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Hospitals

Avera Marshall Medical Staff v. Avera Marshall Regional Medical Center (Minn. S.Ct.)

836 N.W.2d 549 (MN. Ct. App. 2013)

Also under Medical Staff

Issue

The issues in this case are (a) whether a medical staff and its chief of staff have the legal capacity to enforce medical staff bylaws against the hospital, and (b) whether medical staff bylaws are enforceable as a contract.

AMA interest

The AMA supports the self-governance of organized medical staffs.  The AMA also supports the enforceability of medical staff bylaws.

Case summary

The Avera Marshall medical staff, its chief of staff, and its chief of staff elect sued Avera Marshall Regional Medical Center (AMRMC).  The complaint alleged that (i) AMRMC unilaterally appointed and reappointed physicians to the AMRMC Medical Staff without medical staff input, (ii) AMRMC interfered with the internal operations of the Medical Staff and the Medical Staff Executive Committee (MEC), (iii) AMRMC interfered with the composition and function of the Medical Staff Quality Improvement Committee (MSQIC), (iv) AMRMC disciplined a physician without following the peer review procedures set forth in the medical staff bylaws, and (v) AMRMC unilaterally adopted revised medical staff bylaws.

The complaint sought a declaration of “the respective rights, duties, and status of the parties under the applicable law, the Medical Staff Bylaws, and MSQIC Policy,” an order against AMRMC “to cease interfering with Plaintiff’s rights under the applicable law, the Medical Staff Bylaws, and the MSQIC Policy,” and an injunction to prevent repeal and replacement of the Medical Staff Bylaws.

AMRMC moved to dismiss the complaint, asserting that the medical staff and the MEC lacked legal capacity to bring a lawsuit.  The trial court granted the motion, finding that the medical staff and, by extension, its officers had no legal existence separate from the hospital.

Subsequently, the trial court decided the remaining issues in the case, pursuant to cross motions for summary judgment.  It held that the medical staff bylaws should not be deemed a contract between the medical staff and the hospital, and monetary damages would therefore be unavailable as a remedy for their breach.  The trial court also held that, while not a contract, the medical staff bylaws could be enforced by an injunction.

Further, it held that the hospital could amend the medical staff bylaws unilaterally, so long as it gave the medical staff prior notice of its intended amendment.

The plaintiffs appealed to the Minnesota Court of Appeals.  On July 22, 2013, the Court of Appeals held that the medical staff lacked the legal capacity to bring a lawsuit and the medical staff bylaws were not a contract.  The medical staff has appealed to the Minnesota Supreme Court.  Oral argument was heard on February 4, 2014, and the case is under advisement.

Litigation Center involvement

The Litigation Center, along with the Minnesota Medical Association asked the trial court to file an amicus brief in support of the medical staff, but the court denied the motion.  The Litigation Center, along with MMA and several specialty medical societies, filed an amicus brief in the Court of Appeals and in the Minnesota Supreme Court.

Minnesota Court of Appeals brief

Biddulph/Mountain View Hospital v. HCA/Eastern Idaho Regional Medical Center (Bonneville City, Idaho, Dist. Ct.)

Also under Medical staff

Outcome:     Favorable

Issue

The issue in this case was whether a hospital could unilaterally amend 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. 

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 hospital 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.  Under the MSBP, if the EIRMC board determined that a physician had a significant economic conflict, it could 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.

Boggs v. Camden-Clark Memorial Hospital, 609 S.E.2d 917 (W.Va. 2004)

Also under Abusive litigation against physicians, Affidavit of merit, Certificate of merit, and Tort reform

Outcome:    Somewhat unfavorable

Issue

The issues in this case were the timeliness of pre-filing certificates of merit in a medical malpractice action filed in West Virginia and the constitutionality of a cap on non-economic damages recoverable under West Virginia’s medical malpractice statute.

AMA interest

The AMA supports tort reform, specifically the limitation of non-economic damages in medical malpractice cases.

Case summary

Plaintiff Bernard Boggs claimed that Dr. Manish Koyawala caused his wife’s death by failing to adhere to the standard of care in anesthetizing her.  Mr. Boggs also made claims against United Anesthesia (Dr. Koyawala’s anesthesiology group) and Camden-Clark Memorial Hospital for malpractice and various other torts.

The West Virginia Medical Professional Liability Act (MPLA), W.Va. Code §55.7B.1, et seq. provides (among other things) that medical malpractice plaintiffs must serve pre-filing notices of claim and certificates of merit at least 30 days prior to filing suit.  Moreover, a revision to the MPLA provides that claims filed on or after July 1, 2003 are subject to a limit on the amount of non-economic damages recoverable.  The defendants moved to dismiss, arguing that Mr. Boggs had failed to provide them with properly executed certificates of merit a full 30 days prior to filing suit.  The trial court granted the motion, dismissing all claims.  Mr. Boggs then asked for leave to amend his complaint, based on a West Virginia procedural rule providing for the “relating back” of claims.  Such “relating back” would allow Mr. Boggs to avoid the applicability of the cap on non-economic damages.  The trial court denied this motion.  Mr. Boggs then appealed to the West Virginia Supreme Court.

The West Virginia Supreme Court decided the case in the plaintiff’s favor, reasoning that the lower court had incorrectly denied plaintiff leave to amend his complaint.  The Supreme Court held that the plaintiff was entitled to amend his complaint under the “relate back” rule to assert certain “non-medical practice” claims, in addition to the earlier-asserted malpractice claim (which the court held was not subject to the intervening changes to the West Virginia malpractice statute, which reduced the amount of recoverable non-economic damages).

Litigation Center involvement

The Litigation Center, the West Virginia State Medical Association, and several public interest organizations filed an amicus curiae brief supporting defendants Camden-Clark Memorial Hospital, United Anesthesia, Inc., and Manish I. Koyawala, M.D.  The brief contended that Mr. Boggs lacked standing (in view of the lack of any harm suffered) to challenge the constitutionality of the medical liability reforms.

Supreme Court of Appeals of West Virginia brief 

Brown v. Gaalla, 460 Fed. Appx. 469 (5th Cir. 2012)

Also under Medical Staff, Civil Rights

Outcome:     Very favorable

Issue

The issue in this case was whether the individual defendants were entitled to governmental immunity against a claim that a county-owned hospital abridged the medical staff privileges of the plaintiff cardiologists on account of their race and national origin.

AMA interest

The AMA opposes race and national origin discrimination against physicians, and it opposes the consideration of factors other than the best interests of patients in the granting of medical staff privileges.

Case summary

Three cardiologists, all of whom were of Asiatic Indian origin, held medical staff privileges at Citizens Medical Center (CMC), a county-owned hospital located in Victoria, Texas.  Until 2007, the Indian cardiologists regularly admitted patients and exercised their privileges at CMC without problem.  At that time, however, CMC hired a cardiovascular surgeon as an employed physician.  The Indian cardiologists refused to refer their patients to the cardiovascular surgeon, contending that he had a high mortality rate and performed unnecessary surgeries.

At about the same time, CMC brought several new cardiologists of non-Indian origin onto its medical staff.  The new cardiologists were CMC employees , while the Indian employees were not.  The new cardiologists referred all of their cardiology surgery patients to the CMC cardiovascular surgeon.

Friction between the Indian cardiologists and CMC continued to escalate.  In February 2010, the CMC Board of Directors, acting pursuant to the advice of an independent consultant, “closed” the cardiology department to the Indian cardiologists.  The cardiology department was open only to employed physicians on the CMC staff.

On February 24, 2010, the Indian cardiologists sued CMC, its Board of Directors, its CEO, and one of the non-Indian cardiologists.  On August 6, 2010, the Indian cardiologists filed a second amended complaint, which alleged that the reduction of their medical staff privileges had been motivated by ethnic discrimination, as well as economic reasons.  They claimed constitutional violations of substantive and procedural due process, equal protection of the laws, and various common law rights.

The defendants moved for summary judgment on the basis of governmental immunity.  They alleged that the decision to reduce the Indian cardiologists’ privileges had been based on the best interests of the county and CMC, rather than ethnic discrimination.  However, the trial court denied the motion, in part, finding evidence of ethnic discrimination.  That evidence included a 2007 memo from the CMC CEO which stated, “I feel a sense of disgust but am more concerned with what this means to the future of the hospital as more of our Middle Eastern born physicians demand leadership roles and demand influence over situations that are hospital issues…..[This] will change the entire complexion of the hospital and create a level of fear among our employees.”

The defendants other than CMC brought an interlocutory appeal of the denial of their motion for summary judgment.  They contended that there had been no reduction of the Indian cardiologists’ property interests or violation of their constitutionally protected rights.

On January 13, 2012, the Fifth Circuit partially affirmed and partially reversed the trial court’s denial of summary judgment.  The court ruled that the plaintiffs do not have a valid claim for denial of due process, but they could sue for violation of their equal protection rights.  The case was remanded to the trial court.

Ultimately the parties settled, with the defendants paying the plaintiff physicians approximately $8 million.

Litigation Center involvement

The Litigation Center, along with the Texas Medial Association and the American Association of Physicians of Indian Origin, filed an amicus brief supporting the plaintiff cardiologists in the appeal.  The brief argued that medical staff privileges are valuable rights, protectable under federal law against ethnic origin discrimination.

United States Court of Appeals for the Fifth Circuit brief.

California Medical Association v. UCLA, 79 Cal.App. 4th 542, 94 Cal.Rptr.2d 194 (2000)

Also under Corporate practice of medicine

Outcome:     Very unfavorable

The California Medical Association (CMA) charged that UCLA was hiring physicians in violation of the corporate practice of medicine doctrine.  According to the complaint, this policy violated California law and could lead to inferior patient care.  CMA alleged “that UCLA MEDICAL ENTERPRISES has gone far beyond its praiseworthy teaching and research activities...and has commenced an aggressive business plan designed to enable the unlicensed practice of medicine by UCLA, to force community based physicians into an unlawful fee-splitting and referral scheme which jeopardizes the quality of patient care, disrupts the continuity of patient care in the community, and forces private physicians out of practice, under the guise of teaching and research activities.”  The Litigation Center contributed to CMA’s litigation fund.

On March 29, 2000, the California Court of Appeals reversed a preliminary injunction that had been entered in favor of CMA, because CMA would be unlikely to prevail at trial.  It found that the California statute banning the corporate practice of medicine does not apply to teaching institutions such as UCLA.  The California Supreme Court refused CMA’s request for further review.

Cathey v. Baptist Health (Pulaski Cty., Ark. Cir. Ct.)

Also under Economic credentialing and Medical staff

Outcome:     Favorable

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.  Although the full settlement terms were confidential, as a result of the settlement, Dr. Cathey’s husband divested his interest in Arkansas Surgical Hospital, and Dr. Cathey was then 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)

Also under Medical staff

Outcome:     Very unfavorable

Issue

The issue in this case was whether a publicly owned hospital in Tennessee had the right to enter into an exclusive contract for provision of its radiology services.

AMA interest

The AMA opposes the economic credentialing of physicians.

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.

The Tennessee Supreme Court affirmed, holding that the statute permitted the hospital to close its 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 an evidentiary hearing.

Litigation Center involvement

The Litigation Center, the Tennessee Medical Association, the Putnam County [Tennessee] Medical Society, and the American College of Radiology filed an amicus curiae brief on behalf of the radiologists who had lost their staff privileges.

Tennessee Supreme Court brief

Clow v. Webber Hospital Association (Maine Super. Ct.)

Also under Peer review

Outcome:     Very unfavorable

The Maine Board of Osteopathic Licensure investigated an anonymous complaint against Dr. Clow, an osteopathic physician.  The Licensure Board subpoenaed the records of a peer review conducted at Dr. Clow’s hospital, Webber Hospital.  Webber agreed to turn over these records, but Dr. Clow sought a court order to prevent the disclosure.  The Maine Medical Association and the Litigation Center filed an amicus brief to support Dr. Clow.

The court held against Dr. Clow and found that Webber Hospital could turn over its records to the Licensure Board.

Columbia/JFK Medical Center v. Spunberg, 784 So.2d 541 (Fla. App. Ct. 2001)

Also under Due process and Medical staff

Outcome:     Very favorable

Issue

The issue in this case was whether a hospital violated medical staff bylaws by refusing to renew the staff privileges of two radiation oncologists.

AMA interest

The AMA supports the enforceability of medical staff bylaws.

Case summary

This case arose from a hospital’s refusal to renew the staff privileges of two radiation oncologists, because of the hospital’s business decision to exclusively contract with the University of Miami School of Medicine for all radiation treatment of cancer patients.  The hospital did not claim that its decision to not renew the privileges of the two radiation oncologists was based on their competence or conduct.  Rather, the decision was based solely on its right to enter into an exclusive contract with other physician groups. 

The two radiation oncologists filed an action for a preliminary injunction and damages, alleging that the hospital breached its medical staff bylaws, Florida statutes, and the administrative codes, all requiring that reappointment and renewal of privileges be judged on quality-based criteria and not on any additional business or economic rationales.  The trial court granted the preliminary judgment, and the hospital appealed.  The appellate court affirmed the injunction, and the case then went to trial.  The jury then found in favor of the plaintiffs and awarded them $2.5 million in lost profits and $20.25 million in punitive damages.

AMA involvement

The AMA filed an amicus curiae brief, joined by the American College of Radiology, the Florida Medical Association, and the Florida Radiological Society, arguing in favor of the enforceability of the medical staff bylaws.

Crow v. Penrose-St. Francis, 169 P.3d 158 (Colo. 2007)

Also under Due process and Peer review

Outcome:     Unfavorable

Issue

The issue in this case was whether a medical peer review action should proceed without judicial interference, notwithstanding the physician’s claimed denial of due process.

AMA interest

The AMA supports the peer review process, but it also believes that a physician’s due process rights must be respected.

Case summary

Dr. Crow, a physician on the medical staff of Penrose-St. Francis Hospital, brought a lawsuit to challenge a peer review action pending against him.  He alleged that the peer review proceedings were procedurally flawed in many respects, his privileges had been summarily suspended, and his reputation injured while the hospital unduly protracted the proceedings.  He asked that the peer review be enjoined and that he be awarded monetary damages.  The hospital moved to dismiss the trial court proceeding, primarily on the ground that the dispute was not yet “ripe” (i.e., adequately concrete and defined to warrant judicial decision), but that motion was denied. 

After the trial court refused to dismiss the case, the hospital, in an extraordinary action, asked the Colorado Supreme Court to order the trial court to dismiss Dr. Crow’s suit.  The hospital asserted that Dr. Crow’s suit, if allowed to continue prior to the completion of the peer review proceedings, would chill the conduct of further peer review actions.

The Colorado Supreme Court ruled that Dr. Crow’s case should be dismissed as premature.  Thus, Dr. Crow would have to wait until exhaustion of the peer review process before he could challenge it.  The Supreme Court did not address the hospital’s contention that Dr. Crow’s suit would unduly chill peer review in Colorado.

Litigation Center involvement

The Litigation Center filed a brief in the Colorado Supreme Court on behalf of the AMA, the Colorado Medical Society, and the American College of Surgeons.  The brief advised the Supreme Court how organized medicine believes the public health interests in peer review should be balanced against the private concern for due process.  It recommended that the Supreme Court allow the trial court to retain jurisdiction over the case.

Colorado Supreme Court brief

 

Desai v. Lawnwood Medical Center, 54 So.3d 1027 (Fal. Dist. Ct. App. 2011)

Also under Medical staff

Outcome:     Very unfavorable

Issue

The issue in this case was whether a hospital can refuse to recredential a physician without following the due process rights granted in the medical staff bylaws.

AMA interest

The AMA supports the enforceability of medical staff bylaws.  Also, the AMA believes that a physician whose professional conduct is reviewed should be given a fair hearing, pursuant to standards of due process.  Further, the AMA believes that physicians should be entitled to express their opinions on public issues, without fear of retaliation.

Case summary

Lawnwood Regional Medical Center, in St. Lucie County, Florida, has had a multi-year battle with its medical staff regarding medical staff governance issues. After the hospital suffered numerous court losses, it persuaded the Florida legislature to enact a law, known as the “St. Lucie County Hospital Governance Law,” which allowed certain hospitals to amend their medical staff bylaws unilaterally. The Governance Law applied only to hospitals within St. Lucie County, and eventually the Florida Supreme Court held this law unconstitutional as a “special privilege” to a private corporation. Lawnwood Medical Center, Inc. v. Seeger, 990 So.2d 503 (Fla. 2008).

Dr. Desai, a pathologist and a former member of the Lawnwood Medical Executive Committee, was the principal liaison between the Lawnwood medical staff and the Litigation Center in connection with the lawsuit challenging the Governance Law. An AMA member himself, Dr. Desai actively promoted AMA membership within the medical staff.

Dr. Desai had served on the Lawnwood medical staff continuously since February, 1998, and he had been routinely recredentialed every two years. Prior to his January, 2006 reappointment, however, the hospital notified him that, among other conditions, he would be required to attend classes in anger management and ethics. Dr. Desai was not informed of the reasons behind such requirements. Further, he was never found unfit by a peer review committee, and neither the organized medical staff nor any of its committees expressed reservations about his reappointment.

Although he felt that he did not require the anger management or ethics courses, Dr. Desai completed them anyway. Still, the hospital refused to recredential him. With one day to go before the termination of his appointment, Dr. Desai sued the hospital and sought an injunction that would preserve his privileges. At this point, the hospital relented and continued his privileges.

Subsequently, the suit was dismissed, as the principal relief sought had become moot. However, Dr. Desai had expended a substantial amount of money to cover the legal fees and expenses needed to secure his continued medical staff privileges.

In January, 2010, the situation repeated itself. The medical staff executive committee routinely recommended Dr. Desai's reappointment, but the hospital administration rejected this recommendation and indicated that it would not recredential him. The hospital may have tried to decredential Dr. Desai because of his advocacy for the AMA and its policies. At any rate, both in 2006 and in 2010 the hospital acted unilaterally, without according Dr. Desai due process, without allowing him a peer review hearing, and without following the procedures of the medical staff bylaws.

Again in 2010, Dr. Desai was forced to sue the hospital. He secured a preliminary injunction to retain his privileges, but the hospital appealed the preliminary injunction.

The Florida District Court of Appeal reversed. Under a Florida statute, it held, the hospital was immune from suit for a medical staff privileging decision, unless that decision was based on “intentional fraud.” The case was remanded, in order that Dr. Desai could attempt to prove that his decredentialing was based on intentional fraud. 

AMA involvement

Because the hospital’s actions appear to have violated AMA policies, not to mention an AMA member’s rights, the Litigation Center helped to defray a portion of Dr. Desai’s legal expenses.

Eastern Maine Medical Center Dispute with Cardiologists

Also under Medical staff

Outcome:     Very favorable

Issue

The issue in this case was whether a group of cardiologists who were members of a hospital’s medical staff could continue to have one of their group serve on the board of trustees after the cardiologists built a medical office building where they performed procedures they had previously performed at the hospital.

AMA interest

The AMA supports the enforceability of medical staff bylaws by medical staff members.

Case summary

Eastern Maine Medical Center (EMMC) is a community hospital located in Bangor, Maine.  A group of cardiologists on the EMMC medical staff built a new office building and started to perform certain procedures that they had formerly performed in the hospital.  One of the cardiologists, a member of the medical staff executive committee, was to represent the medical staff as an ex officio member of the hospital board of trustees.  The hospital became concerned by the perceived conflict of interest of the cardiologist and he was expelled from the hospital board.

The medical staff was upset with the treatment of the cardiologist, and it organized a "Good Governance Committee" to fight the hospital.  The physicians' Good Governance Committee hired an attorney to advise them, particularly concerning parliamentary procedure during the Annual Corporators Meeting.  Following the cardiologist’s expulsion, they elected one of his partners as the medical staff vice-president, which gave him a seat on the hospital board.  Although the first cardiologist had been expelled from the board, the vice-president was permitted to sit on the board temporarily, pending further review of a potential conflict of interests. 

The physicians brought the matter to the attention of the community at the Annual Meeting of the hospital "corporators."  Four candidates, sympathetic to the medical staff, were nominated from the floor to replace existing board members.  All four candidates won.  Thus, the matter was resolved successfully for the cardiologists and for the medical staff as a whole.

Litigation Center involvement

The Litigation Center paid a portion of the bill from the attorney engaged by the physicians’ Good Governance Committee.

Gluscic v. Avera St. Luke's, 649 N.W.2d 916 (S.D. S.Ct. 2002)

Also under Medical staff

Outcome:     Very unfavorable

Issue

The issue in this case was whether a hospital could terminate a physician’s staff privileges for reasons not set forth in the medical staff bylaws.

AMA interest

The AMA supports the enforceability of medical staff bylaws by medical staff members.

Case summary

Dr. John Gluscic applied to the medical staff at Avera St. Luke’s Hospital.  Although he satisfied the pertinent professional standards, the hospital denied his application because he did not meet its economic requirements.  The trial court ordered the hospital to admit him to the medical staff, and the hospital appealed.

The South Dakota Supreme Court reversed the lower court's ruling and held that, because the medical staff bylaws did not specifically prohibit it, the hospital could use economic credentialing in its staffing determinations. After the decision, Avera St. Luke's terminated Dr. Gluscic's medical staff privileges. 

Dr. Gluscic sued for reinstatement of those privileges, contending that, under the medical staff bylaws, he could not be discharged except for certain specified causes, none of which applied to him. The trial court, however, dismissed his complaint, finding that he had been admitted to the staff only by virtue of an injunction that was later found to have been erroneously entered. Therefore, although the medical staff bylaws did not explicitly state that Dr. Gluscic could be terminated because the injunction had been overturned, implicitly the appointment to staff privileges had been conditional on the viability of the lower court decision. That decision was found to have been improper, and so, according to the trial court, he should never have been appointed to the staff.

Dr. Gluscic appealed the trial court decision to the South Dakota Supreme Court, but the Supreme Court affirmed the trial court decision that Avera St. Luke's was entitled to terminate his staff privileges.

Litigation Center involvement

The South Dakota State Medical Association and the Litigation Center filed an amicus curiae brief in the South Dakota Supreme Court to support Dr. Gluscic.

Higgins v. Baptist St. Anthony's (Potter Cty., Tex. Dist. Ct.)

Also under Antitrust and Economic credentialing

Outcome:     Somewhat favorable

Issue

The issue in this case was whether a parent health care organization, its managed care network and its hospital violated a Texas antitrust statute by attempting to terminate (“deselect”) from the network two physicians who had invested in a competing surgical hospital.

AMA interest

The AMA opposes discrimination against physicians who have ownership interests in specialty hospitals.

Case summary

The case arose from the attempt by a managed care network to deselect the plaintiff physicians from the network’s provider panel, in retaliation for the physicians’ investment in a surgical hospital.  The surgical hospital competed with a general hospital that was owned by the parent of the managed care network.  Furthermore, the parent urged Blue Cross Blue Shield of Texas (“Texas Blue”) to deselect the physicians and other investors in the surgical hospital from the Texas Blue provider network. 

The two physicians sued the parent organization, its managed care network, and its hospital for violations of the federal and Texas anti-kickback statutes and the Texas antitrust statute.  Before the case could be tried, it was settled and dismissed.  As part of the settlement, the parent health care organization bought a majority interest in the specialty hospital and agreed that it would not discriminate against physicians who had also invested in the specialty hospital.

Litigation Center involvement

The Litigation Center and the Texas Medical Association contributed toward the physicians’ litigation expenses.

Knapp Medical Center v. Grass, 2013 Tex. App. LEXIS 6864 (Tex. App. 2013)

Also under Freedom of Information Act, Physician Advocacy

Outcome:    Very unfavorable

Issue

The issue in this case was whether a nonprofit hospital had to disclose various of its financial documents to members of the public who ask to see them. 

AMA interest

The AMA believes that physicians have both the right and the responsibility to participate in activities contributing to the improvement of their community and the betterment of public health.

Case summary

Knapp Medical Center (KMC) was organized as a privately owned corporation under the Texas Nonprofit Corporations Act.  KMC signed an agreement to be purchased by South Texas Health System (STHS), a subsidiary of Universal Health Services, Inc. (UHS). 

Several physicians on the KMC medical staff have openly questioned whether the sale would be in the public interest.  In essence, the physicians have said that the KMC management “deliberately weakened the hospital by doing away with key medical procedures and demoralizing the spirit of staff so that it was ripe for sale.”  The physicians also assert that KMC unduly enriched its administrators, and they suspect that those administrators may be receiving special favors from STHS or UHS to facilitate the transaction.

In an attempt to learn more about KMC and the contemplated sale, the physicians asked KMC to provide them with board minutes and other financial information.  KMC refused, arguing that because it is privately owned it does not have to make such a disclosure.  KMC also contended that the dissident physicians have an ownership interest in a physician-owned hospital that competes with KMC, and it might harm KMC to produce the documents.

In response, the physicians hired an attorney, Jeffrey C. Grass, to represent them in their battle with KMC.  Mr. Grass sent KMC a letter demanding an inspection of KMC’s records.  He contended that KMC was required to produce documents under a provision of the Texas Nonprofit Corporations Act, which required a Texas nonprofit corporation to make its records available for inspection by the general public.  KMC refused the request, arguing that it was excused from the disclosure obligation by an exception in the Nonprofit Corporations Act.  Mr. Grass asserted otherwise.

KMC sued Mr. Grass, seeking a declaratory judgment as to its obligations to make disclosure to him and his clients.  The trial court found that KMC was subject to the disclosure requirements under the Texas Nonprofit Corporations Act and ruled in favor of Mr. Grass.  KMC has now appealed to the Texas Court of Appeals.

On June 6, 2013, the Court of Appeals, by a split decision, reversed the trial court.  It held that the public contributions to KMC were made through a foundation that was legally distinct from KMC, and this separateness was sufficient to exempt KMC from complying with the corporate disclosure law.  Mr. Grass and his clients asked the Texas Supreme Court to hear the case, but the Supreme Court declined jurisdiction.  Grass has moved for rehearing of the denial.

Litigation Center involvement

The Litigation Center, along with the Texas Medical Association, filed an amicus brief in the Texas Court of Appeals, supporting the physicians’ right to access the hospital’s documents.  In addition, the Litigation Center and TMA also contributed to the physicians’ legal expenses.

The Litigation Center also filed an amicus brief in support of the petition in the Texas Supreme Court for rehearing.

Texas Court of Appeals brief

Texas Supreme Court brief in support for rehearing

La Follette v. Marin General Hospital (Marin Cty., Cal. Super. Ct.)

Also under Medical staff

Outcome:     Favorable

Issue

The issue in this case was whether a hospital could restrict a physician’s medical staff privileges without granting that physician’s request for a formal peer review hearing on the restriction.

AMA interest

The AMA supports the right of medical staff members to have timely and fair peer review hearings.

Case summary

Dr. Lizellen La Follette was an obstetrician-gynecologist at Marin General Hospital.  The hospital summarily restricted her medical staff privileges, requiring her to undergo a six-month period of observation during which she was not allowed to deliver babies unless another physician was present.  Dr. La Follette believed that this restriction was unwarranted, and she requested a formal peer review hearing.  The six-month observation period passed, but the hospital, without explanation, failed to provide the hearing.  Meanwhile, Dr. La Follette’s record remained blemished, and she was required to report the disciplinary action on applications for medical staff privileges elsewhere.

Dr. La Follette sued the hospital for declaratory relief, an injunction to clear her name, and monetary damages.  The court awarded her the declaratory relief and the injunction, so the only remaining issue was her claim for emotional distress damages resulting from the hospital’s negligence.  The trial court held that Dr. La Follette could not pursue such a claim in the absence of other forms of monetary damage, and dismissed this element of her case.  Dr. La Follette decided not to appeal this issue.

Litigation Center involvement

The Litigation Center and the California Medical Association each awarded Dr. La Follette a financial grant to offset her legal expenses.

Larson v. Wasemiller, 738 N.W.2d 300 (Minn. 2007)

Also under Medical staff

Outcome:     Very unfavorable

Issue

The issue in this case was whether a cause of action exists against 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. 

Minnesota Court of Appeals brief

Minnesota Supreme Court brief

Lawnwood Medical Center v. Lawnwood Medical Center Medical Staff, 990 So.2d 503 (Fla. 2008)

959 So. 2d 1222 (Fla. App. 2007)

Also under Medical staff

Outcome:     Very favorable

Issue
The issue in this case was whether a Florida statute, which provided that in St. Lucie County, Florida (but not in the rest of the state), hospital board bylaws would prevail over medical staff bylaws in the event of a conflict, was constitutional.

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, had a long-running battle with its medical staff regarding enforcement of the medical staff bylaws.  Over the course of several years, the hospital would violate the medical staff bylaws by removing elected medical staff officers and by suspending physicians on the medical staff without due process.  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.  This law essentially undid the earlier court decisions by providing 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."

Following enactment of the Governance Law, the hospital board attempted to impose changes to the medical staff bylaws in 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 violated the Florida Constitution.  Both the District Court of Appeal and the Florida Supreme Court affirmed the trial court's holding of unconstitutionality.

Litigation Center involvement
The Litigation Center contributed financially toward the medical staff's litigation expenses.  It also 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 presented a portion of the oral arguments in the Florida District Court of Appeal and in the Florida Supreme Court.

 District Court of Appeal amicus brief

 Florida Supreme Court amicus brief.  

Mahan v. Avera St. Luke's, 621 N.W.2d 150 (S.D. S.Ct. 2001)

Also under Economic credentialing and  Medical staff

Outcome:     Very unfavorable

Issue

The issue in this case was whether a hospital could refuse medical staff applicants based on economic criteria.

AMA interest

The AMA opposes the “economic credentialing” of physicians.  More generally, the AMA supports the protection of the physician-patient relationship.

Case summary

The South Dakota Supreme Court, reversing the trial court, found that the hospital administration was entitled to refuse applicants to the medical staff based on economic criteria, including the hospital’s concern that physicians in one specialty might compete with physicians in a second specialty.  In South Dakota, therefore, physicians may be subject to economic credentialing by hospitals. 

In a footnote, the court also questioned the legal right of certain members of the medical staff to open an ambulatory surgery center in competition with the hospital.  The court observed that, although physicians are not necessarily employees of the hospital, their role is sufficiently similar to that of an employee that they should not be allowed to compete with the hospital.

Litigation Center involvement

The Litigation Center joined a brief of the South Dakota State Medical Association opposing the hospital’s decision to consider applicants to its medical staff based on economic considerations. The brief argued that the bylaws created a binding contract between the hospital and its staff under which staff membership should depend on medical competence, rather than economic profitability.  The brief also argued that the bylaw provisions apply to applicants for staff membership as well as current members. 

Medical Staff of Community Memorial Hospital of San Buenaventura v. Community Memorial Hospital of San Buenaventura

(Ventura Cty., Cal Super. Ct.)

Also under Medical staff

Outcome:     Very favorable

Issue

The issue in this case was whether a hospital could encroach on the self-governance rights of its hospital medical staff.

AMA interest

The AMA supports medical staff self-governance, and it opposes a hospital’s unilateral amendment of medical staff bylaws.

Case summary

The 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 (i) 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 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 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, largely favorable to the medical staff.

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.

Superior Court of the State of California brief

Court decision on capacity and standing to sue

Mileikowsky v. Superior Court (Cal. App. 2001)

Also under Due process,  Peer review, and Medical staff

Outcome:     Unfavorable

Issue

The issue in this case was whether a hospital was required to provide a timely peer review hearing before suspending a physician’s medical staff privileges.

AMA interest

The AMA supports a timely and fair peer review process.

Case summary

This case alleged that a hospital, Encino Tarzana Regional Medical Center (ETRMC), abused the peer review process.  Dr. Mileikowsky, an obstetrician/gynecologist specializing in in-vitro fertilization at ETRMC, became embroiled in a number of disputes with ETRMC.  He testified against ETRMC and against several of the physicians on its staff in malpractice suits.  ETRMC attempted to deny or curtail his privileges, and Dr. Mileikowsky obtained two court injunctions against ETRMC.

Without prior notice, ETRMC abruptly informed Dr. Mileikowsky that it had summarily suspended his medical staff privileges.  After Dr. Mileikowsky requested a peer review hearing, ETRMC sent Dr. Mileikowsky a formal notice of charges, listing complaints against him that dated back 10 years.  ETRMC repeatedly postponed Dr. Mileikowsky’s hearing.  Thus, Dr. Mileikowsky’s medical staff privileges were summarily suspended without a hearing.  Dr. Mileikowsky applied to another hospital for medical staff privileges but was refused when that hospital learned of his suspension from ETRMC.

Under California law, a hospital may suspend a physician’s staff privileges without a hearing only if it finds that the physician presents an “imminent danger” to patient health or safety.  Even then, the hospital must hold a hearing within sixty days after receipt of the physician’s request.  The entire peer review process must be completed “within a reasonable time.”  ETRMC, by delay, avoided these obligations.

Dr. Mileikowsky sued the hospital in the Los Angeles County Superior Court and requested a preliminary injunction to restore his staff privileges.  The court denied the preliminary injunction, holding that, in light of the ongoing peer review proceeding, it lacked jurisdiction.  Dr. Mileikowsky appealed to the California Court of Appeal.  He requested a writ of mandamus, which would order the trial judge to adjudicate his request for a preliminary injunction. 

The Court of Appeal, in a two paragraph order, denied Dr. Mileikowsky’s appeal.  Although the hospital had not raised the point in its brief, the court held that Dr. Mileikowsky’s lawyer had not given the hospital proper notice of the motion for preliminary injunction.  Because of this procedural flaw, the trial court had, indeed, lacked jurisdiction.

Litigation Center involvement

The Litigation Center joined a brief prepared by the California Medical Association in support of Dr. Mileikowsky.  The CMA/Litigation Center brief emphasized Dr. Mileikowsky’s procedural rights and avoided taking sides in the ultimate factual dispute.  The brief pointed out that a fair peer review procedure requires that a physician’s staff privileges not be abridged without a hearing.  Summary suspension of those privileges should be allowed only if there is an emergency and then only if a hearing is held promptly to determine if the emergency is genuine.  The brief urged an expedited appeal.

Murphy v. Baptist Health, 373 S.W.3d 269 (Ark. 2010)

226 S.W.3d 800 (Ark. 2006), 209 S.W.3d 360 (Ark. 2005), 189 S.W.3d 438 (Ark. 2004)

Also under Economic Credentialing and Medical staff

Outcome:     Very favorable

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
The AMA opposes the "economic credentialing" of physicians.  More importantly, the AMA supports 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 provided 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.  It broadly defined an indirect ownership or investment interest as including any unbroken chain of attributional relationships between the physician and the person or entity with the ownership or investment interests. 

A number of physicians, in apparent violation of the economic credentialing policy, sued to have it declared invalid.  The AMA and the Arkansas Medical Society on behalf of the Litigation Center intervened in the lawsuit as additional plaintiffs.  Following a two-week trial, the court ruled in favor of the plaintiffs, declaring the Baptist Health policy unconscionable and illegal and enjoining its enforcement.  The opinion stated: "The heart of this case is the patient-physician relationship.  The relationship is entitled to special protection."  Baptist Health appealed that ruling to the Arkansas Supreme Court.

On September 30, 2010, the Arkansas Supreme Court affirmed, finding that the hospital economic credentialing policy tortiously interfered with the physicians' existing and prospective business relationships.  It reversed on the finding of a violation of the Arkansas Deceptive Trade Practices Act, because, it held, there was no private right of action for injunctive and declaratory relief under that statute.

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 financially assisted the plaintiff physicians.

O'Byrne v. Santa Monica-UCLA Medical Center, 114 Cal.Rptr.2d 575 (Cal. Ct. App. 2001)

Also under Medical staff

Outcome:     Very unfavorable

Issue

The issue in this case was whether medical staff bylaws created a contractual relationship between the medical staff and the hospital at which the staff members practiced.

AMA interest

The AMA supports the enforceability of medical staff bylaws by medical staff members.

Case summary

Dr. O’Byrne sued Santa Monica-UCLA Medical Center, where he held medical staff privileges. He alleged breach of contract, breach of fiduciary duty and intentional interference with his practice of medicine.  After the trial court granted summary judgment in the hospital’s favor, Dr. O’Byrne appealed, arguing that triable issues of material fact existed on his three claims.

The California Court of Appeal ruled that the medical staff bylaws did not in and of themselves constitute a contract between a member of the medical staff and the hospital.  The court further held that a hospital’s governing body has a fiduciary duty to the hospital’s shareholders and/or the public but not to a physician on staff.  Finally, the court found no intentional interference with Dr. O’Byrne’s practice of his profession since the hospital had taken no action to prevent Dr. O’Byrne from practicing at any other hospital in the area. 

Litigation Center involvement

The Litigation Center joined in the California Medical Association’s request of the California Supreme Court to “depublish” the decision by the Court of Appeal, but that request was denied.

Radiation Therapy Oncology v. Providence Hospital, 906 So.2d 904 (Ala. S. Ct. 2005)

Also under Medical staff

Outcome:     Very unfavorable

Issue

The issue in this case was whether the medical staff bylaws of Providence Hospital in Mobile, Alabama constrained Providence Hospital from transferring its radiology equipment to a related entity, without compensation.  The transfer, which was motivated solely by financial considerations, was designed to "close" the radiology department to the three physicians who were plaintiffs in the lawsuit.

AMA interest

The AMA supports the enforceability of medical staff bylaws by medical staff members.

Case summary

Radiation Therapy Oncology was owned by the plaintiff physicians.  At all times, these physicians had staff privileges at Providence Hospital, where they were independent contractors.

The medical staff bylaws include the following provisions:

            Preamble

"These bylaws… create a mutually binding agreement between the medical staff and the board of directors [of Providence Hospital] which may not be unilaterally amended.”

            Section 5.1

  “The termination, granting, continuation or restriction of medical staff membership and privileges based on criteria unrelated to clinical qualifications, professional responsibilities or quality of care is prohibited, with the exception of statutory, regulatory, or judicial requirements, or other exceptions which may be defined in the medical staff bylaws.  When privileges are granted it also includes the right to exercise those privileges.”

            Section 7.7-1

"[The] action or recommendation [of the medical staff fair hearing panel] may be affirmed or denied by the board of directors provided that the board limits its consideration to criteria related to quality of care and does not consider criteria unrelated to the criteria considered by the fair hearing panel."

Beginning in 1997, Providence Hospital attempted to secure more control over the plaintiffs’ practice, but the plaintiffs refused to give up their independence.  In response, the hospital devised a scheme to deprive the plaintiffs of their ability to practice medicine at the hospital, notwithstanding that the motive for doing so was financial and unrelated to the criteria allowable under § 5.1.

The scheme, in essence, was that the hospital would convey all of its radiology equipment to Seton Medical Management, Inc., a company owned by the same company that owned Providence Hospital.  The conveyance would be without compensation to the hospital and would be a sham transaction.  The hospital would then refer all of its radiology patients to Seton Medical Management, which was adjacent to Providence Hospital.  The plaintiff physicians would retain their staff privileges at Providence Hospital, but without a radiology department these would be meaningless.

After learning of the contemplated conveyance, the plaintiff physicians demanded a hearing before a fair hearing panel of the medical staff to determine whether their privileges were being curtailed and whether the hospital was entitled to enter into such transaction under the medical staff bylaws.  The fair hearing panel decided in favor of the plaintiff physicians, and the hospital did not appeal that decision.  Nevertheless, the hospital proceeded with the transaction.

The plaintiffs then brought this lawsuit, alleging breach of the medical staff bylaws.  In defense, the hospital contended that the medical staff bylaws and the protections they afforded to staff were intended to cover claims involving professional competence, rather than business decisions.  The hospital further contended that the conveyance to Seton Medical Management was motivated by various business efficiencies and not by an attempt to deprive the plaintiff physicians of their staff privileges.

The trial court entered summary judgment for the defendants.  It held that the decision to "close" the radiology department was a business judgment, which fell outside the purview of the medical staff bylaws and therefore within the discretion of the hospital management.  It relied heavily on Mahan v. Avera St. Luke's, 621 N.W.2d 150 (S.D. 2001).  The plaintiffs appealed the summary judgment directly to the Alabama Supreme Court.

The Alabama Supreme Court affirmed, holding, as did the trial court, that the medical staff fair hearing panel was authorized to determine physicians' professional competence, but the present issue concerned a business judgment, which was outside the purview of the fair hearing panel.  The Court further held that the medical staff bylaws empowered the medical staff to offer recommendations only, while "the [hospital] board has the final authority on all staffing decisions."


Litigation Center involvement

The Litigation Center, through the AMA and the Medical Association of the State of Alabama, filed an amicus curiae brief to support the plaintiffs.  The American College of Radiology also joined that brief.

Alabama Supreme Court brief

Satilla Health Services, Inc. v. Bell, 633 S.E.2d 575 (Ga. Ct. App. 2006)

Also under Medical staff

Outcome:     Very favorable

Issue

The issue in these two comparison 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.

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 wanted the hospital to contribute toward 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 entire medical staff bylaws and the sentiments of the overwhelming majority of the medical staff.  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.

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.

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.

Georgia Court of Appeals brief of the active staff cardiologist injunction

Georgia Court of Appeals brief in the appeal of the affiliate staff cardiologist injunction

Windt v. Exeter Hospital, 810 A.2d. 53 (N.H. S.Ct. 2002)

Also under Medical staff

Outcome:     Unfavorable

Issues

The issues in this case were whether a medical staff could sue a hospital as an unincorporated association 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 the organized medical staff and physicians’ right to discharge their 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 served 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.

Ultimately, 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.

New Hampshire Supreme Court brief