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USHA v. LITTLE CO. OF MARY HOSP. & HEALTH CARE CTR

March 7, 1996

USHA VAKHARIA, M.D., Plaintiff,
v.
LITTLE COMPANY OF MARY HOSPITAL AND HEALTH CARE CENTERS, DAVID J. ROTH, M.D., CHIDAMBARAM SRINIVASAN, M.D., SUSAN CARPO, M.D., NORMA CADAYONA, M.D., HAE CHANG LEE, M.D., TENKASI SUBRAMANIAN, M.D., JOON SUK YU, M.D., MANUAL U, M.D., JAREMA SKIRNYK, M.D., SOUTHWEST ANESTHESIA ASSOCIATES, S.C., EVERGREEN ANESTHESIA AND PAIN MANAGEMENT SERVICES, S.C., KENT F. W. ARMBRUSTER, M.D., BERNARD P. FLAHERTY, M.D., MARTIN J. PHEE, M.D., LOURDES D. FLORO, M.D., ROBERT J. BRUNO, M.D., JOSE M. CAVA, M.D., WILLIAM J. FARRELL, M.D., GEORGE F. HOGAN, M.D., MICHAEL M. STACHOWSKI, M.D., ALICE M. STRATIGOS, M.D., DOUGLAS WEBSTER, D.O., FREDERICK E. WOHLBERG, M.D., LEO J. KNAFF, M.D., JAMES A. K. LAMBUR, M.D., GEORGE MILLER III, D.O., SISTER KATHLEEN MCINTYRE, LCM, CLAUS VON ZYCHLIN, JOHN PROUT, FRANK J. SCHAFFER, GEORGE J. CULLEN, LEO E. HENNESSY, SISTER M. DAMIAN YOUNG, L.C.M., RICHARD M. FARELL, M.D., VINCENT GAVIN, JAMES KEANE, MARY ELLEN MCGUIRE, THOMAS E. MURRAY, ED.D., THOMAS S. PATRICOSKI, M.D., MICHAEL B. SCHNEIDER, SISTER SHARON ANN WALSH, L.C.M., ALBERT C. BALDERMANN, MICHAEL R. CALLAHAN, and PROFESSIONAL STAFF of LITTLE COMPANY OF MARY HOSP. AND HEALTH CARE CENTERS. Defendants.



The opinion of the court was delivered by: NORGLE

 CHARLES R. NORGLE, SR., District Judge:

 Before the court are the motions of the above-named Defendants to dismiss the Complaint of Plaintiff Dr. Usha Vakharia ("Vakharia"). For the following reasons, the motions are granted in part and denied in part.

 I. Background

 In an effort to state a claim, Plaintiff has thrown everything but the proverbial kitchen sink into her Amended Complaint ("Complaint"). *fn1" Naming an estimated 500 Defendants in 178 paragraphs spread over fifty-one pages, the document struggles to allege simple discrimination, antitrust, and breach of contract and bylaws claims.

 Vakharia is a 49-year-old Asian Indian medical doctor practicing since 1974. She is licensed to practice in Illinois and is Board certified in anesthesiology.

 The Defendants include Little Company of Mary Hospital and Health Care Centers ("the Hospital"), and its entire Professional Staff ("Staff"). Defendant Southwest Anesthesia Associates, S.C. ("Southwest"), "is or was" a corporation "involved in the supply of anesthesia services" at the Hospital. Defendant Evergreen Anesthesia and Pain Management Services, S.C. ("Evergreen"), is a corporation involved in the same activity as Southwest.

 Also named are Doctors David Roth ("Roth"), Chidambaram Srinivasan ("Srinivasan"), Susan Carpo ("Carpo"), Norma Cadayona ("Cadayona"), Hae Chang Lee ("Lee"), Tenkasi Subramanian ("Subramanian"), Joon Suk Yu ("J. Yu"), Manual Yu ("M. Yu"), and Jarema Skirnyk ("Skirnyk"), who were staff anesthesiologists at all times relevant to the Complaint. Doctor Kent Armbruster ("Armbruster") has served as the Hospital's Medical Director since 1993. Doctor Bernard Flaherty ("Flaherty") was president of the Staff in 1992 and 1993. Doctor Martin Phee ("Phee") is the current president of the Staff. Defendant Sister Kathleen McIntyre ("McIntyre") was President of the Hospital at all relevant times until June 1994. Defendant Claus von Zychlin ("Zychlin") was the Executive Vice President or the President of the Hospital at all relevant times since March 1993. Defendant John Prout ("Prout") was Executive Vice President through Fall 1992. Defendant Michael Callahan ("Callahan") is an attorney who counsels the Hospital regarding termination of physician staff membership and privileges.

 Also named are members of the Hospitals Medical Executive Committee ("MEC"): Armbruster, Flaherty, Phee, Lourdes Floro ("Floro"), Robert Bruno ("Bruno"), Jose Cava ("Cava"), William Farrell ("Farrell"), George Hogan ("Hogan"), Michael Stachowski ("Stachowski"), Alice Stratigos ("Stratigos"), Douglas Webster ("Webster"), Frederick Wohlberg ("Wohlberg"), Leo Knaff ("Knaff"), James Lambur ("Lambur"), George Miller III ("Miller"). Vakharia names the following members of the Hospital's Board of Directors ("Board") as well: Flaherty, Phee, Cava, Lambur, McIntyre, Zychlin, and Doctors Richard Farell ("Farell"), Thomas Murray ("Murray"), Thomas Patricoski ("Patricoski"), Michael Schneider ("Schneider") as well as Sister Damian Young ("Young"), Sister Sharon Ann Walsh ("Walsh"), Frank Schaffer ("Schaffer"), George Cullen ("Cullen"), Leo Hennessy ("Hennessy"), Vincent Gavin ("Gavin"), James Keane ("Keane"), Mary Ellen McGuire ("McGuire"), and Albert Baldermann ("Baldermann").

 Generally, Vakharia complains of Defendants' action, or inaction, in processing her application for full anesthesiology privileges at the Hospital and in selecting an exclusive provider group for anesthesiology services. Vakharia states that the Hospital, after determining its need for physicians, screens potential applicants through a pre-application process. After the pre-application process, the Hospital provides applications. The Board regulates credentialling, and the Staff regulates privileges under the bylaws.

 Before the Hospital selected Evergreen as its exclusive provider of anesthesiology services in February 1994, Hospital anesthesiologists were engaged in an employment relationship with the Hospital, and entered contracts with individual patients assigned to the anesthesiologists by the Hospital.

 Vakharia repeatedly alleges that, at all relevant times, the Hospital had a need for anesthesiologists. This need was manifested by numerous alleged complaints and scheduling problems.

 Vakharia completed pre-application papers for active privileges in both the Obstetrical and Gynecological ("OB/GYN") and Surgical sections of the Hospital's Anesthesiology Department ("Department") in February 1992. In March 1992, the Hospital granted Vakharia temporary privileges in only the OB/GYN section and provided her with a copy of the Professional Staff Bylaws ("Bylaws") and the Department Rules and Regulations ("Rules"). Vakharia states that Roth played a role in the denial of her Surgical section privileges.

 Vakharia alleges that in August 1992 she "reapplied" for active privileges in the Surgical and OB/GYN sections. The Hospital and Roth failed to process this application within sixty days, which Vakharia contends was in violation of the Bylaws. Vakharia contends that the Board and the MEC knew of her reapplication, yet failed to insure that it was processed within the prescribed time period despite the Hospital's shortage of anesthesiologists.

 Also in August 1992, Roth, then Chair of the Department, attempted to organize a group of anesthesiologists, known as Southwest, to exclusively provide anesthesiology services to the Hospital. Vakharia contends that Roth did so in order to force the anesthesiologists to surrender their privileges without the protection of the appeals process provided by the bylaws, to lower their pay, and to eventually terminate them from the Staff. Vakharia avows that Roth began to recruit white males to replace female foreign anesthesiologists, like Vakharia, in violation of the Bylaws and the Rules. Vakharia states that Roth slated her for removal not only because of her race, but also because of her age. Vakharia avows that he did so as part of an illegal agreement with the Hospital, the Board, the MEC, Prout, and McIntyre, and that every Defendant knew of the scheme. One such white male was Dr. Mark Krause, who was granted privileges in the Surgical section in violation of the Bylaws and the Rules. As part of his attempt to form an exclusive provider group, Roth presented pro forma employment contracts to all members of both Department sections, to which many anesthesiologists objected. Prout and the Hospital attempted to force all anesthesiologists to join the group.

 In September 1992, the Hospital and Prout did not directly respond to an exclusive provider contract offered by a second group of anesthesiologists, consisting mostly of Asian females. That second group informed Roth that they intended to vote him out as Department Chair at a bi-yearly election which was due to be held in October 1992. Roth attempted to solicit the support of the second group for Southwest. When refused, Roth told one member of the second group, "When I take over the Department, I am going to give you a one-way ticket to the Philippines"; Roth also said that he would terminate the female Asian anesthesiologists from the Surgical section. McIntyre instructed the Department to postpone the election in violation of the Bylaws. By December 1992, the election had been held and a non-Defendant anesthesiologist, Dr. Padma Rao ("Rao"), became the Chair of the Department.

 Also at that time, Vakharia asked Rao about the status of her re-application. Vakharia declares that Rao initiated processing of Vakharia's application, as well as the application of Srinivasan (an Asian male) in February 1993. Vakharia states that Srinivasan's application was approved that same month, and that he immediately began on regular rotation in the Surgical section. In March 1993, Rao raised Vakharia's reapplication for consideration at the Department meeting. At the meeting, the Department continued consideration of the reapplication until the next monthly meeting. On March 29, McIntyre extended Vakharia's interim privileges to include Surgical, as well as OB/GYN, section privileges.

 The Hospital hired Zychlin as Executive Vice-President in March 1993. Vakharia avers that one of Zychlin's primary objectives was to form an anesthesiology group headed by Roth. According to Vakharia, and based on her speculation, Zychlin's motivation sprang from his desire to terminate all female Asian members of the Department. Vakharia understands that, several years before, Callahan had proclaimed that he would "make sure that plaintiff never practices medicine again." (Compl. at 17.) Zychlin and Callahan met to carry out their plan in March 1993.

 At the April 1993 Departmental meeting, the Department approved Vakharia for "Provisional Associate with privileges as noted." (Compl. at 18.) Vakharia avows that, one day later, Cadayona, Roth, Skirnyk, Srinivasan, Subramanian, and M. Yu conspired and instituted a group boycott of the Plaintiff from providing anesthesia services in the surgery section. Id. In that same month, Vakharia says that Carpo, Lee, J. Yu, Zychlin, McIntyre, the Hospital, its Board and its MEC enlisted in the conspiracy. She states that this conspiratorial boycott arose in violation of the Bylaws and the Rules and required her immediate placement on regular rotation. The conspiracy, however, ventured to place Vakharia on only an "'as needed basis,' subject to . . . [the conspirators'] . . . whims and fancy." The boycotters then caused Rao to send Vakharia a letter, importuning Vakharia's compliance with their scheme. Vakharia refused to comply, declaring the scheme in violation of the Bylaws and Rules.

 In May 1993, the Department further approved Vakharia for a special anesthesia procedure, and forwarded her reapplication to the Credentials Committee, requesting that Vakharia be granted only "as needed" privileges. The Credentials Committee declined the Department's request for the "as needed" classification, indicating that the Bylaws did not provide for such a classification, and stated that the Department would have to either approve or disprove Vakharia's reapplication.

 In May 1993, Rao submitted a proposed anesthesiology group agreement to the Hospital administration. Zychlin then met with the Department in a special meeting and, upon Roth's requests, with each anesthesiologist individually. Rao's proposal was placed "on hold" by the Hospital administration.

 In June 1993, Callahan began working for the Hospital, supervising the entire selection of a new anesthesiology director. Vakharia asserts that the Hospital intended to ensure that female Asian anesthesiologists were forced to relinquish their privileges without the Bylaws' due process, and to grant Roth an exclusive contract and install him as Chair of the Department. According to Vakharia, "Callahan was responsible for designing and directing the entire process which led to the removal of . . . Rao and installation of . . . Roth" and Evergreen. (Compl. at 21.)

 Rao inquired of the Board as to why her proposal was not approved. "She had previously been informed that the primary reason for the refusal was that she was filling the department with too many Indians, and in particular that she had acted on Plaintiff's application for staff privileges." (Compl. at 22.) The Board did not respond.

 At that time, the Board also approved a resolution to begin the process of selecting a medical director and an exclusive provider agreement. It stated that it did so in order to enhance the quality of care rendered to Hospital patients. However, Vakharia asserts that the administration established a selection process which would "sanitize" the Department by installing Roth as Chair and removing all female Asian anesthesiologists from the Staff.

 After Vakharia received notification of the approval of her application in July 1993, both she and Rao requested that Vakharia be placed on regular rotation. Vakharia alleges that McIntyre and Zychlin pressured Rao not to place Vakharia on regular rotation. Vakharia says that Zychlin also told other Department members not to use Vakharia's services. However, Rao and Dr. Shah, "primarily," assigned some of their cases to Vakharia (Compl. at 23.)

 Also in July 1993, the Hospital invited all Staff anesthesiologists to apply for the position of Chair of the Department, and to form an exclusive provider group. Vakharia asserts that this invitation was a "sham," as it was common knowledge that McIntyre and Zychlin had already schemed to award the exclusive provider contract to Roth. Despite this "common knowledge," seven anesthesiologists applied for the position, five of whom were minorities, including Vakharia.

 Vakharia declares that, in November 1993, after full completion of the sham selection process, Roth was selected as director of the Department, with full responsibility for contact between the Hospital and the exclusive provider group. Srinivasan was selected as president of the group, with full responsibility for financial, legal, and compensation management of the group. Vakharia quotes Zychlin as saying "in all matters, decision [sic] of Dr. Roth are final . . . in all matters," including disputes between Roth and Srinivasan. (Compl. at 25.) The Hospital instructed Roth and Srinivasan to form Evergreen, the exclusive provider group corporation. Vakharia states that the exclusive provider contract with Roth and Srinivasan was signed in February 1994. Vakharia contends that the selection of Roth and Srinivasan occurred in violation of the Bylaws and the Hospital Bylaws, as Rao was removed as Department Chair approximately eleven months before her term was set to end.

 In March 1994, all anesthesiologists, including Vakharia, were invited to a group meeting to discuss Evergreen's proposed employee contracts with the anesthesiologists. At the meeting, Vakharia realized that all Department members except Vakharia had been given draft employee contracts. The terms of the employee contracts were dictated by the Hospital, and any changes had to be approved by the Hospital. The members were told that they would be replaced if they did not enter into the contracts. Vakharia maintains that the contract violates the Federal Medicare Fraud and Abuse prohibitions and Illinois law.

 After the meeting, because she had not been placed on regular rotation, Vakharia complained of discrimination to Roth, McIntyre, Zychlin, Phee, and the other anesthesiologists. Vakharia contends that, in retaliation for her complaint, the Zychlin and the Hospital informed Vakharia that she would not be allowed to practice at the Hospital and that she would not be permitted to use Hospital facilities. Accordingly, Roth did not permit other physicians to refer work to Vakharia.

 In April 1994, Vakharia wrote to McIntyre to discuss her situation. She also met with Zychlin. Zychlin informed Vakharia that, according to her file, Vakharia had only "as needed" privileges. Zychlin also told Vakharia that he intended to discuss the matter with Callahan. Zychlin agreed to instruct Roth and Srinivasan to permit Vakharia to work "as needed."

 Srinivasan, Armbruster, and McIntyre also met with Vakharia to resolve Vakharia's problem to no avail. They informed Vakharia that Roth and Srinivasan were responsible for all anesthesia scheduling, and that Vakharia could not accept cases referred to her by other physicians. They told Vakharia that she would be terminated if she refused to accept employment with Evergreen on an "as needed" basis. Vakharia was offered a contract with Evergreen as a "backup" anesthesiologist.

 Like the Evergreen contract offered to the other anesthesiologists, Vakharia declares that this "backup" contract violates the Federal Medicare Fraud and Abuse prohibitions and Illinois law. Vakharia refused the "backup" contract when her demand to review the Hospital's contract with Evergreen was refused. Zychlin told Vakharia that, although she would retain her Staff membership and clinical privileges, she would not be scheduled absent the contract. According to Vakharia, the Board and the MEC were aware of McIntyre and Zychlin's actions in 1993 and 1994.

 Vakharia requested a hearing pursuant to the Bylaws. Phee told Vakharia that, although the Bylaws do not provide for hearings which do not relate to quality of care issues, that Vakharia would be granted a hearing. Vakharia quotes Phee as telling her, "The Hospital had not made any claim that your care has been substandard and specific quality of care problems are not an issue." (Compl. at ...


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