

pursuant to C.R.S. § 39-22-112, as amended.

4. That North Colorado Medical Center, Inc. has no

membership and is managed by a self-perpetuating Board

of Directors of not less than eleven nor more than thirteen

persons, four of whom are selected by the Board of Direc-

tors from the Board of Trustees of North Colorado Medi-

cal Center.

5. That the hospital facility is owned by Weld

County, Colorado, which manages the property through

the Board of Trustees of North Colorado Medical Center,

which consists of seven members appointed by the Weld

County Commissioners. North Colorado Medical Center,

Inc. leases the hospital facility from the Board of Trustees

pursuant to C.R.S. § 25-3-313.

6. That neither the State of Colorado nor any politi-

cal subdivision thereof manages or controls the internal

operations of North Colorado Medical Center, Inc.

7. That North Colorado Medical Center, Inc., owns

all of the equipment and supplies and employs all of the

personnel necessary and convenient to the operation of

the hospital.

8. That North Colorado Medical Center, Inc., does

not receive any tax funds or support from the State of

Colorado or any of its political subdivisions.

NORTH COLORADO MEDICAL

CENTER, INC.

By Richard H. Stenner

Richard H. Stenner, President

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Subscribed and sworn to before me this 22nd day of

January, 1993, by Richard H. Stenner, President of North

Colorado Medical Center, Inc.

WITNESS my hand and official seal.

My commission expires: My commission expires Mar.

11, 199[Mlegible}

/s/ [{Ilegible]

Notary Public

ee a

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.