A hospital that "substantially complies" with its bylaws does satisfy its procedural obligation to a physician when reviewing an application for permanent staff status, according to a recent opinion handed down by the Tennessee Court of Appeals.
In Gekas v. Seton Corp., a hospital denied a physician a position on its permanent medical staff because of the physician's rude and insulting conduct towards nurses and doctors. Under the hospital's bylaws, the ultimate loss of his staff membership and hospital privileges entitled the doctor to a hearing before the hospital's Medical Executive committee.
After a lengthy hearing, the committee affirmed its decision to deny the doctor active staff member status. The hospital adopted the committee's recommendation and the doctor sued, claiming that the hospital did not comply with its bylaws' hearing procedures. His case was dismissed and the physician appealed to the Tennessee Court of Appeals arguing that the hospital denied him a fair hearing as guaranteed in its bylaws. However, the Court of Appeals, in a matter of first impression in Tennessee, concluded that the hospital's minor deviations from the bylaws did not make the hearing unfair. Since the hospital was in "substantial compliance" with the rules and procedures set out in the bylaws, the doctor had received the appropriate and fair review to which he was entitled.
In judging whether the hospital had "substantially complied," the Court looked to whether the physician was afforded all of the rights provided in the medical staff bylaws, and whether he received a full and fair hearing before his peers. The Court rejected the doctor's argument that the hearing committee impermissibly considered past informal complaints that did not result in discipline, since the bylaws allowed the hospital to consider all relevant information. The Court also found that even though one of the committee members was absent from a day of the hearings, the absence was due to a patient emergency, the committee member read the day's transcript before voting, and the physician did not object to the member's absence during the hearing. Because the "substantial compliance" standard was met, the Court declined to second guess the hospital's decision.
This decision has several implications for hospitals in Tennessee.
First, the Court reaffirmed that in Tennessee, medical staff bylaws may constitute a contract between the hospital and a physician. Accordingly, hospitals may be liable for breach of contract if they don't adhere to the procedures set out in the bylaws.
Second, where a hospital "substantially complies" with its bylaws (i.e. provides adequate notice and a fair hearing), it does not "breach" the bylaws merely because minor procedural issues arose during the proceedings. It is important to keep in mind, however, that "substantial compliance" is a fact intensive determination. Hospitals need to make a good faith effort to meet the letter and sprit of their bylaws during the credentialing process. If a procedural deviation is necessary, it may be prudent practice to make an appropriate record explaining the reason and purpose of the deviation in the event a challenge is later raised and to be able to show substantial compliance with the rules.
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