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Chaganti v. Missouri Board of Registration for Healing Arts

Court of Appeals of Missouri, Western District, Third Division

March 10, 2015

SURENDRA CHAGANTI, Appellant,
v.
MISSOURI BOARD OF REGISTRATION FOR THE HEALING ARTS, Respondent

Appeal from the Circuit Court of Cole County, Missouri. The Honorable Jon Edward Beetem, Judge. Before Division Three: Victor C. Howard, P.J., James Edward Welsh, and Gary D. Witt, JJ.

Glenn Bradford, Kansas City, MO, Counsel for Respondent.

Nancy Skinner, Kansas City, MO, Co-Counsel for Respondent.

James Edward Welsh, Judge. All concur.

OPINION

James Edward Welsh, Judge.

Page 392

Surendra Chaganti appeals the decision of the Administrative Hearing Commission (AHC) finding that the Missouri Board of Registration for the Healing Arts (Board) had cause to discipline his medical license pursuant to section 334.100.2(4) and (4)(g), RSMo Cum. Supp. 2010. The AHC found that, when SSM DePaul Health Center (DePaul) revoked Chaganti's courtesy staff privileges because Chaganti failed to list all hospital affiliations on his reapplication for active staff privileges at the hospital, it was a " final disciplinary action" taken by the hospital that was related to " unprofessional conduct." The AHC also found that, when SSM St. Mary's Health Center (St. Mary's) revoked Chaganti's staff privileges because Chaganti failed to update his information and report that DePaul had revoked his staff privileges, it was also a " final disciplinary action" taken by the hospital that was related to " unprofessional conduct."

On appeal, Chaganti claims: (1) that the terms " unprofessional conduct" and " final disciplinary action" used in section 334.100.2(4)(g) are unconstitutionally

Page 393

vague, (2) that the actions taken by the hospitals in this case were not " final disciplinary actions" ; (3) that nothing in section 334.100.2 permits the Board to file a complaint against a licensee for actions taken by a hospital where the licensee omits information or fails to update information in an application for medical staff privileges; (4) that nothing in section 334.100.2 permits the Board to file a complaint against a licensee for the licensee's failure to report any changes of staff privileges at another hospital; (5) that no substantial evidence supported the AHC's decision that Chaganti omitted information in his staff privileges application at DePaul; (6) that no substantial evidence supported the AHC's decision that Chaganti omitted information in his staff privileges application at St. Mary's; and (7) that the AHC erred in ruling that there was no evidence of conflict of interest and selective prosecution by the members of the Board. We reverse the circuit court's judgment affirming the AHC's decision that cause existed to discipline Chaganti's medical license pursuant to section 334.100.2(4) and (4)(g).

Factual and Procedural Background

Chaganti is licensed by the Board as a physician and surgeon. At all relevant times, his license was current and active.

On January 3, 2006, Chaganti submitted a reapplication for staff privileges at DePaul and a request to have his status changed from " courtesy staff" to " active staff." Upon investigation, DePaul discovered that Chaganti had not included all past hospital affiliations on his reapplication. On the reapplication form, Chaganti listed St. Alexius Hospital as his primary hospital and listed affiliations with St. John's Hospital and DePaul. Chaganti did not list St. Mary's, Des Peres Hospital, and St. Anthony's Medical Center on the reapplication form. By letter dated May 22, 2006,[1] DePaul denied Chaganti's reapplication and revoked his staff privileges based on his failure to provide updated information on his DePaul reapplication form. The letter stated:

As a member of the SSM DePaul Health Center Medical Staff, you agreed to Section 3.3.6 of the Credentials Manual[2]

Page 394

which requires you to provide updated information at the time of any significant change in the information provided in your most recent application form. You also agreed to Section 3.3.7 of the Credentials Manual[3] which states that any misrepresentation or misstatement in or omission from the application, reapplication and any required updates, whether intentional or not, shall constitute cause for automatic and immediate rejection of the application/reapplication, if applicable, and result in denial or revocation of previously granted Medical Staff membership and clinical privileges. Such denials or revocations are not subject to the procedural rights set forth in Article 9 of the Credentials Manual, and the Health Center President may, in his or her discretion, refuse to accept subsequent applications from the affected Practitioner. We have attached those Sections of the Credentials Manual for your reference.
Due to your omission of three hospital affiliations on your reappointment application, your Medical Staff membership and clinical privileges are revoked effective immediately and your reappointment request is denied pursuant to Section 3.3.7 of the Credentials Manual. If you currently have inpatients in house at the Health Center, the revocation of your Medical Staff membership and clinical privileges will be effective immediately upon the discharge of your last patient. You are not entitled to any of the procedural rights provided in Article 9 of the Credentials Manual with respect to this decision.

On June 26, 2006, St. Mary's, which is affiliated with DePaul, informed Chaganti by letter from its President, Sr. Susan Scholl, that Chaganti's medical staff membership and clinical privileges were being revoked and terminated due to his failure to report DePaul's revocation of his medical staff membership and clinical privileges. The letter stated:

SSM St. Mary's Health Center (" St. Mary's" ) has just discovered your Medical Staff membership and clinical privileges were terminated at SSM DePaul Health Center (" DePaul" ) on May 22, 2006, for material omissions from your reapplication. You have not reported DePaul's revocation of your Medical Staff appointment and clinical privileges to St. Mary's.
As a member of the St. Mary's Medical staff, you agreed to Section 3.3.6 of the Credentials Manual which requires you to provide updated information at the time of any significant change in the information provided in your most recent application form. You also agreed to Section 3.3.7 of the Credentials Manual which states that:
[A]ny misrepresentation or misstatement in or omission from the application, reapplication, or any required

Page 395

updates of such information, whether intentional or not, shall constitute cause for automatic and immediate rejection of the application/reapplication, if applicable, and result in denial of appointment and clinical privileges or revocation of previously granted Professional Staff membership and clinical privileges. In the event of such a denial or revocation, the affected Practitioner or Independent Provider is not entitled to any of the procedural rights provided in Article 9 of this Manual, and the campus-specific Hospital President may, in his or her discretion, refuse to accept subsequent applications from the affected Practitioner or Independent Provider.
Due to your failure to report DePaul's revocation of your Medical Staff membership and clinical privileges to St. Mary's at the time of DePaul's revocation, your Medical Staff membership and clinical privileges are revoked effectively immediately. You are not entitled to any of the procedural rights provided in Article 9 of the Credentials Manual with respect to this decision. We have attached the Credentials Manual for your reference.

Chaganti was not given the right to appeal from DePaul's decisions to deny his reappointment request and to revoke his staff privileges; he also was not given the right to appeal from St. Mary's decision to revoke his staff privileges.[4]

On February 15, 2011, the Board filed a first amended complaint with the AHC against Chaganti, alleging cause to discipline Chaganti's license pursuant to section 334.100.2(4) and (4)(g).[5] After a hearing, the AHC found that DePaul had refused to grant Chaganti active staff privileges for omitting past hospital affiliations in his reapplication for staff privileges and that St. Mary's had revoked Chaganti's staff privileges for failing to update his information and report that DePaul had revoked his staff privileges. The AHC concluded that the actions taken by DePaul and St. Mary's were " final disciplinary actions" and were " related to unprofessional conduct," and, therefore, concluded that Chaganti's license was subject to discipline pursuant to section 334.100.2(4) and (4)(g). Thereafter, Chaganti filed a petition for judicial review of the AHC's decision with the Circuit Court of Cole County. The circuit court affirmed the AHC's decision. Chaganti appeals.

In an appeal from the circuit court's review of decision of the AHC, this court reviews the AHC's decision, not the decision of the circuit court. Albanna v. State Bd. of Registration for Healing Arts,

Page 396

293 S.W.3d 423, 428 (Mo. banc 2009). " Article V, section 18 of the Missouri Constitution articulates the standard of judicial review of administrative actions." Id. On appeal, we must determine " whether the agency actions 'are authorized by law, and in cases in which a hearing is required by law, whether the same are supported by competent and substantial evidence upon the whole record.'" Id. (quoting Mo. Const. art. V, § 18). We, therefore, must determine whether the decision is supported by sufficient competent and substantial evidence, after considering the whole record. Id. We will affirm the AHC's decision unless it:

(1) Is in violation of constitutional provisions;
(2) Is in excess of the statutory authority or jurisdiction of the agency;
(3) Is unsupported by competent and substantial evidence upon the whole record;
(4) Is, for any other reason, unauthorized by law;
(5) Is made upon unlawful procedure or without a fair trial;
(6) Is arbitrary, capricious or unreasonable;
(7) Involves an abuse of discretion.

§ 536.140.2, RSMo Cum. Supp. 2013. We will not substitute our judgment for that of the AHC on factual matters, but we review any questions of law concerning an agency's decision de novo. Moheet v. State Bd. of Registration for Healing Arts, 154 S.W.3d 393, 398 (Mo. App. 2004).

Chaganti asserts seven points on appeal, but points three and four are dispositive. In those points, Chaganti contends that nothing in section 334.100.2(4) and (4)(g) establishes that a licensee's omission of information on a reapplication for staff privileges or a licensee's failure to report to a hospital any changes of staff privileges at another hospital amount to " unprofessional conduct" as that term is used in section 334.100.2(4) and (4)(g). Chaganti asserts, therefore, that the Board lacked a statutory basis for filing the complaint against Chaganti's license for the actions taken by DePaul and St. Mary's. We agree.

Section 334.100.2(4)(g) provides:

2. The board may cause a complaint to be filed with the administrative hearing commission as provided by chapter 621 against any holder of any certificate of registration or authority, permit or license required by this chapter or any person who has failed to renew or has surrendered the person's certificate of registration or authority, permit or license for any one or any combination of the following causes:
. . . .
(4) Misconduct, fraud, misrepresentation, dishonesty, unethical conduct or unprofessional conduct in the performance of the functions or duties of any profession licensed or regulated by this chapter, including, but not limited to, the following:
. . . .
(g) Final disciplinary action by any professional medical or osteopathic association or society or licensed hospital or medical staff of such hospital in this or any other state or territory, whether agreed to voluntarily or not, and including, but not limited to, any removal, suspension, limitation, or restriction of the person's license or staff or hospital privileges, failure to renew such privileges or license for cause, or other final

Page 397

disciplinary action, if the action was in any way related to unprofessional conduct, professional incompetence, malpractice or any other violation of any provision of this chapter[.][6]

In finding cause to discipline Chaganti's license, the AHC specifically found that, because Chaganti did not intentionally fail to list his hospital affiliations on his reapplication to DePaul and did not intentionally fail to update his information with St. Mary's and report that DePaul had revoked his staff privileges, Chaganti did not engage in fraud, misrepresentation, dishonesty, or unethical conduct as those terms are used in section 334.100.2(4).

Page 398

Thus, for the Board to seek discipline against Chaganti's license under section 334.100.2(4), Chaganti's conduct had to constitute " unprofessional conduct in the performance of the functions or [his] duties[.]" The AHC found that Chaganti's conduct was unprofessional.

The Missouri Supreme Court, however, has provided specific guidance about what constitutes unprofessional conduct under section 334.100.2(4).[7] In Albanna v. State Board of Registration for Healing Arts, the Supreme Court recognized a definition of " unprofessional conduct" used in Perez v. State Board of Registration for Healing Arts, 803 S.W.2d 160, 164 (Mo. App. 1991), that stated " unprofessional conduct warranting revocation of a license consists of 'any conduct which by common opinion and fair judgment is determined to be unprofessional or dishonorable.'" Albanna, 293 S.W.3d at 430. The Albanna court, noted that this definition was " circular and amount[ed] to the statement that unprofessional conduct constitute[d] unprofessional conduct." The Albanna court, therefore, turned to the section 334.100.2(4) and noted that the statute was " far more explicit, giving the profession, the board and the courts a clearer understanding of the conduct, practices or professional failings for which a licensee can be disciplined." Id. In interpreting " unprofessional conduct," the Albanna court acknowledged that section 334.100.2(4) specifically stated that " unprofessional conduct" included but was " not limited to" the 17 grounds[8] specified in subparagraphs (a) through (q) of section 334.100.2(4). The Court recognized, however, that " significant notice issues would arise if grounds not based in statutory language, (whether in subparagraphs (a)-(q) or somewhere else in the statute), were attempted to be used to provide a basis for a finding of unprofessional conduct." Id. at 431.

In Albanna, the Board did not specify any of the 17 grounds listed in subparagraphs (a) through (q) of section 334.100.2(4), and the Albanna court stated that " it is not within the purview of this Court to speculate as to which grounds the board may have had in mind." Id. The Court noted that the " 17 grounds cover a wide range of conduct" and that the licensee's conduct in the case fell within " some of those grounds." Id. In our case, however, the Board specified the ground under which it sought to discipline Chaganti's license--subparagraph (g) of section 334.100.2(4).

Subparagraph (g) of section 334.100.2(4) provides that the Board may file a complaint against a licensee for " unprofessional conduct in the performance of the functions or duties" including:

(g) Final disciplinary action by any professional medical or osteopathic association or society or licensed hospital or medical staff of such hospital in this or any other state or territory, whether agreed to voluntarily or not, and including, but not limited to, any removal, suspension, limitation, or restriction of

Page 399

the person's license or staff or hospital privileges, failure to renew such privileges or license for cause, or other final disciplinary action, if the action was in any way related to unprofessional conduct, professional incompetence, malpractice or any other violation of any provision of this chapter[.]

Therefore, as it pertains to this case, subsection (g) provides that it may be unprofessional conduct if a licensee is found to have a " [f]inal disciplinary action" by a hospital " if the action was in any way related to unprofessional conduct." Like the definition of unprofessional conduct provided for in Perez, 803 S.W.2d at 164, subsection (g) seems to be somewhat circular--unprofessional conduct is a final disciplinary action involving unprofessional conduct. The Supreme Court in Albanna, however, defined " unprofessional conduct" as that term was used in section 334.100.2(4). As we have previously stated, the Albanna court looked to the 17 specific subparagraphs (a) through (q) of section 334.100.2(4) to determine what constituted " unprofessional conduct" and noted that " significant notice issues would arise if grounds not based in statutory language, (whether in subparagraphs (a)-(q) or somewhere else in the statute), were attempted to be used to provide a basis for a finding of unprofessional conduct." Id. at 431. We believe the same analysis would hold true for the use of the term " unprofessional conduct" in subparagraph (g) of section 334.100.2(4). In other words, to constitute unprofessional conduct the final disciplinary action taken by the hospitals in this case would have to involve one of the grounds specified in subparagraphs (a) through (f) and (h) through (q) of section 334.100.2(4) or would have to involve an action by the licensee prohibited " somewhere else in the statute." Id.

We do not find any statutory sections that would put a licensee on notice that his license could be disciplined for " unprofessional conduct" if the licensee inadvertently failed to list hospital affiliations on a reapplication for staff privileges at a hospital or if the licensee inadvertently failed to update information and report to another hospital that another hospital had revoked the licensee's staff privileges because the licensee had omitted past hospital affiliations on a reapplication for staff privileges. See Merwin v. State Bd. of Registration for Healing Arts, 399 S.W.3d 110, 117 (Mo. App. 2013) (Following Albanna, the court found that a physician's failure to disclose his history of alcohol abuse to a hospital was not unprofessional conduct and noted that significant notice issues would arise if grounds not based on statutory language were used to find unprofessional conduct). Indeed, representatives from DePaul and St. Mary's testified before the AHC that they did not consider their actions regarding Chaganti's staff privileges to be disciplinary actions and did not believe that Chaganti's actions in failing to list his hospital affiliations on his reapplication to DePaul and in failing to update his information with St. Mary's and report that DePaul had revoked his staff privileges were even related to Chaganti's professional competence.

Under the circumstances of this case, the Board has no lawful basis under section 334.100.2(4) and (4)(g) to assert a disciplinary action for " unprofessional conduct" against Chaganti's license to practice as a physician.[9] We, therefore, reverse the circuit court's judgment affirming the AHC's decision that cause existed to discipline Chaganti's medical license pursuant

Page 400

to section 334.100.2(4) and (4)(g).[10]

All concur.


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