Minnesota's highest court has ruled that hospital "medical staff" meet the statutory criteria to sue and be sued at hospitals where physicians have privileges and that medical staff bylaws are an enforceable contract between the medical staff and the hospital.
The New Year got off to a good start for physicians with the Minnesota Supreme Court ruling that strengthens the autonomy of hospital medical staffs.
In a 5-2 opinion issued on Dec. 31, the Gopher State's highest court overturned a state appeals court and said that hospital medical staffs "composed of two or more physicians who associate and act together for the purpose of ensuring proper patient care at the hospital under the common name 'Medical Staff'" meet the statutory criteria to sue and be sued at hospitals where physicians have privileges.
Along with that, the high court ruled that medical staff bylaws are an enforceable contract between the medical staff and the hospital.
The ruling marks the latest turn in a three-year running battle between Avera Marshall Medical Center, in Marshall, MN, and its medical staff, which saw its bylaws unilaterally amended by the board of directors after Avera acquired the hospital in 2009.
Writing in dissent, Justice G. Barry Anderson said that "at its heart, this case is about who has ultimate control of Avera Marshall Regional Medical Center—Avera Marshall's Medical Staff or Avera Marshall's board of directors. As a matter of contract law, and under the terms of Avera Marshall's corporate bylaws and the medical staff bylaws, the answer to that question is Avera Marshall's board of directors."
Anderson went on to express concerns that the majority's opinion "will encourage conflict between medical staffs and a hospital's board of directors. Ultimately, in my view, a hospital's board of directors must be allowed to amend medical staff bylaws when it has expressly reserved ultimate authority over the medical staff and determines that doing so is in the best interest of the hospital and patient care."
The case was remanded back to a state district court.
A call to Avera Marshall Medical Center was not immediately returned.
The Minnesota Medical Association, which filed an amicus brief on behalf of the Avera Marshall medical staff, had argued that the medical staff bylaws were "a binding contract that protects the medical staff's role in facilitating the quality of patient care which, traditionally, has been a key function of a hospital medical staff."
MMA President Donald Jacobs, MD, said the ruling marks a huge victory for physician autonomy and patient safety.
"An independent, autonomous medical staff serves a critical role in facilitating and maintaining quality patient care in a hospital setting and should have a strong, collaborative voice in the decision-making process regarding that care," Jacobs said in prepared remarks.
Those remarks were echoed by American Medical Association Robert M. Wah, MD, who called the ruling "an important court victory in support of medical staff autonomy and the enforceability of medical staff bylaws. The court ruling reaffirms that medical staff bylaws are a binding contract that help protect the rights, duties and responsibilities of the medical staff to uphold the quality of patient care."
Little Effect on Daily Operations
There is debate on whether or not this ruling will have any effect beyond Minnesota. The MMA said the ruling "has broad implications that may be felt across the nation. The decision reaffirms medical staff autonomy and the enforceability of medical staff bylaws. Decisions in similar cases in other states have been mixed. But this strong ruling for Minnesota physicians may be used to persuade courts in future cases."
However, Minnesota Hospital Association General Counsel Ben Peltier says the ruling won't have much effect on day-to-day operations of medical staffs "for the vast majority of hospitals in Minnesota" and elsewhere.
"There are some potential concerns related to liability that comes with the fact that a medical staff is an unincorporated association and thus has the capacity to sue and be sued under Minnesota law," Peltier told me. "That has some long-term potential impact on risk and liability for all healthcare providers that practice in a hospital."
The Minnesota Supreme Court ruling cites Minnesota state law, which defines the terms of unincorporated associations. In order for the ruling to affect other states, Peltier says, "they would have to have a statute that was similar and potentially a supreme court that came to the same conclusion about a similar statute. I don't know if that portion of it is going to be nationally significant."
"There are some states that have already identified the medical staff bylaws as a binding contract. I have not seen others that have identified the medical staff as a separate legal entity or an unincorporated association that may sue or be sued as subject to law suits. That is something that hospitals around the country may take note of and need to potentially address."
Peltier says that the celebratory comments of the AMA and the MMA fail to note that the ruling affirms the right of medical staffs to sue – and be sued.
"The outcome of this case gave them a little more than they might have bargained for with respect to liability," he says. "In theory, a plaintiff's attorney could file suit against an entire medical staff for the negligence of a single member of that medical staff and individual members of the medical staff could potentially be liable for the damages awarded against another member of the medical staff."
Culture Clash
"Practically speaking, will a court allow a plaintiff's attorney to bring a claim against multiple members of a medical staff when only one was involved? Will a court enforce a judgment against an entire medical staff if it finds that one individual on the medical staff is unable to fulfill a damage award that has been levied against them?"
Although both sides in the suit repeatedly cite "patient safety" as their primary concern, the origins of the case are pedestrian. This is a turf war between established physicians at a hospital and the new owners, as Justice Anderson noted, a classic clash of cultures.
We see a lot of this with all of the mergers, acquisitions and other affiliations ongoing in healthcare. In fact, with so many egos at play it's nearly unavoidable and maybe even healthy for the overall process if some sort of clear parameters are set for physician autonomy. Clear lines of responsibility bring accountability, and that will improve patient safety.
As the Minnesota Supreme Court made clear, however, with autonomy comes liability.
John Commins is the news editor for HealthLeaders.