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KentuckyOne Health, Inc. v. Reid

Supreme Court of Kentucky

June 15, 2017

KENTUCKYONE HEALTH, INC. APPELLANT
v.
BENJAMIN REID, -JR., M.D. APPELLEE

         ON REVIEW FROM COURT OF APPEALS CASE NO. 2015-CA-000092-MR JEFFERSON CIRCUIT COURT NO. 14-CI-000590

          COUNSEL FOR APPELLANT: Katherine Ann Quesenberry Bradley A. Case Jeffrey Kaplan Jr. DINSMORE 85 SHOHL LLP.

          COUNSEL FOR APPELLEE: Larry B. Franklin Kelly Jo Brownfield Patrick John Smith FRANKLIN LAW GROUP.

          COUNSEL FOR AMICUS CURIAE: Wesley Reed Butler Holly Iaccarino BARNETT BENVENUTI & BUTLER PLLC.

          OPINION OF THE COURT BY JUSTICE VANMETER VACATING AND REMANDING

         Under CR[1] 12.03, a judgment based on a motion for judgment on the pleadings is reserved for those cases in which the pleadings demonstrate that one party is conclusively entitled to judgment. In this case, we must determine whether the Court of Appeals erred in reversing the Jefferson Circuit Court's judgment that KentuckyOne Health, Inc.[2] was entitled to a judgment on the pleadings with respect to Dr. Benjamin Reid's complaint alleging various claims arising from the Hospital's review of Reid's surgical privileges at the Hospital. Because we hold that the circuit court erred in granting the Hospital's motion for judgment on the pleadings and that the Court of Appeals erred as well in holding that the Hospital had taken .a "professional review action" against Reid, we vacate both decisions and remand to the Jefferson Circuit Court for further proceedings.

         I. Factual and Procedural Background.

         Reid is a general surgeon licensed to practice medicine in the Commonwealth of Kentucky. He was a member of the medical staff at the Hospital for over forty years. The foregoing facts appear from complaint and answer in this matter. The following "facts" are gleaned from the parties' memoranda or briefs in support of their respective positions in this matter.

         On February 4, 2013, Reid received a letter advising that all of his cases, starting January 31, 2013, and continuing through June 30, 2013, would be subject to a focus review. Reid claims that during an impromptu meeting on February 27, 2013, Dr. William James Monarch, Chair of the Hospital's Medical Executive Committee, informed him that the Committee had voted to cancel Reid's surgical and endoscopy privileges and that he could no longer perform any further surgical procedures unless he was accompanied by an actively practicing and board certified general surgeon or endoscopist. The same day, Reid's assistant received a phone call from the surgical nurse supervisor letting her know that Reid would not be permitted to perform a previously scheduled surgery the following day without the assistance of another surgeon. Reid was able to find another surgeon to accompany him during the February 28, 2013, surgery. The following week, Reid received a formal letter from the Committee stating that in the interest of patient safety, the Committee was recommending "that a Board Certified Surgeon/ Board Certified Gastroenterologist accompany you into [the] operating room for all future procedures." Reid did not perform any additional surgeries at the Hospital after February 2013.

         On August 5, 2013, Reid received a second letter from the Committee informing him that the focus review had ended without any finding of quality concerns. Reid was granted a conditional reappointment to the medical staff for six months, which permitted him to practice at the hospital as long as he met certain conditions. Reid did not exercise his privileges during the six-month period and his medical staff membership expired on August 26, 2014. Reid took no further action to renew his membership and as a result, his privileges to practice at the Hospital have lapsed.

         On January 31, 2014, Reid filed a complaint in the Jefferson Circuit Court against the Hospital seeking compensatory and punitive damages for breach of contract, intentional infliction of emotional distress, tortious interference with business and contractual relations, and slander. The Hospital answered generally, denying Reid's substantive counts and, six months later, filed a motion for judgment on the pleadings pursuant to CR 12.03.

         Therein, the Hospital claimed entitlement to immunity under the Health Care Quality Improvement Act of 1986, 42 U.S.C.[3] §§ 11101 et seq. (the "Act"), because the Hospital's conduct with respect to Reid was related to its professional review activities. The Hospital further argued that, notwithstanding immunity, all of Reid's asserted claims failed as a matter of law. Following Reid's response and a hearing on the motion, the trial court entered an opinion and order granting the Hospital's motion and dismissing all of Reid's claims. Therein, the trial court noted,

Here,, it is clear from the facts that Reid has proffered that a mandate or recommendation that another surgeon observe his professional activities in the operating room constituted a professional review activity. He knew [the Hospital] had concerns about his competence. Reid did not permit [the Hospital] to conduct this review of his professional actions. [The Hospital] took no corrective, adverse action against him. Reid did not allege any facts in his Complaint or his response to [the Hospital's] motion that would evidence [the Hospital] acted outside the scope of its immunity. Accordingly, he has not rebutted the presumption that [the Hospital] is immune, and [the Hospital] is entitled to judgment on the pleadings.

         Reid thereafter appealed to the Court of Appeals, arguing that the trial court had erred in concluding he could not overcome the rebuttable presumption that the Hospital was entitled to immunity. His reasoning was that professional review actions are afforded a rebuttable presumption of immunity only if certain conditions occur, including notice and hearing, and that the Hospital had not complied with these conditions.

         The Court of Appeals undertook a review of the Act and the distinction it makes between a health care entity's "professional review action" or "professional review ...


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