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Mathews v. Lancaster general Hospital

June 20, 1996

ROBERT S. MATHEWS, M.D., APPELLANT AT NO. 95-1391

v.

LANCASTER GENERAL HOSPITAL; LANCASTER GENERAL HOSPITAL FOUNDATION; COLUMBIA HOSPITAL; COLUMBIA HOSPITAL FOUNDATION; GERALD W. ROTHACKER, JR., M.D.; THOMAS R. WESTPHAL, M.D.; JOHN SHERTZER, M.D.; J. PAUL LYET, M.D.; JAMES P. ARGIRES, M.D.; HUGH H. HOKE, JR., M.D. ROBERT S. MATHEWS, M.D., APPELLANT AT NO. 95-1392

v.

ORTHOPEDIC ASSOCIATES OF LANCASTER, LTD. ROBERT S. MATHEWS, M.D.

v.

LANCASTER GENERAL HOSPITAL; LANCASTER GENERAL HOSPITAL FOUNDATION; COLUMBIA HOSPITAL; COLUMBIA HOSPITAL FOUNDATION; GERALD W. ROTHACKER, JR., M.D.; THOMAS R. WESTPHAL, M.D.; JOHN SHERTZER, M.D.; J. PAUL LYET, M.D.; JAMES P. ARGIRES, M.D.; HUGH H. HOKE, JR., M.D. APPELLANTS AT NO. 95-1532 ROBERT S. MATHEWS, M.D.

v.

ORTHOPEDIC ASSOCIATES OF LANCASTER, LTD., APPELLANT AT NO. 95-1548



On Appeal from the United States District Court for the Eastern District of Pennsylvania

(D.C. Civil Action Nos. 93-cv-06774 and 94-cv-04647)

Before: SCIRICA, ALITO and WEIS, Circuit Judges

SCIRICA, Circuit Judge.

Argued January 10, 1996

Filed June 21, 1996

OPINION OF THE COURT

Dr. Robert Mathews brought suit against Lancaster General Hospital, Columbia Hospital, and several physicians, alleging defendants conspired to curtail his professional privileges in violation of the Sherman Act and state law. The district court held all defendants except Columbia Hospital were immune from suit for monetary damages under the Health Care Quality Improvement Act of 1986 (the "Act"), 42 U.S.C. Section(s) 11101-11152 (1988 & Supp. IV 1992). It also found that Dr. Mathews failed to produce evidence of concerted action and antitrust injury. The district court entered summary judgment against Dr. Mathews on his antitrust claims and dismissed his pendant state law claims. See Opinion and Order, Mathews v. Lancaster Gen. Hosp., Nos. 93-6774, 94- 4647 (E.D. Pa. May 4, 1995).

Dr. Mathews appeals the grant of immunity, and defendants cross-appeal the denial of their motion for attorneys' fees. The Act requires that "a professional review action be taken in the reasonable belief that the action was in furtherance of quality health care" for immunity to attach. 42 U.S.C. Section(s) 11112(a)(1). Because the evidence in this case supports the conclusion that defendants possessed a reasonable belief that their action was in furtherance of quality health care, we believe the district court correctly found them to be immune from suit. We also hold that the award of attorneys' fees to prevailing defendants under the Act lies in the discretion of the district court.

Dr. Mathews also challenges the district court's grant of summary judgment on the antitrust claims. We believe Dr. Mathews has failed to raise a genuine issue of material fact as to whether defendants engaged in concerted action in restraint of trade. Nor has he shown the existence of an antitrust injury. We will affirm.

I. Factual Background

Dr. Robert Mathews is an orthopedic surgeon who has been on the staff of Lancaster General Hospital ("Lancaster General") since 1973 and Columbia Hospital ("Columbia") since 1992. He practices as a corporate partner with another orthopedic surgeon, Dr. George Kent. Lancaster General, Columbia, and affiliated corporate entities, the Lancaster General Hospital Foundation and the Columbia Hospital Foundation, are defendants in this antitrust suit. Also defendants are Orthopedics Associates of Lancaster, Ltd. ("Orthopedic Associates"), an orthopedic surgery group practice in competition with Dr. Mathews' practice, and several doctors, including Drs. Gerald Rothacker, Jr., Thomas Westphal, and John Shertzer, all orthopedic surgeons and shareholders of Orthopedic Associates. Dr. Mathews alleges that Lancaster General, Columbia, Orthopedic Associates, and the individual defendants engaged in an antitrust conspiracy to curtail his orthopedics practice and his privileges at Lancaster General by improperly sanctioning him in a peer review proceeding. He alleges that Dr. J. Paul Lyet, another orthopedic surgeon, Dr. James Argires, a neurosurgeon and a member of the Lancaster General Hospital Board of Directors, and Dr. Hugh Hoke, a former President of the Medical and Dental Staff of Lancaster General Hospital and ex-officio member of the Lancaster General Hospital Board, also participated in the conspiracy.

The chain of events that precipitated this lawsuit began on December 27, 1989. That morning, Dr. Kent was performing spinal surgery at Lancaster General. Dr. Mathews was listed as a co-surgeon for the operation. During the procedure, a high speed drill slipped and tore the patient's esophagus. Dr. Kent attempted to repair the esophagus himself without seeking outside assistance or a consultation. Dr. Mathews was not present in the operating room when the esophagus was injured. Later that evening, the patient suffered complications necessitating emergency surgery to repair the tear.

After the accident, Dr. Kent's hospital privileges were suspended for five days while an ad hoc committee, chaired by Dr. Hoke and composed of several other Lancaster General physicians (the "Hoke Committee"), investigated. The Hoke Committee concluded that Dr. Kent had acted inappropriately by failing to seek a consultation on the patient's torn esophagus. In a report dated January 4, 1990, the Hoke Committee recommended a focused review of Dr. Kent's cases for a prospective six month period by the Quality Assurance Committee of the Department of Surgery and urged that letters of reprimand be placed in the confidential files of both Drs. Kent and Mathews. The report concluded that Dr. Mathews, as co-surgeon, bore some responsibility for the incident. *fn1

In accordance with the Hoke Committee's recommendation, Dr. Robert Johnson, the President of the Medical and Dental Staff, authorized a second ad hoc committee of three board-certified orthopedic surgeons to conduct the six-month focused review of Dr. Kent's cases. The committee was selected by Dr. Rothacker, Chairman of the Department of Surgery at Lancaster General, and consisted of Drs. Rothacker, Westphal and Lyet (the "Rothacker Committee"). The parties dispute why the focused review was not undertaken by the Quality Assurance Committee as the Hoke Committee had recommended. Drs. Rothacker and Westphal are both shareholders of Orthopedic Associates and economic competitors of Dr. Mathews.

The Rothacker Committee reviewed 208 surgical cases in which Dr. Kent served as either the primary or assisting surgeon. Apparently Dr. Rothacker played the most important role in the review. At the end of the review which took two years, the committee concluded that 27 of the 208 cases evidenced a substandard level of care. Twenty-three of those cases, the committee discovered, involved spine surgery, and Dr. Mathews had been the primary surgeon in each of those cases. Dr. Rothacker reported the findings of the committee to Dr. Johnson in a March 19, 1992 letter. In the letter, Dr. Rothacker recommended that the 27 files rated substandard by the committee be sent to an outside agency for further review, and "[i]f this agency agrees that these cases were not managed in an acceptable fashion, a restriction of privileges would be indicated." Both Dr. Kent and Dr. Mathews were sent copies of the letter. Dr. Rothacker also reported the conclusions of his committee to the Executive Committee of the Medical and Dental Staff on April 6, 1992, although he did not provide the Executive Committee with any underlying materials or with the Hoke Committee report. Subsequently, in a letter dated April 30, 1992, Dr. Johnson informed Dr. Mathews that an independent reviewer would evaluate both Dr. Mathews' and Dr. Kent's cases. Attached to this letter was a copy of the minutes of the April 6, 1992 meeting of the Executive Committee, which stated in part:

In a significant number of these cases [of Dr. Kent], Dr. Robert Mathews was also involved in the surgery, as primary or assistant surgeon. Therefore, any review by an outside review agency will also involve a review [of] Dr. Mathews' performance in these cases, and may result in a recommendation regarding Dr. Mathews' clinical privileges.

At the time he was conducting the review of Dr. Kent's cases, Dr. Rothacker was also concerned about economic trends affecting the medical profession. In a November 1991 letter to the Lancaster General Hospital Foundation Board, Dr. Rothacker wrote: "The economic climate for medical practice, as you know, is not favorable at this time. Most of us anticipate a significant drop in our gross earning ability and most likely our net earning ability." In January 1993, in order to respond to negative economic trends, Orthopedic Associates, of which Dr. Rothacker was a principal, and Lancaster General formed a joint venture- -the MidAtlantic Orthopedic Institute. The Institute was intended "to develop, operate and market a comprehensive orthopedic care and orthopedic surgical services program, through [Lancaster General]." Orthopedic Associates was to be the exclusive provider of orthopedic surgical services at the Institute, and Lancaster General agreed to dedicate operating room time and support personnel to Orthopedic Associates. Dr. Mathews was a major user of operating room time at Lancaster General.

Meanwhile, Lancaster General had retained the American Medico-Legal Foundation to select an independent reviewer to review the 27 cases in which the Rothacker Committee had found that Drs. Kent and Mathews had provided substandard care. The Foundation chose Philip D. Wilson, Jr., M.D., of Cornell Medical College. Dr. Wilson is a board certified orthopedic surgeon who has taught in the field of orthopedic surgery for over 40 years. Drs. Kent and Mathews were given an opportunity to submit additional information regarding the files to be sent to the independent reviewer, and both submitted some supplementary materials. On March 18, 1993, Dr. Wilson issued a report concluding the quality of care rendered by Drs. Kent and Mathews was inadequate and below acceptable standards. Dr. Wilson's report concluded:

the pattern and trend of care reflected by review of the records of the 23 patients undergoing lumbar spinal surgery by these two surgeons in a period of 6 months are substandard in the following ways:

(1) Incredibly poor documentation of patient work-ups lacking clear definition of primary complaints, clear histories of present illnesses, well recorded past medical histories, complete and orderly specific orthopedic and neurological examinations, and specifics of prior ambulatory care and treatments.

(2) Lack of timely review, editing and correction of dictated and typed office notes.

(3) Lack of timely signature to authorize such notes.

(4) Poor use of consultants such as neurologists, neurosurgeons, and/or electroneurodiagnosticians.

(5) Great dependence on literal and non-objective interpretations of CAT scans without direct clinical correlations for diagnosis.

(6) Failure to use alternative imaging techniques such as the full spectrum of routine x-rays, MRIs, and myelographic enhanced CTs.

(7) Lack of judgment in applying extensive lumbar surgical decompressions and fusions to patients irrespective of age and type of condition.

(8) Lack of well controlled ambulatory non-operative techniques such as bracing, exercise therapy, pain blocks and physiotherapeutic modalities.

(9) Nonsystematic use of medications such as NSAIDs, muscle relaxants, analgesics, etc.

(10) Lack of objective hospitalization progress notes recording such details as progress of wound, recovery milestones, etc.

(11) The lack of a concise but descriptive discharge note with details of course as well as diagnoses, operative procedures and complications.

(12) Deficient operative notes without details of intraoperative findings and annotated justification for widespread and radical ...


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