Doctors fight for enforcement of staff bylaws

An Alabama hospital says its board of directors retains final authority on business decisions.

By Damon Adams — Posted Jan. 19, 2004

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The Supreme Court of Alabama will determine if a hospital violated medical staff bylaws by transferring a cancer program and radiation oncology equipment to a medical practice affiliated with the hospital.

Radiation Therapy Oncology sued Providence Hospital in Mobile, Ala., after the hospital in 2001 transferred its cancer program to Seton Medical Management, which also is named in the suit.

Radiation Therapy Oncology's physicians were on staff at Providence and had used the hospital's equipment. But they said they lost access to the equipment after the change to Seton and are unable to practice radiation oncology at the hospital, according to court records.

The physicians claim that the hospital's actions breached medical staff bylaws. Providence responded that the staff bylaws do not limit its board of directors' power to make business decisions.

In August, Mobile County (Ala). Circuit Judge Robert Kendall ruled in the hospital's favor.

"This court should not and will not interfere in the internal policies of a private, nonprofit hospital corporation nor in the making of a valid business decision by its board of directors," Kendall wrote in his decision.

Radiation Therapy Oncology appealed to the Supreme Court of Alabama, which could rule on the case this summer, attorneys said.

"If Judge Kendall's rationale is correct, it renders many of the protections in the medical staff bylaws meaningless, because you can't enforce them," said Steven Nicholas, the lawyer for Radiation Therapy Oncology.

The Radiation Oncology physicians said they were told in 2000 that Seton was taking over radiation oncology services at the hospital and that they would lose access to facilities and equipment, according to court documents.

A medical executive committee made up of doctors at Providence rejected the hospital's plan, saying it violated bylaws and was not in the best interest of the staff, the physicians' suit said.

The physicians requested a hearing before a panel of their peers, and the panel rejected the hospital's proposal, records show.

Providence went ahead with its plan, a decision that the oncology group's suit claims violated medical staff bylaws.

"The transaction was a sham, a subterfuge," Nicholas said.

In court records, Providence Hospital said it had transferred the cancer department to Seton in 2001 to create an integrated, multispecialty oncology center. The hospital also said its board of directors has ultimate authority in making such business decisions.

Neither the hospital nor its attorney would comment on the case.

In November 2003, a friend-of-the-court brief was filed in support of Radiation Therapy Oncology by the American Medical Association, the Medical Assn. of the State of Alabama and the American College of Radiology.

"If hospitals are allowed to breach medical staff bylaws under the guise of making a financial decision, then the legal force of the medical staff bylaws will be substantially eviscerated," the brief said.

Hospitals and medical staffs have been at odds elsewhere in the nation as hospitals tighten budgets and compete with physician-owned facilities for patients.

Physicians at a Ventura, Calif., hospital sued after the hospital adopted policies that prohibited doctors with financial stakes in other entities from holding hospital medical staff leadership positions.

And last year, New Hampshire's Supreme Court ruled that medical staffs in that state don't have the legal standing to sue a hospital or its trustees.

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Case at a glance

Venue: Supreme Court of Alabama
At issue: Whether a hospital violated medical staff bylaws by transferring a cancer program and radiation oncology equipment to an affiliated practice.
Potential impact: Physicians and medical groups say the legal clout of medical staff bylaws is in jeopardy. The hospital says its board of directors has ultimate authority in making business decisions.

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