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Medical Staff

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

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

Also under Hospitals

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 Hospitals

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.

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

Also under   Hospitals, 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.

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

Also under Economic credentialing and Hospitals

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.

Chadha v. Charlotte Hungerford Hospital, 829 A.2d 419 (Conn. S. Ct. 2003)

Also under Abusive litigation against physicians

Outcome:    Very unfavorable

Issues

The principal issue in this case was whether physicians who communicated with the Connecticut Department of Public Health about the professional competence of another physician were entitled to absolute immunity against a suit for defamation or were only entitled to immunity if they had acted without malice.

AMA interest

The AMA believes that physicians have an ethical obligation to report incompetent colleagues to appropriate authorities.

Case summary

The plaintiff, Mohinder P. Chadha, M.D., was a licensed psychiatrist and a member of the Charlotte Hungerford Hospital medical staff.  The Connecticut Medical Examining Board initiated a disciplinary action against his medical license. 

At the request of the Department of Public Health, four physicians submitted affidavits to the Department of Public Health expressing concerns about Dr. Chadha’s ability to practice medicine safely.  Two of these physicians were on the Charlotte Hungerford Hospital medical staff, and the other one had, pursuant to the hospital’s request, reviewed the medical records of some of Dr. Chadha’s patients.  The Medical Examining Board then suspended Dr. Chadha’s medical license.

Dr. Chadha sued the four physicians who had submitted affidavits against him as well as Charlotte Hungerford Hospital.  He alleged that the physicians had defamed him by maliciously submitting false affidavits. 

The defendants moved for summary judgment, claiming that their statements had been made in "a quasi-judicial proceeding" and they therefore had absolute immunity against a suit for defamation under Connecticut common law.  The trial court granted the motion in part, but it also denied it in part, holding that the defendant physicians did not have absolute immunity.  The physicians then appealed the partial denial of their motion to the Appellate Court of Connecticut.

The Appellate Court noted that the physicians would have been entitled to absolute immunity under Connecticut common law.  However, it held, the Connecticut peer review statute had modified the common law and now they could obtain immunity only if they were able to show that their statements to the Department of Public Health had been submitted in good faith and with the reasonable belief that they were true.  Such a showing would require a trial, and therefore the Appellate Court affirmed the trial court's partial denial of the motion for summary judgment.  The case was then appealed to the Connecticut Supreme Court.

The Connecticut Supreme Court affirmed, holding that the Connecticut peer review statute modified the common law right of absolute immunity.  Thus, the defendant physicians were only entitled to qualified immunity.

Litigation Center involvement

The Litigation Center submitted an amicus brief supporting the defendants.  The brief argued that the peer review statute had not been intended to diminish the physicians’ common law immunity rights.

Connecticut Supreme Court brief

City of Cookeville v. Humphrey, 126 S.W.3d 897 (Tenn. S. Ct. 2004)

Also under Hospitals

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,  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.

Supreme Court of Tennessee brief

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

Also under Due process and Hospitals

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 enforceability of the medical staff bylaws.

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

Also under Hospitals

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 Hospitals

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.

El-Attar v. Hollywood Presbyterian Medical Center, 56 Cal. 4th 976 (Cal. 2013)

Also under Peer review

Outcome:    Unfavorable

Issue

The issue in this case was whether, under California law, a hospital governing body, rather than a Medical Executive Committee (MEC) could appoint a Judicial Review Committee (JRC) to adjudicate a denial of medical staff privileges.

AMA interest

The AMA supports fairness in peer review proceedings, medical staff self-governance, and strict compliance with medical staff bylaws.

Case summary

Osamah A. El-Attar, MD is board certified in internal medicine and cardiology and has been a member of the medical staff at Hollywood Presbyterian Medical Center since 1975.  Beginning in about 2000, he began to criticize certain hospital practices regarding patient care.  In 2002, he, along with other members of the medical staff, signed a petition to remove the hospital’s chief executive officer (CEO).  Also that year, the hospital governing board reviewed the quality of care that Dr. El-Attar provided to his patients, and it hired two independent medical review groups to assist in this process.  The reviewers found that Dr. El-Attar had engaged in disruptive behavior and his medical care in several respects fell below accepted professional standards.

Shortly before his medical staff privileges were due to expire, Dr. El-Attar submitted a periodic application to the MEC for reappointment.  The MEC recommended that he be reappointed, but the hospital governing board ordered that the application be denied and it directed the CEO to suspend his privileges.  The CEO then requested the MEC to ratify the board’s decision to suspend Dr. El-Attar, but the MEC refused to do so.  The CEO notified Dr. El-Attar that his clinical privileges were summarily terminated, but the MEC terminated the suspension.  Shortly thereafter, the hospital denied Dr. El-Attar’s application for reappointment.  Dr. El-Attar requested a judicial peer review of the denial of his privileges.

The MEC met and granted Dr. El-Attar’s request for a judicial peer review.  However, it also resolved to “leave … the actions relating to the Judicial Review Hearing procedures to the [hospital] Governing Board.”  The hospital submitted a list of six charges of misconduct and substandard practice against Dr. El-Attar.  It also selected a hearing officer and six members of the medical staff to serve as the JRC.

Following approximately 30 evidentiary hearing sessions, the JRC made specific findings on all six of the charges against Dr. El-Attar.  It found three of the charges substantiated by a preponderance of the evidence, concluding –

“Under all circumstances of this case … the … decision of the Governing Board to deny Dr. El-Attar’s application for reappointment to the Medical Staff of this Hospital was reasonable and warranted, but the Committee notes that if it had been the initial decision maker, it would have pursued an intermediate resolution.”

Based on this determination, the JRC ratified the denial of Dr. El-Attar’s reappointment to the medical staff.

Dr. El-Attar appealed the JRC decision on several grounds, including the MEC’s delegation to the hospital of the power to select the members of the JRC.  The trial court denied his appeal and entered judgment for the hospital.  He then appealed to the California Court of Appeal.

The Court of Appeal found that Dr. El-Attar had been deprived of a fair hearing under common law, the medical staff bylaws, and California statutes.  The hospital’s medical staff bylaws provided that the MEC was to appoint the JRC and the hearing officer, and there was no provision for the MEC’s delegating this appointment power to the hospital.  Thus, the court held that the MEC lacked authority to delegate its appointment power to the hospital.  It did not consider the various claims of error other than the procedure used to appoint the JRC.  The Court of Appeal reversed the trial court judgment and remanded with new instructions to issue an order against the hospital and grant Dr. El-Attar a new peer review hearing.

The hospital appealed to the California Supreme Court.  In its order granting review, the Supreme Court identified the following issues:

“(1) Could the executive committee of the hospital medical staff delegate to the hospital governing board its authority to select the hearing officer and the physician members of the peer review panel to hear a physician’s challenge to the governing board’s denial of his application for reappointment to the hospital medical staff? (2) If the hospital by-laws did not permit this procedure, was the peer review panel selected by the governing board “improperly constituted,” requiring a new peer review procedure conducted by a new hearing panel selected by the executive committee?”

On June 6, 2013, the California Supreme Court reversed the Court of Appeal decision.  It held that the medical staff bylaws were violated in connection with the selection of the peer review panel and of the hearing officer.  Nevertheless, the violation was not sufficiently material as to deprive Dr. El-Attar of a fair peer review hearing.  The case was remanded for consideration of Dr. El-Attar's other bases for claiming that he had been unjustly deprived of his medical staff privileges.

Litigation Center involvement

The Litigation Center, along with the California Medical Association filed an amicus brief in the California Supreme Court.  The brief argued that when the medical staff bylaws expressly vest the MEC with authority to appoint the JRC, only the MEC should be allowed to make such appointment.  Further, the brief contended that only a MEC-appointed JRC can ensure the physician receives a fair hearing, free from potential conflicts of interest and bias.

California Supreme Court brief

Fabrizio v. Provena United Samaritans, 857 N.E.2d 670 (Ill. S.Ct. 2006)

Outcome:     Very unfavorable

Issue

The issue in this case was whether a hospital could require the members of its medical staff to carry medical malpractice insurance with limits greater than those approved by the Medical Executive Committee (MEC), acting under the authority of the medical staff bylaws.

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 medical staff bylaws at Provena United Samaritans Medical Center required that the members of the medical staff maintain professional liability insurance in at least “the minimum amounts as …. may be determined by …. the Medical Executive Committee and … the Board.” The MEC, with Board approval, required minimum limits of $200,000 per occurrence and $600,000 aggregate for multiple occurrences. However, the Board, without MEC approval, sought to increase those limits to $1,000,000 per occurrence and $3,000,000 aggregate for multiple occurrences.

Four of the physicians on the medical staff sued to prevent the hospital from requiring them to increase their malpractice insurance limits. The trial court enjoined the hospital from requiring such an increase, and the hospital appealed.

By a split decision, the Illinois Appellate Court reversed the trial court ruling.  The order held, in essence, that medical staff bylaws are unenforceable by physicians except in matters concerning the granting, reduction, or revocation of staff privileges based on issues of clinical competence.  The medical staff then asked the Illinois Supreme Court to review this case, but the Supreme Court denied that request.

Litigation Center involvement

The Litigation Center, along with the Illinois State Medical Society, filed an amicus curiae brief to support the trial court injunction, which would have prevented the hospital from requiring the members of the medical staff to increase the limits of their malpractice insurance coverage.

Illinois Appellate Court brief

Fahlen v. Sutter Central Valley Hospitals, 2014 Cal. LEXIS 1262 (Cal. 2014)

Also under Employment, SLAPP laws, Termination of employment

Outcome:    Very favorable

Issue

The issue in this case was whether physicians who lose their medical staff privileges for criticizing patient care at a hospital can invoke the California Whistleblower Protection Act, Cal. Health and Safety Code § 1278.5 (WPA), to restore their lost privileges and obtain concomitant monetary damages.

AMA interest

The AMA believes physicians should advocate for their patients’ health care.

Case summary

Mark Fahlen, MD, was employed at a Sutter Central Valley Hospital. On several occasions, he became embroiled with the hospital nurses regarding the proper care to be provided to his patients. The hospital indicated that it wished to terminate his employment and his medical staff privileges, and the matter was referred to a peer review panel. The peer review panel found that, although Dr. Fahlen had not acted properly in every regard, termination of his employment and medical staff privileges would be unwarranted. Despite this finding, the hospital terminated his employment and refused to renew his privileges.

Dr. Fahlen sued the hospital under the WPA, asserting that his termination had been in retaliation for his complaints about nursing incompetence and substandard care at the hospital. He sought monetary damages as well as a restoration of his medical staff privileges. His WPA suit was in contrast to the usual California procedure for challenging medical staff terminations, which would have been through a common law petition for  mandamus.

Based on the California Anti-SLAPP (“Strategic Lawsuit Against Public Participation”) statute, Cal. Code Civ. Proc. § 425.16, the hospital moved to dismiss Dr. Fahlen’s lawsuit. The Anti-SLAPP law was enacted to prevent litigation abuse, which would otherwise chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances (as provided in the Federal First Amendment and in comparable provisions of the state constitution). The trial court denied the Anti-SLAPP motion to dismiss.

The hospital appealed the denial of the Anti-SLAPP motion to the California Court of Appeal. In its decision, the Court of Appeal observed that one requirement of an Anti-SLAPP motion is the plaintiff’s inability to demonstrate that the complaint is supported by prima facie facts sufficient to sustain a favorable judgment if those facts are credited at the actual trial. In this regard, the issue was whether Dr. Fahlen could demonstrate a prima facie case, inasmuch as he had not sought a writ of mandamus to challenge the denial of his medical staff privileges. According to the hospital, Dr. Fahlen could bring a WPA suit only if he had first exhausted his rights through a mandamus action. However, the Court of Appeal rejected the hospital’s argument. Based on its reading of the WPA, it held the trial court had correctly denied the hospital’s Anti-SLAPP motion and Dr. Fahlen’s lawsuit could proceed.

The hospital appealed to the California Supreme Court, which affirmed the Court of Appeal decision.  It held that such exhaustion of Dr. Fahlen's rights through a mandamus action is not required for physician whistleblowers.

Litigation Center involvement

The Litigation Center will be joining the California Medical Association in an amicus brief to the California Supreme Court in support of Dr. Fahlen.  Also, the CMA attorney spoke on behalf of the Litigation Center at oral argument.

California Supreme Court brief

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

Also under Economic credentialing and Hospitals

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.

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

Also under Due process and Hospitals

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 Hospitals

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)

Also under Hospitals

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.

Lo v. Provena Covenant Hospital, 796 N.E.2d 607 (Ill. App. Ct. 2003)

Outcome:     Unfavorable

Issue

The issue in this case was whether a hospital could summarily suspend a physician's medical staff privileges without a finding or recommendation by the medical staff, if the hospital had evidence that the physician's mortality rate was above the national average.

AMA interest

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

Case summary

For many years, Dr. Lo had been chairman of the cardiovascular surgery unit at Provena Covenant Hospital, in Champaign, Illinois.  Following a review of patient statistics, however, the hospital became concerned about its cardiovascular surgery program.  The mortality rate of Dr. Lo’s patients for open heart surgery was approximately 5% during the period in question, and the mortality rate for the entire department was approximately 7%.  The national mortality rate was approximately 2.5%.  Because of the apparent disparity, the hospital hired a team of consultants to review the hospital’s cardiovascular surgery program and report their findings.  In its report, the consultants identified problems with Dr. Lo’s cardiovascular surgeries.  The hospital notified Dr. Lo that “the report raised grave concerns about quality, far more concerns than any of us had anticipated.”

Dr. Lo disputed the validity and significance of the statistics and denied any problem with his cardiovascular surgeries.  After several months of dispute, Dr. Lo consented to perform cardiovascular surgery under the supervision of a cardiac surgeon affiliated with Carle Clinic, a nearby facility.  He thereafter performed some cardiovascular surgeries under supervision.  Later, he withdrew his consent to supervision, because he thought the hospital was imposing “inappropriate and stringent requirements” on the supervising surgeon.  Ultimately, Dr. Lo sued the hospital for restricting his staff privileges.

About two months later, Dr. Lo notified the hospital that he had scheduled an open heart surgery and would perform it without supervision.  Alarmed by that announcement, the hospital’s president and chief executive officer sought a recommendation from the medical staff leadership that Dr. Lo’s clinical privileges summarily suspended.  This was the first time the hospital administration had informed the medical staff that it questioned Dr. Lo's competence.  The chief of staff, who was then in the process of leaving town, told the hospital president that, because of this other commitment, he would be unable to investigate Dr. Lo's case.  He advised the hospital president to contact the secretary-treasurer of the medical staff for assistance.  When she did, the secretary-treasurer asked the hospital for the data pertaining to Dr. Lo and advised the hospital president that he would need legal advice to react appropriately.  The hospital president, however, never gave the data to the secretary-treasurer.

After the hospital president failed to secure the desired results from the medical staff leadership, the executive committee of the hospital’s board of directors held a special meeting.  They found that the medical staff was not cooperating with them and that there would be an imminent danger to patients if Dr. Lo were to perform an unsupervised open heart surgery.  The committee authorized the hospital president to summarily suspend Dr. Lo’s clinical privileges to perform open heart surgery if he continued to reject supervision, and the hospital president did so.

Dr. Lo sought a temporary restraining order against the hospital, contending that the summary suspension violated the medical staff bylaws.  The trial court agreed and entered an order temporarily restraining the hospital from suspending all or any portion of Dr. Lo’s clinical privileges, until such time as the hospital complied with the medical staff bylaws.  The hospital appealed.

The Illinois Appellate Court reversed the temporary restraining order, finding that the hospital had complied with the medical staff bylaws.  It held that the hospital administration was responsible for the maintenance of standards of professional work in the hospital, and its responsibilities included oversight of the medical staff.  Quoting from a Joint Commission on Accreditation of Healthcare Organizations standard, the court concluded that the hospital administration, and not the medical staff, has "the [ultimate] authority to render … renewal or modification of clinical privileges decisions."

The court noted that summary suspensions must result from a “genuine and imminent” danger to patients.  Otherwise, the summary suspension would be an arbitrary and capricious act by the hospital administration and thus contrary to the bylaws.  This, however, was “an anomalous case in which the medical staff failed to act one way or the other.”

Dr. Lo asked the Illinois Supreme Court to hear his case, but it declined to do so. The case was then remanded to the trial court.  Based on the decision of the Court of Appeals, the hospital moved to dismiss Dr. Lo's case, and the trial court granted this motion.

Litigation Center involvement

The Litigation Center, along with the Illinois State Medical Society, asked the Illinois Supreme Court for leave to file an amicus curiae brief supporting Dr. Lo's petition for leave to appeal.  However, the Supreme Court denied this request.

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

Also under Economic credentialing and Hospitals

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.  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 Hospitals

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 California brief.

Court decision on capacity and standing to sue

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

Also under Due process, Hospitals, Peer review

Outcome:    Unfavorable

Issue
The issue in this case was whether a hospital was required to provide a timely peer review hearing to a physician whose privileges it suspends.

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, based on a peer review proceeding. After Dr. Mileikowsky requested a hearing, ETRMC sent Dr. Mileikowsky a formal notice of charges, listing complaints against him, dating 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 “imminent danger” to patient health or safety. Even then, the hospital must hold a hearing on the grounds for the suspension 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 did, indeed, lack 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 Hospitals

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 Hospitals

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 Hospitals

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

Also under Hospitals

Outcome:    Very favorable

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.

Georgia Court of Appeal brief of the active staff cardiologist injunction.

Georgia Court of Appeal brief of the affiliate staff cardiologist injunction.

Thomas v. Henry Ford Macomb Hospital Corp., 2010 Mich. App. LEXIS 1811 (Mich. Ct. App. 2010)

Outcome:     Very unfavorable

Issue

The issue in this case was whether two critical care physicians could enforce a provision in a hospital's medical staff bylaws that would prohibit the hospital from entering into an exclusive contract with a physician group to "close" its intensive care facility.

AMA interest

The AMA believes that medical staff bylaws should be enforced as a contract between the members of the organized medical staff and the hospital. 

Case summary

Henry Ford Hospital, with the approval of the Medical Executive Committee (MEC) of its medical staff, entered into an exclusive contract to staff its intensive care unit (ICU). Under this contract, the ICU was to be closed to any physicians outside the group with the exclusive contract. The medical staff bylaws did not provide for such exclusive contracts.

When the physicians learned of the planned closing of the ICU, they circulated a petition signed by more than 10 percent of the medical staff to schedule a full meeting of the medical staff to discuss and possibly disapprove the closing.

Under the medical staff bylaws, the MEC was required to hold a meeting of the full medical staff when more than 10 percent of the membership demands such a meeting in writing.  However, the MEC refused to call the meeting.  Therefore, the physicians sued the hospital, asserting that it was aware of the wrongful refusal of the MEC to call a meeting of the full medical staff, that without such meeting the exclusive contract was unauthorized.  They further asserted that the medical staff bylaws established a contract between the individual members of the medical staff and the hospital and that the hospital was in breach of this contract.

The trial court ruled that the physicians could not enforce the medical staff bylaws against the hospital, and the physicians appealed to the Michigan Court of Appeals.

The Michigan Court of Appeals affirmed, but for a different reason than the trial court had stated.  The Court of Appeals noted that the hospital had changed its credentialing standard for the ICU.  Under the new standard, only physicians board-certified in critical care would be allowed to staff the ICU.  The physicians who were protesting the closure of the ICU were not board-certified in critical care, but they had not challenged the hospital's upgrade of its credentialing requirement.  Thus, the court held, even if the hospital were wrong to close its ICU, these physicians could not have been granted the relief they sought - ICU privileges.  The Court of Appeals did not reach the breach of contract issue.

Litigation Center involvement

The Michigan State Medical Society filed an amicus curiae brief to support the plaintiff-physicians and the Litigation Center contributed toward the cost of the brief.

Michigan Court of Appeals brief

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

Also under Hospitals

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.