Physicians prevail in complex suit against hospital board
- The Minnesota Supreme Court has ruled that the doctors who sued their hospital's board of directors have the standing to do so and that medical staff bylaws are "an enforceable contract between members of a medical staff and a hospital." The lawsuit is the result of alleged breaches by the board of the provider's own medical by-laws, according to a story in MedPage Today.
- The 3-year-long case, which wound its way through the district courts—finally reaching the Minnesota Supreme Court last year—pitted the Avera Marshall Regional Medical Center's board against the medical staff. At Avera Marshall, like at most hospitals, the medical staff was charged with physician credentialing, peer review and quality assurance. Per standard rules, a two-thirds majority vote was required to change the medical bylaws, but in early 2012, the hospital administration autonomously made changes, leading two doctors to file the lawsuit.
- After suffering defeats in earlier court rulings—despite having the support of The American Medical Association, American Academy of Family Physicians and others—the plaintiffs were granted a victory with the state Supreme Court's decision.
While on the surface this is a simple case of overreach in hospital governance of medical staff, there's a prickly political background here that may abrogate the hospital's culpability. The tension that sparked this suit was between the two groups of physicians that staff Avera Marshall—physicians employed by the hospital's medical group, and Affiliated Community Medical Center physicians, who staff clinics in southwestern Minnesota. Staff was split 50-50 between the two groups and political wrangling for dominance has been ongoing. In 2010, ACMC physicians claimed that the hospital was steering ER patients towards its own doctors, a period during which ACMC held the majority on the medical committees. When ACMC tried to discuss issues relevant to the pending litigation into meetings, the hospital objected and ACMC attempted to hold meetings off-site. The hospital refused to recognize these meetings and it wasn't long before credentialing stalled.
Other physicians called on the hospital to adjust its bylaws to break the deadlock, and the hospital board acted in what was arguably the best interest of the hospital. This is the meat of the lawsuit, which claims the changes were invalid absent a two-thirds approval by the existing medical staff. In addition to adjusting the bylaws without medical staff input, the plaintiffs alleged that hospital administration appointed physicians without medical staff input, interfered with internal medical staff operations (and the medical staff executive committee), disciplined a physician without following peer review standards and interfered with the operations and members of the medical staff quality improvement committee.
"Our position has always been that a hospital must be allowed to govern itself, particularly in the critical areas of patient safety and care," Avera Marshall said in a statement following the decision. "We believe that maintaining such a clear line of authority is consistent with the law."
The hospital's attorney went on to say that the hospital had been "hijacked" by the plaintiffs.
So what's next? The Supreme Court did not answer the core debate of the lawsuit: Does Avera Marshall have the right to modify bylaws in the absence of a two-thirds majority? While Supreme Court decisions can't be appealed, when the case goes back to the district court the judge could conceivably still award the hospital board ultimate decision-making authority over medical staff bylaws.
This would be pretty extreme, however. Given the complex consequences of patient care decision-making, there is a reason why the medical staff is in charge of issues like peer review, credentialing and quality assurance. It's also why the by-laws that govern how those tasks are executed require discussion, debate, and a vote of concerned professionals in a care-based matrix.
Stay tuned. Even though this was a relatively small case in a small town at an even smaller (25-bed) hospital, the lesson is larger than the dispute. Being a Minnesota case, it's not likely that it will set any precedent outside of the state, but it is a fascinating case study in hospital governance, especially in states where medical staff is considered an unincorporated association that may sue a hospital.
- MedPage Today When Docs Sue Their Own Hospital