Fried v. Straussman, 41 N.Y.2d 376 (1977)
A private nursing home may exclude a physician if the exclusion is made in good faith and based on objectively reasonable grounds related to patient welfare, institutional objectives, or the physician’s character or competency; a court’s role is limited to ensuring the exclusion meets these criteria, not to determining the ultimate truth of the underlying facts.
Summary
This case addresses the extent of judicial review permitted when a physician is excluded from a private nursing home. The owners of a nursing home excluded two physicians due to concerns about overvisiting, improper billing, and non-compliance with administrative directives. The court held that while a nursing home cannot arbitrarily exclude a physician, judicial review is limited. The court should only determine if the exclusion was made in good faith, based on objectively reasonable grounds related to patient welfare, institutional objectives, or the physician’s character/competency, without needing to ascertain the absolute truth of the underlying facts. The lower court erred by holding a hearing on the truth of the allegations, which is beyond the scope of permissible review.
Facts
Edward and George Straussman owned Grace Plaza, a nursing home. Drs. Allan and Maxine Fried were granted visiting privileges. By 1974, the Frieds were personal physicians for about 50 residents. Conflicts arose due to the Frieds’ alleged failure to notify the home of vacations, refusal to adhere to policies, and acquiring patients at the expense of other physicians. More significantly, complaints arose regarding overvisiting and improper billing to Medicare/Medicaid. Finally, Dr. Allan Fried called the police about an alleged assault on a patient without consulting the administration, which had already investigated and dismissed the claim.
Procedural History
The Frieds’ visiting privileges were revoked. They sued, obtaining a temporary restraining order and then a preliminary injunction. After a trial, a permanent injunction was issued preventing the Straussmans from barring the Frieds. The Appellate Division affirmed.
Issue(s)
Whether a physician, excluded from a private nursing home based on good faith and objectively reasonable grounds, is entitled to a judicial hearing to establish the truth of the facts underlying those grounds.
Holding
No, because judicial review is limited to determining whether the exclusion was made in good faith and on objectively reasonable grounds related to patient welfare, institutional objectives, or the physician’s character or competency, without requiring the court to determine the ultimate truth of the facts.
Court’s Reasoning
The court acknowledged that Section 2801-b of the Public Health Law changed the common-law rule, preventing arbitrary exclusion of physicians. However, the statute doesn’t authorize plenary judicial review. The court rejected the Frieds’ constitutional and federal statutory claims, stating that state regulation of nursing homes isn’t sufficient