Hospital told to check bylaws on exclusive deals

A Georgia court found that while hospitals are entitled to offer exclusive contracts to specialty groups, applications for privileges are governed by medical staff bylaws.

By Amy Lynn Sorrel, AMNews staff. April 28, 2008.

Georgia hospitals cannot skirt protections afforded in medical staff bylaws to keep out physicians in favor of exclusive arrangements for certain specialty services, a state appeals court recently affirmed.

That applies whether doctors already have staff privileges or seek to apply for them, a unanimous court went on to say.

The Fourth Division of the Court of Appeals of Georgia put a stop to Satilla Regional Medical Center's efforts to prevent three cardiologists from applying for privileges because the hospital purported to have an exclusive relationship with another group for cardiology services.

"That does not mean ... that no exclusive agreement can ever be enforced," Judge J.D. Smith wrote in the March 7 opinion. "Nor does it upset the 'delicate balance' between hospital and physicians. It maintains the current balance between the power of the hospital to manage its 'administrative, operational, and managerial functions' and the physicians' privilege of practicing medicine and providing hospital care for their patients."

Judges emphasized that under Georgia case law, if hospitals want to deny physicians privileges to establish exclusive relationships, such provisions must be spelled out in staff bylaws or in contracts with individual physicians.

Doctors say the ruling is an affirmation of the medical staff's authority and is important, due to the growing popularity of exclusive contracts at hospitals across the country.

Hospitals are entitled to enter into exclusive agreements, which can benefit patients, said Donald Palmisano Jr., general counsel to the Medical Assn. of Georgia. The association filed a friend-of-the-court brief supporting one of the cardiologists.