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.