# Opposition Brief — Nicholas v. North Colorado Medical Center, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0868%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 2002 - **Citation:** 534 U.S. 1084 ## Text 1Z/US/UL Web 14:40 FAA SEQ 211 JOB 11118CV2- 000-02 REINAN REVISED O04DECOI AT 16:49 BY AP DEPTH: 43.06 PICAS WIDTH 28 PICAS i“ Lies. —_—=—_— 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 ee vw BRIEF IN OPPOSITION TO PETITION FOR WRIT OF CERTIORARI te sd 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 12/05/01 Web 44:25 FAA SEQ 212 JOB 11118IN3- 000-02 PAGE-001 REINAN REVISED O4DECO! AT 16:50 BY AP DEPTH: 44 PICAS WIDTH 28 PICAS i 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 COSY o vcccscsdiencdyséiecdeavevceveneuecs 1Z2/US/UL WEY 14:44 FAA wvvs EQ 213 JOB 11118IN3- 000-02 PAGE-002 REINAN EVISED 04DECO! AT 16:50 BY AP DEPTH: 44 PICAS WIDTH 28 PICAS | ‘ 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 4 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 12/06/01) WED 14:24 rAd EQ 214 JOB 111181N3- 000-02 PAGE-003 REINAN ‘EVISED 04DECO1 AT 16:50 BY AP DEPTH: 44 PICAS WIDTH 28 PICAS 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 OES 6 ee ee, GE TA. © Be ras stn keeled tive cavecdvensearee GB USA... © LENG; OE Bila ouste ic scvesinscceveces G2 URE. © B2UTI) oo occ cc dev cccssesesccvicess Oe TR, © TANS hia hire ne edad cickeuraranctay State STATUTES CARS. § 12-36.5-101, a6 606 .. 02 ccccstecsveceseses Ee i ise v ened i doccewas a ON ad gion dooce cad cade OO Oe atic tas Gs Page -14, 18 19, 20 ‘Gvyey 12/05/01 WED 14:24 Fax 2 031 JOB 11118IN4- 000-02 PAGE-004 REINAN VISED 0SDECO! AT 11:43 BY DW DEPTH: 44 PICAS WIDTH 28 PICAS iv TABLE OF AUTHORITIES - Continued Page ey AEEED 5 vntues 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. wavs ‘Vay 12/05/01 WED 14:26 FAA SEQ 224 JOB 11118BR4- 000-04 PAGE-009 REINAN REVISED 04DECO! AT 17:13 BY AP DEPTH: 43.09 PICAS WIDTH 28 PICAS 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. 4 vw 12/05/01 WED 14:26 FAA ws vay SEQ 225 JOB 11118BR4- 000-04 PAGE-010 REINAN REVISED 04DECO! AT 17:13 BY AP DEPTH: 43.09 PICAS WIDTH 28 PICAS 10 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 12/05/01 WED 14:27 Fax SEQ 22650B 11118BR4- 000-04 PAGE-011 REINAN REVISED O4DECO! AT 17:13 BY AP DEPTH: 43.09 PICAS WIDTH 28 PICAS 11 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 12/05/01 WED 14:27 FAA SEQ 065JOB 11118BRS- 000-03 PAGE-012 REINAN REVISED OSDECO) AT 11:50BY DW DEPTH: 44 PICAS WIDTH 28 PICAS 12 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). 12/05/01 WED 14:27 FAX SEQ 066 JOB 11118BRS- 000-03 PAGE-O13 REINAN REVISED OSDECO! AT 11:50 BY DW DEPTH: 44 PICAS WIDTH 28 PICAS 13 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 12/05/01 WED 14:27 FAA “ay Vev iIBQ 229 JOB 11118BR4- 000-04 PAGE-014 REINAN LEVISED O4DEC0! AT 17:13 BY AP DEPTH: 43.09 PICAS WIDTH 28 PICAS 14 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. 12/05/01 WED 14:28 FAX SEQ 068 JOB 11118BRS- 000-03 PAGE-015 REINAN REVISED OSDECO! AT 11:50 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS 15 830 (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 12/05/01 WED 14:26 FAA tj) Vee 1 231 5OB 11118BR4 000-04 PAGE-016 REINAN SVISED O4DECO! AT 17:13 BY AP DEPTH: 44 PICAS WIDTH 28 PICAS 16 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. 12/05/01 WED 14:28 raa SEQ 070 JOB 11118BRS- 000-03 PAGE-0I7 REINAN REVISED OSDECO! AT 11:50 BY DW DEPTH: 44PICAS WIDTH 28 PICAS Gvevw 17 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). { b 5 be ! ' 7 % f ie ' eT - SEQ 231 JOB 11118AB1- 000-04 PAGE-008 REINAN REVISED 30NOVOI AT 14:07 BY DW DEPTH: 43.07 PICAS WIDTH 28 PICAS App. 14 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. IV NCMC Procedures There are essentially three groups associated with the operation of the hospital: the Board of Directors, the 12/05/01 WED 14:33 FAX SEQ 232 JOB 11118AB1- 000-04 PAGE-009 REINAN . REVISED 30NOVO! AT 14:07 BY DW DEPTH: 43.06 PICAS WIDTH 28 PICAS 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. vse SEQ 233 JOB 11118AB1- 000-04 PAGE-010 REINAN REVISED 30NOVOI AT 14:07 BY DW DEPTH: 44 PICAS WIDTH 28 PICAS 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. Vv 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. 12/05/01 WED 14:33 FAX SEQ 234JOB 11118AB1- 000-04 PAGE-O11 REINAN REVISED 30NOVO1 AT 14:07 BY DW DEPTH: 44 PICAS WIDTH 28 PICAS 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. 12/05/01 Wrb 14:34 Faas BQ 235JOB 11118AB1-000-04 PAGE-O12 REINAN EVISED 30NOVOI AT 14:07 BY DW DEPTH: 44 PICAS WIDTH 28 PICAS “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. 12/05/01 WED 14:35 FAA jell 936 JOB 11118AB1- 000-04 PAGE-OI3 REINAN BSED 30NOVO! AT 14:07 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS 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 12/05/01 WED 14:38 FAX wines SEQ 237 JOB 11118AB1- 000-04 PAGE-014 REINAN REVISED 30NOVO! AT 14:07 BY DW DEPTH: 43.10PICAS WIDTH 28 PICAS 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. 12/05/01 WED 14:39 FAA 3EQ 238JOB 11118AB1- 000-04 PAGE-OI5 REINAN REVISED 30NOVO1 AT 14:07 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 21 VI 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. A. 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 12/05/01 WED 14:58 FAA aaicack SEQ 239JOB 11118AB1- 000-04 PAGE-O16 REINAN REVISED 30NOV0i AT 14:07 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS 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 12/05/01 Web 14:38 FAA 3EQ 240JOB 11118ABI- 000-04 PAGE-O17 REINAN REVISED 30NOVO! AT 14:07 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICaS 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 12/05/01 WED 14:39 FAX “) VVO SEQ 241 JOB 11118ABi- 000-04 PAGE-018 REINAN REVISED 30NOVO! AT 14:07 BY DW DEPTH: 44.03 PICAS WIDTH 28 PICAS 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. 12/05/01 WED 14:40 FAX SEQ 242 JOB 11118AB1- 000-04 PAGE-O19 REINAN REVISED 30NOVO! AT 14:07 BY DW DEPTH: 43.07 PICAS WIDTH 28 PICAS 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 12/05/01 WED 14:40 FAX mu vue SEQ 243 JOB 11118AB1- 000-04 PAGE-020 REINAN REVISED 30NOVOI AT 14:07 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS 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. . 12/05/01 WED 14:40 FAX “vee SEQ 244 JOB 11118AB}- 000-04 PAGE-021 REINAN REVISED 30NOVO! AT 14:07 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS 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. 12/05/01 WED 14:40 FAL SEQ 245 JOB 11118AB1-000-04 PAGE-022 REINAN REVISED 30NOVO! AT 14:07 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS tavav App. 28 All other outstanding motions are either moot or denied. Dated: June 5, 1998 /s/ William L. West William L. West District Judge 12/05/01 WED 14:40 FAX SEQ 247 JOB \1118ACi- 000-04 PAGE-002 REINAN REVISED 3ONOVO! AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 29 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 LZ/US/UL Wev 44:44 FAA ww ~eo SEQ 248 JOB 11118AC1- 000-04 PAGE-003 REINAN REVISED 30NOVO1 AT {4:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 30 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. ss 12/05/01 WED 14:41 FAX SEQ 249JOB 11118ACI- 000-04 PAGE-004 REINAN REVISED 30NOVO! AT 14:08 BY DW DEPTH: 43.08 PICAS WIDTH 28 PICAS App. 31 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. 12/05/01 WED 14:41 FAX ws van SEQ 250JOB 11118ACI- 000-04 PAGE-005 REINAN REVISED 30NOVO1 AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 32 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. 12/05/01 WED 14:41 FAX SEQ 251 JOB 11118AC1- 000-04 PAGE-006 REINAN REVISED 30NOVOI AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 33 (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. 12/05/01 WED 14:42 FAX : vee SBQ 252 JUB 11118ACi- 000-04 PAGE-O0O7 KEINAN REVISED 30NOVO! AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 34 (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. (c) A society or association of physicians whose 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; 12/05/01 WED 14:42 FAA SEQ 253 JOB 11118AC1- 000-04 PAGE-008 REINAN REVISED 30NOVO! AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 35 (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 . .22/00/UL WED 14:44 FAA “vay St) 254 JOB 111 18AC1- 000-04 PAGE-0U9 KEINAN REVISED 30NOVOI AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 36 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, 12/05/01 WED 14:42 FAX areas SEQ 235 JOB 11118AC1- 000-04 PAGE-010 REINAN . REVISED 30NOVOI AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 37 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 (c) The physician who is the subject of any investi- 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. 12/05/01 WED 14:43 FAX oui PQ 256 JOB 11118AC1- 000-06 PAGE-01) REINAN EVISED 30NOVOI AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 38 (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. 12/05/01 WED 14:43 FAX SEQ 257 JOB 11118AC1-000-04 PAGE-O12 REINAN REVISED 30NOV01 AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 39 (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 12/05/01 WED 14:49 FAA vee SBQ 258 JOB 1118ACI- 000-04 PAGE-O13 KEINAN REVISED 30NOVOi AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 40 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. - 12/05/01 WED 14:43 FAX ts vev SEQ 259 JOB 11118ACI- 000-04 PAGE-014 REINAN REVISED 30NOVO1 AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS ‘ ’ ' ; 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 12/05/01 WED 14:44 FAA wa vee SkQ) 260 JOB 111 18AC1- 000-04 PAGE-OI5 REINAN REVISED 30NOVOI AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 42 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. 12/05/01 WED 14:44 FAA on, 4 SEQ 261 JOB 11118ACI- 000-04 PAGE-O16 REINAN = REVISED 30NOVO! AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 43 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. 12/05/01 WED 14:44 FAA oe SEQ 262JOB 11118ACI- 000-04 PAGE-017 REINAN REVISED 30NOVO1 AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 44 (c) The governing board and professional review 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 12/05/01 WED 14:44 FAA mre: SEQ 263 JOB 11118AC1- 000-04 PAGE-O1$ REINAN REVISED 30NOVO! AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 45 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. 12/05/01 WED 14:45 FAA ts Veo SEQ 264 JOB 11118ACI- 000-04 PAGE-O19 REINAN REVISED 30NOVOI AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 46 (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. (c) Asa condition of filing a complaint under para- 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 12/05/01 Web 14:43 FAA SEQ 265 JOB 11118AC1-000-04 PAGE-020 REINAN REVISED 30NOVO! AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 47 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 12/05/01 WED 14:45 FAX ay Vou SEQ 266J0B 11118ACI- 000-04 PAGE-02! REINAN REVISED 30ONOVO1 AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 48 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 12/05/01 WED 14:45 FAX SEQ 267JOB 11118ACi- 000-04 PAGE-022 REINAN REVISED 30NOVOI AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 49 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; (c) any person under a contract or other formal 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: ae 12/05/01 WED 14:46 FAX “vve SEQ 268 JOB 11118AC1- 000-04 PAGE-023 REINAN REVISED 30NOVO! AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 50 (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; 12/05/01 WED 14:46 FAX SEQ 269 JOB 11118ACI- 000-04 PAGE-024 REINAN REVISED 30NOVOI AT 14:08 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 51 (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 ' , ~~ Ee 2 12/05/01 WED 14:46 FAX w Vee SEQ 271 JOB 11118ADi-000-02 PAGE-002 REINAN REVISED 30NOVO! AT 14:09 BY DW DEPTH: 41.11 PICAS WIDTH 28 PICAS App. 52 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 12/05/01 WED 14:46 FAA SEQ 272 JOB 11118AD1- 000-02 PAGE-003 REINAN REVISED 30NOVOI AT 14:09 BY DW DEPTH: 43.09 PICAS WIDTH 28 PICAS App. 53 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 12/05/01 WED 14:46 FAX SEQ 214JOB 11118AD1- 000-02 PAGE-004 REINAN REVISED 30NOVOI AT 14:09 BY DW DEPTH: 43.07 PICAS WIDTH 28 PICAS App. 54 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 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0868%3A2. Public record. Not legal advice.