Ryals v. St. Mary-Corwin Regional Medical Center

10 P.3d 654, 2000 Colo. J. C.A.R. 5329, 2000 Colo. LEXIS 1098, 2000 WL 1335873
Supreme Court of Colorado·Decided September 18, 2000·No. No. 99SC137·Published·Cited by 3 cases

Opinion

Justice KOURLIS

delivered the Opinion of the Court.

This case deals with the question of whether a physician is required to file a claim against a hospital that has denied him privileges with the Committee on Anticompetitive Conduct (CAC) rather than with the court. We hold that if the denial of privileges does not arise out of professional review committee activity at the hospital, then the physician need not seek review before the CAC. In this case, St. Mary-Corwin Regional Hospital (the Hospital) denied Dr. Jarvis D. Ryals, a neurologist, privileges to read MRIs at the Hospital based on a long-standing exclusive contract between the Hospital and a group of radiologists. Ryals filed suit claiming that the Hospital had engaged in anticompetitive conduct. The trial court dismissed his suit, holding that Ryals was first required to exhaust his administrative remedies with the CAC. The court of appeals affirmed. See Ryals v. St. Mary-Corwin Reg'l Med. Cir., 987 P.2d 865 (Colo.App.1999).

We reverse. We hold, based on the plain language of the Colorado Professional Review Act (CPRA) and the statutory scheme as a whole, that the CAC has jurisdiction only over those claims of anticompetitive conduct that arise out of professional review committee activity. Professional review committees assess physician qualifications, physician conduct, and the quality and appropriateness of patient care. In this case, the Hospital did not engage in any professional review committee activity in denying Ryals's privileges. Rather, the Hospital made a business decision unrelated to Ryals's qualifications or conduct. If that decision has antitrust implications, then Ryals's claims against the Hospital and other Defendants were anticompetitive conduct claims arising independently of a peer review process. Therefore, Ryals was not required to file his claims with the CAC before seeking a remedy in district court.

L.

The Hospital has employed Dr. Ryals as a licensed neurologist since 1976. Prior to 1995, the Hospital did not own an MRI scanner, and Ryals interpreted MRI seans for the Hospital's patients outside of the Hospital at Southern Colorado MRI, Ltd. (SCMRI). Ryals, the Hospital, and Pueblo Radiological Group (PRG) were joint partners in SCMRL In December 1995, SCMRI closed. Shortly thereafter, the Hospital obtained its own MRI machines to read MRIs "in-house."

Because Ryals did not have privileges to read MRIs at the Hospital, Ryals began to make inquires regarding obtaining privileges. After several informal inquiries with the Hospital staff, Ryals submitted a request for privileges to the Hospital's Medical Qualifications Committee on February 1, 1996. PRG had a long-standing exelusive contract with the Hospital to perform radiology services at the Hospital. The Medical Qualifications Committee decided that this exclusive contract prevented other doctors from reading MRIs. Ryals wrote PRG on February 6, 1996 requesting PRG to renegotiate their exclusive contract with the Hospital so as to permit him to read MRIs. PRG declined.

[657] Ryals submitted a second request to the Medical Qualifications Committee, which the Committee again denied at its meeting on March 1, 1996. The Committee found that although Ryals was qualified to read MRIs, he was not eligible to do so because of PRC's exclusive contract. The Hospital's acting chief executive officer, Stan Jonas, wrote Ryals on March 4, 1996 to inform him of the Committee's decision to deny his request. On March 12, 1996, the Hospital Governing Board then passed a resolution affirming its exclusive contract with PRG. The resolution did not specifically address Ryals's requests for privileges. Ryals did not receive a copy of the resolution until May 29, 1996 when he requested a copy of the exclusive contract from the Hospital.

Ryals then filed suit against St. Mary, Corwin Hospital, Hospital officers, and PRG in district court claiming three antitrust violations, breach of contract, promissory estop-pel, tortious interference with contractual and prospective contractual relations, and outrageous conduct. The defendants moved to dismiss the complaint alleging that Ryals failed to exhaust his administrative remedies by first filing his complaint with the Colorado Committee on Anticompetitive Conduct (CAC). The trial court agreed and granted the motion without an evidentiary hearing.

The court of appeals affirmed the trial court's decision, holding that Ryals must first present his claims to the CAC. See Ryals, 987 at 869. The court of appeals held that the CAC had jurisdiction because the Hospital's denial constituted a professional review activity within the parameters of the CAC's enabling legislation. See id. The court reached this conclusion by reasoning that the Hospital's Medical Qualifications Committee and the governing board operated pursuant to valid written bylaws, and therefore, they constituted professional review committees for the purpose of the CPRA. See id. The court further held that the Hospital's actions, taken as a whole, could constitute final action and appropriate notice of the denial of privileges to Ryals in these circumstances. See id. at 868. The court also held that the CAC's jurisdiction extended to Ryals's common law claims. See id. at 870. We granted certiorari.1

IL.

Maintaining standards of patient care is of preeminent importance in a hospital. In service of that goal, hospitals rely upon peer review processes to oversee physician conduct and promote appropriate patient care. During the peer review process, a peer review committee may be critical of the physi-clan, and may issue a corrective action or sanction. See Fredrick Yu, The Committee on Amticompetitive Conduct: New Agency on the Block, 21 Colo. Lawyer 31, 31 (1992). However, a peer review committee is necessarily composed of peers who may be competitors of the physician being reviewed. Accordingly, when a peer review committee issues an adverse decision, it is possible that the committee's decision was based not on a deficiency in the physician's performance, but rather on a desire to remove the physician from competition. See id. This possibility raises antitrust lability concerns.

In 1988, the Supreme Court ruled that a hospital's peer review committee was not immune from federal antitrust liability because the state did not actively supervise the committee. See Patrick v. Burget, 486 U.S. 94, 100, 108 S.Ct. 1658, 100 L.Ed.2d 83 (1988). Because the committee did not qualify for immunity,2 the individual members of the peer review committee could be subject to [658] suit for violating federal antitrust laws. See id. at 102, 108 S.Ct. 1658. In order to qualify for state action immunity,2 the Supreme Court held that a state must actively supervise the private peer review committee's activities so that the state exercises "ultimate control over the challenged anticompetitive conduct." Id. at 101, 108 S.Ct. 1658.

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Ryals v. St. Mary-Corwin Regional Medical Center, 10 P.3d 654, 2000 Colo. J. C.A.R. 5329, 2000 Colo. LEXIS 1098, 2000 WL 1335873 (Colo. 2000).

10 P.3d 654 (Ryals v. St. Mary-Corwin Regional Medical Center) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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