_____________________________________________________________
_____________________________________________________________
Frank E. Simmerman, Jr., Esq.
Simmerman Law Office, PLLC
Clarksburg, West Virginia
Attorney for Dr. Kessel
C. Michael Bee, Esq.
Susan B. Tucker, Esq.
Hill, Peterson, Carper, Bee & Deitzler, PLLC
Charleston, West Virginia
Attorneys for Drs. Vaglienti and Huber
Gordon H. Copland, Esq.
Steptoe & Johnson, PLLC
Clarksburg, West Virginia
Attorney for Monongalia General Hospital
Thomas A. Heywood, Esq.
Bowles Rice McDavid Graff & Love, PLLC
Attorney for Amicus Curiae,
West Virginia Hospital Association
CHIEF JUSTICE MAYNARD delivered the Opinion of the Court.
JUSTICE STARCHER concurs and reserves the right to file a concurring opinion.
2. “The doing by one of that which he is already legally bound to do is not a valuable consideration for a promise made to him, since it gives to the promisor nothing more than that to which the latter is already entitled.” Syllabus Point 2, Thomas v. Mott, 74 W.Va. 493, 82 S.E. 325 (1914).
3. Generally, fair hearing and due process provisions in a hospital's medical staff bylaws are not implicated unless there are allegations against a physician bearing on professional competency and conduct.
4. Absent express language to the contrary, a hospital's medical staff bylaws do not constitute a contract between the hospital and its staff physicians. However, where it is alleged that a physician is guilty of professional incompetence or misconduct, the hospital is bound by the fair hearing provisions contained in the medical staff bylaws.
5. “The Due Process Clause, Article III, Section 10 of the West Virginia
Constitution, requires procedural safeguards against State action which affects a liberty or
property interest.” Syllabus Point 1, Waite v. Civil Service Commission, 161 W.Va. 154, 241
S.E.2d 164 (1977).
6. “A 'property interest' includes not only the traditional notions of real and personal property, but also extends to those benefits to which an individual may be deemed to have a legitimate claim of entitlement under existing rules or understandings.” Syllabus Point 3, Waite v. Civil Service Commission, 161 W.Va. 154, 241 S.E.2d 164 (1977).
7. “To have a property interest, an individual must demonstrate more than an abstract need or desire for it. He must instead have a legitimate claim of entitlement to it under state or federal law. Additionally, the protected property interest is present only when the individual has a reasonable expectation of entitlement deriving from the independent source.” Syllabus Point 6, State ex rel. Anstey v. Davis, 203 W.Va. 538, 509 S.E.2d 579 (1998).
8. “A regularly licensed physician and surgeon who has conformed to the law and to all reasonable rules and regulations of a public hospital has a right to become a member of the staff thereof and, in the event such right is denied, he shall be afforded an opportunity to be heard and to offer his defense to any charges upon which such denial is based.” Syllabus Point 1, State ex rel. Bronaugh v. City of Parkersburg, 148 W.Va. 568, 136 S.E.2d 783 (1964).
9. A physician or surgeon is entitled to practice in the public hospitals of the State so long as he or she stays within the law and conforms to all the reasonable rules and regulations of the hospitals. He or she cannot be deprived of that privilege by rules, regulations, or acts of the hospital's governing authorities that are unreasonable, arbitrary, capricious, or discriminatory.
10. “The governing authorities of a private hospital, in the exercise of their discretion, have the absolute right to exclude licensed physicians from its medical staff and such action is not subject to judicial review.” Syllabus Point 4, State ex rel. Sams v. Ohio Valley General Hospital Association, 149 W.Va. 229, 140 S.E.2d 457 (1965).
11. Quasi-public hospitals have the same duty as public hospitals to admit regularly licensed physicians to membership on their medical staffs and are subject to the same level of judicial review of rules, regulations, or acts which have the effect of depriving staff physicians from practicing in their facilities.
12. A public or quasi-public hospital may not enter into exclusive contracts
with medical service providers that have the effect of completely excluding other physicians
who have staff privileges at the hospital from the use of the hospital's medical facilities.
Maynard, Chief Justice:
We are called upon to answer a certified question from the Circuit Court of Monongalia County. In the exercise of our discretion, we reformulate the certified question as follows: (See footnote 1)
May a public or quasi-public hospital enter
into an exclusive contract with a medical service
provider that has the effect of completely
excluding physicians who have staff privileges at
the hospital from the use of the hospital's medical
facilities.
(See footnote 2)
For the reasons that follow, we answer the question in the negative.
(See footnote 3)
The plaintiffs below, Dr. James W. Kessel, Dr. Richard M. Vaglienti, and Dr.
Stanford J. Huber, are anesthesiologists who have been granted staff privileges
(See footnote 4)
at defendant
Monongalia General Hospital (hereafter “Monongalia General” or “the hospital”), a 207-bed
acute facility which provides surgical services to patients. The plaintiffs were employees and
shareholders of Monongalia Anesthesia Associates, Inc. (hereafter “MAA”) which originally
entered into a contract with Monongalia General in 1975 for the provision of anesthesia
services. This contract extended indefinitely, with a termination clause upon sufficient
advance notice.
In 1987, Monongalia General entered into an exclusive contract with another
medical service provider to provide cardiac anesthesia services. At that time, MAA remained
the primary provider of all other types of anesthesia services. In 1989, contract negotiations
between the hospital and MAA failed to produce an extension of the contract, apparently due
in part to the hospital's desire to add a contractual provision that tied staff privileges of MAA
anesthesiologists to the exclusive contract. As a result, MAA continued to provide the
primary non-cardiac anesthesia services for the hospital for approximately the next decade
without a contract.
In 1999, Monongalia General entered into an agreement with Dr. Mark Bennett
and Bennett Anesthesia Consultants, PLLC, defendants below, to exclusively provide all
anesthesia services for orthopedic patients at the hospital. Thereafter, the hospital sought a
provider for all, save cardiac and orthopedic, general anesthesia services.
At that point, MAA asserted that such actions constituted a reduction in
privileges previously granted to its physicians for reasons unrelated to clinical competency
in violation of the medical staff bylaws. A hearing was held before the Fair Hearing Panel
as provided in the bylaws.
(See footnote 5)
The Panel recommended, inter alia, approval of contracting for
anesthesiology services, since the privileges of MAA doctors had not been compromised.
MAA appealed the recommendations to the Hospital Board of Directors which essentially
accepted the recommendations.
Thereafter, the hospital entered into a contract with Professional Anesthesia
Services, Inc., which granted it the exclusive right to provide all other general anesthesia
services at the hospital, with the exception of cardiac and orthopedic surgery patients. As
a result, even though the plaintiffs maintain privileges at the hospital, they no longer are
permitted to provide operative and orthopedic anesthesia in the hospital.
(See footnote 6)
The plaintiffs subsequently sued the Hospital, Dr. Bennett, Bennett Anesthesia
Consultants, and Professional Anesthesia Services alleging tortious interference with
business relationships; due process violation/failure to provide a fair hearing; restraint of
trade; breach of contract; and breach of covenants of good faith and fair dealing. The
hospital sought summary judgment on every count but the alleged antitrust violation. The
circuit court, finding the matter was controlled by a question not yet addressed by this Court,
certified the question, set forth above, as dispositive of the hospital's motion for summary
judgment.
In addressing this issue, “we shall assume arguendo, that [Monongalia
General] is a public agency for our purposes here and analyze the case before us from that
point of view.” Orteza v. Monongalia County General Hosp., 173 W.Va. 461, 466, 318
S.E.2d 40, 45 (1984) (footnote omitted). The Fourteenth Amendment of the Federal
Constitution provides, in part, that the State may not “deprive any person of life, liberty, or
property, without due process of law[.]” “The Due Process Clause, Article III, Section 10
of the West Virginia Constitution, requires procedural safeguards against State action which
affects a liberty or property interest.” Syllabus Point 1, Waite v. Civil Service Commission,
161 W.Va. 154, 241 S.E.2d 164 (1977). “The threshold question in any claim of due process
deprivation is isolation of the property interest . . . that the plaintiff alleges was at stake.”
Orteza, 173 W.Va. at 466-67, 318 S.E.2d at 45. This Court has held that “[a] 'property
interest' includes not only the traditional notions of real and personal property, but also
extends to those benefits to which an individual may be deemed to have a legitimate claim
of entitlement under existing rules or understandings.” Syllabus Point 3, Waite, supra.
However,
To have a property interest, an individual
must demonstrate more than an abstract need or
desire for it. He must instead have a legitimate
claim of entitlement to it under state or federal
law. Additionally, the protected property interest
is present only when the individual has a
reasonable expectation of entitlement deriving
from the independent source.
Syllabus Point 6, State ex rel. Anstey v. Davis, 203 W.Va. 538, 509 S.E.2d 579 (1998). We
also have recognized that “a 'property' interest protected by due process must derive from
a private contract or state law.[.] Major v. DeFrench, 169 W.Va. 241, 251, 286 S.E.2d 688,
695 (1982) (citations omitted). However, a property interest “must be more than a unilateral
expectation of continued employment.” Id.
(See footnote 10)
Having determined herein that the medical staff bylaws do not constitute a
contract between a hospital and its staff physicians, it follows that the plaintiffs' alleged
property right cannot derive from a private contract. Also, we are not aware of any state or
federal law that grants to hospital staff physicians a property right in their staff privileges.
Instead, the plaintiffs appear to reason that because they have practiced at the hospital for a
number of years, they have a right to continue to do so. This, however, amounts to no more
than a unilateral expectation of continued employment which we have rejected as a sufficient
basis for a property interest. Finally, this Court has previously stated that “a physician does
not have a constitutional or any vested right to membership on a hospital staff.” State ex rel.
Sams v. Ohio Valley General Hospital Association, 149 W.Va. 229, 238, 140 S.E.2d 457,
463 ((1965). Accordingly, we conclude that the plaintiffs' assertion of a property right
protected by due process must fail.
(See footnote 11)
See also Capili v. Shott, 487 F.Supp. 710, 713
(S.D.W.Va. 1978), affirmed by 620 F.2d 438 (4th Cir. 1980) (concluding as a matter of law
that “[a] physician . . . has no constitutional right to staff privileges at a public hospital . . .
merely because he is licensed to practice medicine.” (Citations omitted)).
This, however, is not the end of our analysis. Rather, we believe that this Court's precedent concerning physicians' staff privileges is controlling. Traditionally, we have distinguished between private and public hospitals in determining the scope of our review of hospital decisions affecting staff privileges. See also Rao v. Auburn General Hospital, 10 Wash.App. 361, 365, 517 P.2d 240, 243 (1973) (providing that “[g]enerally, courts have drawn a distinction between private and public hospitals in considering the extent to which courts may review the exclusion of a physician from staff privileges.”). In State ex rel. Bronaugh v. City of Parkersburg, 148 W.Va. 568, 136 S.E.2d 783 (1964), a physician asked this Court to compel the Board of Trustees of Camden-Clark Memorial Hospital, a public hospital, either to grant the physician's application for staff membership in and use of the facilities of Camden-Clark or give him notice and a hearing on his application. In discussing the matter, this Court noted that
The authorities are almost unanimous in
holding that private hospitals, in the exercise of
their discretion, have the right to exclude licensed
physicians from the use of their facilities. Public
hospitals, however, are not entitled to that
immunity. A regularly licensed physician and
surgeon has a right to practice in the public
hospitals of the state so long as he stays within the
law and conforms to all reasonable rules and
regulations of the institutions.
Bronaugh, 148 W.Va. at 572, 136 S.E.2d at 786 (citations omitted). The Court held in
Syllabus Point 1 of Bronaugh,
A regularly licensed physician and surgeon
who has conformed to the law and to all
reasonable rules and regulations of a public
hospital has a right to become a member of the
staff thereof and, in the event such right is denied,
he shall be afforded an opportunity to be heard
and to offer his defense to any charges upon
which such denial is based.
Therefore, the Court granted the physician's petition for a writ of mandamus to compel
Camden-Clark to grant him a hearing on his application for staff privileges. The holding in
Bronaugh is consistent with the general rule set forth in 40A Am.Jur.2d, Hospitals and
Asylums § 19 (1999), and we now hold that “[a] physician . . . is entitled to practice in the
public hospitals of [the] state so long as he or she stays within the law and conforms to all
the reasonable rules and regulations of the hospitals. He or she cannot be deprived of that
privilege by rules, regulations, or acts of the hospital's governing authorities that are
unreasonable, arbitrary, capricious, or discriminatory.” (Footnotes omitted)).
In contrast to Bronaugh, the case of State ex rel. Sams v. Ohio Valley General
Hospital Association, 149 W.Va. 229, 140 S.E.2d 457 (1965), concerned the issue whether
a private hospital has authority to exclude, in its discretion, members of the medical
profession from membership on its staff. The petitioner, Dr. Sams, a physician and surgeon
licensed to practice medicine, applied for appointment to the medical staff of the respondent,
Ohio Valley General Hospital Association, but was summarily denied. Dr. Sams then sought
a writ of mandamus from this Court compelling Ohio Valley General to appoint him to its
medical staff or, in the alternative, to afford him a hearing on his application. This Court first
determined that “the controlling question here is whether the respondent hospital is a private
or a public hospital[,]” 149 W.Va. at 232, 140 S.E.2d at 459, and found Ohio Valley General
to be a private hospital. The Court then looked to its language in State ex rel. Bronaugh,
supra, concerning the right of private hospitals to exclude licensed physicians from the use
of their facilities. Concluding that Dr. Sams failed to establish a clear legal right to the
requested relief, the Court explained:
It is well settled by the great weight of
authority and, in fact, is readily admitted by the
petitioner, that a physician does not have a
constitutional or any vested right to membership
on a hospital staff. When the hospital involved is
determined to be a public institution, a physician
applicant to the medical staff is entitled to
membership thereon or to a hearing of the reasons
for the refusal of his application. If upon hearing
it is found that the governing authorities have
acted arbitrarily, capriciously or unreasonably,
mandamus may lie. This right does not exist,
however, in relation to a private hospital, which
may, in its discretion, exclude any physician from
its staff without being required to give any reason
therefor.
149 W.Va. at 238, 140 S.E.2d at 463. Accordingly, the Court held in Syllabus Point 4 of
Sams that “[t]he governing authorities of a private hospital, in the exercise of their discretion,
have the absolute right to exclude licensed physicians from its medical staff and such action
is not subject to judicial review.” See also 40A Am.Jur.2d, Hospitals and Asylums § 20
(1999) (stating that “[p]rivate hospitals have the right to exclude licensed physicians from
the use of their facilities, and such exclusion rests within the sound discretion of the
hospital's managing authorities.” (footnotes omitted)); Peterson v. Tucson General Hosp.,
Inc., 114 Ariz. 66, 69, 559 P.2d 186, 189 (Ariz.Ct.App. 1976) (recognizing “[t]he general
rule . . . that the exclusion of a physician from staff privileges in a private hospital is a matter
which ordinarily rests within the discretion of the managing authorities thereof, not subject
to judicial review.” (Citations omitted)).
Finally,
in Mahmoodian v. United Hosp. Center, Inc., 185 W.Va. 59, 404
S.E.2d 750 (1991), we carved out a narrow exception to our holding in Sams for instances
where there are allegations against a staff physician of professional incompetence or
misconduct. In Mahmoodian, a physician challenged the revocation of his medical staff
privileges at a private hospital after he was found to have committed improper conduct. The
issue was “whether a decision of a private hospital adversely affecting a medical staff
member's previously granted privileges at that hospital is subject to judicial review.” 185
W.Va. at 64, 404 S.E.2d at 755 (footnote omitted). We distinguished our holding in Sams
on the basis that it “involved . . . the denial of an initial appointment to a private hospital's
medical staff,” id, and explained that,
the scope of judicial review of health care peer
review decisions adversely affecting the
privileges of a medical staff member is essentially
the same for private and public hospitals.”
(See footnote 12)
While such decisions of public hospitals must be
reached after affording “due process,” and such
decisions of private hospitals must be reached
after affording “fair procedures,” recent federal
legislation will encourage essentially all hospitals
to use the same procedures.
185 W.Va. at 62 n. 2, 404 S.E.2d at 753 n. 2 (citation omitted and footnote added). Finally,
we held in Syllabus Point 1 of Mahmoodian:
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.
As noted above, the issue presently before us does not involve allegations of
incompetence or misconduct and the invocation of the peer review process, thus we find that
Mahmoodian is not relevant.
(See footnote 13)
Accordingly, we will apply the law set forth in Bronaugh and
Sams and our traditional distinction between public and private hospitals. We initially must
determine the status of Monongalia General. If Monongalia General is a public or quasi-
public
(See footnote 14)
hospital, staff physicians have a general right to practice in its facilities
(See footnote 15)
pursuant
to Bronaugh.
(See footnote 16)
Conversely, if it is a private hospital, there is no such right as provided in
Sams.
Previously, in Orteza, supra, this Court discussed at length the status of Monongalia General, listing all of its public and private characteristics. (See footnote 17) After weighing these characteristics, we concluded,
Certainly, the appellant Hospital Company
lies somewhere in the twilight zone between a
government instrumentality and a private charity.
The record does not establish any nexus between
the state and the Hospital Company's personnel
decisions, and the trend in state action decisions
would seem to be away from finding state action
in cases involving personnel at quasi-public
institutions. Nevertheless, we shall assume
arguendo, that the hospital is a public agency for
our purposes here and analyze the case before us
from that point of view.
Orteza, 173 W.Va. at 466, 318 S.E.2d at 45 (footnote omitted).
(See footnote 18)
Based on Orteza, we conclude that Monongalia General, if not public, is
certainly a quasi-public hospital. Further, as a quasi-public hospital, we believe that
Monongalia General should be treated as a public hospital for the purpose of answering the
certified question. “The trend of the decisions is to recognize that hospitals other than being
completely private or public may also be classified as quasi-public. The quasi-public status
subjects a hospital to the same responsibilities as a public hospital.” Rao, 10 Wash.App. at
364, 517 P.2d at 242. Several courts have found that the quasi-public status of hospitals
justifies greater judicial review and warrants treating the hospitals much the same as public
hospitals. Storrs v. Lutheran Hospitals, Etc., 609 P.2d 24, 28 (Alaska 1980) (holding that
a privately owned hospital was subject to constitutional due process standards as a “quasi
public” hospital because it was the only hospital serving the community and because it was
significantly funded by government sources); Brandt v. St. Vincent Infirmary, 287 Ark. 431,
701 S.W.2d 103 (Ark. 1985) (stating instances when a private hospital is considered public
and subject to judicial review); Silver v. Castle Memorial Hospital, 53 Haw. 475, 497 P.2d
564 (Haw. 1972) (holding that state and federal funding during hospital's construction
subjects it to judicial review of denial of staff privileges). Accordingly, we hold that quasi-
public hospitals have the same duty as public hospitals to admit regularly licensed physicians
to membership on their medical staffs and are subject to the same level of judicial review of
rules, regulations, or acts which have the effect of depriving staff physicians from practicing
in their facilities.
Thus far, we have determined that staff physicians of public or quasi-public
hospital may not be deprived of their privilege to practice in the hospital facilities by an act
of the hospital that is unreasonable, arbitrary, capricious, or discriminatory. The dispositive
issue, therefore, is whether it is reasonable for a hospital to execute an exclusive contract
which has the effect of completely depriving other staff physicians from practicing in the
hospital. Deciding this issue involves several important considerations.
First, as this Court recognized in Bronaugh, the privilege of practicing in a hospital is a valuable one.
A physician or surgeon who is not permitted to
practice his [or her] profession in a hospital is, as
a practical matter, denied the right to fully
practice his profession. Much of what a physician
or surgeon must do in this day of advanced
medical technology can be done only in a
hospital. Only there are found the facilities
necessary for proper diagnosis or treatment.
Although one's right to practice medicine is not
absolute and unqualified, it is a valuable franchise
afforded to one properly trained which should be
reasonably protected.
Bronaugh, 148 W.Va. at 575, 136 S.E.2d at 787. In the instant case, it is undisputed that the
plaintiffs are totally prohibited from using Monongalia General's surgical suites. Dr. Kessel
states in his brief that since the denial of his use of Monongalia General's facilities, he has
supported his family by itinerant employment, providing anesthesia services from Clarksburg
to Logan and beyond.
A second consideration is the discretion of hospital authorities to govern their institutions as they see fit. According to W.Va. Code § 7-3-15 (1986), the board of trustees vested with the administration and management of a county hospital “shall provide for the employment of and shall fix the compensation for and remove at pleasure all professional, technical and other employees, skilled or unskilled, as it may deem necessary for the operation and maintenance of the hospital[.]” This Court explained in Wallington v. Zinn, 146 W.Va. 147, 118 S.E.2d 526 (1961) that the power granted in W.Va. Code § 7-3-15 relates to,
the overall duty and responsibility of the board in
the efficient operation or management of the
hospital, for the purpose for which created, the
best service for the greatest number of people in
the community. In the exercise of that discretion
by the board, without arbitrariness, caprice or
discrimination, the Courts can not interfere.
Zinn, 146 W.Va. at 153, 118 S.E.2d at 529-30 (citation omitted). The governing authority
of Monongalia General is its board of directors. Under our Code of State Rules, the
governing authority of a hospital is legally and morally responsible for the management and
control of the entire hospital including appointment of medical staff. 64 C.S.R. §§ 12-7.1
and 7.2.1 (July 1, 1994).
A third and final consideration is the interest of patients in choosing their own
physicians. For example, in the present case, several patients allegedly were denied the
choice of the plaintiffs as their anesthesiologists due to Monongalia General's exclusive
contract with other medical service providers. Ideally, a patient should be able to choose a
physician with whom he or she has an ongoing doctor-patient relationship; one with whom
he or she is comfortable; and one in whom he or she has confidence. Without a doubt such
patient control is more conducive to his or her overall mental, emotional, and physical health
than being forced to rely on the hospital's choice of physician to render crucial medical
services.
(See footnote 19)
Admittedly, the desire to choose one's own anesthesiologist may not be great.
Normally, a surgical patient chooses his or her surgeon, not his or her anesthesiologist, the
identity of whom the average patient most likely is completely unaware.
(See footnote 20)
Nevertheless, a
patient should retain the right to choose his or her anesthesiologist even if he or she does not
exercise that right. Also, this Court's answer to the certified question will apply to situations
where the issue of patient choice may be of more significance.
After carefully weighing the above considerations, we hold that a public or
quasi-public hospital may not enter into exclusive contracts with medical service providers
that have the effect of completely excluding other physicians who have staff privileges at the
hospital from the use of the hospital's medical facilities.
(See footnote 21)
Our decision essentially is based
on the determination that the total exclusion of physicians from their hospital practices, and
the concomitant complete deprivation of patient choice, simply cannot be justified by the
alleged ends to be achieved. In other words, this Court is convinced that a hospital can
adopt less extreme measures to solve management problems such as scheduling conflicts and
repeated delays in surgery complained of by Monongalia General.
We believe that one such measure of addressing a hospital's management
problems, while still providing for the interests of physicians and patients, is the use of what
we choose to call “a preferential contract.” Such an agreement grants to a single medical
services provider the primary right to practice in a specific department, but, unlike an
exclusive contract, provides exceptions in instances where another staff physician is
specifically requested by a patient. For example, under a preferential contract, Dr. Kessel,
although not the primary provider of services in Monongalia General's anesthesiology
department, would be allowed access to hospital facilities to treat patients when he is
requested. A preferential contract has the advantage of not completely excluding staff
physicians from practicing in the hospital. Also, the use of such contracts retains the
discretion of hospital authorities to contract with primary service providers to prevent
scheduling and staffing problems. Finally, it preserves patient choice of physicians.
In its brief to this Court, Monongalia General posits several arguments in favor
of the use of exclusive contracts. We have already addressed some of these arguments in our
discussion above, and the remaining ones do not persuade us. This Court is satisfied that our
decision herein does not impede the ability of hospitals to effectively manage their
institutions, and since it applies only to the execution of exclusive contracts, it does not
preclude the authority of a hospital to close one of its departments as a reasonable business
decision. Also, while we acknowledge that the weight of authority appears to support the
right of hospitals to execute exclusive contracts, we do not agree with this authority. See
Gonzalez, 880 S.W.2d at 441 (asserting that “[e]xclusive contracts have generally been
upheld as a reasonable exercise of a hospital's board of trustees' power to provide for the
proper management of the hospital.” (Citation omitted)). We believe, rather, that the rule
crafted in this opinion is consistent with our own previous holdings on the right of physicians
to practice in the public hospitals of this State. Further, we reject the hospital's contention
that there is a difference between being granted staff privileges at a hospital and actually
being able to practice in a hospital's facilities. Monongalia General's medical staff bylaws
define “privileges” as “the permission granted to a practitioner to render specific diagnostic,
therapeutic, medical, dental or surgical services.” “Medical Staff” is defined as “the formal
organization of all licensed physicians, oral surgeons and dentists who are privileged to
attend patients in the hospital.” Finally 64 C.S.R. § 12-3.13, defines “Medical Staff” as
“[t]he group of physicians . . . who practice in the hospital[.]” Each of these definitions
contemplates that physicians who have staff privileges enjoy the right actually to treat
patients in the hospital.
For the foregoing reasons, we answer the certified question as follows:
May a public or quasi-public hospital enter
into an exclusive contract with a medical service
provider that has the effect of completely
excluding physicians who have staff privileges at
the hospital from the use of the hospital's medical
facilities.
Answer: No.
Certified Question Answered.
An
individual's right to conduct a business or pursue an occupation is a property
right. The type of injury alleged in an action for tortious interference is
damage to one's business or occupation. Therefore, the two-year statute of
limitations governing actions for damage to property, set forth under W.Va.
Code, 55-2-12 [1959], applies to an action for tortious interference with
business relationship.
We find that Garrison is inapposite to the instant case inasmuch as Garrison involved
an allegation of substandard medical care which affected a physician's ability
to obtain employment at other hospitals.
In Orteza, this Court
noted:
The
appellant hospital is housed in facilities that are owned by the Monongalia
County Building Commission, a public body, and leased to the private hospital
corporation. The hospital must make periodic financial reports to the county,
which can then review them to insure proper management of the hospital. Moreover,
the Monongalia County Building Commission exercises real and substantial power
over the selection of members of the appellant's Board of Trustees. According
to the Hospital's by-laws, the Board of Trustees submits three names to the Building Commission, which
then has thirty days to select one of the nominees, if it finds one to be acceptable.
The Building Commission is a public body, an agency of the County Commission
created specifically by the latter to accommodate the construction and administration
of Monongalia General Hospital.
Furthermore
the hospital has been and remains dependent on public resources for its operation.
Public funds financed nearly all of the construction of the appellant's physical
plant and the county established the Building Commission specifically to secure
funding from the Farmer's Home Administration. The Building Commission issued
bonds to help finance construction, and the hospital derives more than one third
of its revenue from governmental sources. At the time this case was tried the
hospital also participated in the West Virginia Public Employees Retirement Plan,
which through joint state and employee contributions, provides pension benefits
to state employees. . . .
Having
said all of that, however, it should also be noted that Monongalia General Hospital
has several important private characteristics. The hospital was incorporated
by private individuals . . . as a conscious decision to move the facility away
from the political arena and to make it a more attractive recipient of revenue
bond funding. Thus, the hospital's private status can be seen as a necessary
factor in its continued existence. Secondly, the Hospital Company receives no
funding from the County Commission nor does it receive other direct payments
from the state. Finally, the Hospital Company is classified by the Internal Revenue
Service as a private, not-for-profit corporation.
Orteza, 173 W.Va. at 464-65, 318 S.E.2d at 43-44.