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Radiation Oncology, LLC, A Hawai`I Limited Liability Corporation, et al v. the Queen's Medical Center

March 20, 2012

RADIATION ONCOLOGY, LLC, A HAWAI`I LIMITED LIABILITY CORPORATION, ET AL., PLAINTIFFS,
v.
THE QUEEN'S MEDICAL CENTER, A HAWAI`I NON-PROFIT CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Leslie E. Kobayashi United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

On January 27, 2012, Plaintiffs Pacific Radiation Oncology, LLC, a Hawai`i Limited Liability Corporation ("PRO"), PRO Associates, LLC, a Hawai`i Limited Liability Corporation ("PROA", together with PRO "the LLCs"), and John Lederer, M.D., Individually and as a Manager of the LLCs appearing for the Pacific Radiation Oncology Physicians (collectively "Plaintiffs")*fn1 filed their Motion for a Temporary Restraining Order, or in the Alternative, for a Preliminary Injunction ("Motion")*fn2 with their complaint in state court.

[Dkt. nos. 1-1 (complaint), 1-3 to 1-19 (Motion and all supporting materials).] Defendants The Queen's Medical Center, a Hawai`i Non-Profit Corporation, Queen's Development Corp, a Hawai`i for Profit Corporation, and the officers and/or trustees of Queen's Medical Center, in their individual and official capacities (collectively "Defendants") removed this action on January 31, 2012, and filed their memorandum in opposition to the Motion on February 2, 2012. [Dkt. nos. 1, 14.] Plaintiffs filed their reply on February 8, 2012. [Dkt. no. 30.] Also on February 8, 2012, Defendants filed their Submission of Affidavits for Direct Examination ("Defendants' Direct Evidence"). [Dkt. no. 29.] Plaintiffs filed a Compendium of Plaintiffs' Evidence ("Plaintiffs' Direct Evidence") on February 9, 2012. [Dkt. no. 31.] On February 13, 2012, Defendants filed their Submission of Supplemental Affidavits for Direct Examination ("Defendants' Supplemental Evidence"), and Plaintiffs filed their Second Submission of Affidavits ("Plaintiffs' Supplemental Evidence"). [Dkt. nos. 36, 38.] Defendants also filed a Notice of Supplemental Authority on February 10, 2012, and a Request for Judicial Notice ("RJN") on February 14, 2012. [Dkt. nos. 35, 39.]

This matter came on for hearing on February 14, 2012. Appearing on behalf of Plaintiffs were Mark Davis, Esq., Loretta Sheehan, Esq., and Clare Connors, Esq. Dr. Lederer was also present. Appearing on behalf of Defendants were Paul Alston, Esq., Claire Wong Black, Esq., and Daniel Mulholland, III, Esq.*fn3 As ordered in this Court's February 22, 2012 preliminary ruling, Plaintiffs filed a supplemental memorandum on March 5, 2012, and Defendants filed their supplemental memorandum on March 9, 2012. On March 12, 2012, this Court held a status conference to discuss the issues addressed in the supplemental memoranda. After careful consideration of the Motion, supporting and opposing memoranda, the evidence presented by both parties, and the arguments of counsel, Plaintiffs' Motion is HEREBY GRANTED IN PART AND DENIED IN PART for the reasons set forth below.

BACKGROUND

The factual and procedural background of this case, as well as the parties' arguments in the Motion and Memorandum in Opposition, are set forth in this Court's TRO Order. 2012 WL 381209, at *1-4. This Court granted Plaintiffs' request for a TRO to the extent that the Court ordered

Defendants to allow Plaintiffs to perform the following procedures on Plaintiffs' patients at the Queen's facilities, including any in-patient treatment, hospitalization, chart or record review, surgery, follow-up care and/or scheduling:

a. Volume Studies for permanent seed implants of the prostate;

b. Permanent seed implants;

c. High dose rate brachytherapy implants of the prostate and substitute tumors;

d. Endoluminal trachea, bile duct, (brachytherapy) radiation therapy;

e. Tomotherapy;

f. 4DCT;

g. Stereotactic body radiotherapy; and

h. Patients that need general anesthesia for external radiation including pediatric external beam radiation.

Id. at *8-9.*fn4 The TRO Order provided that the temporary restraining order would remain in effect until this Court issued its ruling on Plaintiffs' request for a preliminary injunction.*fn5

The following is a summary of the relevant portions of the parties' submissions filed after the Court issued the TRO Order.

I. Plaintiffs' Reply

Plaintiffs emphasize that the scope of the preliminary injunction that they seek is very limited. They seek an order requiring Defendants to allow Plaintiffs to perform the Listed Procedures at The Queen's Medical Center ("Queen's" or "QMC"), but only until Plaintiffs complete their efforts to move their practice out of Queen's facilities. Plaintiffs have already begun the process of securing the necessary equipment and clinical privileges at alternate facilities, and Plaintiffs estimate they will be able to perform some of the Listed Procedures at another facility within four months, but the remaining procedures may take as long as ten months. [Reply at 1 (citing Decl. of John Lederer, M.D. at ¶ 32).] Plaintiffs, however, state that it is not possible for Plaintiffs to give a definite time frame when the services will be available at the alternate facilities. Plaintiffs emphasize that, until the services can be safely performed elsewhere, Queen's is the only facility where the Listed Procedures can be performed. Further, the procedures are a matter of life and death for Plaintiffs' patients.

Plaintiffs argue that the issue before the Court is not whether Defendants had a right to move Queen's radiation oncology department to a closed-department model. Plaintiffs only challenge the manner in which Defendants made that decision and how Defendants implemented that decision. Plaintiffs contend that they have established a likelihood of success on the merits of their claims that Defendants' actions in adopting and implementing the closed-department model violated Plaintiffs' due process rights and constituted various violations of Haw. Rev. Stat. Chapter 480.

Plaintiffs argue that, without a preliminary injunction allowing Plaintiffs to use Queen's facilities to perform the Listed Procedures on their patients, irreparable harm will result. Plaintiffs also argue that the public interest weighs in favor of a preliminary injunction because the Listed Procedures can only be performed at Queen's and because there are certain therapies which only the PRO physicians are qualified to perform. Thus, without a preliminary injunction, any patient requiring one of those therapies will not be able to receive that treatment from a qualified physician in Hawai`i. Plaintiffs argue that Defendants will not suffer any harm if the Court enters a preliminary injunction because Queen's will be paid in full for all of Queen's charges associated with procedures that Plaintiffs perform at Queen's facilities.

Plaintiffs therefore urge the Court to grant a preliminary injunction allowing Plaintiffs to perform the Listed Procedures at Queen's until those procedures are available at alternative facilities.

II. Defendants' Direct Evidence

Defendants submitted Affidavits for Direct Examination from the following witnesses: 1) Darlena Chadwick; 2)

Peter Bryant Greenwood, M.D.; 3) Emily Hirata; 4) Scott Moon, M.D.; 5) Randy Talavera; and 6) Arthur Ushijima. [Dkt. nos. 29-1 to 29-5, 29-8.]

Ms. Chadwick is the Vice President of Patient Care for Oncology, Women's Health, Neuroscience, Pathology and Professional Services at Queen's. She, inter alia, oversees Queen's patient care programs, policies, and procedures. [Def.'s Direct Evid., Attch. A (Aff. for Direct Exam. of Darlena Chadwick ("Chadwick Aff.")), at ¶¶ 1-2.] Ms. Chadwick testified that, in recent years, Queen's received numerous complaints from patients that PRO physicians were transferring patients they initially saw at Queen's to PRO affiliated facilities for no apparent medical reason and without an affirmative request from the patient. These patients reported that they were dissatisfied with certain aspects of the post-transfer services. In addition, Queen's received complaints from referring physicians who were not notified when the PRO physicians transferred patients.

Ms. Chadwick asserts that this jeopardized the continuity of patient care. [Id. at ¶¶ 12-13.]

At least in part due to these complaints, Queen's convened the task force which ultimately recommended that Queen's transition to a closed-department model for its radiation oncology department. In the process, the task force identified several concerns raised by the practice of transferring Queen's patients for no medical reason. [Id. at ¶¶ 14-15, 19.] These concerns included: "QMC patients that are transferred to PRO facilities no longer receive the benefit of QMC's stringent quality control measures and safety precautions[;]" [id. at ¶ 17;] the practice "caused confusion and discord on the part of both patients and referring physicians[,] disrupting the continuity of care"; [id. at ¶ 18;] and Queen's ancillary services are not available to patients who have been transferred to PRO affiliated facilities [id. at ¶ 19]. Based on the task force's findings and recommendations, the Queen's Board of Directors adopted a resolution providing that the radiation oncology department would be a closed department. [Id. at ¶ 22.]

Peter Bryant-Greenwood, M.D., is a physician who has been the Chairman of Queen's Credentialing Committee for physicians since January 2011. [Def.'s Direct Evid., Attch. B (Aff. for Direct Exam. of Peter Bryant-Greenwood, M.D. ("Greenwood Aff.")), at ¶¶ 1-2.] He was part of the Queen's task force and, through the task force investigation, he learned that PRO physicians had been consulting with some patients at Queen's initially but then transferring the patients to a PRO affiliated facility for treatment. Dr. Greenwood states that he was greatly concerned about this practice because some of these patients would return for other treatment at Queen's after treatments at the PRO affiliated facility, but Queen's would not always receive the pertinent medical records from the PRO facilities. This could detrimentally affect the patients' subsequent treatment at Queen's. [Id. at ¶¶ 3-4.] Dr. Greenwood also points out that PRO physicians refused to participate in the PAAROT program that Queen's implemented for its radiation oncologists.*fn6 The PAAROT program "requires input of data concerning patients and treatment in order to effectively measure and understand outcomes . . . for improvement of care and treatment on an ongoing basis of breast cancer patients." [Id. at ¶ 6.] In addition, Dr. Greenwood states that some of the PRO physicians rarely attend Queen's daily multi-disciplinary team meetings.*fn7 [Id. at ¶ 7.]

Emily Hirata is the Chief Medical Physicist of the Radiation Therapy Department at Queen's Cancer Center. She is board certified in Therapeutic Radiologic Physics by the American Board of Radiology. [Def.'s Direct Evid., Attch. C (Aff. for Direct Exam. of Emily Hirata ("Hirata Aff.")), at ¶¶ 1-2.] She states that, after a physician approves a patient's treatment plan, she or another physicist reviews the plan to ensure that it is correct, and the Queen's physicists can also take measurements from the machines to verify that the output matches the plan. [Id. at ¶ 4.]

Scott Moon, M.D., is the Medical Director of the Queen's Radiation Therapy Department. [Moon Aff. at ¶ 1.]

Dr. Moon was a radiation oncologist with PRO and PROA from approximately July 2003 to June 2008. [Id. at ¶ 3.] He states that, during his employment with PRO, the PRO physicians discussed ways to divert Queen's patients to PRO affiliated facilities to increase PRO's revenue from insurance reimbursements, but there was no discussion about telling the patients that they were being transferred to a facility that was partially owned by PRO. He also states that he heard a PRO physician give a patient false information that Queen's would not pay for transportation to its facility, but that PRO would do so. Dr. Moon also states that when patients received some of their treatments at a PRO affiliated facility and other treatments at Queen's, the practice at PRO facilities was to only give patient records to Queen's upon request. [Id. at ¶ 6.] Dr. Moon states that Queen's "radiation oncologists are accredited and qualified to perform head, neck, and gynecological interstitial brachytherapy, and high dose radiation brachytherapy and seed brachytherapy for prostate cancer." [Id. at ¶ 11.]

Randy Talavera is the Manager of Radiation Therapy and Medical Physics at Queen's Radiation Therapy Department. As the department's manager, he is responsible for its daily operations. [Def.'s Direct Evid., Attch. E (Aff. for Direct Exam. of Randy Talavera ("Talavera Aff.")), at ¶¶ 1-2.] He also discussed patient complaints about being transferred to PRO affiliated facilities after receiving an initial consultation at Queen's. [Id. at ¶¶ 4-6.] Mr. Talavera presented data about the treatments received by and insurance coverage for Queen's radiation oncology patients who were transferred to PRO affiliated facilities. [Id. at ¶¶ 9-10, Exhs. A & B.]

Arthur A. Ushijima is the President and Chief Executive Officer ("CEO") of Queen's. [Def.'s Direct Evid., Attch. F (Aff. for Direct Exam. of Arthur A. Ushijima ("Ushijima Aff.")), at ¶ 2.] He also states that the Queen's task force noted the transfer of Queen's patients to non-Queen's facilities and found that the practice raised concerns about quality and continuity of patient care. The task force concluded that the closed-department model "would effectively address concerns regarding quality, patient safety and continuity of care." [Id. at ¶ 13.] He also states that the closed-department policy that Queen's ultimately adopted has one exception: in the interests of patient care, radiation oncologists not employed by QMC on and after February 1, 2012, but who have patients who began their radiation therapy treatments at QMC prior to February 1, will be permitted to continue treating those patients at QMC until radiation therapy treatments and follow up appointments are completed. [Id. at ¶ 17.]

Defendants also presented an affidavit from Barry Bittman, M.D., the Chief Innovations Officer of Meadville Medical Center in Pennsylvania, and an affidavit from Richard O. Schmidt, Jr., J.D., LL.M., the President, CEO and General Counsel of United Hospital System in Wisconsin. Both affidavits discuss the benefits of a closed-department model. [Def.'s Direct Evid., Attch. G (Aff. of Barry Bittman, M.D.), Attch. H (Aff. of Richard O. Schmidt, Jr., J.D., LL.M.).]

III. Plaintiffs' Direct Evidence

Plaintiffs submitted affidavits or declarations from the following persons in lieu of direct examination: 1) Dr. Lederer; 2) Cancer Patient 1; 3) Eva Bieniek, M.D.; 4) Cancer Patient B.J.; and 5) Cancer Patient D.S. [Dkt. nos. 31-1 to 31-6.]

Plaintiffs submitted an affidavit by Dr. Lederer dated January 27, 2012 ("Lederer Affidavit") and a declaration by Dr. Lederer dated February 8, 2012 ("Lederer Declaration").*fn8

Dr. Lederer states that PRO employs six of the eleven civilian radiologists who practice on Oahu and, as of February 1, 2012, Queen's employed all of the civilian radiologists who were not employed by PRO. According to Dr. Lederer,

QMC offered to hire all PRO physicians, but only on the condition that we bring all of our patients to QMC and that we divest all of our interests in all of QMC's competitions (sic). Had the plan worked, QMC would be the employer of all the civilian radiation oncologists in the state and there would be no competition. [Lederer Aff. at ¶ 6, Exh. G (letter dated 11/18/11 to PRO Physician Group from Darlena Chadwick explaining standard conditions imposed on physicians employed by Queen's).] He also states that, in addition to the therapies which the PRO physicians perform at PRO affiliated facilities, they perform other therapies which require either a hospital operating room or patient admission, and these therapies must be performed at a facility which is licensed by the Nuclear Regulatory Commission ("NRC"). With the closure of Hawaii Medical Center - East ("HMC East") and Hawaii Medical Center - West ("HMC West"), Queen's became the only NRC-licensed facility with an operating room that the PRO physicians had privileges to use for these treatments. [Lederer Aff. at ¶ 9.] Thus, once Queen's closed-department policy takes full effect, the PRO physicians will not be able to perform those procedures. Queen's also informed PRO that PRO physicians will not be allowed to attend to PRO patients who receive treatment at Queen's during the patients' post-operative stays. [Id. at ¶ 16.] He asserts that Queen's has improperly "attempt[ed] to exclude [PRO] from continuing its practice" and that Queen's actions "will have important and severely adverse impacts on our physician-patient relationships and on our patients, all of whom are cancer patients in desperate need of lifesaving treatment." [Id. at ¶ 17.]

Dr. Lederer states that, under the terms of the TRO Order, PRO has "had to refuse referrals from treating physicians who have inpatients at QMC and yet want PRO services." [Lederer Decl. at ¶ 4.] The Lederer Declaration also describes a typical course of treatment for patients in need of radiation therapy, from referral to seed implantation, and a typical course for higher risk treatment, from referral to high dose rate ("HDR") brachytherapy. [Id. at ¶¶ 6-7.] Dr. Lederer described examples of his patients who would be affected if the Court denies a preliminary injunction. [Id. at ¶¶ 8-10.] Further, he states that Queen's radiation oncology department staff is not as qualified to perform the procedures relevant to this Motion. [Id. at ¶¶ 11-15.] Dr. Lederer also discussed examples of some of the other PRO physicians' patients, [id. at ¶¶ 17-18,] and refuted several points in Ms. Chadwick's affidavit, including her contention that Kuakini Medical Center ("Kuakini") is a viable alternative location for the procedures at issue in this Motion [id. at ¶¶ 19-25]. Dr. Lederer describes problems that he and the other PRO physicians have had accessing their patients' medical records at Queen's, [id. at ¶¶ 26-28,] and he discusses Plaintiffs' ongoing efforts to secure alternative sites to perform the procedures at issue in this Motion [id. at ¶¶ 32.ac].

Attached to the Lederer Declaration and the Lederer Affidavit are several exhibits, including correspondence between PRO, and/or its physicians, and Queen's.

Dr. Bieniek's declaration, the affidavit of Cancer Patient 1, and the declarations of cancer patient B.J. and D.S. all discuss individual cases in which Plaintiffs allege the patients will be denied necessary treatment in the absence of a preliminary injunction. [Pltfs.' Direct Evid., Decl. of Eva Bieniek, M.D. ("Bieniek Decl."), Aff. of Cancer Patient 1, Decl. of Cancer Patient B.J., Decl. of Cancer Patient D.S.]

IV. Defendants' Supplemental Evidence

Defendants submitted Supplemental Affidavits for Direct Examination from the following witnesses: 1) Ms. Chadwick; 2) Ms. Hirata; 3) Dr. Moon; and 4) Mr. Talavera. [Dkt. nos. 36-1, 36-3, 36-8, 36-11.] Defendants also submitted Affidavits for Direct Examination from: 1) Stuart Tsuji, M.D.; 2) Marilynn Hata; and 3) Kaye K. Kawahara, M.D. [Dkt. nos. 36-12, 36-14, 36-15.]

In pertinent part, Ms. Chadwick asserts that Queen's can maintain continuity of care for PRO patients, even if the PRO physicians are no longer able to perform procedures at Queen's. [Defs.' Suppl. Evid., Attch. A (Suppl. Aff. for Direct Exam. of Darlena Chadwick ("Suppl. Chadwick Aff.")), at ¶¶ 2-4.] She also presents further testimony about Queen's concerns about the PRO physicians' practice of transferring patients to PRO affiliated facilities. [Id. at ¶¶ 5-9.] She states, "[t]he task force committee was convened in large part to address these concerns . . . . The task force considered feedback, including the complaints above, and concluded that the transfers confused patients, caused discord among referring physicians, and jeopardized patient safety and continuity of care." [Id. at ¶ 10.]

Ms. Hirata testified, inter alia, that all of the Listed Procedures can be delivered at other facilities besides Queen's. [Defs.' Suppl. Evid., Attch. B (Suppl. Aff. for Direct Exam. of Emily Hirata ("Suppl. Hirata Aff.")), at ¶¶ 2-2.i.] She also states that "[f]rom a technical perspective, all radiation oncologists who are listed on a facility's Nuclear Regulatory Commission (NRC) license are able to perform high dose rate radiation brachytherapy, regardless of the site of treatment." [Id. at ¶ 3.] Queen's has five radiation oncologists, who are not affiliated with PRO, listed on its NRC license.*fn9 [Id.]

Ms. Hirata acknowledges: "HDR Brachytherapy for the prostate, is considered an inpatient procedure requiring an operation room. Best practices would be to have a patient's entire continuum of radiation therapy, including the surgical insertion and radiation delivery, done at the same facility." [Id. at ¶ 5.] She argues that a non-Queen's radiation oncologist could perform an HDR Brachytherapy for the prostate at any hospital with an operating room and an NRC license, such as Kuakini, with the use of a mobile HDR treatment unit. She argues that Kuakini is a viable alternative for HDR Brachytherapy treatments, in part because Queen's provides dosimetry staff to Kuakini on a contract basis. [Id. at ¶¶ 6-7.]

Dr. Moon states that HDR Brachytherapy can be performed at "any facility that has an HDR suite", and he believes the PRO affiliated facility on Liliha Street has an HDR suite. [Defs.' Suppl. Evid., Attch. C (Suppl. Aff. for Direct Exam. of Scott Moon, M.D. ("Suppl. Moon Aff.")), at ¶¶ 3.] He states that Kuakini's NRC license authorizes it to use radioactive materials, including brachytherapy and prostate seeds. [Id. at ¶ 7, Exh. B (Kuakini's NRC license).] PRO physicians Vincent Brown and Thanh Huynh have active privileges at Kuakini. [Suppl. Moon Aff. at ¶ 7.] He also emphasizes that prostate brachytherapy is never "the single best option for curative therapy. Rather, it is simply one of a number of treatment options that a patient may choose." [Id. at ¶ 9 (citation omitted).] He also contests Plaintiffs' claims that: 1) Dr. Lederer is the only radiation oncologist who can perform pediatric treatments; 2) pediatric external radiation treatments always require general anesthesia and can only be performed at Queen's;*fn10 and 3) stereotactic body radiotherapy ("SBRT") requires tomotherapy equipment and cannot be performed at the PRO affiliated facilities. [Id. at ¶¶ 10-15.]

Marilyn Hata, office manager for Island Urology, and Queen's oncologist Kaye Kawahara testified regarding referring physician complaints that Dr. Lederer, and PRO physicians in general, transferred their patients from Queen's to PRO affiliated facilities for procedures. [Defs.' Suppl. Evid., Attch. F (Aff. for Direct Exam. of Marilyn Hata ("Hata Aff.")), Attch. G (Aff. for Direct Exam. of Kaye Kawahara, M.D. ("Kawahara Aff.")).]

V. Plaintiffs' Supplemental Evidence

Plaintiffs submitted an affidavit by urologist Todd Miller who testified that he refers all of his patients who require HDR brachytherapy to Dr. Lederer, who Dr. Miller believes has the most skill and experience in brachytherapy of any physician on the island. Dr. Miller testified that he would not feel comfortable referring his patients to any other physician. [Pltfs.' Suppl. Evid, Aff. of Todd Miller, M.D. ("Miller Aff."), at ¶¶ 1, 5.] He states that Queen's is the only facility where his patients could receive HDR brachytherapy, and that he needs to be able to refer his patients needing brachytherapy to Dr. Lederer for treatment at Queen's. [Id. at ¶¶ 6-7.]

Plaintiffs also submitted a rebuttal affidavit by Dr. Lederer. [Pltfs.' Suppl. Evid, Rebuttal Aff. of John Lederer, M.D. ("Rebuttal Lederer Aff.").] Dr. Lederer contests Queen's allegations that PRO physicians have unnecessarily transferred Queen's patients to PRO affiliated facilities. [Id. at ¶¶ 4-5.] He states that neither he nor any other physicians were aware that PRO affiliated facilities failed to provide Queen's with medical records upon request. Further, the PRO physicians have not refused to participate in the PAAROT program or attend multi-disciplinary team meetings. [Id. at ¶¶ 7-8.] He also denied that the transfers of Queen's patients to PRO affiliated facilities were based on the patient's ability to pay for treatments. ...


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