- Biddulph/Mountain View Hospital v. HCA/Eastern Idaho Regional Medical Center
- Cathey v. Baptist Health
- City of Cookeville v. Humphrey
- Larson v. Wasemiller
- Lawnwood Medical Center v. Lawnwood Medical Center Medical Staff
- Medical Staff of Community Memorial Hospital of San Buenaventura v. Community Memorial Hospital of San Buenaventura
- Murphy v. Baptist Health
- Satilla Regional Medical Center Litigation
- Windt v. Exeter Hospital
Biddulph/Mountain View Hospital v. HCA/Eastern Idaho Regional Medical Center
(Bonneville City, Idaho, Dist. Ct.)
Issue
The issue in this case was the appropriateness of a hospital's unilateral amendment of its medical staff bylaws, in order to institute an economic credentialing policy for medical staff privileges.
AMA interest
The AMA opposes the "economic credentialing" of physicians, as well as the unilateral amendment of medical staff bylaws. More generally, the AMA supports the protection of the physician-patient relationship.
Case summary
Mountain View Hospital ("MVH"), a small, acute care hospital in Idaho Falls, Idaho wholly owned by physician investors, offered a narrow range of medical services. Eastern Idaho Regional Medical Center ("EIRMC"), a for-profit hospital owned by HCA, Inc., a publicly traded company, was the dominant regional medical center in the greater Idaho Falls area.
Shortly before MVH became operational, EIRMC published a Medical Staff Development Plan ("MSDP"), which the medical staff then specifically rejected. A provision of the MSDP stated that physicians who apply or reapply for EIRMC medical staff privileges must disclose any financial interests in competing health care facilities. If the EIRMC board determines that a physician has a significant economic conflict, it may impose conditions on the physician's staff privileges, such as requirements that the physician not consider economic incentives when making patient referrals. Most importantly, "If the Board determines by objective criteria that a practitioner is diverting patients to other facilities for reasons related to that practitioner's financial or other gain, it may, in its discretion, remove that practitioner's appointment and clinical privileges."
Based on the MSDP, the EIRMC board, unilaterally and without notice, determined that five members of the EIRMC medical staff ("the decredentialed physicians") were substantial investors in MVH, that MVH was a competitor of EIRMC, and that those physicians were using economic factors to apportion their patients between MVH and EIRMC, to the detriment of EIRMC. EIRMC then notified the decredentialed physicians that they would lose their medical staff privileges, although they would be allowed to continue treatment of patients admitted prior to the decredentialing. EIRMC also published an "Open Letter to the Community from the EIRMC Board of Trustees," which stated that the decredentialed physicians "chose to compete in a way that broke our privileging rules." Subsequently, EIRMC rescinded the terminations, but it stated that it would reconsider possible termination when it had obtained additional information about the decredentialed physicians and their referrals. The MSDP, however, remained in effect and referrals by all EIRMC staff physicians to MVH declined substantially.
MVH and four of the five decredentialed (but later reinstated) physicians sued EIRMC and its parent corporation, HCA, seeking an injunction and a declaratory judgment against enforcement of the MSDP, as well as monetary damages.
Ultimately, the case settled. While the full settlement terms were confidential, the parties issued a joint press release indicating that the settlement had been without payment of financial consideration.
Litigation Center involvement
The Litigation Center made a modest financial contribution to the plaintiff-physicians' litigation expenses.
Cathey v. Baptist Health (Pulaski Cty., Ark. Cir. Ct.)
Issue
The issue in this case was whether a gynecologist on staff at a Baptist Health hospital could lose her privileges simply because her physician husband had an interest in a spine surgery hospital that competed with Baptist Health.
AMA interest
The AMA opposes economic credentialing and supports the enforceability of medical staff bylaws by medical staff members.
Case summary
This case arose from the Baptist Health Economic Credentialing Policy, which is intended to prevent physicians on the medical staff of any Baptist Health hospital from competing with Baptist Health. Dr. Cathey had served on the medical staff at Baptist Health Medical Center – Little Rock for approximately 19 years before the incidents giving rise to the lawsuit, and no one questioned her clinical competence. However, Baptist Health wanted to terminate her medical staff membership because her physician husband owned an interest in Arkansas Surgical Hospital, a hospital specializing in spinal surgery.
Because Arkansas Surgical Hospital is not equipped for gynecological care, Dr. Cathey could not, absent extraordinary circumstances, refer her patients to it. Thus, the sole purpose of the Economic Credentialing Policy, as applied to Dr. Cathey, was to thwart competition, rather than to protect legitimate commercial interests, such as trade secrets or patient relationships.
Dr. Cathey sued Baptist Health for a court order preventing the termination of her privileges. Her complaint alleged several legal theories, principally that the Baptist Health Economic Credentialing policy was an unlawful restraint of trade and in violation of the Arkansas Deceptive Trade Practices Act. The court temporarily enjoined Baptist Health from enforcing its Economic Credentialing Policy against Dr. Cathey.
The case ultimately settled. The full settlement terms were confidential. As a result of the settlement, however, Dr. Cathey's husband agreed to divest his interest in Arkansas Surgical Hospital, and Dr. Cathey was allowed to remain on the medical staff at Baptist Health.
Litigation Center involvement
The Litigation Center, along with the Arkansas Medical Society, provided financial support to Dr. Cathey's lawsuit. After her settlement with Baptist Health was finalized, Dr. Cathey refunded the money that the Litigation Center and the Arkansas Medical Society, had contributed toward her litigation costs.
City of Cookeville v. Humphrey 126 S.W.3d 897 (Tenn. S. Ct. 2004)
Issue
The issue in this case was whether a publicly owned hospital in Tennessee has the right to enter into an exclusive contract for provision of its radiology services.
AMA interest
The AMA opposes the economic credentialing of physicians. More generally, the AMA supports the protection of the physician-patient relationship.
Case summary
Previously, publicly owned hospitals in Tennessee had to allow staff privileges to all professionally qualified physicians. Based on a statutory amendment, though, the Cookeville Regional Medical Center contended that the law had changed, and that public hospitals could now consider economic factors in credentialing physicians. Both the trial court and the Tennessee Court of Appeals agreed with the hospital.
Unfortunately, the Tennessee Supreme Court affirmed, holding that the statute permitted the hospital to close the radiology staff by means of an exclusive provider agreement, that the hospital’s decision to do so did not violate the medical staff bylaws and that the radiologist defendants were not entitled to a hearing if their clinical privileges were terminated upon the execution of an exclusive provider contract.
Litigation Center involvement
The Litigation Center and the Tennessee Medical Association filed an amicus curiae brief in the Tennessee Supreme Court on behalf of the radiologists who had lost their staff privileges. The Putnam County [Tennessee] Medical Society and the American College of Radiology joined the brief.
View the brief. (PDF, 125KB)
Larson v. Wasemiller 738 N.W.2d 300 (Minn. 2007)
Issue
The issue in this case was whether a patient can sue a hospital for negligent medical staff credentialing.
AMA interest
The AMA supports the peer review process, including maintaining the confidentiality of that process in order to safeguard its effectiveness.
Case summary
A patient claimed that her surgery fell below an acceptable standard of care. She and her husband sued the surgeon and the hospital at which the surgery had been performed. The plaintiffs asserted that the hospital knew or should have known that the surgeon was incompetent. Therefore, the hospital should not have credentialed the surgeon. The hospital moved to dismiss, asserting that negligent credentialing was not a recognized cause of action. The court denied the defendants' motion, finding that although negligent credentialing had never been adjudicated in Minnesota, such a claim could exist. The court then certified the question for immediate appeal as a novel and important issue of law.
The Minnesota Court of Appeals reversed the trial court and remanded the case, holding that Minnesota does not recognize a cause of action for negligent credentialing of a physician. The plaintiffs then appealed to the Minnesota Supreme Court.
The Minnesota Supreme Court reversed the court of appeals and upheld the trial court's determination. The case was remanded to the trial court.
Litigation Center involvement
The Litigation Center filed an amicus brief with the Minnesota Court of Appeals and with the Minnesota Supreme Court. The briefs opposed the recognition of a cause of action for wrongful credentialing. The briefs pointed out that a wrongful credentialing claim would invoke evidence (either to prosecute or defend the case) privileged by the Minnesota peer review law and would open evidentiary issues prejudicial to the principal malpractice claim.
View the appellate brief (PDF, 1.1MB).
View the Supreme Court brief (PDF, 2.4MB).
Lawnwood Medical Center v. Lawnwood Medical Center Medical Staff
959 So.2d 1222 (Fla. App. 2007)
Issue
The issue in this case is the constitutionality of a Florida statute which provides that in St. Lucie County, Florida (but not in the rest of the state), hospital board bylaws prevail over medical staff bylaws in the event of a conflict.
AMA interest
The AMA supports the self-governance of organized medical staffs. The AMA also supports the enforceability of medical staff bylaws.
Case summary
Lawnwood Regional Medical Center & Heart Institute ("the hospital"), the largest hospital in St. Lucie County, Florida, has had a long-running battle with its medical staff regarding enforcement of the medical staff bylaws. During the past several years, the hospital repeatedly attempted to remove medical staff officers elected pursuant to the medical staff bylaws and to suspend physicians on the medical staff under procedures contrary to those authorized by the medical staff bylaws. Each time, the medical staff was able to defeat these attempts in court.
Pursuant to the hospital's lobbying efforts, the Florida legislature enacted a law known as the "St. Lucie County Hospital Governance Law" (the "Governance Law"), which applies only to hospitals within St. Lucie County. (There are two general hospitals within St. Lucie County, both owned by the same for-profit company.) This law essentially undoes the earlier court decisions and provides that "in the event of a conflict between bylaws of a hospital corporation's board of directors and a hospital's medical staff bylaws, the hospital board's bylaws shall prevail with respect to medical staff privileges, quality assurance, peer review, and contracts for hospital-based services."
Pursuant to the Governance Law, the Lawnwood hospital board proposed changes to the medical staff bylaws, to confirm that it, rather than the medical staff, would control the areas delineated in the Governance Law. The medical staff and the hospital then sued each other, with the principal issue being the constitutionality of the Governance Law.
Eventually, the trial court held in favor of the physicians, finding that the Governance Law violates the Florida Constitution. The hospital appealed, and the District Court of Appeal affirmed the trial court decision, finding that the Governance Law is unconstitutional in that it impermissibly impairs the hospital's obligations to its medical staff under a pre-existing contract between the hospital's board of trustees and medical staff and also impermissibly grants a privilege to a private corporation (i.e., the hospital). The hospital has now appealed to the Florida Supreme Court, where the case is presently pending.
Litigation Center Involvement
The Litigation Center has contributed financially toward the medical staff's litigation expenses. Additionally, the Litigation Center, joined by the Florida Medical Association, filed amicus curiae briefs in the District Court of Appeal and the Florida Supreme Court to support the medical staff. Further, the Litigation Center attorney helped the medical staff attorney prepare for the oral argument in the first appeal and presented a portion of that oral argument himself.
View the District Court of Appeal amicus brief (PDF, 69KB).
View the Florida Supreme Court amicus brief (PDF, 73KB)
Medical Staff of Community Memorial Hospital of San Buenaventura v. Community Memorial Hospital of San Buenaventura
(Ventura Cty., Cal. Super. Ct.)
Issues
The issues in this case were protection of the self-governance rights of the hospital medical staff against encroachment by the hospital administration and preservation of the exclusive right of the medical staff to determine who is to provide medical care and what standards are to be met in the provision of that care within the hospital.
AMA interest
The AMA opposes the economic credentialing of physicians, as well as a hospital’s unilateral amendment of medical staff bylaws. More generally, the AMA supports the protections of the physician-patient relationship.
Case summary
Te Medical Staff of San Buenaventura Community Memorial Hospital sued the hospital, its trustees, and a medical management company that operated the hospital. The principal claims were the hospital attempted to amend the medical staff bylaws unilaterally, (ii) the hospital interfered in internal medical procedures, such as medical staff voting rights and procedures and the conduct of medical staff meetings, (iii) the hospital attempted to impose a code of conduct, including a conflict of interest policy, on the medical staff, (iv) the hospital appointed physicians to perform certain procedures within the hospital, although the medical staff had neither reviewed those appointments nor authorized the procedures, and (v) the hospital converted, for its own uses, the medical staff treasury. The medical staff alleged that these actions violated the medical staff bylaws and California law.
The defendants moved to dismiss (demurred to) the complaint, arguing, in part, that the medical staff lacked the legal capacity and legal standing to maintain the lawsuit.
The court held that the medical staff was a recognized legal entity, capable of suing the hospital and its trustees. Although the court sustained certain causes of actions, it struck others with a right to replead them. The court emphasized that, while the medical staff was entitled to sue on behalf of the medical staff membership as a whole, it had no right to sue on behalf of individual physicians' personal interests. The medical staff then filed its Second Amended Complaint, which the court upheld against a demurrer.
Shortly after the filing of the Second Amended Complaint, the hospital's chief executive officer resigned, and he was replaced by a significantly more physician-friendly administrator.
After lengthy negotiations, the parties reached a settlement, key points of which included the following provisions: (1) The medical staff, hospital administration and board of trustees must comply with the provisions of the medical staff bylaws, including those providing for medical staff elections and leadership; the proper conduct of peer review, credentialing and privileging by the medical staff; and the general rights and responsibilities of the medical staff; (2) The hospital governing body may not unreasonably withhold approval of medical staff bylaw amendments adopted by the medical staff; (3) The medical staff bylaws may not be changed unilaterally by the hospital administration; (4) The medical staff dues fund of $250,000 which the hospital administration had confiscated prior to the litigation, would be returned to the medical staff for its exclusive use; (5) The medical staff will have the right to obtain its own independent counsel and even to take legal action against the hospital, paid for by its own dues and assessments; (6) Input from the medical staff is to be sought prior to the creation, renewal or termination of an exclusive contract within the hospital; (7) A conflicts resolution process must be implemented to resolve disputes or controversies arising out of the settlement agreement; (8) The hospital is to increase its funding to the medical staff budget to pay for leadership development, medical education, and other medical staff expenses including small stipends for administrative work required of medical staff leaders in assuring the quality of care; (9) An outside expert, agreeable to both the hospital administration and the medical staff, will review the procedures that the medical staff had not authorized, to ensure they are medically appropriate; and (10) The medical staff bylaws would be amended to add provisions regarding disclosure of potential conflicts of interest by medical staff members, a "code of conduct" for medical staff members, and a delineation of the permissible use of the money that the hospital will be contributing to the medical staff fund.
The medical staff unanimously approved the settlement agreement on September 21, 2004, thus concluding the matter.
Litigation Center involvement
The Litigation Center, together with the California Medical Association, assisted the medical staff financially. Also, the Litigation Center and the California Medical Association submitted an amicus curiae brief to the court, emphasizing the public importance of an independent medical staff.
View the brief. (PDF, 169KB)
Murphy v. Baptist Health (Pulaski Cty., Ark. Cir. Ct.)
209 S.W.3d 360 (Ark. 2006)
Issue
The issue in this case is whether a hospital's economic credentialing policy is illegal because it is overbroad and unnecessarily interferes with the physician-patient relationship.
AMA interest
AMA opposes the "economic credentialing" of physicians. More generally, the AMA supports the protection of the physician-patient relationship.
Case summary
Baptist Health, the largest hospital system in Arkansas, adopted a policy which it entitled "BAPTIST HEALTH CONFLICT OF INTEREST POLICY (Economic Credentialing)." The economic credentialing policy provides that a physician who holds a direct or indirect ownership or investment interest in a competing hospital is ineligible for medical staff privileges at any Baptist Health hospital. An indirect ownership or investment interest is broadly defined to include a situation where, between the physician or the physician's immediate family member and the competing hospital, there exists an unbroken chain of any number of persons or entities having ownership or investment interests between them. Also, ownership or investment can include such a matter as tangential as ownership of the land where the hospital builds a parking lot.
A number of physicians, who are in apparent violation of the economic credentialing policy, have sued to have it declared invalid. The trial court preliminarily enjoined Baptist Health from terminating the plaintiffs' medical staff privileges while the lawsuit was pending. Baptist Health appealed the preliminary injunction to the Arkansas Supreme Court.
After hearing the case twice, the Arkansas Supreme Court affirmed the injunction. The Supreme Court held that the plaintiff physicians had demonstrated a reasonable likelihood that they would be able to prove, at trial, that the Baptist Health economic credentialing policy (1) threatened to interfere tortiously with the relationship between the plaintiffs and their patients, (2) violated the Arkansas Deceptive Trade Practices Act, and (3) could be unconscionable. Following the Supreme Court affirmance, the case was remanded to the trial court.
A two-week trial of this case was held March 10-20, 2008 before an Arkansas state court judge in Little Rock. At the judge's request, the parties will submit post-trial briefs by June 6, 2008.
Litigation Center involvement
The AMA and the Arkansas Medical Society, representing the Litigation Center, intervened as additional plaintiffs in the lawsuit. In addition to its direct participation in this case, the Litigation Center has provided financial assistance to the plaintiff physicians.
Satilla Regional Medical Center Litigation 633 S.E.2d 575 (Ga. Ct. App. 2006)
Issue
The issue in these two related cases was whether a hospital can “close” its cardiology department without authorization to do so in the medical staff bylaws.
AMA interest
The AMA supports the enforceability of medical staff bylaws by medical staff members.
Case summary
Satilla Regional Medical Center is a publicly owned small-town hospital in southeastern Georgia. Until the events leading up to these lawsuits, it had twelve cardiologists on staff. Under the hospital’s medical staff bylaws, rules, and regulations, the cardiologists were collectively responsible for providing 24 hours a day, 7 days a week emergency “call” coverage.
Two of the cardiologists worked at Satilla Hospital on a full time basis and were deemed part of the “active” medical staff. The other ten cardiologists only occasionally admitted their patients to the hospital and were deemed part of the “affiliate” medical staff. The full time cardiologists indicated that they would like to bring a third full time cardiologist into the hospital to assist them in their duties, but they would like the hospital to pay a portion of the expense of doing so. The cardiologists and the hospital tried to negotiate a suitable financial arrangement, but they were unsuccessful.
Following the breakdown in the negotiations, the hospital announced that it would be entering into an exclusive contract for cardiology services with a group of physicians based in Jacksonville, Florida. It then revoked the privileges of the two active medical staff cardiologists and subsequently the ten affiliate medical staff cardiologists. This was against both the provisions of the medical staff bylaws and the sentiments of the overwhelming majority of the medical staff as a whole. Shortly after the hospital revoked the staff privileges of its cardiologists, the Jacksonville group of cardiologists announced that they were unable to find cardiologists to staff the hospital.
In two separate lawsuits, the active staff cardiologists and the affiliate staff cardiologists secured temporary injunctions to restore their privileges during the pendency of the lawsuit. Had they been unable to do so, the hospital would have been left with no cardiologists, active or affiliate, on its medical staff. Nonetheless, the hospital appealed the temporary injunctions.
On June 23, 2006, the Georgia Court of Appeals affirmed the injunctions that had been entered for both the active staff and the affiliate staff cardiologists. The court held that a hospital cannot deprive the physicians on its medical staff of access to its facilities and resources, unless the hospital reserved the right to do so in its bylaws or in a contract with the individual physicians in question. On September 18, 2006, the Supreme Court of Georgia declined to hear the cases.
Litigation Center involvement
The Litigation Center and the Medical Association of Georgia (‘MAG”) filed a brief in each of the appeals, to support the physicians’ right to rely on the medical staff bylaws. The brief urged the Court of Appeals to affirm the trial court’s discretion to maintain the status quo while the suits were pending. In addition to joining the brief with MAG, the Litigation Center awarded a modest financial grant to the ten affiliate medical staff cardiologists.
View the brief in the appeal of the active staff cardiologist injunction. (PDF, 60KB)
View the brief in the appeal of the affiliate staff cardiologist injunction. (PDF, 58KB)
Windt v. Exeter Hospital 810 A.2d. 53 (N.H. S.Ct. 2002)
Issue
The issues in this case were whether a hospital’s medical staff could govern itself without undue interference from the hospital and whether a physician serving as President of the medical staff and thus as an ex officio trustee of the hospital could exercise his right and obligation to discharge his professional duties in conformity with the AMA Code of Medical Ethics.
AMA interest
The AMA supports the self-governance of organized medical staff and physicians’ right to discharge professional duties and obligations in conformity with the AMA Code of Medical Ethics.
Case summary
Dr. Mark Windt was the President of the Exeter Hospital medical staff. Pursuant to the hospital bylaws, the President of the Medical Staff ordinarily serves as ex officio trustee of the hospital. On assuming his duties as ex officio trustee, Dr. Windt agreed to a policy of the Board of Trustees, under which board members must maintain the confidentiality of matters considered at Board meetings.
Dr. Windt had a falling out with the hospital Board of Trustees. The Board removed him from his position as trustee and, citing to the confidentiality policy, forbade him from discussing the details of his disagreement with the hospital, the general public, or even other members of the medical staff. The Board also attempted to make it impossible for Dr. Windt to fulfill his duties as President of the Medical Staff, and they unsuccessfully lobbied the medical staff to recall Dr. Windt. In various ways, the hospital repeatedly attempted to persuade the rest of the medical staff to abandon Dr. Windt.
On August 3, 2000, Dr. Windt and the medical staff sued Exeter Hospital and its parent corporation, Exeter Health Resources. The suit sought, primarily, a judicial declaration that the hospital’s broad ban against disclosure of hospital issues was invalid. Subsequently, Dr. Windt filed a separate lawsuit seeking reinstatement as a trustee and an injunction restraining interference with his duties as President of the Medical Staff.
Pursuant to motion by the hospital, the court dismissed the medical staff as plaintiff, finding that it lacked the legal capacity to sue the hospital. Subsequently, the court dismissed Dr. Windt’s portion of the first case as moot. The second suit, which sought broader relief, was voluntarily dismissed with prejudice. Dr. Windt appealed the dismissal of his case to the New Hampshire Supreme Court, and the medical staff also appealed its dismissal.
On November 14, 2002, the New Hampshire Supreme Court ruled that hospital medical staffs are subordinate administrative units, dependent upon and accountable to the hospital and its trustees. Therefore, medical staffs are legally incapable of suing the hospital or its trustees. Thus, the Supreme Court affirmed dismissal of the medical staff.
The New Hampshire Supreme Court also ruled that Dr. Windt’s personal request for relief from the hospital’s disclosure ban had not been mooted. That portion of the case was remanded to the trial court for further adjudication.
On August 28, 2003, the trial court finally ruled on the merits of the case and held in Dr. Windt's favor. It allowed him to communicate his concerns about hospital policy to the other members of the medical staff, without fear of legal liability from the hospital.
Litigation Center involvement
The Litigation Center submitted an amicus curiae brief in support of Dr. Windt and the medical staff. The brief argued that the medical staff should have the right to sue Exeter Hospital in its own name (and thus, by implication, possibly be subject to suit in its own name), notwithstanding that the medical staff is an unincorporated association. The Litigation Center also provided financial support to Dr. Windt.
View the brief. (PDF, 2856 KB)
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