New York Law Review

Tag: Hospital Staff Privileges

  • Gelbard v. Genesee Hospital, 87 N.Y.2d 691 (1996): Exhaustion of Remedies Required Before Seeking Reinstatement of Hospital Privileges

    Gelbard v. Genesee Hospital, 87 N.Y.2d 691 (1996)

    A physician seeking reinstatement of hospital privileges through injunctive relief must first exhaust administrative remedies by submitting a complaint to the Public Health Council (PHC) before commencing a court action.

    Summary

    Dr. Gelbard sued Genesee Hospital (TGH) for breach of contract, seeking an injunction to restore his staff privileges after TGH terminated them based on alleged unacceptable medical practices. The New York Court of Appeals held that Dr. Gelbard was required to exhaust his administrative remedies before the Public Health Council (PHC) before bringing a court action to compel the restoration of his staff privileges. The Court reasoned that threshold PHC review is necessary to allow an expert body to review the matter initially and to promote pre-litigation resolution. The court affirmed the dismissal of Gelbard’s cause of action for breach of contract, emphasizing the importance of the PHC’s role in resolving disputes between physicians and hospitals.

    Facts

    Dr. Gelbard, an anesthesiologist, had staff privileges at The Genesee Hospital (TGH) since 1989. In 1993, the Chief of Anesthesiology recommended that Dr. Gelbard not be reappointed, citing incidents of unacceptable medical practices. Following a series of hearings, TGH’s Board of Governors terminated Dr. Gelbard’s staff privileges.

    Procedural History

    Dr. Gelbard filed a lawsuit against TGH for breach of contract, seeking an injunction for reinstatement, and against Dr. Bodary for defamation and tortious interference. TGH cross-moved to dismiss the breach of contract claim for lack of subject matter jurisdiction due to failure to exhaust administrative remedies with the Public Health Council (PHC). Supreme Court denied both Dr. Gelbard’s motion for a preliminary injunction and TGH’s cross-motion to dismiss. The Appellate Division reversed the denial of TGH’s cross-motion, holding that PHC review was required before seeking reinstatement of hospital privileges. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether a physician seeking an injunction to compel the restoration of staff privileges must first exhaust administrative remedies by submitting a complaint to the Public Health Council as required by Public Health Law § 2801-b, even when the claim is framed as a breach of contract based on violations of hospital bylaws.

    Holding

    Yes, because the statutory scheme mandates threshold PHC review in all cases where a physician seeks injunctive relief to compel the restoration of staff privileges, regardless of how the claim is framed.

    Court’s Reasoning

    The Court reasoned that Public Health Law § 2801-b was enacted to provide a limited avenue of recourse for physicians challenging the denial or termination of staff privileges. The statute establishes a two-step process: first, a complaint must be submitted to the Public Health Council (PHC); second, only after PHC review can a physician commence an action under § 2801-c to enjoin the hospital. The PHC’s determination serves as prima facie evidence in any subsequent action.

    The Court emphasized the dual purpose of threshold PHC review: to allow an expert body to initially review the complaint and to promote pre-litigation resolution. Unlike courts, the PHC possesses specialized medical expertise to assess patient care, physician competence, and institutional welfare. Requiring PHC review ensures that the PHC has the opportunity to apply its expertise before a court orders the restoration of staff privileges. The court noted that the PHC’s findings are given only presumptive effect, balancing the PHC’s expertise with the physician’s right to a judicial remedy.

    The Court rejected the argument that framing the claim as a breach of contract circumvents the requirement of PHC review, stating that the statutory requirement is too important to be undermined by artful pleading. “The statutory requirement of threshold PHC review is too important to be circumvented by artful pleading.” The Court also highlighted the PHC’s vital mediation role in resolving disputes early, potentially avoiding costly litigation. Finally, the Court stated that requiring PHC review does not impair or affect any other right or remedy available to the physician, but “merely assures prompt investigation by the administrative body best able to assess the respective interests of the parties involved”.

  • Fritz v. Huntington Hospital, 39 N.Y.2d 339 (1976): Judicial Review of Hospital Staffing Decisions

    Fritz v. Huntington Hospital, 39 N.Y.2d 339 (1976)

    New York Public Health Law § 2801-b limits a hospital’s discretion in granting staff privileges and allows judicial review of decisions that are unrelated to patient care, welfare, institutional objectives, or applicant competency; aggrieved physicians have standing to sue for violations.

    Summary

    This case concerns two licensed osteopathic physicians (D.O.s) denied staff privileges at Huntington Hospital based on the hospital’s requirement of American Medical Association (AMA)-approved training programs. The New York Court of Appeals addressed whether this denial violated Public Health Law § 2801-b, which prohibits hospitals from denying privileges for reasons unrelated to patient care or physician competency, and whether the physicians had standing to sue. The court held that the statute limited the hospital’s discretion and the physicians had standing to sue. It remitted the case for a hearing to determine if the hospital’s denial was indeed related to legitimate concerns.

    Facts

    Dr. Fritz and Dr. Levy, both Doctors of Osteopathy (D.O.), were licensed to practice medicine and surgery in New York. They both maintained practices near Huntington Hospital, with a significant portion of their patients residing in the hospital’s service area. Both doctors had completed accredited internships, including rotations in various medical specialties. After practicing for approximately 12 years, they applied for staff privileges at Huntington Hospital. The hospital denied their applications, citing their failure to complete AMA-approved formal training programs.

    Procedural History

    The doctors filed complaints with the Public Health Council, which found cause to credit the complaints, stating the hospital’s reasons were not related to patient care or physician competency. After the hospital reaffirmed its denial, the Public Health Council again disapproved. The doctors then filed a petition in Special Term, which granted the petition and directed the hospital to appoint the doctors to its medical staff. The Appellate Division reversed, holding the hospital’s determination was not subject to judicial interference and the doctors had not demonstrated economic necessity or monopoly power.

    Issue(s)

    1. Whether the rejection of the physicians’ applications for staff membership by the privately funded not-for-profit Huntington Hospital violated Public Health Law § 2801-b and is subject to judicial review.
    2. Whether the physicians had standing to maintain this proceeding.

    Holding

    1. Yes, because Public Health Law § 2801-b limits a hospital’s discretion in granting staff privileges and prohibits denials based on reasons unrelated to patient care, patient welfare, institutional objectives, or the applicant’s competency.
    2. Yes, because the statute envisages the enforcement of rights and the physicians suffered injury in fact and arguably fall within the zone of interest to be protected by the statute.

    Court’s Reasoning

    The court reasoned that while, at common law, private hospitals had broad discretion in granting staff privileges, Public Health Law § 2801-b limited this discretion. The statute makes it an improper practice to deny staff privileges if the reasons are unrelated to patient care, patient welfare, institutional objectives, or the applicant’s character or competency. The court emphasized the Public Health Council’s finding, which constitutes prima facie evidence under § 2801-c, that the hospital’s requirement of AMA-approved internships was inappropriate. The hospital failed to rebut this finding by demonstrating how the AMA-approved programs differed from the programs the doctors completed or how its requirement related to legitimate concerns. Regarding standing, the court noted the expanding scope of standing and stated that only a “clear legislative intent negating review…or lack of injury in fact…will standing be denied.” The court found no legal precedent, statute, or legislative history to support the argument that the statute was not intended to confer standing upon the physicians. The court remitted the case to Special Term for a hearing to determine de novo whether the hospital committed an improper practice. The court clarified that hospitals are still free to be selective but cannot deny privileges without proper foundation and reason, especially when the applicants’ credentials have been reviewed and deemed adequate by relevant licensing and educational bodies. The court highlighted the vital public concern regarding access to health services and emphasized the obligation of hospitals to ameliorate medical service shortages and increase physician availability. The court emphasized that the Public Health Council’s finding serves as prima facie evidence, placing the burden on the hospital to justify its decision. The court stated, “The governing body of the Huntington Hospital is, therefore, directed to make a prompt review of the action involved in withholding staff membership or professional privileges from Doctor Levy [and Doctor Fritz].”