Illinois court hears hospital's appeal of staff bylaws ruling

The lawsuit is one of a number of cases across the nation in recent years that have threatened physicians' independence from hospital boards.

By Amy Lynn Sorrel — Posted Jan. 16, 2006

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An Illinois appellate court in January is hearing arguments in a lawsuit that could threaten medical staffs' right to self-governance, which doctors say is the very foundation for ensuring the quality of patient care.

A lower court has already ruled in favor of a group of Danville, Ill., doctors, saying that their medical staff bylaws are contractually binding. The court said that Provena United Samaritans Medical Center violated the bylaws when it, without getting medical staff approval, tried to increase the amount of medical liability insurance doctors had to carry in order to keep their privileges at the hospital.

But hospital administrators are challenging that decision, arguing that they have the right to set policy as they see fit. They argue that Illinois law only protects doctors when a hospital tries to interfere in a physician's medical judgment.

"It is a basic common-sense principle that the hospital board should be able to set liability requirements," said attorney Marcos Reilly, who represents Provena United Samaritans Medical Center.

But doctors say that if the appellate court reverses the lower court ruling and sides with the hospital, "medical staff bylaws would be reduced to meaningless verbiage," according to a friend-of-the-court brief the American Medical Association/State Medical Societies Litigation Center, the Illinois State Medical Society and several Illinois county medical societies filed with the court.

"It's important to protect the professional autonomy of medical staffs," said Craig Backs, MD, Illinois State Medical Society president. "If bylaws can be changed or ignored, then medical staffs have little or no input in the quality of care at hospitals."

Whether they are dealing with discipline, privileges, or liability, said Thomas Pliura, MD, attorney for the Danville, Ill., physicians, if hospital boards can unilaterally ignore provisions, or mandate new requirements, "then you may as well not even have any bylaws."

Liability requirements spark suit

The lawsuit, Fabrizio v. Provena United Samaritans Medical Center, stems from a dispute between Provena administrators and physicians who have privileges there. Doctors say their medical staff bylaws require them to carry medical liability insurance limits of $200,000 per incident and $600,000 aggregate annually. But the hospital says the doctors need to carry limits of $1 million per incident and $3 million annually due to a change in hospital policy.

Although hospital administrators say they informed the medical staff of the new requirements, "none of these discussions ever ripened to the point of an amendment to the bylaws," Vermillion County trial Judge James Borbely wrote.

The hospital didn't get the proper consent from the medical executive committee, the court said, and it did not give the medical staff 180 days notice of the amendment, as the bylaws require.

Although many doctors already carried the higher insurance limits, some would face having privileges suspended or removed by the hospital board if they did not comply with the new policy. Other doctors fear not being able to afford to stay in practice if they had to pay for the more expensive, higher-limit policies.

As the case heads to the Fourth District Appellate Court in Illinois, doctors and attorneys say many states have upheld the contractual nature of medical bylaws, "which strengthens our position," said AMA President-elect, William G. Plested III, MD.

A California case, Ventura County Memorial Hospital Medical Staff v. Hospital Board of Directors, paved the way by prompting state lawmakers to pass a bill that recognizes and protects the self-governance rights of medical staffs there. The law took effect in January 2005.

In court, the Ventura hospital administration argued that the medical staff did not have any rights independent of hospital policy, including going to the courts for a resolution. But the judge ruled that the medical staff could sue, and the case ended in a favorable settlement for the doctors.

Physicians say these cases are just one symptom of a more serious problem in which hospitals are increasingly asserting their authority as a way to express their displeasure with having to go through the process of approving changes with the medical staff.

Dr. Plested said the AMA got involved in the Illinois case through the friend-of-the-court brief because of recurrent problems between medical staffs and hospitals. He said doctors are increasingly up against hospitals trying to amend bylaws unilaterally.

"The bylaws are doctors' bill of rights," Dr. Plested said. "There are straightforward procedures for amending them, and if there are areas of disagreement, the way to handle it is to sit down and try to come to [some] kind of understanding."

With a growing number of instances of hospitals challenging medical staff autonomy, doctors and attorneys say medical staffs can learn to protect themselves by standing firm and knowing their bylaws.

While doctors may often feel they are subject to the whims of hospital boards, Dr. Backs said they should understand there is an appropriate process for resolving issues.

"Physicians should realize they are standing on solid ground," Dr. Backs said. Emphasizing the mutual responsibility of hospital boards and medical staffs, he said, they "should use appropriate methods to deal with issues."

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Case at a glance

Joseph Fabrizio, MD, Charanjit S. Rakalla, MD, Mutiah Thangavellu, MD, and Bumyong Lee, MD, v. Provena United Samaritans Medical Center

Venue: Appellate Court of Illinois, Fourth District
At issue:Whether medical staff bylaws are a binding contract to which hospital administrators must adhere. A lower court said the contract is binding.
Impact: If the appellate court overturns the decision, physicians say medical staff bylaws will become a meaningless document and doctors will have little say in patient care. Hospitals argue they have the right to set policy because they bear the fiduciary responsibility of patient care.

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