American Academy of Emergency Medicine

Texas Legal Case Challenges Surgeons' Staff Privileges

by Kevin Wacasey, MD FAAEM

In February of this year the Texas 13th District Court of Appeals in Corpus Christi overturned a lower court's decision on a case that has significant ramifications for all of medicine. In Tenet Health Ltd./Brownsville Medical Center vs. Jose Zamora & Carlos Chavez, the appellate judge ruled that two cardiovascular surgeons, Drs. Zamora and Chavez, had not had their medical staff privileges at Brownsville Medical Center restricted without due process.

In their original trial Drs. Zamora and Chavez charged that their rights to due process under the hospital's medical staff bylaws had been breached. Having practiced at the hospital for a number of years, they had apparently accrued an operative mortality rate that was significantly higher than the national average. In early 1999 the hospital administrator became aware of this and, rather than dealing with the potential problem through methods prescribed by peer review and due process measures, hired a consultant firm to investigate the situation.

The consultant firm reported its findings and recommended that the responsibility and control for all cardiovascular surgery be placed under one exclusive provider, and that only this provider, the provider's employees, partners, or independent contractors under contract with the provider, could perform cardiovascular surgery services at the hospital. With the backing of the hospital's Board of Directors, the administrator offered an exclusive contract with cardiovascular surgeon, Dr. Louis Elkins from Corpus Christi.

The administrator's next act was to deliver these recommendations to Zamora and Chavez, as well as notice that the Board had decided to grant an "exclusive contract" to Dr. Elkins, who had previously never been associated with the hospital. The letter assured Zamora and Chavez that their clinical privileges had not been suspended, reduced, or terminated, and that these privileges would remain intact but subject to the terms of the exclusive contract after its implementation, less than a month away. The notice then pointedly warned that the physicians were expected to maintain their current level of cardiovascular surgical services and that abandonment of patients or failure to conform to accepted standards of care would be referred for corrective action.

In their suit filed against the hospital seeking damages and injunctive relief, the surgeons claimed that, by entering into the exclusive contract agreement with Dr. Elkins, the hospital had denied them procedural due process and breached the contract, created by the bylaws, entitling them to a hearing before their privileges could be restricted. The trial judge ruled in favor of Drs. Zamora and Chavez, and granted them an injunction against Brownsville Medical Center, permitting them to continue their practices at the hospital.

In reversing the lower court's decision, the Appellate judge made several contradictory observations: in regards to Zamora and Chavez's contention that their privileges had been reduced, the court maintained that both doctors still enjoyed their privileges at the hospital and that they could still operate, albeit only under Elkins' authority. The court correctly recognized the fact that privileges do not guarantee employment, but ruled that since Zamora and Chavez's privileges were neither terminated nor reduced, due process was "irrelevant."

While acknowledging that "revoking or limiting a physician's hospital privileges has far different implications than entering into an exclusive contract which has the effect of excluding a physician from practicing a type of procedure," the court also ruled that "Brownsville Medical Center was exercising its right to formulate the policies and procedures governing its medical staff in a competent manner when it elected to implement the exclusive provider program," and held that "entering an exclusive contract such as the one in this case is a valid exercise of a hospital's administrative discretion." The Court then agreed with the hospital 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."

When Zamora and Chavez insisted that the hospital's alliance with Elkins "was not to further efficient hospital administration, but rather was to exclude" themselves from practicing cardiovascular surgery, the Appellate Judge turned to the Texas Supreme Court for a perspective on this point: "Improper motives cannot transform lawful activities into actionable torts. Whatever a man has a legal right to do, he may do with impunity, regardless of motive, and if in exercising his legal right in a legal way damage results to another, no cause of action arises against him because of a bad motive in exercising the right."

By refusing to accept the fact that Zamora and Chavez's privileges had been altered without due process, the Appellate Court voided the relevance of the statute which was the basis for the surgeons whole case.

Section 241.101c of the Texas Health & Safety Code states:

"The process for considering applications for medical staff membership and privileges or the renewal, modification, or revocation of medical staff membership and privileges must afford each physician, podiatrist, and dentist procedural due process."

The case was appealed to the Texas Supreme Court, but has recently been settled favorably for Drs. Zamora and Chavez, according to their attorney Jan Thurman. For years hospital-based physicians, especially emergency physicians working for contract holders, have routinely fallen victim to similar tactics designed to circumvent established procedure. Thurman stated that this case may be an ominous harbinger of things to come and should be a wake-up call to those doctors who rely on hospital privileges for a significant portion of their practice - especially obstetricians, oncologists, and all surgical sub-specialties.

Just as significant for employed physicians is the Appellate Court's interpretation of the Texas Supreme Court's opinion. Texas is a "right-to-work" state, and the ability to maliciously act with impunity in pursuing legally acceptable goals has seemingly stacked the cards against practicing physicians in favor of their employers, contract holders, and hospitals. The fact that the legal principle of wrongful termination in Texas is very difficult to prove has contributed greatly to the tenuous appointment status of the states' emergency physicians.

As all too many hospital-based physicians are aware, it is not hard to rid a practice of a troublesome doctor. They are simply taken off the schedule by whomever makes it, and as noted above privileges do not equal employment. Thus physicians may remain on staff at a hospital for years, facing decisions about attending staff meetings and paying dues without profiting from the relationship by being allowed to practice there. Currently under these circumstances one has little legal recourse indeed.

All of medicine should band together to oppose the corporate and administrative control that is encroaching and threatens every aspect of our practice. One of the first steps must be the strict adherence to policy regarding the protection and preservation of physician relationships within healthcare delivery systems. In the balancing act between patient rights and public safety vs. procedure and due process, hospitals clearly have a delicate wire to walk on. However, circumvention of established rules is not an available alternative, and actions taken in the ostensible mission of bettering medical care in order to achieve financial, administrative, or other goals is tantamount to the unlicensed practice of medicine. The policing of physicians should be performed in an objective, disciplined method in order to ensure that quality medical care is preserved.

Editors Note: The text of the Zamora v. Brownsville Medical Center Case can be found at www.taem.org.