Tuesday, February 5, 2008

Egan v. St. Anthony’s Medical Center[1]

Opinion handed down Feb. 5, 2008
Link to Mo. Sup. Ct. Opinion

The Missouri Supreme Court held that members of a private hospital’s medical staff have an equitable cause of action for injunctive relief when the hospital fails to abide by the bylaws in revoking hospital privileges.

I. Facts and Holding

Dr. Robert Egan was suspended from St. Anthony’s Hospital for neurocognitive abnormality. Pursuant to the bylaws of St. Anthony’s medical staff, Egan requested and was granted a hearing in which St. Anthony’s had to justify the suspension because “life of health is imminently threatened.” At the hearing, the committee considered a claim that Egan had “mental deficiencies” and allowed a member to testify about his personal observation despite another member’s objection that the statement was prejudicial. At the hearing, the committee found that Egan treated patients contrary to medical ethics and recommended his privileges be revoked.

Egan appealed the committee’s recommendation, pursuant to the bylaws, but the decision was upheld. The board of directors accepted the recommendation to revoke Egan’s privileges.

Egan then brought a civil lawsuit seeking injunctive relief for the reinstatement of his privileges. The Circuit Court granted St. Anthony’s motion to dismiss on the grounds Egan failed to state a claim in which relief may be granted.[2] The Eastern District Court of Appeals affirmed.[3]

The Missouri Supreme Court heard the case to determine in which circumstances a medical staff member may bring a lawsuit to force the hospital to comply with its bylaws, when that staff member was personally affected by the hospital’s refusal to follow the bylaws. The Court held that for purposes of requiring the hospital to act in accordance with the bylaws, Egan could bring a lawsuit for injunctive relief, but not damages. The opinion noted that the medical staff bylaws are not a contract, in which a breach would result in damages, because the hospital has a pre-existing duty to comply with its bylaws. The Court explained the court’s role is to make sure the hospital complies with the bylaws and does not review personal matters as that decision is for the hospital and peer review progress.

II. Legal Background

A. Hospital Bylaws

Prior to Egan, the management of a private hospital had sole discretion regarding medical staff’s employment status and there was no judicial review.[4] At that time, this was the majority position taken among states.[5] However, that position has changed as the majority of states now have exceptions for judicial review.[6] Egan created Missouri’s exception to the general rule which permits equitable claims against private hospitals to enforce compliance with the bylaws.[7]

B. Regulation 19 Mo. ACD 30-20.021

In 1982, the Department of Health adopted Regulation 19 Mo. ACD 30-20.021, “Organization and Management of Hospitals.” Pursuant to the regulation, medical staff must have “bylaws, rules and policies governing their professional activities in the hospital.”[8] The bylaws must establish the procedure and criteria for admitting medical staff and conferring privileges.[9] In addition, the bylaws are to provide “formal mechanism[s]” for recommending “delineation of privileges, curtailment, suspension or revocation of privileges and appointments and reappointments to the medical staff” and the hearing and appeal process when this action is taken.[10]

C. Bylaws as Contracts

Hospital bylaws are not contracts because of the hospital’s pre-existing duty under a state regulation to have bylaws, thus the bylaws lack consideration for the contract to exist.[11] No consideration exists when “a party is already legally obligated” to act.[12]

III. Commentary

For the first time in over forty years, the Court recognizes an exception to the general rule of Cowan v. Gibson that prohibited judicial review of private hospital’s personnel decisions.

The narrow exception for judicial review only for equitable relief is proper for three reasons. First, the Court recognizes the Department of Health’s Regulation that requires medical staff at private hospitals to have bylaws and establish procedures for granting and denying hospital privileges. Judicial review will allow the courts to ensure private hospitals are abiding by the bylaws. Second, by only allowing equitable claims, a disadvantaged medical staff member has a legal option that will require the hospital to reconsider their claim by complying with the bylaws. A court will not render a decision on how to resolve the issue or provide for damages; thereby, the courts are not taking authority away from the hospital. Third, Missouri now follows the majority of states in having some exceptions to the general rule.

By limiting judicial review to equity claims, the court strikes a balance between recognizes the hospitals autonomy and ensuring the hospital complies with the established bylaws.

- Kate E. Nolan

[1] No. SC 884932008 (Mo. Feb. 5, 2008) (en banc). The West reporter citation is Egan v. St. Anthony's Medical Center, 244 S.W.3d 169 (Mo. 2008) (en banc).
[2] Egan v. St. Anthony’s Med. Ctr., No. 06CC-002469, 2006 WL 4556541 (Mo. Cir. Oct 23, 2006) (Trial Court).
[3] Egan v. St. Anthony's Med. Ctr., No. ED88783, 2007 WL 738674 (Mo. App. E.D. Mar 13, 2007) (Appellate Court).
[4] Cowan v. Gibson, 392 S.W.2d 307, 308-09 (Mo. 1965).
[5] Id.
[6] Egan, WL 307689 at *2.
[7] Id. at *3.
[8] 19 Mo. ACD 30-20.021(2)(C)(1) (2007).
[9] Id. at 30-20.021(2)(C)(2).
[10] Id. at 30-20.021(2)(C)(5).
[11] Zipper v. Health Midwest, 978 S.W.2d 398, 416 (Mo. App. W.D. 1998).
[12] Id.

Resource Sources

John Hulston, et al., Do Hospital Medical Staff Bylaws Create a Contract, 51 J. Mo. B. 352 (Nov./Dec. 1995).