Catholic Health Initiatives v. Gross is an excellent example of why premature resignations of medical staff privileges could have permanent adverse consequences. Dr. Gross was recruited by Centura Health – St. Thomas Moore Hospital, which is operated by Catholic Health Initiatives. Shortly after the commencement of the contract, Dr. Gross was involved in a peer review investigation, after which the Medical Executive Committee required Dr. Gross to obtain an evaluation of his surgical skills and requested that he voluntarily withdraw his privileges for certain surgical cases until the completion of the recommended corrective actions. MEC told Dr. Gross that he could be summarily suspended if he failed to follow those recommendations.

Dr. Gross abruptly resigned, but his first resignation specified a future effective date. The MEC responded by questioning whether Dr. Gross intended to voluntarily withdraw his privileges during the interim period, after which Dr. Gross sent a second resignation letter effective immediately. Shortly thereafter, Dr. Gross sent a third letter stating that he had not had sufficient time to consider his options and attempting to withdraw his resignation. The MEC responded by advising Dr. Gross that he could not withdraw his resignation and that he would have to reapply for medical staff privileges if he wished to continue at the hospital. Dr. Gross never submitted a new application nor did he request a hearing regarding the adverse peer review actions which had already occurred. The hospital thereafter reported Dr. Gross to the National Practitioner Data Bank for resigning while under an investigation. 

Centura Health then sued Dr. Gross for advances paid pursuant to the Recruitment Agreement, and Dr. Gross counterclaimed against the hospital and the Medical Executive Committee for denial of due process, failure to act in good faith, and tortious interference with existing and future business relationships. The United States District Court for the District of Colorado initially awarded and subsequently reaffirmed summary judgment in favor of the Medical Executive Committee, the individual members thereof, and the hospital, dismissing Dr. Gross’ claims for denial of due process and breach of implied duty of good faith and fair dealing. The hospital argued that Dr. Gross had no right to any due process under the bylaws because he resigned before any action was taken that would have entitled him to a hearing on to any of the other due process rights under the bylaws and that he had failed to exhaust his administrative remedies. The court agreed that the corrective action recommended by the hospital did not rise to the level of an adverse peer review action triggering due process rights pursuant to the bylaws, and also agreed that Dr. Gross had basically waived those rights by resigning and making himself ineligible for those protections.

The District Court also dismissed Dr. Gross’ claim that the hospital was tortiously interfering with his prospective business relationships by filing the National Data Bank Report, holding that the Data Bank Report accurately stated the facts that had occurred and was required by the Health Care Quality Improvement Act. Since the Data Bank Report was required and there was no doubt regarding the truth of the report, the immunity provisions of HCQIA protected the hospital. 

The court declined only to grant summary judgment dismissing Dr. Gross’ claims for intortious interference with existing business relationships because there was a factual issue regarding the hospital’s allegedly defamatory statements to other members of the administration and medical staff which were not immunized as part of the peer review process.

Finally, the court also granted the hospital summary judgment on its contract action to recover funds advanced to Dr. Gross pursuant to the recruitment agreement.

The case illustrates the “double-whammy” associated with premature resignations of medical staff membership and clinical privileges. First, if the resignation is made during an investigation or in order to avoid an investigation, the act generates an automatic unfavorable Data Bank Report. Second, because of the doctrine of exhaustion of administrative remedies, resignation could, as happened in the Gross case, waive any opportunity to challenge the adverse peer review actions in accordance with the medical staff bylaws. Not only does that waive the right to pursue whatever due process rights a physician might have pursuant to the bylaws, but it also forecloses recourse to the civil courts, leaving the physicians with no recourse of any kind by the hospital stand behind the shield of HCQIA immunity. The key to piercing this shield of immunity is showing that the due process rights mandated by HCQIA were not provided. When the physician waives those rights by premature resignation, that opportunity is forever lost. A copy of the opinion granting the various motions for summary judgment and the subsequent opinion denying the motions of both parties to reconsider those orders is attached at the link below.$File/catholic.pdf