Alliance for Patient Safety

                            All that is necessary for the triumph of evil...
                                                                ... is for good men to do nothing.

                                                                                                   Edmund Burke

Retaliation Against Physicians - Medical Staff of Ventura Community Initial CMA Participation: August 2003 Memorial Hospital

Medical Staff of Ventura Community
Memorial Hospital (San Buenaventura)
vs. Ventura Community Memorial Hospital
(Medical Staff Self-Governance)

Issue: This case involves issues of medical staff self-governance and the appropriate relationship between medical staffs and hospital administration. Weighing in on behalf of physicians, in August 2003, AMA and CMA filed an amicus brief backing the medical staff of Community Memorial Hospital in Ventura in its legal fight with the hospital administration. The brief urges the court to recognize a medical staff’s legal right to operate as an organized and self-governing entity in the hospital, citing the need to ensure quality of care for patients.

The medical staff is suing the hospital administration for violating state laws requiring medical staff selfgovernance. The suit alleges that the administration usurped the medical staff’s credentialing, standard setting, disciplinary, and quality assurance functions; refuses to recognize duly elected medical staff officers; unilaterally amended the medical staff bylaws; improperly interfered with the medical staff’s efforts to review and update its bylaws; and illegally seized the medical staff dues fund totaling $250,000. The hospital is arguing that the medical staff is not a separate entity under the law. The organized medical staff, it says, is just another department within the hospital, and as such lacks standing to sue the hospital.

CMA’s brief, filed with the Superior Court in Ventura, discusses the many state and federal legal precedents that establish and reinforce a medical staff’s position as a separate legal entity, and how that status permits it to best assure high-quality patient care. Under California law, medical staffs are responsible for setting patient-care standards, establishing and enforcing medical staff membership standards, and ensuring that patients obtain quality care through continuous peer review and evaluation. The brief argues that “there is no question that, under California law, a hospital medical staff has standing to enforce its legal rights. Outcome: The trial court has r

uled that a hospital medical staff has standing to enforce its legal rights. In October 2003, the board of Community Memorial Hospital in Ventura asked for and accepted the resignation of the hospital’s executive director. In September, 2004, a settlement was reached between the medical staff and the hospital, resulting in dismissal of the lawsuit.. The settlement was very favorable to the medical staff, and included the following points:

  • The medical staff, hospital administration and board of trustees must comply with the provisions of the medical staff bylaws, including those providing for medical staff elections and leadership; the proper conduct of peer review, credentialing and privileging by the medical staff; and the general rights and responsibilities of the medical staff;

  • The hospital governing body may not unreasonably withhold approval of medical staff bylaw amendments adopted by the medical staff;

  • The medical staff bylaws may not be changed unilaterally by the hospital administration;

  • The medical staff dues fund of $250,000, which was confiscated by the hospital administration prior to the litigation, will be returned to the medical staff for its exclusive use;

  • The medical staff has the right to obtain its own independent legal counsel, even to take action against the hospital, paid for by its own dues and assessments;

  • Input from the medical staff will be sought prior to the creation, renewal or termination of an exclusive contract within the hospital;

  • A conflicts resolution process must be implemented to resolve disputes or controversies arising out of the settlement agreement;

  • The medical staff agrees not to become incorporated under IRS regulations as an entity separate from the hospital before two years from the date of the settlement agreement or before any material breach of the settlement agreement by the hospital, whichever occurs first;

  • The hospital will dramatically increase its funding to the medical staff budget to pay for leadership development, medical education, and other medical staff expenses including small stipends for administrative work required of medical staff leaders in assuring the quality of care;

  • External review will take place by an expert agreeable to both the medical staff and the hospital administration of the hospital’s Prostate Institute of America, and the procedures it employs involving freezing of the prostate in prostate cancer cases;

The settlement proposal also provides that the medical staff agrees to add to its medical staff bylaws provisions regarding disclosure of potential conflicts of interest by medical staff members, a “code of conduct” for medical staff members, and the scope of use of monies contributed to the medical staff fund by the hospital.

Arising from this case, CMA was also successful in passing SB 1325 (Kuehl, Stats. 2004, Ch. 669). This legislation codified six basic elements of medical staff self governance and provided the right of the medical staff to obtain a court order to stop any hospital interference with the self governance rights of the medical staff if other reasonable efforts to resolve the dispute have failed. The six minimum self governance rights include:

  1. Creating and amending medical staff bylaws. (Although all bylaw changes are subject to approval by the hospital governing body, the governing body cannot unreasonably withhold its approval.);

  2. Establishing and enforcing criteria for medical staff membership and privileges;

  3. Establishing and enforcing quality of care and utilization review standards, and overseeing other medical staff activities, such as medical records review and meetings of the medical staff and its committees;

  4. Selecting and removing medical staff officers;

  5. Collecting and spending medical staff dues; Hiring independent legal counsel, at the expense of the medical staff.