Minnesota ruling could put medical staff rights at risk

A column analyzing the impact of recent court decisions on physicians

By — Posted May 21, 2012.

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It was no secret that by the winter of 2011, the relationship between medical staff and the hospital board at Avera Marshall Regional Medical Center had become strained, said Steven T. Meister, MD, chief of the medical staff.

The Marshall, Minn., critical care hospital and its medical staff disagreed on how executive meetings should be conducted and how peer review committee members should be chosen. However, doctors were still shocked when the hospital introduced new bylaws in early 2012 that would impact patient care — without the input of medical staff, Dr. Meister said.

The changes “basically neuter the medical staff as far as being decision-makers,” said Dr. Meister, a family physician. “Bylaws are there to facilitate quality care. Physicians are the only ones that are uniquely qualified to judge what is quality medical care.”

The dispute has led to a heated legal challenge that calls into question whether bylaws constitute a contract and whether medical staffs have the right to govern themselves. Experts say a ruling for Avera could restrict doctors’ independence and lead to more hospitals changing bylaws without warning. Physician organizations, including the American Medical Association, are concerned that the case also could impact patient safety at hospitals.

“This is an important case,” said a legal brief written jointly by the Litigation Center for the American Medical Association and the State Medical Societies and the Minnesota Medical Assn. “At issue are fundamental aspects of the relationship between medical staffs and the hospitals in which they are privileged. A self-governing medical staff is a necessary ingredient of optimum patient care in hospitals. The ultimate goal of medical staff bylaws is to foster an environment where physicians have the freedom to practice medicine in an environment that puts the quality of patient safety at the forefront.”

The Avera medical staff, which includes about 30 doctors, sued the hospital in January in Minnesota State District Court, 5th Judicial District. The physicians alleged that the medical center violated current bylaws when it repealed the rules and adopted new bylaws. The hospital failed to follow the process for amending rules outlined by the current bylaws, the doctors said, thus breaching its contract.

The new bylaws strip physicians of “nearly all rights and responsibilities” and give Avera absolute power in controlling processes that require medical staff direction, the complaint said. Such bylaws say hospital administrators will now control the medical staff executive committee and decide who should serve on peer review committees. A separate policy provides hospital executives the authority to approve when to induce some pregnant patients, doctors said.

The doctors requested a restraining order against the new bylaws, which the court denied April 30.

Avera asked the court to dismiss the lawsuit. Because the medical staff is part of the hospital, the plaintiffs have no grounds to sue, Avera said.

Bylaws are not a contract, said David R. Crosby, an attorney for Avera. The medical staff cannot prevent Avera from making decisions that are best for the hospital, he said. Crosby contradicted claims that the hospital adopted the bylaws without doctors’ input. The medical center asked for feedback from the medical staff after the rules initially were drafted and took doctors’ comments into consideration when issuing the final regulations, he said.

“Under Minnesota law, the board has the right and the responsibility to manage itself and operate how it thinks is best for its patients,” Crosby said. “The changes that the hospital made were clearly for that purpose. The doctors are important, but their role is to provide an advisory function in assisting the management team.”

The hospital board has the right to recommend changes to the bylaws, not impose changes, argued Kathy Kimmel, an attorney for the doctors.

“The changes the hospital made takes away the rights of the medical staff to self-govern themselves and to elect their own leaders,” she said. “It essentially eviscerates the medical staff’s authority.”

In declining to enjoin the new bylaws, the court said the plaintiffs had not proved that the rules would cause irreparable harm. Before ruling, the court declined to accept the Litigation Center’s friend-of-the-court brief in support of doctors. The brief was not necessary at this time, the judge said.

The bylaws went into effect May 1. At this article’s deadline, the court had not ruled on whether to dismiss the lawsuit. A hearing in the case is set for June.

National medical staff standards

Self-governance has been a fundamental part of medical staff standards for decades, said Mark Chassin, MD, MPP, MPH, an internist and president of the Joint Commission. The commission accredits nearly 20,000 health care organizations in the U.S.

“Medical staff has the responsibility of specific and major roles in overseeing the way in which quality and safety is carried out in hospitals,” Dr. Chassin said, speaking in general about the issue. “Their expertise [includes] peer review decisions and deciding on safety protocols and how physicians are credentialed. How do you decide whether a gastroenterologist can do a liver biopsy? That’s up to the medical staff.”

In March 2011, the Joint Commission revised its standards for hospital medical staffs, further emphasizing medical staffs’ self-governance and the importance of collaboration with hospital leaders.

The standards say the “self-governing organized medical staff provides oversight of the quality of care, treatment and services delivered by practitioners who are credentialed and privileged through the medical staff process.” The guidelines state that neither the medical staff nor the governing body may “unilaterally amend the medical staff bylaws.”

AMA policy supports self-governing, autonomous medical staffs that have the power to elect medical staff and appoint committees. The policy indicates that credentialing for medical staff privileges should be done primarily by the medical staff, with hospital input oversight.

The vast majority of hospitals have productive and collaborative relationships with their medical staffs, Dr. Chassin said. Most hospitals accredited with the Joint Commission did not have to change their practices after the revised standards because they already had such rules in place, he said.

Avera voluntarily withdrew its Joint Commission accreditation in January, about a week after the doctors’ lawsuit was filed, according to commission records.

Avera’s attorney, Crosby, said the termination was related to the hospital dysfunction caused by the medical staff. Specifically, he said turmoil among the medical staff was leading to executive meetings not being conducted consistently with accreditation standards. The medical staff also was using the Joint Commission as another forum in which to file complaints against the hospital, he said.

The doctors suing Avera, however, said the hospital withdrew its accreditation because its new bylaws no longer met industry standards.

Avera believes its standards are in line with other critical care hospitals, and it may reinitiate its Joint Commission accreditation at a later date, Crosby said. The medical center is still accredited with the state of Minnesota, allowing it to continue operation.

Ruling could have broad impact

The Avera case could have widespread effects in other jurisdictions, medical and legal experts said.

Other states’ rulings have been mixed as to whether medical staffs are independent of hospitals and can enforce their bylaws as contracts, including conflicting decisions in South Dakota and New Hampshire.

In the South Dakota case, judges ruled that a medical staff is an unincorporated association that can enter into a contract with a hospital, the bylaws of which are enforceable. In New Hampshire, the court said a medical staff is part of the hospital and not its own entity. The court did not answer whether bylaws are a contract.

A strong ruling for or against the Minnesota doctors will be used to persuade courts in future cases, said Kimmel, an attorney for the physicians.

“On a fundamental level, if medical staff bylaws are set forth and the hospital can change those rules when they want to, the physicians really have no [security],” she said. “They can’t rely on the rules as they understood them to be when they applied for privileges at that hospital.”

The ruling will set a precedent on whether medical staff bylaws can be amended or repealed unilaterally by a hospital, said Karolyn Stirewalt, MMA policy counsel. “If the court rules in favor of the hospital, the decision could significantly reduce the authority granted to physician medical staff under their medical staff bylaws.”

Dr. Meister said patient care ultimately would suffer if hospitals are allowed to uproot bylaws and make unfettered decisions about medical care.

“When you look at health care changes, this is a small cog in a huge wheel, but it’s a vital cog,” he said. “If they can do this here, they can do it anywhere.”

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