04-430SUPREME COURT OF ARKANSAS

No. 04-430

      BAPTIST HEALTH,

      APPELLANT,

      VS.

      BRUCE E. MURPHY, M.D., SCOTT L. BEAU, M.D., DAVID C. BAUMAN, M.D., D.

      ANDREW HENRY, M.D., DAVID M. MEGO, M.D., and WILLIAM A. ROLLEFSON, M.D.,

      APPELLEES,Opinion Delivered June 2, 2005

      APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, THIRTEENTH DIVISION,

      NO. CV-04-2002,

      HON. RAYMOND C. KILGORE, JR., JUDGE,

      REVERSED AND REMANDED; REBRIEFING ORDERED.


      PER CURIAM


  Appellant Baptist Health (Baptist) appeals an interlocutory order of the

  Pulaski County Circuit Court, Thirteenth Division, granting a preliminary

  injunction enjoining Baptist from preventing appellees Bruce E. Murphy, M.D.,

  Scott L. Beau, M.D., David C. Bauman, M.D., D. Andrew Henry, M.D., David M.

  Mego, M.D., and William A. Rollefson, M.D., from practicing medicine at its

  hospitals. We reverse and remand to the circuit court for further findings and

  order rebriefing.

Baptist is a private, charitable, nonprofit corporation that operates several

full-service community hospitals throughout Arkansas. Appellees are

cardiologists and are partners in Little Rock Cardiology Clinic, P.A., (LRCC).

Appellees hold indirect interests in ArkansasHeart Hospital through their direct

ownership in LRCC, which owns 14.5% of Arkansas Heart Hospital. Additionally,

appellee Murphy directly owns three percent of Arkansas Heart Hospital, and

appellee Henry also directly owns a percentage of Arkansas Heart Hospital.

Appellees are on the medical staff of Arkansas Heart Hospital and admit patients

there. Appellees are also on the professional staff at Baptist Medical Center in

Little Rock and admit patients there.

Baptist's Board of Trustees adopted the Economic Conflict of Interest Policy

(Policy), which is the subject of this litigation, at its quarterly meeting in

May 2003. The Policy mandates denial of initial or renewed professional staff

appointments or clinical privileges at any Baptist hospital to any practitioner

who, directly or indirectly, acquires or holds an ownership or investment

interest in a competing hospital.

Appellee Murphy's and appellee Beau's terms of appointment at Baptist expired on

February 26, 2004. Because both appellees Murphy and Beau hold, either directly

or indirectly, ownership or investment interests in Arkansas Heart Hospital,

both were deemed ineligible for reappointment by Baptist pursuant to the Policy.

The remaining appellees also hold ownership or investment interests in Arkansas

Heart Hospital, and they will be similarly affected by the Policy upon the

expiration of their respective terms of appointment.

On February 10, 2004, appellees sued Baptist in the U.S. District Court for the

Eastern District of Arkansas, alleging that the actions of Baptist violate the

federal anti-kickback statute, the Arkansas Medicaid Fraud Act, the Arkansas

Medicaid Fraud False Claims Act,and the Arkansas Deceptive Trade Practices Act.

Appellees further alleged that Baptist's Policy tortiously interfered with the

doctor-patient relationship. Baptist moved to dismiss for lack of federal

jurisdiction, and U.S. District Judge James Moody entered an order granting the

motion on February 24, 2004. See Murphy v. Baptist Health, No. 4:04CV00112 (E.D.

Ark. Feb. 24, 2004) (unpublished opinion).

Appellees filed the instant lawsuit, almost identical in form to the federal

lawsuit, in the Pulaski County Circuit Court on February 25, 2004. Appellees

requested preliminary and permanent injunctive relief to enjoin Baptist from

enforcing the Policy. After a hearing on February 26, 2004, and further briefing

by the parties, the circuit court granted appellees' motion for preliminary

injunction, finding that appellees would ultimately prevail at trial on all

points and that absent an injunction, appellees would suffer harm. This

interlocutory appeal followed.

In determining whether to issue a preliminary injunction or temporary

restraining order pursuant to Rule 65, the trial court must consider two things:

(1) whether irreparable harm will result in the absence of an injunction or

restraining order, and (2) whether the moving party has demonstrated a

likelihood of success on the merits. Three Sisters Petroleum, Inc. v. Langley,

348 Ark. 167, 72 S.W.3d 95 (2002). This court reviews the grant of a preliminary

injunction under an abuse-of-discretion standard. See AJ&K Operating Co., Inc.

v. Smith, 355 Ark. 510, 140 S.W.3d 475 (2004). Rule 65(e) of the Arkansas Rules

of Civil Procedure provides in part:

Every order granting an injunction or restraining order shall set forth the

reasons for its issuance; shall be specific in terms; shall describe in

reasonable detail, and not by reference to the complaint or other document, the

act or acts sought to be restrained or mandated. . . .

In its order granting the motion for preliminary injunction, the circuit court

made the following findings:

The Plaintiffs filed their Motion for Temporary Restraining Order or

Alternatively for Preliminary Injunction in this Court on February 25, 2004,

stating that Baptist Health's policy of conditioning privileges to physicians

based only on Economic Credentialing is contrary to the federal Anti-Kickback

Statute, 42 U.S.C. § 1320a-7b(b), the Arkansas Medicaid Fraud Act, ACA §

5-55-111, the Arkansas Medicaid Fraud False Claims Act, ACA § 20-77-902, and is

contrary to public and regulatory policy in violation of the Arkansas Deceptive

Trade practices Act, ACA § 4-88-101 et seq.

      Under the Plaintiffs' interpretation of the facts in this case, Baptist's

granting privileges to physicians is remuneration in exchange for possible

referrals and is, therefore, a violation of the statutes cited above. The

Plaintiffs allege that these acts of Baptist are contrary to the above-cited

laws and interfere with the right of a patient to be admitted to a hospital and

be treated by a doctor of his or her choice. Therefore, the Plaintiffs allege

that Baptist's Economic Credentialing policy tortiously interferes with the

Plaintiffs' relationships with their patients and tortiously interferes with the

Plaintiffs' relationships with referring physicians.

***

        Irreparable Harm

          The Doctor/Patient Relationship

The relationship of doctor-patient is unique. The loss of this relationship,

even temporarily, causes irreparable damage to the doctor and the patient. There

is no adequate remedy at law because the loss is a loss of a one-time

opportunity.

Moreover, Arkansas Department of Health Rules and Regulations forHospitals and

Related Institutions in Arkansas, Section 5(A)(10) states that "The bylaws [of

an institution] shall ensure admission of patients by a physician[,] patient

choice of physician and/or dentist and emergency care by a physician." I

interpret this to mean that an otherwise qualified doctor must be granted access

to his patient for the purpose of treating his patient, if that is what both the

doctor and the patient want. Or, stated another way, a hospital cannot deny the

services of a physician of the patient's choice if the hospital admits the

patient and accepts the patient's insurance company or Health Maintenance

Organization to cover any part of the patient's hospital expenses.

          The Harm to Patients through Inconsistent Healthcare

The physicians raise the possibility of having patients that cannot be referred

to the Arkansas Heart Hospital because the patient's insurance plan or health

maintenance organization does not cover medical services provided at AHH or only

provides coverage for services at a Baptist facility. The effect of Economic

Credentialing therefore is to prevent a prospective or existing patient from

being treated at the only facility available through insurance to them by the

doctor of their choice, possibly resulting in inconsistent healthcare.

          The Reputation of the Plaintiffs

Baptist states that the granting of the injunction requested by the doctors will

harm Baptist's reputation because the only inference to be drawn is that Baptist

has violated state and federal statutes. The doctors state that, on the other

hand, in addition to the disruption to the doctor-patient privilege, their

reputations will be harmed if they are not granted privileges or renewal of

their privileges because the non-renewal must be disclosed to insurance

companies and to other hospitals. A real possibility exists that the denial of

privileges to a doctor on purely economic grounds would be interpreted by

patients as reflective on the doctor's competency as a physician and disrupt the

doctor-patient relationship. Both sides have valid points. However, the fracture

of the doctor-patient relationship is paramount, and, therefore, the equities

and public policy weigh in favor of the doctors.

***

On all of these points, it appears likely that the plaintiffs will ultimately

prevail at trial.

***

We conclude that the circuit court failed to comply with Rule 65(e).

Specifically, upon review of the order, we are uncertain of the circuit court's

basis for concluding that plaintiffs would ultimately prevail at trial. Without

findings on the issue of the likelihood of success on the merits, we are unable

to determine whether the circuit court abused its discretion in granting the

preliminary injunction. As such, we reverse and remand this case to the circuit

court to make findings in accordance with Rule 65(e) on the issue of appellees'

likelihood of success on the merits. The preliminary injunction shall remain in

effect until further orders of the court.

In addition, upon reviewing the materials included in Baptist's abstract, we

note that Baptist has failed to abstract the February 26, 2004, hearing before

the circuit court on appellees' motion for preliminary injunction. Supreme Court

Rule 4-2(b)(3) explains the procedure to be followed when the appellant has

failed to supply this court with a sufficient brief. The rule provides in part:

Whether or not the appellee has called attention to deficiencies in the

appellant's abstract or Addendum, the Court may address the question at any

time. If the Court finds the abstract or Addendum to be deficient such that the

Court cannot reach the merits of the case, or such as to cause an unreasonable

or unjust delay in the disposition of the appeal, the Court will notify the

appellant that he or she will be afforded the opportunity to cure any

deficiencies. . . to conform to Rule 4-2(a)(5) and (8). Mere modifications of

the original brief by the appellant, as by interlineation, will not be accepted

by the Clerk. Upon the filing of such a substituted brief by the appellant, the

appellee will be afforded the opportunity to revise or supplement the brief, at

the expense of the appellant or appellant's counsel, as the Court may direct. If

after the opportunity to cure the deficiencies, the appellant fails to file

acomplying abstract, Addendum and brief within the prescribed time, the judgment

or decree may be affirmed for noncompliance with the Rule.

Ark. Sup. Ct. R. 4-2(b)(3) (2004).

We hereby order Baptist to submit a substituted brief that contains a revised

abstract that includes an abstract of the February 26, 2004, hearing on the

motion for preliminary injunction. Generally, when rebriefing is ordered,

appellant is directed to file a substituted brief within fifteen days from the

entry of this court's rebriefing order. See Ark. Sup. Ct. R. 4-2(b)(3). Here,

since we have also reversed and remanded this case to the circuit court for

further findings, we direct appellant to file a substituted brief in accordance

with the briefing schedule set by the clerk of this court upon entry of the

circuit court's order.

Reversed and remanded; rebriefing ordered.

Special Justices David Westbrook Doss, Jr., and Jim Boyd, join.

Special Justices Xollie Duncan and James E. Burnett, Jr., concur in part;

dissent in part.

Special Justices Duncan and Burnett, dissenting in part, would not allow the

preliminary injunction to remain in effect pending further orders of the court.

Corbin, Imber, Dickey and Gunter, JJ., not participating.