Court rules hospital not bound by bylaws

Illinois physicians say an appellate court ruling will expose them to the whims of hospital boards and ultimately threaten their say in patient care issues if it is allowed to stand.

The Illinois Fourth District Appellate Court, in a 2-1 decision in May, ruled that under Illinois law, medical staff bylaws are only contractually binding when it comes to granting or denying staff privileges. In other circumstances, the judges said, hospital policy takes precedence because courts are "not equipped" to review the nitty-gritty details of hospital and medical staff rules and regulations.

"To delve into the rule-making history of hospital bylaws on an issue such as malpractice insurance requirements is beyond the scope of this court's limited review," Judge Sue Myerscough wrote for the majority.

The ruling comes after Provena United Samaritans Medical Center last year challenged a trial court decision that said the hospital violated the medical staff bylaws when it imposed higher insurance limits on staff doctors without getting proper consent from the medical staff. A group of physicians, some of them struggling to pay the high insurance premiums in Illinois, sued the hospital saying they should be allowed to carry the lower limits of insurance because the medical staff never approved the hospital's decision to raise the limits.

As the first case in Illinois to question the contractual nature of medical staff bylaws beyond privilege disputes, doctors say the ruling could set a dangerous precedent for eviscerating medical staffs' independence.

The bylaws are "one of the few things that physicians have within a hospital institution that they can use to govern their practice and where there is a great deal of input," said Richard King, general counsel of the Illinois State Medical Society, which filed a friend-of-the-court brief in the case, with the American Medical Association/State Medical Societies Litigation Center.

Doctors fear the court's interpretation will render medical staff bylaws meaningless if they are not recognized as a valid contract as a whole.

"The court has suggested that the hospital can pretty much do what it wants and ignore the bylaws as long as it doesn't result in a restriction or removal of the medical staff privileges," said Thomas J. Pliura, MD, an emergency physician and the attorney representing the Danville, Ill., doctors who sued. Dr. Pliura said the doctors plan to appeal the ruling to the Illinois Supreme Court.

Hospital administrators, though, say the ruling is a victory, preserving their right to set and adapt policies as necessary. They also said it reinforces the fact that Illinois law only protects doctors when privilege procedures are violated.

"[The bylaws] are statements of intent and the way things are supposed to be done, but not a contract per se," said Marcos Reilly, the attorney who represents Provena. The hospital board and medical staff are "an organization; membership changes, circumstances change," like the liability requirements, he said.

At the heart of the physician-hospital dispute is whether Provena staff doctors have to carry liability insurance with limits of $200,000 per incident and $600,000 aggregate annually, or $1 million per incident and $3 million annually.

Court records show that hospital administrators changed policy requirements to the higher limit in 1993.The hospital adopted those bylaws with the lower limits in 2003, but the medical staff bylaws were never amended to reflect the change. Many doctors already carried the higher limits, but those who did not faced losing their privileges.

Despite a memo from the hospital informing medical staff of the new requirements, "none of these discussions ever ripened to the point of an amendment," to the medical staff bylaws, so they could not be enforced, Vermillion County trial Judge James Borbely wrote last year.

But the appellate court reversed that ruling, saying that Illinois case law has only recognized medical staff bylaws as a contract in the context of staff privileges.

Whether they are "enforceable in their entirety" concerning other rules and regulations outlined, would be a question for the high court if it takes the case.

The decision deals a double blow, Dr. Pliura said.

It threatens to drive some doctors out of practice by requiring them to carry a more expensive insurance policy and quashes their say in other patient care issues, he said.

Though uncertain what the state Supreme Court will do, Dr. Pliura points to the dissenting opinion in the appellate decision. In the dissent, Judge Thomas R. Appleton said the court was "properly called upon" to determine whether the hospital board had the power to impose the higher insurance limits, and that the board should have sought to change the bylaws.

As battles between hospitals and medical staffs become increasingly common throughout the country, Dr. Pliura said, "At some point we need to clearly set out what is or isn't the law."