Opinion ID: 2570384
Heading Depth: 2
Heading Rank: 1

Heading: Did the District Court Err by Limiting the Scope of Its Review of the Hospital's Decision Denying Medical Staff Privileges to Dr. Miller?

Text: In its memorandum opinion denying Dr. Miller's motion for injunctive relief or mandamus, the district court stated that it views its authority to determine the parties' respective rights and duties as originating in contract. The district court relied upon the decision of the West Virginia Supreme Court of Appeals in Mahmoodian v. United Hospital Center, Inc., 185 W.Va. 59, 404 S.E.2d 750, 755 (1991), wherein it stated: Utilizing breach of contract principles, most courts explicitly addressing the issue presented here have held, and we hereby hold, that the decision of a private hospital to revoke, suspend, restrict or to refuse to renew the staff appointment or clinical privileges of a medical staff member is subject to limited judicial review to ensure that there was substantial compliance with the hospital's medical staff bylaws governing such a decision, as well as to ensure that the medical staff bylaws afford basic notice and fair hearing procedures, including an impartial tribunal. The district court concluded that the Bylaws constituted the contract between Dr. Miller and the Hospital. By the time of the hearing on the Hospital's motion for summary judgment, the parties both agreed that a contract was formed when Dr. Miller applied for privileges. In its findings of fact and conclusions of law entered in support of its grant of the Hospital's motion for involuntary dismissal, the district court stated, The Court holds a contract existed which required Saint Alphonsus to consider Dr. Miller's application in accordance with the Bylaws. The district court held that because every contract contains an implied covenant of good faith, it would examine the evidence to determine whether Dr. Miller had proven the existence of bad faith in the consideration of his application for privileges. The district court concluded that Dr. Miller has failed to prove, by a preponderance of the evidence, that any particular actor at any stage of the proceedings acted in bad faith, much less that any decision of any relevant committee was the product of bad faith. Dr. Miller alleges that the district court erred in finding that he had failed to prove bad faith. A trial court's findings of fact will not be set aside on appeal unless they are clearly erroneous. Bramwell v. South Rigby Canal Co., 136 Idaho 648, 39 P.3d 588 (2001); IDAHO R. CIV. P. 52(a). When deciding whether findings of fact are clearly erroneous, this Court does not substitute its view of the facts for that of the trial court. Id. It is the province of the trial court to weigh conflicting evidence and to judge the credibility of witnesses. Rowley v. Fuhrman, 133 Idaho 105, 982 P.2d 940 (1999). On appeal, this Court examines the record to see if challenged findings of fact are supported by substantial and competent evidence. Id. Evidence is regarded as substantial if a reasonable trier of fact would accept it and rely upon it in determining whether a disputed point of fact has been proven. Bramwell v. South Rigby Canal Co., 136 Idaho 648, 39 P.3d 588 (2001). As explained below, we do not agree that the Bylaws constituted a contract between Dr. Miller and the Hospital. Because the Hospital has not challenged that conclusion on appeal, however, we have reviewed the record to determine whether the district court's findings regarding good faith are supported by substantial and competent evidence. The district court's findings in this regard are not clearly erroneous. Dr. Miller argues that the district court erred in limiting the scope of its review of the Hospital's decision denying him medical staff privileges. He argues that the district court should not have limited its review to whether or not Dr. Miller had proven bad faith, but it should have treated this as any other action for breach of contract and made findings of fact upon every critical issue, including whether there was a sufficient basis for denying him privileges. The Bylaws provide a list of factors to consider when determining whether to grant staff privileges. They state: Each recommendation concerning the appointment or reappointment of an Applicant and the Clinical Privileges to be granted for the Applicant, and the determinations made with respect thereto, shall be based upon such Applicant's current competence and clinical judgment in the treatment of patients; his or her professional ethics; his or her education, training and experience; his or her participation in continuing education; his or her meeting of the qualifications for staff status and his or her anticipated ability in or history with respect to fulfilling of the responsibilities of staff status; his or her anticipated and/or historical use of the Hospital facilities; his or her discharge of obligations hereunder; his or her compliance with the Medical Staff Bylaws, Rules and Regulations and hospital and Board policies in this hospital and others where he or she has provided clinical services; his or her cooperation with other members, patients and hospital employees; his or her disruption, if any, of hospital operations; his or her physical health, mental health and emotional stability; and other matters bearing on his or her ability and willingness to contribute to high quality patient care practices in the Hospital including, without limitation, previously successful or currently pending challenges to any professional license or registration or any voluntary relinquishment of such professional license or registration and any voluntary or involuntary termination of Medical Staff privileges or any voluntary or involuntary limitation or reduction or loss of Clinical Privileges at this or another hospital. The basis for privileges determinations to be made in connection with appointments, reappointment, or otherwise shall be uniformly applied to all Applicants and shall include observed clinical performance and the documented results of quality assurance activities conducted at the Hospital or other health care facilities. Clinical Privileges shall also be based on pertinent information concerning clinical performance obtained from staff members, peers and other sources, especially other institutions and health care settings where the Applicant exercises or has exercised Clinical Privileges. This information shall be added to and maintained in the Hospital's file established for a staff member. According to Dr. Miller, under the contract between him and the Hospital, he was entitled to have his application for privileges judged according to the above criteria. He contends that in his breach of contract action, the district court was required to make findings of fact regarding how Dr. Miller met these criteria. This Court has never addressed the issue of what is the appropriate standard of judicial review, if any, applicable to the denial of staff privileges by a private hospital. [2] Courts around the country are divided on this issue. The positions range from no judicial review, Barrows v. Northwestern Mem. Hosp., 123 Ill.2d 49, 121 Ill.Dec. 244, 525 N.E.2d 50 (1988); to judicial review of whether the hospital followed the applicable procedures, Rosenberg v. Holy Redeemer Hosp., 351 Pa.Super. 399, 506 A.2d 408 (1986); to judicial review of the applicable procedures to ensure that they afford basic notice and fair hearing procedures, including an impartial tribunal, Mahmoodian v. United Hosp. Ctr. Inc., 185 W.Va. 59, 404 S.E.2d 750 (1991); to judicial review of whether a regulation giving rise to exclusion is arbitrary, capricious and unrelated to any legitimate aim of the hospital, Reiswig v. St. Joseph's Hosp. and Med. Ctr., 130 Ariz. 164, 634 P.2d 976 (Ct.App.1981); to judicial review of whether the denial is founded upon reasonable and sensible grounds and is supported by sufficient reliable evidence to justify the result, Garrow v. Elizabeth Gen. Hosp. and Dispensary, 79 N.J. 549, 401 A.2d 533 (1979). Courts have used various rationales in order to justify judicial intervention into the affairs of a private hospital. We believe, however, that the determination of the appropriate standard of judicial review, if any, must begin with the applicable law. The district court concluded, and the parties agreed, that the Bylaws constituted a contract between Dr. Miller and the Hospital. That conclusion was in error. The Hospital's Bylaws did not confer any contractual rights. We agree with the reasoning of the Georgia Court of Appeals in St. Mary's Hospital of Athens, Inc. v. Radiology Professional Corp., 205 Ga.App. 121, 421 S.E.2d 731, 736 (1992) (citations omitted), wherein the court stated: Our courts have held that because hospitals have the authority to establish and revise rules and regulations governing the appointment of physicians to the hospital staff, medical staff bylaws alone do not create any contractual right to continuation of staff privileges. Indeed, hospitals are entitled to change the staff bylaws or the terms of appointment even if that act results in the termination of a physician's staff privileges. Given that the bylaws themselves confer no contractual rights, we conclude that no cause of action lies against a hospital ex contractu based solely on an alleged breach of bylaw provisions. The Bylaws merely provided the procedures setting forth how the Hospital would process Dr. Miller's application for medical staff privileges. Dr. Miller's agreement in his application to abide by the Bylaws, and the Bylaws provision stating that by applying for appointment he agreed to be bound by them, did not create a contract between Dr. Miller and the Hospital. We see no need to expand contract law in order to provide a basis for some form of judicial review of applications for medical staff privileges. There are two provisions of Idaho law that relate to this issue. Idaho Code § 39-1395 provides, insofar as is relevant, as follows: Except as otherwise provided in this section, no provision or provisions of this section shall in any way change or modify the authority or power of the governing body of any hospital to make such rules, standards or qualifications for medical staff membership as they, in their discretion, may deem necessary or advisable, or to grant or refuse membership on a medical staff. An applicant for medical staff membership may not be denied membership solely on the ground that the applicant holds a license to practice podiatry issued by the Idaho state board of podiatry. The criteria utilized for granting medical staff membership shall be reasonable and shall not discriminate against podiatry. The process for considering applications for medical staff membership and privileges shall afford each applicant due process. All applications for medical staff membership shall be acted upon within one hundred twenty (120) days from the date the required information is submitted. The title to the legislation adopting § 39-1395 stated that its purpose was to provide standards for determining staff membership for hospitals. Ch. 134, 1992 Idaho Sess. Laws 421. The first paragraph of § 39-1395 recognizes the general rule that hospitals have the authority to make such rules, standards or qualifications for medical staff membership as they, in their discretion, may deem necessary or advisable. The statute limits the hospital's discretion in three areas, however, to prevent discrimination against podiatrists, to require that the process for considering applications afford each applicant due process, and to require that applications be acted upon within one-hundred-twenty days. The legislature has also given the Idaho Department of Health and Welfare authority to adopt rules, regulations, and standards for the licensing of hospitals. IDAHO CODE § 39-1303a (2002). Pursuant to that authority, the Department has adopted [3] IDAPA 16.03.14.200.01.d which provides: d. Medical Staff Appointments and Reappointments: i. A formal written procedure shall be established for appointment to the medical staff; ii. Medical staff appointments shall include an application for privileges, signature of applicant to abide by hospital bylaws, rules, and regulations, and delineation of privileges recommended by the medical staff. The same procedure shall apply to nonphysician practitioners who are granted clinical privileges. iii. The procedure for appointment and reappointment to the medical staff shall involve the administrator, medical staff, and the governing body. Reappointments shall be made at least biannually. iv. The governing body bylaws shall approve medical staff authority to evaluate the professional competence of applicants, appointments and reappointments, curtailment of privileges, and delineation of privileges; v. Applicants for appointment, reappointment or applicants denied to the medical staff privileges shall be notified in writing; vi. There shall be a formal appeal and hearing mechanism adopted by the governing body for medical staff applicants who are denied privileges, or whose privileges are reduced. Thus, Idaho Code § 39-1395 requires hospitals to adopt procedures for considering applications for medical staff membership and privileges that afford each applicant due process. IDAPA 16.03.14.200.01.d requires that those procedures be in writing; that the applicant must agree to abide by hospital bylaws, rules, and regulations; that the procedures involve the hospital administrator, medical staff, and governing body; that the medical staff must have the authority to evaluate applicants; that applicants who are denied privileges must be notified in writing; and that there must be a formal appeal and hearing mechanism for applicants who are denied privileges. Implicit in those mandates is the requirement that the hospital substantially follow whatever procedures it adopts for determining qualifications for medical staff appointment. It would be meaningless to require a hospital to adopt written procedures that afford due process to applicants for medical staff privileges unless the hospitals were also required to substantially comply with the procedures they adopt. Thus, the appropriate standard of judicial review in this case is limited to determining whether the procedures adopted by the Hospital afforded each applicant due process, whether the procedures included the requirements set forth in IDAPA 16.03.14.200.01.d, and whether the Hospital substantially followed its procedures when considering Dr. Miller's application for staff privileges. The district court did not err by failing to expand the scope of judicial review as asserted by Dr. Miller.