Miller v. Huron Regional Medical Center

          Submitted: June 11, 2019

          Appeal from United States District Court for the District of South Dakota - Sioux Falls

          Before LOKEN, KELLY, and ERICKSON, Circuit Judges.

          KELLY, CIRCUIT JUDGE.

         Huron Regional Medical Center (HRMC) appeals the district court's^[1] denial of its motion for remittitur or a new trial following the jury's award of damages to Dr. Linda A. Miller, one of HRMC's former physicians. We conclude that the district court did not abuse its discretion and therefore affirm.

         I

         The Health Care Quality Improvement Act of 1986 (HCQIA), 42 U.S.C. §§ 11101-11152 (2012), requires certain information about physicians to be reported to the National Practitioner Data Bank (NPDB). A health care entity such as HRMC must report whenever it "accepts the surrender of clinical privileges of a physician (i) while the physician is under an investigation by the entity relating to possible incompetence or improper professional conduct, or (ii) in return for not conducting such an investigation or proceeding." § 11133(a)(1)(B). Another type of report must be filed whenever a medical malpractice claim is settled. See § 11131(a). NPDB reports are not available to the public but are available to state licensing boards and prospective employers. The HCQIA contains an immunity provision that states: "No person or entity . . . shall be held liable in any civil action with respect to any report made under this subchapter . . . without knowledge of the falsity of the information contained in the report." § 11137(c).

         Dr. Miller began working for HRMC as a surgeon in 2004. In 2009, she executed a new three-year contract with HRMC (the Surgical Services Agreement or SSA). The SSA provided for termination without cause by either party on 180 days' notice. The SSA required Dr. Miller to maintain a valid medical license in South Dakota and full admitting privileges at HRMC. Decisions about physician appointments and privileges are made by HRMC's Board of Directors based on recommendations by the Medical Executive Committee (MEC). Members of the medical staff, including physicians, are governed by the Medical Staff Bylaws.

         While working at HRMC, Dr. Miller settled a number of malpractice lawsuits, each of which triggered a NPDB report. At a regularly scheduled August 24, 2010 Board of Directors meeting, the Board received an update on pending litigation and asked the MEC to conduct a review of Dr. Miller's medical records "to determine any trends to be addressed, to be reported back to the Board." The MEC met on October 14, 2010, and agreed to conduct a three-month review of Dr. Miller's charts, followed by a reevaluation. That review ended on January 18, 2011. Although the MEC did not report any concerns with the first review, the Board requested that the MEC conduct a second three-month review.

         While the second review was ongoing, Dr. Miller experienced two bad outcomes with patients. On April 25, 2011, the MEC decided to have Dr. Blessinger discuss the cases with Dr. Miller. According to Dr. Miller's testimony, Dr. Blessinger told her that the MEC recommended a voluntary reduction in her surgical privileges, in the hopes that it would appease the Board and avoid her termination. Dr. Blessinger testified that he did not ask Dr. Miller to reduce her privileges but "discussed with her that reducing her privileges might allow us to continue to have her practice medicine" with HRMC. Dr. Blessinger expressed his belief that a voluntary reduction in her privileges would not trigger a NPDB report.

         That same day, Dr. Miller submitted a revised privilege checklist omitting abdominal surgeries. HRMC's CEO, John Single, consulted with the hospital's counsel and concluded that if the Board accepted Dr. Miller's reduction in privileges it would need to be reported to the NPDB. Single showed Dr. Miller a draft of the NPDB report, and Dr. Miller did not attempt to withdraw her privileges request. On April 29, 2011, the Board accepted Dr. Miller's reduction in privileges, and HRMC filed the NPDB report on May 11, 2011. The report stated: "Dr. Miller voluntarily surrendered a portion of her surgical privileges while the Medical Executive Committee was investigating her quality of care. The Board of Directors approved this surrender of certain privileges April 29, 2011." At the same April 29 meeting, the Board voted to terminate the SSA without cause per the 180-day provision.

         Dr. Miller later resigned, but HRMC continued to pay her through October 30, 2011, which was the end of the 180-day period in the SSA. Dr. Miller remained unemployed for six months before accepting a job performing wound care in Florida. Prior to accepting that job, she had applied for a surgical position and was told she would not be able to get credentials because of the NPDB report filed as a result of her reduction in privileges.

         Dr. Miller sued HRMC for breach of contract and defamation.^[2] In her contract claim, Dr. Miller alleged that HRMC's request to reduce her privileges constituted corrective action, which created a right to a hearing under Sections 10.2(h)(iv), 10.2(i) and 11.2-2 of the Medical Staff Bylaws. On the defamation claim, she alleged that the MEC was not "investigating her quality of care" at the time she surrendered her privileges, making HRMC's NPDB report knowingly false. Dr. Miller sought compensatory and punitive damages.

         At trial, one of Dr. Miller's experts, Dr. Lawrence Huntoon, presented evidence that HRMC had not complied with the Medical Staff Bylaws because it did not afford Dr. Miller a hearing prior to requesting a reduction in her surgical privileges. He also testified that the review being conducted of Dr. Miller's cases was not an "investigation" as that term is used in the Bylaws. As Dr. Miller was not "under an investigation . . . relating to possible incompetence or improper professional conduct," § 11133(a)(1)(B)(i), no NPDB report needed to be filed. Further, the NPDB ...