Opinion ID: 1058767
Heading Depth: 3
Heading Rank: 3

Heading: Necessity of a Hearing

Text: If the Authority executes an exclusive provider contract with a competing group of radiologists, the defendants contend that they are entitled to a hearing under the medical staff bylaws because this exclusive contract would effectively terminate their privileges. This contention is without merit. Article XVI of the medical staff bylaws contains a fair hearing plan. Under the bylaws, only certain recommendations or actions, [2] if deemed adverse, [3] entitle a member of the medical staff to a hearing. For example, if deemed adverse, the reduction, suspension, or revocation of clinical privileges would entitle a physician to a hearing under the bylaws. According to the RFP, medical staff access to the Imaging Department would terminate when an exclusive contract for the Imaging Department's operation and administration is executed. Thus, if an exclusive provider contract is awarded to a group of physicians other than Putnam, the defendants' clinical privileges will necessarily be terminated. The defendants contend that this automatic loss of clinical privileges would be an adverse action under section 16.1-2 of the bylaws, and so they would be entitled to a hearing. We disagree. Section 14.1D of the bylaws plainly contemplates the Board entering into an exclusive provider contract. It provides that the medical staff's input regarding the closure of a department's staff is advisory only and that the Board retains the ultimate decision-making authority. The cardinal rule for interpretation of contracts is to ascertain the intention of the parties and to give effect to that intention . . . . Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc., 521 S.W.2d 578, 580 (Tenn.1975). All contractual provisions should be construed in harmony with each other, if possible, to promote consistency and to avoid repugnancy between the various provisions of a single contract. Guiliano, 995 S.W.2d at 95. Accordingly, we hold that the loss of clinical privileges resulting from the execution of an exclusive provider contract does not constitute the reduction, suspension, or revocation of clinical privileges for purposes of the fair hearing procedures mandated by the medical staff bylaws. This construction is consistent with the intent of the Hospital Authority Act. A hearing under the present circumstances would be futile because the Hospital Authority Act gives public hospitals the authority to make a business decision to close the staff of a hospital department by means of an exclusive provider contract. See, e.g., Tenet Health Ltd. v. Zamora, 13 S.W.3d 464, 471 (Tex.App.2000) (noting that if each and every decision that affected a physician's practice were deemed to `revoke' or `modify' staff privileges, a hospital could make precious few decisions without becoming mired in hearings); E. Tex. Med. Ctr. Cancer Inst. v. Anderson, 991 S.W.2d 55, 63 (Tex.App.1998) (stating that [t]he purpose of such a hearing could not be to override administrative decisions regarding the operation of [a hospital]). A hospital's business judgment, such as a decision to close the staff of a department, is due great deference. See, e.g., Armstrong v. Bd. of Dirs., 553 S.W.2d 77, 79 (Tenn.Ct.App.1976). Therefore, if the Authority executes an exclusive provider contract under the present circumstances, the defendants would not be entitled to a hearing on this matter. Lewisburg Community Hospital, Inc. v. Alfredson, 805 S.W.2d 756, 759 (Tenn.1991), does not demand a different result. In Alfredson , we concluded that a radiologist, Alfredson, was entitled to a hearing under the medical staff bylaws when his clinical privileges were significantly reduced due to the hospital entering into a new exclusive provider contract. Id. at 762. In addition to the medical staff bylaws, however, the contractual relationship between Alfredson and the hospital was defined by a separate written contract. There was a breach of contract in Alfredson because: 1) the separate written contract between the parties did not permit the hospital to reduce Alfredson's privileges without cause; and 2) a reduction in Alfredson's privileges for cause triggered a right to a hearing under the bylaws. Our conclusion that there was a breach of contract was based in part upon the removal of a provision in the parties' separate contract that would have automatically terminated Alfredson's clinical privileges if his exclusive provider contract was terminated without cause. We explained that [h]ad [the hospital] not made that business decision, Alfredson would have no claim for breach of contract. Id. at 759. By agreeing to remove the contractual provision permitting automatic termination of Alfredson's privileges, the hospital was agreeing to either continue his privileges after termination of his exclusive provider contract or to provide him with some type of process prior to the termination of his privileges. Because Alfredson's privileges could not be reduced without cause, the bylaws entitled him to a hearing on the question of cause. At a hearing, Alfredson could presumably show that there was, in fact, no cause to reduce his privileges. The contractual relationship between the parties in the present case does not preclude the Authority from closing the staff of a department for reasons unrelated to cause. Here, the Board has the express authority to enter into an exclusive provider contract. Thus, unlike Alfredson, the defendants in the present case have no issue to be heard. In summary, the bylaws' fair hearing provisions are inapplicable to the defendants in this case. Accordingly, there will be no breach of contract if the defendants are not afforded a hearing upon the closure of the Imaging Department's staff. Finally, the defendants contend that Tennessee Code Annotated section 68-11-227 governs the ability of the hospital to terminate medical staff privileges in this case. The defendants, however, failed to raise this argument in the courts below. As a general rule, questions not raised in the trial court will not be entertained on appeal. Lawrence v. Stanford, 655 S.W.2d 927, 929 (Tenn.1983); see also Chadwell v. Knox County, 980 S.W.2d 378, 384 (Tenn.Ct.App.1998) (refusing to consider a theory that was raised for the first time on appeal). Therefore, we decline to address whether Tennessee Code Annotated section 68-11-227 governs this case.