Case Name: Charles J. CARLINI, M.D. v. HIGHMARK, d/b/a Highmark Blue Cross Blue Shield, Keystone Health Plan West, Inc., Appellants
Court: Commonwealth Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 2000-06-26
Citations: 756 A.2d 1182
Docket Number: 
Parties: Charles J. CARLINI, M.D. v. HIGHMARK, d/b/a Highmark Blue Cross Blue Shield, Keystone Health Plan West, Inc., Appellants.
Judges: Before McGINLEY, Judge, PELLEGRINI, Judge, and RODGERS, Senior Judge.
Reporter: West's Atlantic Reporter, Second Series
Volume: 756
Pages: 1182–1191

Head Matter:
Charles J. CARLINI, M.D. v. HIGHMARK, d/b/a Highmark Blue Cross Blue Shield, Keystone Health Plan West, Inc., Appellants.
Commonwealth Court of Pennsylvania.
Argued Feb. 7, 2000.
Decided June 26, 2000.
Reargument and Request for
Rehearing Denied Aug. 29, 2000.
David R. Johnson, Pittsburgh, for appellants.
Larry A. Silverman, Pittsburgh, for ap-pellee.
Before McGINLEY, Judge, PELLEGRINI, Judge, and RODGERS, Senior Judge.

Opinion:
McGINLEY, Judge.
Highmark d/b/a Blue Cross Blue Shield (Highmark) and Keystone Health Plan West, Inc. (Keystone) (collectively, Appellants), seek review of the order of the Court of Common Pleas of Allegheny County (Chancellor) that denied High- mark's motion for reconsideration, continued in effect the September 1, 1998, order that granted preliminary injunctive relief, and denied other relief as set forth in the order.
Charles J. Carlini, M.D. (Dr. Carlini) is a board-certified physician and surgeon who specializes in obstetrics and gynecology. Since 1980, Dr. Carlini has been a member of the medical staff of St. Clair Hospital, practiced in the South Hills area of Pittsburgh, and participated in various Highmark managed care plans. The Pennsylvania State Medical Board has never disciplined Dr. Carlini from the time he started practicing in 1972.
By letter dated August 4, 1997, Carey Vinson, M.D. (Dr. Vinson), Highmark's medical director, informed Dr. Carlini that Highmark's Credentials Committee (Credentials Committee) denied Dr. Carlini's recredentialing application to the Keystone network based on malpractice claims filed against him. Dr. Carlini appealed the Credentials Committee's decision and attended a hearing before two Highmark physicians on January 5, 1998, at which time he submitted a letter from St. Clair Hospital's medical director, and discussed the malpractice cases in detail. The Hearing Panel (Medical Review Committee) recommended that the decision to terminate Dr. Carlini's participation in the Keystone network be reversed.
By letter dated February 11, 1998, Dr. Vinson advised Dr. Carlini that the Credentials Committee, upon reconsideration, upheld the earlier termination decision, and that the decision was to be communicated to the National Practitioners Data Bank (Data Bank). On May 22, 1998, Dr. Carlini commenced an equity action against Highmark and alleged a breach of eontract/denial of due process and sought declaratory judgment. Dr. Carlini also alleged unfair competition. Shortly thereafter, Dr. Carlini petitioned for a preliminary injunction and requested recertification. The Chancellor initially denied Dr. Carlini relief and transferred the case to the "law" side on June 11, 1998.
Thereafter, Dr. Carlini's motion for partial reconsideration was granted on September 1, 1998. The Chancellor also entered a preliminary injunction against Highmark. The Chancellor ordered Dr. Carlini reinstated with Highmark and directed Highmark to retract the notice submitted to the Data Bank.
On July 6, 1999, the Chancellor overruled Highmark's preliminary objections and denied reconsideration, together with the motion to dissolve the injunction. Dr. Carlini's motion to strike was denied, and the transfer order was vacated. Lastly, the Chancellor directed that the September 1,1998, order remained in effect.
The Chancellor concluded:
In this case, the granting of the preliminary injunction was necessary to preserve the status quo as it existed prior to Defendants' [Highmark's and Keystone's] decision to decertify Plaintiff [Dr. Carlini]. The reporting of this decision to the National Practitioner's Data Bank will undoubtedly have a devastating impact upon Plaintiffs [Dr. Carlini's] professional reputation. Additionally, as at least sixty (60) % of Plaintiffs [Dr. Carlini's] practice consisted of Defendants' [Highmark's and Keystone's] members, this Court believes that this injunction will prevent imminent and irreparable harm from occurring to Plaintiff [Dr. Carlini].
More importantly, this Court believes that Plaintiff [Dr. Carlini] has estab lished a clear right to relief under both state and federal law as well as on due process grounds as set forth by the Pennsylvania Supreme Court in Rudolph v. Pennsylvania Blue Shield, 553 Pa. 9, 717 A.2d 508 (1998) and Lyness v. State Board of Medicine, 529 Pa. 535, 605 A.2d 1204 (1992). Even though Defendants [Highmark and Keystone] afforded Plaintiff [Dr. Carlini] notice and a hearing, by disregarding the recommendations of the impartial peer review panel, Defendants [Highmark and Keystone], who acted as prosecutor, adjudicator and sentencer, violated Plaintiffs [Dr. Carlini's] statutory rights as well as his rights to due process of law. Defendants [Highmark and Keystone] are Professional Health Services Plan Corporations and are thus governed by the Pennsylvania Professional Health Services Plan Corporation Act.... Accordingly, Defendants' [Highmark's and Keystone's] attempt to decertify Plaintiff [Dr. Carlini] is governed by the provisions of that Act.
Chancellor's Opinion, October 15, 1999, at 5-6. Highmark and Keystone appealed.
On appeal, Highmark and Keystone contend: 1) that the Chancellor erred when he concluded that Dr. Carlini established a clear right to relief under state and federal statutes; 2) that the Chancellor erroneously treated Highmark and Keystone as "state actors" and thereby rewrote Keystone's credentialing procedures; and 3) that the Chancellor should not have granted injunctive relief because an adequate remedy at law was available.
A preliminary injunction is justified when the following criteria are satisfied:
1. A threat of immediate, irreparable injury that cannot be remedied through damages;
2. The injury resulting from the denial of the injunction is worse than the injury caused by granting the equitable relief; and
3. The injunction will restore the parties to their previous situations.
Schaeffer v. Frey, 403 Pa.Super. 560, 589 A.2d 752, 755 (1991). This Court will disturb the chancellor's decision only if "no grounds exist to support the decree or that the rule of law relied upon was palpably erroneous." Lewistown Police, 661 A.2d at 512 n. 15.
At the outset, Highmark and Keystone point out a discrepancy between the Chancellor's September 1,1998, order and October 15, 1999, opinion. Pursuant to the September 1998 order, the Chancellor issued the injunction only against High-mark, whereas the October 1999 opinion referred to the Appellants, Highmark and Keystone, collectively. Even though the Chancellor did not enjoin Keystone specifically, the merits of Keystone's decertification decision were the heart of the controversy.
Dr. Carlini's Clear Right to Relief
Highmark and Keystone contend that the Chancellor should not have applied the Professional Health Services Plan Corporation Act, (PHSPCA), 40 Pa.C.S. § 6301-6335, because it does not govern Keystone's hearing procedures. However, the Pennsylvania Blue Shield Review Committee Guidelines, attached to Dr. Carlini's complaint, directly refer to the PHSPCA as controlling herein. See Verified Complaint in Equity at Exhibit C; R.R. at 62a. Section 6324 of the PHSPCA addresses the rights of health service doctors:
(a) Admission to plan- Every, health service doctor practicing within the area covered by any professional health service corporation shall have the right, on complying with such regulations as the corporation may make with the approval of the Department of Health, to register with such corporation for such general or special professional health services as he may be licensed to practice, within that area, but the corporation may, with the approval of the Department of Health, refuse to place the name of any health service doctor on its register. Any professional health service corporation may, with the approval of the Department of Health, remove from its register the name of any health service doctor after due notice and opportunity for hearing for cause satisfactory to the corporation.
(c) Disputes. — All matters, disputes, or controversies relating to the professional health services rendered by the health service doctors, or any questions involving professional ethics, shall be considered and determined only by health service doctors as selected in a manner prescribed in the bylaws of the professional health service corporation, (emphasis added).
40 Pa.C.S. § 6324(a) and (c)
Pursuant to the applicable bylaws, Article X, Disputes and Controversies Involving Doctors, provides:
Section 1. Review Committees. All matters, disputes or controversies arising out of the relationship between the Corporation and professional providers who render health services to the Corporation's subscribers, including any questions involving professional ethics, shall be considered, acted upon, disposed of and determined by the appropriate one of the two Review Committees hereinafter referred to.
Section 2. Medical Review Committee. There shall be a Medical Review Committee consisting of at least five (5) members, each of whom shall be appointed by the Chairman of the Board of Directors of the Corporation and each of whom shall serve until his successor is appointed. A majority of the members of the Medical Review Committee shall be doctors who are either members of the Board of Directors of the Corporation or members of the Corporation. Section 8. Proceedings Involving Status of a Doctor as a Participating Doctor. If a Review Committee determines that a hearing should be held with respect to any matter which has been stated in a Complaint, the Chairman shall promptly fix a time, date and place for such hearing. The Participating Doctor involved shall be given at least fifteen (15) days written notice by the Secretary of the Committee of the date, time and place of such hearing, and the doctor shall be furnished with a copy of the Complaint. . At the hearing such witnesses may be heard and such evidence may be received as is deemed to be relevant and of reasonable probative value, provided, however, that formal rules of evidence need not be adhered to. The doctor affected by the Complaint shall be afforded an opportunity to be heard before the Committee, either in person or by counsel, and to produce evidence and witnesses at such hearing. . After the hearing, the Review Committee, by majority vote of those members who are doctors, shall take whatever action it deems appropriate, based on the evidence and testimony produced at the hearing and, if such action involves either suspension or termination of a doctor as a Participating Doctor, the matter shall be promptly referred to the Secretary of Health of the Commonwealth of Pennsylvania for approval or for such other action as he may deem appropriate, (emphasis added).
Verified Complaint in Equity at Exhibit C; R.R. at 59a-61a.
In the present controversy, the Medical Review Committee's recommendation to reinstate Dr. Carlini was dispositive in and of itself. Additionally, we disagree with Highmark and Keystone's contention that the Chancellor's reliance upon the FHCQIA, 42 U.S.C. § 11101 to 11152, was palpably erroneous. The Chancellor correctly noted that federal law delineates standards for professional review proceedings whereby physicians are entitled to due process. 42 U.S.C. § 11112. In footnote 3, the Chancellor's discussion regarding the FHCQIA serves as a supplement to its evaluation of the PHSPCA. Common Pleas Court Opinion at 5.
It is undisputed that Keystone is a licensed health maintenance organization (HMO) that offers commercial and Medicare products. Highmark and Keystone assert that Keystone falls within the purview of the Health Maintenance Organization Act, (HMO Act), Act of December 29, 1972, P.L. 1701, as amended, 40 P.S. § 1551-1568, and that no provision of the HMO Act grants a physician a right to a hearing before a contract is terminated. Nevertheless, we believe that there were reasonable grounds for the Chancellor's application of the PHSPCA in these circumstances. In addition, we do not view the PHSPCA and the HMO Act as being mutually exclusive.
Highmark and Keystone as "State Actors"
Highmark and Keystone contend that neither Highmark nor Keystone engaged in state action with respect to Dr. Carlini insofar as Keystone's credentialing process would have been required to afford Dr. Carlini due process. Rudolph v. Pennsylvania Blue Shield, 553 Pa. 9, 717 A.2d 508 (1998) is instructive as to the due process analysis.
In Rudolph, a participating Blue Shield physician rendered services to patients and was denied payment. Dr. Joseph P. Rudolph (Dr. Rudolph) had submitted a claim to a medical review committee which denied the claim. Subsequently, Dr. Rudolph filed a contract action in the Court of Common Pleas of Allegheny County (common pleas court), and the matter was referred to a panel of physician arbitrators. The panel found in Dr. Rudolph's favor, and the common pleas court confirmed the award. On Blue Shield's appeal, the Pennsylvania Superior Court vacated the common pleas court's judgment. Joseph P. Rudolph, M.D. v. Pennsylvania Blue Shield, 451 Pa.Super. 300, 679 A.2d 805 (1996).
Our Pennsylvania Supreme Court reversed the Superior Court's order and reinstated the common pleas court's judgment. Rudolph v. Pennsylvania Blue Shield, 553 Pa. 9, 717 A.2d 508 (1998). The Supreme Court determined that a medical review committee, formed pursuant to the PHSPCA, was a "creature of the state" and must adhere to due process standards. Id. at 14, 717 A.2d at 510.
In the present controversy, the review process utilized to evaluate Dr. Carlini's credentials is analogous to the medical review committee in Rudolph, certainly to the extent that both merit due process. The guarantees of notice and a hearing must be conducted within a fair, impartial forum. Rudolph, 553 Pa. at 14, 717 A.2d at 510.
In light of the fact that the Credentials Committee in the present case upheld Dr. Carlini's decertification, there was a real possibility that the Medical Review Committee's recommendation was not given bona fide and genuine consideration. Certainly, based on our standard of review we cannot fault the Chancellor's conclusion that "[t]he impartial review process to which Plaintiff [Dr. Carlini] was statutorily entitled was, in the instant case, indeed illusory." Chancellor's Opinion at 8.
Irreparable Harm that Cannot be Remedied by Damages
Finally, Highmark and Keystone contend that the Chancellor erred by granting injunctive relief despite Dr. Carlini's inability to prove the absence of an adequate remedy at law. Highmark and Keystone assert that Dr. Carlini's termination from the Keystone network did not harm his status as a Highmark provider because he continued to treat Highmark patients and SelectBlue patients as a non-network provider.
With respect to equitable relief, ' "the impending loss of a business opportunity" ' is considered to be irreparable harm. West Penn Specialty MSO, Inc. v. Nolan, 737 A.2d 295, 299 (Pa.Super.1999)(quoting Sovereign Bank v. Harper, 449 Pa.Super. 578, 674 A.2d 1085, 1093 (1996)). An irreparable injury causes ' "damage which can be estimated only by conjecture and not by . an accurate pecuniary standard." ' Id. at 299, 737 A.2d 295 (quoting Sovereign Bank, 674 A.2d at 1091).
An affidavit by Dr. Carlini's office manager reflects 15.63% of Dr. Carlini's practice was provided under the Keystone network and 30.82% of Dr. Carlini's practice was provided under SelectBlue, a Highmark point-of-service plan. See Second Affidavit of Jacqueline M. Boyle, September 23, 1998 at 1; R.R. at 435a. As these percentages reflect, a substantial portion of his practice is. intimately involved with his participation with the Keystone network and Highmark. Undoubtedly, he would lose some patients and there is no way of knowing exactly how many. Absent speculation and conjecture Dr. Carlini's potential business loss cannot be reasonably measured. The Chancellor properly concluded that the legal remedy available to Dr. Carlini was inadequate. In summary, we conclude that the Chancellor did not commit legal error by entering the preliminary injunction and reinstating Dr. Carlini until such time as a decision on the merits is rendered.
Accordingly, we affirm.
ORDER
AND NOW, this 26th day of June, 2000, the July 6, 1999, order of the Court of Common Pleas of Allegheny County in the above-captioned matter is affirmed.
. The Credentials Committee performed the function of a review committee as described in the bylaws. Dr. Vinson notified Dr. Carlini of his appeal option and provided directions for arranging a hearing. Additionally, the Hearing Panel acted as a medical review committee.
. Pursuant to the Federal Health Care Quality Improvement Act (FHCQIA), health care entities must report decertifications to the Data Bank. 42 U.S.C. § 11133.
.Highmark and Keystone cite Section 762(a)(5) of the Judicial Code, 42 Pa.C.S. § 762(a)(5), which addresses not-for-profit corporations as a basis for this Court's jurisdiction. To the extent that one may argue that Highmark and Keystone do not fit within this classification, we note that this Court has jurisdiction over private club membership, hospital staff privileges, and church affairs. See, e.g., Conference of A.U.F.C.M.P.C. v. Shell, 426 Pa.Super. 374, 627 A.2d 188 (1993), Sandoval v. Maliver, 145 Pa.Cmwlth. 439, 603 A.2d 695 (1992), and Pa. Dairy Herd Imp. Ass'n v. Wagner, 132 Pa.Cmwlth. 556, 573 A.2d 668 (1990).
. Our review of orders granting or denying a preliminary injunction "does not inquire into the merits of the controversy, but examines the record only to determine if there were any apparently reasonable grounds to justify the chancellor's action." Lewistown Police v. Mifflin County, 661 A.2d 508, 512 n. 15 (Pa. Cmwlth.1995).
. The allegations of Dr. Carlini's complaint reflect that he sought injunctive relief against both Highmark and Keystone. Verified Complaint in Equity at 2; Reproduced Record (R.R.) at 29a. We note that the ambiguity between the order and opinion is not fatal because Keystone, as a subsidiary of High-mark, openly operates under the auspices of Highmark. In fact, Dr. Vinson's correspondence to Dr. Carlini listed both Highmark and Keystone on the letterhead. Because this inconsistency involved only form, not substance, we find no resulting prejudice.
. We note that the Chancellor indicated that "as at least sixty (60) % of Plaintiffs [Dr. Carlini] practice consisted of Defendants' [Highmark and Keystone] members," this Court believes that this injunction will prevent imminent and irreparable harm from occurring to Plaintiff [Dr. Carlini]. Common Pleas Court Opinion at 5 (emphasis added).
. It is the position of Highmark and Keystone that if damages are eventually appropriate, they can be objectively calculated based simply upon the percentages of business of Dr. Carlini's practice that involve the Keystone program.. The Chancellor rejected this argument and we agree. .