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Memorial Hermann Health System v. Gomez

Court of Appeals of Texas, First District

August 15, 2019


          On Appeal from the 333rd District Court Harris County, Texas Trial Court Case No. 2012-53962.

          Panel consists of Justices Keyes and Lloyd.[9]


          Evelyn V. Keyes Justice.

         Appellees, Miguel A. Gomez, III, M.D., and Miguel A. Gomez, M.D., P.A. (Gomez P.A., or, collectively, Gomez), sued appellant, Memorial Hermann Health System (MHHS), for defamation, business disparagement, tortious interference with prospective business relations, and restraint of trade based on two main allegations-that MHHS had used misleading data and a "whisper campaign" to eliminate competition by defaming Gomez and disparaging Gomez P.A. Following a lengthy trial, the jury found in favor of Gomez and Gomez P.A. on their defamation and business disparagement claims and awarded them more than $6 million in compensatory and exemplary damages.

         In six issues on appeal, MHHS argues that: (1) the alleged defamation and disparagement described in the jury charge through Gomez's testimony regarding a conversation he had with an MHHS administrator was not published to a third party; (2) there was no evidence that the defamation and disparagement described in the jury charge as a statement made by an MHHS physician liaison to an employee of a competitor hospital caused any of Gomez's alleged damages; (3) the alleged defamatory and disparaging statements were protected by qualified privilege; (4) there is no evidence of causation generally; (5) there is legally insufficient evidence of lost profits; and (6) alternatively, the judgment should be reformed to eliminate a purportedly improper "double recovery" and the award for exemplary damages.

         In a contingent cross appeal, Gomez and Gomez P.A. argue that trial court erred in its submission of their claim for tortious interference with prospective business relations to the jury.

         We affirm.


         A. Prior to 2008, Gomez Practiced Exclusively with MHHS

         Gomez practiced as a cardiovascular surgeon for MHHS at its Memorial Hermann/Memorial City location (MH/MC) beginning in 1998. He testified that Dr. Don Gibson, "the primary heart surgeon there," was looking for another surgeon to join his group. Over the next ten years, their practice continued to be successful.

         Dr. Phillip Berman, a friend and cardiologist who had referred patients to Gomez, testified that, leading up to 2009, he and other cardiologists "thought [Gomez] was an excellent surgeon" because "[h]e was successful. He was doing quite well. He did the robotic surgery. Patients did well."

         B. Late 2008 Through Early 2009, Gomez's Practice Experienced Changes

         However, in 2008, the West Houston-medical market had begun to change in several material ways. MH/MC became concerned regarding mortality rates in its cardiovascular surgery department.[1]

         In 2008, Methodist Hospital System moved forward with plans to open a new hospital in West Houston, Methodist West Hospital.

         Also in 2008, the then-CEO of MH/MC, Wayne Voss, left and ultimately went to work with Methodist and became the CEO of Methodist West Hospital. Throughout late 2008 and early 2009, Methodist West recruited other employees from MH/MC as well. After Voss left, MHHS made changes at MH/MC, including hiring Keith Alexander as its new CEO.

         C. Early 2009, Gomez Looked into Opening a Practice at Methodist West and an MHHS Employee Made the "Todd Statement"

         Gomez testified that sometime in late 2008 or early 2009, people from Methodist West approached him about practicing at the new hospital, and he testified that he was interested in expanding his practice. This interest was based in part on concerns he had regarding the change in administration at MH/MC and dissatisfaction with "how [his] patients were taken care of." Gomez agreed to pursue opening a practice at Methodist West and began communicating with people, including his partner, Gibson, regarding his new involvement with Methodist. He indicated that he intended to perform surgeries at both hospitals. However, others at MH/MC believed that Gomez might begin working exclusively at Methodist West. Both Portia Willis, who was responsible for marketing for MHHS, and Francesca Sam-Sin, who was a patient relation representative for MHHS, testified that, early on, MHHS administrators believed that Gomez was discussing moving his practice or splitting his practice, [2] including the robotic procedures, to Methodist West, which would be a "[b]ig deal" because MH/MC would lose business.

         At some point in the first half of 2009, while Methodist was still considering and negotiating its future relationship with Gomez, Jennifer Todd-a physician liaison with MHHS-contacted Cyndi Pena, who was by that time working as a physician liaison with Methodist West.[3] Pena testified that Todd told her, regarding Gomez, "Be careful. We heard he's going to Methodist and I just want to let you know there's things being said here, and they're pertaining to the bad quality, mortality rates. There was-I heard bad quality, high mortality rates, unnecessary surgeries." Pena further testified that Todd told her the allegations "were serious enough that she was letting me know, because they had heard in meetings that Dr. Gomez had plans to go to Methodist West."

         Pena testified that Todd's statement "concerned [her] enough [that she] took the information to [her] CEO as part of [her] job" at Methodist, and she recommended, "I would be careful to vet him because things like that don't just come out of nowhere." Pena also testified that she believed the things Todd told her because "it was out there already. It's hard to explain. It was in the ether, it was out there. So, in hearing that, I absolutely did believe it. And as I said, because I witnessed it, you know, I witnessed that happening and heard it from multiple physicians." Pena also stated that Methodist West did look into Gomez's qualifications and, because he already had a relationship with the Methodist CEO, Voss, Methodist decided to hire him.

         D. Also in Early 2009, MH/MC Hired Auzenne

         As Methodist was announcing its plans for a new hospital, MHHS was also making some changes, beginning in early 2009. Prompted by federal-government efforts to publish data about the quality of hospital care and concerns coming from cardiologists and other specialists associated with the hospital, MHHS initiated data-driven programs throughout its system, including in its cardiovascular surgery (CV surgery) program at MH/MC. As part of these efforts, MHHS hired Byron Auzenne.

         Early in Auzenne's tenure as the heart and vascular service line leader, he received a recommendation from the Clinical Programs Committee, [4] through its Cardiovascular and Thoracic Subcommittee, which was chaired by Gomez at that time, regarding the hospital's use of STS data.

         "STS data" refers to data that the Society of Thoracic Surgeons (STS) has compiled in a database administered by the Duke Clinical Research Institute. Among other things, STS tracks seven risk-adjusted procedures that are measured based on information provided from physicians and hospitals. Participants-i.e., the hospital, clinic, or individual surgeon-collect and report data from their treatment of patients, and then transmit that data to STS. STS analyzes the data and processes it into a database that hospitals and healthcare providers across the nation can use to make decisions about care.

         The subcommittee chaired by Gomez recommended that the heart and vascular service line at MH/MC present "STS data by facility to the CV surgery subcommittee and each facility's physician group." Based on this recommendation and at the prompting of CEO Alexander, Auzenne started developing "a process for reviewing [the hospital's] STS data (i.e., the raw data that would be reported to STS)."

         MHHS originally focused on mortality data because it "did not want to dive into too many things initially" and "mortality was the most important." Mortality data was also a focus because, according to Auzenne, the hospital "had received word from some of our cardiologists that they were concerned about [the] mortality rate within the program being high."

         Auzenne realized in February 2009 that MH/MC had a "weak" process for collecting the raw data that was necessary to report to STS. Among other concerns, Auzenne stated that physicians were all documenting their cases in different and inconsistent ways, which impacted what data could be submitted to STS, and he also realized that physicians were not reviewing the data that was submitted to STS and were not generally aware of what was submitted with regard to their cases.

         E. Summer 2009, Concerns about the Raw STS Data Led to Peer-Review of All CV Cases

         On June 4, 2009, Auzenne and Alexander met with Dr. Rick Ngo, the chair of MH/MC's peer review and surgical performance improvement committee, and Dr. John Abramowitz, the chief of staff. Alexander wanted to discuss concerns raised by the raw STS data with Abramowitz and Ngo because they were "two physician leaders," and, "in case this turns into peer review, we wanted to engage them early in the process."

         MHHS decided to have CV surgery cases reviewed by an outside consultant. Dr. Ngo testified that it was not his idea to send the cases to an external evaluator, and he felt that MH/MC's Peer Review Committee was "circumvented" by the hiring of the outside peer review consultant. The hospital felt it was important, however, because, out of its four CV surgeons, Gibson was at that time the chief medical officer for MH/MC and Gomez was a member of the board of the Memorial Hermann Physician Network, MHMD, an independent physician organization associated with MHHS. They did not send every case to external peer review, just cases with mortalities, "major complications," or prolonged ICU stays. This review was done based on the medical records of the patients in the relevant cases, along with the physicians' documentation and other records from the patients' time in the hospital. These were sent to an organization called National Peer Review for a full review.

         F. Fall 2009, Gomez Entered an Agreement with Methodist West, MHHS Made an Internal Presentation of CV Surgical Data

         On September 14, 2009, Gomez signed a confidential Agreement for Physician Services with Methodist West that made him an independent contractor to provide physician services at Methodist. The Agreement also provided that he would hold an "administrative" position as the "Co-Director of the Cardiovascular Robotics Institute" and "Senior Advisor for Cardiovascular Surgery Service Development at [the] West Houston campus." This Agreement was executed in advance of Methodist West's officially opening its cardiovascular surgery program, while the hospital was still building this program.

         On September 25, 2009, Gomez was approached by his partner, Gibson. Gomez testified that Gibson told him "that the hospital [MH/MC] had data that showed that I had a high mortality [rate]," which "essentially [said] that I was a bad surgeon." Gomez testified that Gibson said the mortality rate data indicated that there was a "safety issue" and that "they were concerned that the government would look at these numbers and come in and shut down the [cardiovascular] surgery program." According to Gomez, Gibson told him that "because of those reasons you're going to be suspended or you're going to be proctored."

         Proctoring is a process by which a surgeon is supervised while providing services. Regarding the significance of having privileges suspended or being "proctored," Gomez testified:

[T]hat's not something that you keep to yourself. It's impossible. That's something that you have to report for the rest of your life as a physician any time you get privileges at any other hospital and the hospital you're at everyone is going to know, every doctor, every nurse all the-they're going to know that you're a suspended doctor, a proctored doctor. And so basically your reputation is ruined.

         Gomez testified that he "was in shock" following this conversation with Gibson. Gomez decided to approach Dr. Ngo to discuss the concerns regarding his mortality rate.

         On September 27, 2009, Gomez called Ngo. According to both Gomez and Ngo, Ngo was not aware of the data that MHHS was relying upon to determine that Gomez had a high mortality rate that presented a "safety issue" to the hospital. Gomez testified that he was concerned to learn that the surgical peer review committee knew nothing about the individual surgeon mortality data because, in his mind, MHHS employees "were subverting the process. . . . These types of issues are supposed to go through the peer review process."

         Ngo testified that he was the chair of the Surgical Peer Review Committee, and it was the committee's job to review the performance of various medical personnel on a case-by-case basis to evaluate whether the care given in each case was appropriate or whether any problems needed to be addressed. However, he was not concerned that he was unaware of the specific mortality data being used by MHHS. He did not recall specifically asking that there be "a surgeon mortality rate by CV surgeon created," but he also stated, "[I]f someone approached me with that idea, I would have agreed to that." He also believed that the decisions about "what's supposed to be evaluated" would fall "under the umbrella of the quality department at Memorial City," calling it "more of an administrative duty." Ngo further testified that he was not concerned that someone at the hospital was "doing something with data that [he] didn't know about":

It did not bother me because I don't have the time or access to all that data to do that initial analysis. But then it's my job then to dissect that data and depending on how that data looks and the methodology as far as the acquisition of that data, I wouldn't say that administration engaging and trying to find this data bothered me. I think that's a good thing. I think it's important to look at data in metrics, but the key is to do it the right way with the right methodology.

         Ngo also testified that when data raises performance concerns for a particular physician, it was his committee's job to investigate further, and he did so in Gomez's case.

         On September 29, 2009, MH/MC held a cardiovascular surgery discussion meeting with medical and administrative hospital leadership, including Auzenne. This meeting involved the presentation of a slide show reviewing data for the CV surgery program. It identified "Primary Areas of Concern" as including the 2009 "overall mortality rate" for the hospital's CV surgeries of 7.1%, comparing that mortality rate to national averages, and it identified "[t]wo CV surgeons [as] the primary drivers in the unfavorable mortality rate." The surgeons were identified only by number-one surgeon's number was listed next to "40%" and another's was listed next to "11.1%." The slide show also contained data reflecting the "current situation" in terms of total volume of surgeries for the hospital and volume by surgeon from 2005-2009, comparing them to national averages. Some of this data was risk adjusted and some of it was not.

         On another slide in this presentation, Auzenne presented a "Risk Adjusted Observed to Expected Ratio" (also referred to in testimony and presentations as the "O/E" ratio) for mortalities for four surgeons, again identified only by number. The slide stated that a ratio greater than one-indicating that more deaths were observed to have occurred than would be expected-was "unfavorable." The data showed that two surgeons had performed better than that marker, with a ratios of zero and 0.0874142, while two surgeons' performance fell below that standard, with ratios of 3.94624 and 7.65733. Again, the surgeons were identified by number only. This slide also showed a "facility overall" ratio of observed to expected mortalities of 2.57661, and it contained a notation stating, "Average STS O/E ratio for like sized Cardiovascular Surgery Programs is .08 to 1.2 [with] 1, 200 surgeons working in more than 600 hospitals."

         The next slide reflected "Operative Mortality within 30 days" for each of the four surgeons, again identified only by number, and the hospital total from 2005 through 2009, and it provided for comparison the "Cleveland Clinic 2008 Mortality Rates (emergent and non-emergent)." Finally, there was a slide showing the "2009 Operative Mortality Percentage by Physician," with the four surgeons identified by number, breaking down "total mortalities" with both a number of procedures performed and then a percentage reflecting the mortality rate, and then performing a similar breakdown across several specific risk-adjusted procedures.

         On October 23, 2009, motivated in part by the complaint Gomez had made to Ngo prior to the slide show, there was another cardiovascular surgery discussion meeting in which Auzenne presented Ngo with essentially the same presentation from September 29. Ngo examined the data generated by Auzenne, and he testified that:

the first part of the slide that jumped out to me was Bullet Point No. 2 [which stated that "[t]wo CV surgeons are the primary drivers in the unfavorable mortality rate" and identified two surgeons, by number, as having 40% and 11.1% mortality rates]. In our world the word "mortality" jumps out. But, you know, the very clear profound statement of two CV surgeons are the primary drivers of this, you know, unfavorable mortality rate, that's the item that jumped out at me.

         Ngo testified that when he originally viewed the slide, he "didn't know who they were directing it at because I don't know [who] the five digit identifier . . . pertained to," but Auzenne later shared with him that Gomez was one of the two CV surgeons in question.

         Ngo asked Auzenne and Dr. Bobbi Carbonne, who was also in a position of administrative leadership at MH/MC, questions regarding the data such as "where did that statement come from" and "what was your process to generate that conclusion." Ngo also expressed concern that, "by [their] own definition and metrics," Dr. Gibson should also have been reflected as a surgeon with a concerning mortality rate, but he was not. Ngo stated that, to the extent data might be used to "make one surgeon reveal[ed] to be a problem versus another not," that would be a problem, stating, "It's just not right. It's not the fair and objective thing to do." Ngo could not remember the "exact verbal response" to his questions regarding why Gibson's individual mortality rates were not identified as a driver of the overall mortality rates, but he remembered that he asked for "the ability for our [peer review] committee to review every single case of the four surgeons that were involved that Memorial City's administration used to generate the data and let us review each individual case on our own and grade them on our own."

         Ngo testified at trial that, looking back, he was bothered by what had happened:

You know, Dr. Gibson and [Dr. Michael] Macris [the two other CV surgeons at MH/MC] at the time were-well, Dr. Gibson, I believe, he held some very high physician/volunteer/administrative, maybe even paid positions, including at some point being Chief Medical Officer for Memorial City [Hospital], and so it reeks of favoritism.

         Ngo testified that, over the next two or three months, the Surgical Peer Review Committee was able to review all of the surgical cases, i.e., all of the cases from which the raw data was taken.

         On October 27, 2009, there was a CV surgery quality review meeting. Gomez characterized the meeting as a "peer-review" meeting to review "what the hospital was calling my STS data." This meeting was attended by Gomez, Ngo, Carbone, and Abramowitz in addition to Auzenne. There were no statistics presented at this meeting, just raw data. Auzenne testified that when Gomez saw his own mortality data, "he got upset," and he stated that "this data is statistically invalid." Ngo and Gomez felt that the hospital needed to look at a broader period of data, not just for one year, and that the hospital should be careful to look at risk-adjusted data.

         On November 11, 2009, there was a cardiovascular surgery meeting in which the participants, including Auzenne and the CV surgeons, reviewed hospital-wide data for the CV surgery program. No individual surgeon data was examined as part of the meeting, but each surgeon got a sealed and private envelope containing his or her own raw data.

         On December 17, 2009, the CV surgeon data and external peer review results were presented to Dr. Ngo's Surgical Peer Review Committee. Ngo requested that Auzenne present the non-risk-adjusted mortality data to his committee and to all four CV surgeons. The peer review process confirmed there was room for improvement but no need for corrective action.

         G. 2010 through 2011, Peer-Reviews are Completed, Gomez Continued Practicing at MH/MC

         On February 9, 2010, there was another cardiovascular surgery meeting and, similar to what occurred in November 2009, the presentation focused on hospital-wide performance markers. Again, the CV surgeons got their individual data by envelope, with none of the physicians seeing the individual data of any other physician, but all seeing the performance markers.

         Also in February 2010, Ngo, as the chair of the peer review committee, concluded the months-long investigation into the concerns over the quality of the CV surgery program, including Gomez's cases that had resulted in mortalities. Ngo and the committee concluded that there was no "quality of care issue with any of the four surgeons that had their data presented." Specifically, the committee determined that there was no need for "any proctoring or changing of privileges or anything and the go-forward recommendation was that we would, as we did with every surgeon, continue to closely track and trend and monitor the care of their future patients."

         Ngo testified that his committee also made recommendations regarding the surgeon mortality data used by Auzenne. Ngo stated, "One of the major areas that we thought in the process that was extremely flawed was the lack of risk adjustment with each of these individual cases" because "every single case is different. There's a different level of acuity, especially in the specialty that's as complex as cardiovascular surgery."

         Ngo also testified that the committee's recognition of those complex factors that are considered on a case-by-case basis led to its recommendation that, going forward, MHHS rely more on STS data, i.e., data that had been risk adjusted rather than raw data, stating:

[I]n looking at this data we ask what governing society in this country that kind of determines quality metrics and evaluations and so forth for cardiovascular surgeons and that's the Society of Thoracic Surgeons. They have a very clear process and methodology on how to risk adjust individual cases. . . .
Some surgeries and some patients are just harder than others. And so when you're comparing the hardest patient in a situation to one that's a lay-up and a slam dunk, that's not fair.

         Regarding Gomez specifically, Dr. Ngo testified, "[I]n the review of those, you know, 20 some-odd cases of Dr. Gomez, there were some where we did feel it could have been an area for particular improvement. But in looking at all of those we didn't feel that there was a major issue with his quality of care." Ngo testified that sharing overall surgeon mortality data that was not risk adjusted was "absolutely not" the right thing to do "because that would hinder referral patterns, damage reputations, et cetera." Without identifying any particular use of the data by MHHS, Ngo testified generally that continuing to show surgeon mortality data without risk adjustment to cardiologists and those who refer for CV surgeries would be "atrocious, damaging, [and] way over the line." Regarding mortality data, Ngo testified that using mortality data-i.e., "if a physician has a hundred surgeries in a year and four of them die"-as a starting point in evaluating areas for improvement was appropriate: "There's nothing inappropriate in saying that's a four percent mortality rate and the next step would be to individually look at each case." Ngo testified that that was what his peer review committee had done in this case. By contrast, the data slide shows and surgeons' meetings had not used only risk-adjusted data but had included raw data.

         On February 18, 2010, Dr. Ngo sent each CV surgeon, including Gomez, a letter stating that the issues considered during the third-party review were closed. Gomez testified that he was relieved by the peer review committee's finding, but the peer review process was "difficult" because he felt that "the whole focus was Dr. Mike Gomez, is he a bad surgeon." Gomez stated that when he received the notice from Ngo in February 2010 about the findings of the peer review committee determining that there were no safety concerns regarding his surgical abilities, he thought the issue was resolved: "I thought, okay, they understand, you know, what they did wasn't right. . . . [T]he way they were looking at the numbers wasn't-it's not the right way to do it."

         Gomez testified that, for the next year and a half, he had no indication that MHHS employees Auzenne and Alexander were continuing to create and use individual surgeon mortality data, contrary to Ngo's recommendation from the peer review committee.

         H. November 1, 2011 Meeting of Cardiovascular and Thoracic Surgery Subcommittee and the Auzenne Statement

         On November 1, 2011, the Cardiovascular and Thoracic Surgery Subcommittee held its quarterly meeting. According to the minutes, approximately nineteen committee members or interested parties were present, including Gomez. Gomez, however, testified that there were thirty to forty people present.

         The power point presented at this meeting included a segment on STS data review. It included a slide showing heart surgery volume by surgeon for twenty MHHS surgeons, who were identified only by a letter. There was a slide showing the "distribution of predicted mortality risk in STS adult cardiac surgery database 2010 by procedure," and there was a chart showing how the actual observed performance of each of the twenty surgeons, again identified by number, compared to STS's predicted mortality and complication rates by procedure type.

         Gomez testified that Dr. Macris, who was by that time the chair of the Cardiovascular and Thoracic Surgery Subcommittee, "again" used a 2010 version of the individual surgeon mortality data at the November 1, 2011 meeting. Gomez testified that, as before, at the beginning of the presentation each surgeon received an envelope "to let them know which surgeon they were" in the data shared during the presentation. This presentation did not include any "overall" mortality rates- it looked at the raw numbers of individual doctor mortality rates, as opposed to STS's risk-adjusted procedures. Gomez testified that, after the presentation was over, "we had a discussion about this lie. I got up and said that the data wasn't accurate[.]" Among other issues, Gomez testified at trial that the data presented in this meeting attributed to him a surgical death that he had not been responsible for, and Gomez believed, in any event, that the data was not supposed to be used any longer.

         Gomez testified that when he objected that the data "wasn't statistically accurate or valid," Dr. Macris "looked at me and made a gesture to me and said, 'Only the surgeons that look bad need . . . to be concerned.'" Gomez stated that Macris's comment "made it pretty clear that I was one of the red flagged [surgeons]" and that "everybody at the committee knew that I was one of the red-flag surgeons."

         Following the November 1 meeting, Gomez testified that he "was upset . . . when this data was presented again," so he spoke to Auzenne and asked him "why is this misleading data . . . being shown again?" Gomez believed that the use of the individual surgeon mortality data had stopped in 2010 following Ngo's recommendation. However, Gomez testified that Auzenne told him after the November 1meeting,

that he had spoke[n] to CEO Keith Alexander and they had discussed it and they felt that the data needed to be shared, that we needed to be a transparent organization, that this was a safety issue, a safety issue, and that means they can do what they will with the data and that he was going to show it and had shown it to cardiologists at cardiology meetings and other physicians who referred to me so they can make informed decisions when they refer patients.

         Gomez testified that he understood Auzenne to be saying that he had been showing the data to Gomez's referring doctors since 2010, and Gomez stated that he "spoke to several doctors after this and others and was able to confirm that what [Auzenne] told me was exactly what he was telling me." Gomez testified that it was "difficult" to hear that this had been going on for the past eighteen months, "but it made it pretty clear what was happening, why I was seeing a decrease in my surgical bodies over that time period, so it kind of made sense; and I just was ...

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