M E D I C A L S T A F F I N D E P E N D E N C E A N D S E L F - G O V E R N A N C E
i n T u l a r e , C a l i f o r n i a a n d b e y o n d
ASMAC Fall Conference
November 19, 2017
Long X. Do, Esq.
Legal Counsel & Director of Litigation
CMA Center for Legal Affairs
Part 1 | What happened
Part 2 | Legal analysis
Part 3 | Consequences and implications
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TOPICS
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BACKGROUND
Tulare County
• Pop. 61,000
• 11.9% bachelor degree or higher
• 78.3% above federal poverty level
• #1 milk producer in nation ($1.7B in 2015)
• Top or near top in nation in overall agriculture
• Home to U.S. Rep. Bob Mathias (1967-
75), 2-time Olympic gold medalist in
decathlon (1948 London, 1952
Helsinki)
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BACKGROUND
Tulare Regional Medical Center
• Opened in 1951
• 103 beds today
• Owned by Tulare Local
Healthcare District Authority
• Elected board of five
• 170 physicians on staff (OMSS member)
• 40 percent of revenue from Medi-Cal
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BACKGROUND
• CEO fired in 2012, was rehired,
and fired again in 2014
• “Tower of Shame”
• Bond measure for $55M failed
in Nov. 2016 election
• 2014 management services
agreement with Health Care
Conglomerates, Inc. (HCCA)
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JANUARY 26, 2016
MEDICAL STAFF COUP
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In the course of a one-hour
board meeting, the hospital
dissolved a decades-old
medical staff organization
(eliminating democratically
established bylaws and
officers); unilaterally propped
up a sham medical staff with
hospital-appointed leaders and
medical staff bylaws written by
hospital lawyers; and
disenfranchised all physicians
at the hospital.
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THE MEDICAL STAFF’S
LAWSUIT
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• Legal claims:
- Medical staff independence
and self-governance under
Bus. & Prof. Code §2282.5
- Retaliation under Health &
Safety Code §1278.5
• Originally filed by medical
staff’s counsel and later joined
by litigation specialists
• Three different law firms and
an LA-based PR firm defend
the Hospital defendants
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Bob
Mathias’s
nephew
CMA INITIAL ENGAGEMENT
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• Recognize and acknowledge gravity of
the situation on all medical staffs
• Immediate, direct intervention with the
hospital board
• Mobilize and organize physician
community
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MOBILIZATION – SUPPORT THE LAWSUIT
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• Assemble litigation team from CMA contacts and network
• Take a public stand in the local media
• File amicus brief and argue at TRO
hearing
• Fundraise
• Determine litigation budget
• Develop fundraising campaign
• Secure initial cash infusion from
the AMA Litigation Center
THANK YOU AMA LITIGATION CENTER!
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MOBILIZATION – BROADEN ADVOCACY
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• Hospital regulators (Cal. Dept. of Public Health & CMS)
• California Hospital Association
• Local elected officials
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FILE UNDER: CRAZY
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THREE APPLICABLE LEGAL PRINCIPLES
1. Hospital governance structure
“Hospitals in this state have a dual structure, consisting of an
administrative governing body, which oversees the operations of the
hospital, and a medical staff, which provides medical services and is
generally responsible for ensuring that its members provide
adequate medical care to patients at the hospital.”
- California Supreme Court in El-Attar v. Hollywood Presby. Med. Ctr. (2013)
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THREE APPLICABLE LEGAL PRINCIPLES
2. Medical staff independence and self-governance
Functions of Self-Governance
• Propose, adopt, and amend medical staff bylaws, rules and regulations (subject to hospital governing board approval, not unreasonably withheld)
• Elect and remove medical staff officers
• Establish membership criteria and determine members
• Establish clinical criteria and standards to oversee and manage quality assurance, UR, and other meetings of the medical staff
• Collect and use medical staff dues
• Establish patient care standards
• Retain independent legal counsel (at medical staff’s expense)
(Bus. & Prof. Code §2282.5)
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THREE APPLICABLE LEGAL PRINCIPLES
3. Hospital board relationship with the medical staff
“[T]he governing board of a hospital must act to protect the quality of
medical care provided and the competency of its medical staff . . . . The final
authority of the hospital governing board may be exercised for the
responsible governance of the hospital or for the conduct of the business
affairs of the hospital; however, that final authority may only be exercised
with a reasonable and good faith belief that the medical staff has failed to
fulfill a substantive duty or responsibility in matters pertaining to the quality
of patient care. It would be a violation of the medical staff’s self-
governance and independent rights for the hospital governing board to
assume a duty or responsibility of the medical staff precipitously,
unreasonably, or in bad faith.”
(AB 1325, §1 (2004) (enacting Bus. & Prof. Code §2282.5)
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EVALUATING HOSPITAL’S ACTIONS
Functions of Self-Governance
• Propose, adopt, and amend medical staff bylaws, rules and regulations (subject to hospital governing board approval, not unreasonably withheld)
• Elect and remove medical staff officers
• Establish membership criteria and determine members
• Establish clinical criteria and standards to oversee and manage quality assurance, UR, and other meetings of the medical staff
• Collect and use medical staff dues
• Establish patient care standards
• Retain independent legal counsel (at medical staff’s expense)
(Bus. & Prof. Code §2282.5)
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HOSPITAL’S DEFENSES
• The medical staff was completely dysfunctional
• CMS was going to revoke Medicare/Medicaid status unless the hospital got rid
of the dysfunctional medical staff
• All hospitals have “ultimate authority” to do what is necessary for the protection
of the hospital and patients
• CMA is behind the case and controls the medical staff and CDPH!
Proven at trial to be factually false, exaggerated, and/or misleading
Hospital’s own expert on cross-examination admitted the hospital’s
actions were “not justified”
“Ultimate authority” narrowly permits hospital to assume a specific
medical staff function affecting patient care only upon failure of that
function; can never justify replacing an entire medical staff
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STATUS OF THE CASE
Trial and post-trial briefing completed in mid-September 2017
CMA filed amicus curiae brief (hospital lawyer responded with
personal attacks and request for sanctions)
Closing argument was scheduled on Oct. 2, 2017
Case stayed on Sept. 30, 2017 due to Chapter 9 bankruptcy filing
All three law firms originally defending the hospital defendants are
no longer involved in the case
Settlement talks ongoing
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VOTER REVOLT
• Rejected Measure I by 67% ($55M
hospital bond to complete construction of
“tower of shame”
• By 67%, voted two new, independent
citizens onto the hospital board
• By 81%, voted to recall hospital vice-
chairman and key architect of medical
staff coup and replace him with new
independent board member
• Fourth and fifth members of board that
voted to terminate medical staff resigned
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CAL. DEPT. OF PUBLIC HEALTH INVESTIGATIONS
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CAL. DEPT. OF PUBLIC HEALTH INVESTIGATIONS
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“When faced with a potential threat to hospital revenues, the Board failed to
exercise efforts to work with MS 1. Instead, the Board removed the medical staff's
right to self-governance by "terminating the relationship" and installing a medical
staff with officers to its liking. The Board's failure to respect MS 1's right to self-
govern disrupted medical staff functions, interrupted clinical oversight of
department responsibilities, and removed 174 medical staff members from Active
status without due process, just cause, or their consent to give up their self-
governance. As a result in part, many members of the previous medical staff
resigned or lapsed in membership. One entire pediatric group resigned abruptly
creating a crisis period when the obstetric and emergency services were not
supported. Obstetric activity continued to dwindle as obstetric providers also left
the hospital. Such outcomes put patients at risk for delays in treatment or errors by
unqualified providers.”
IMPACT ON PATIENT CARE AT HOSPITAL
• CMS investigation (Nov. 2016) found 2 patient deaths caused by
surgery staff shortages that true medical staff was trying to fix
• CDPH investigated and substantiated 11 complaints concerning
medical care at the Hospital after medical staff termination
(almost triple total number in the four prior years)
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FORWARD PROSPECTS
Valley Voice (local Tulare newspaper)
www.ourvalleyvoice.com
Nov. 6, 2017
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NATIONAL IMPACT
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“How the court rules in the Tulare case, once it resumes, will have profound consequences for
whether medical staffs can do their work independently of nonclinical administrators. And it
will also provide an answer to the more important question of who should be in charge of
hospital care.”
“The case . . . is a symptom of a
much bigger problem in
American medicine: the gradual
loss of autonomy by physicians at
our nation’s hospitals. If a
hospital board can dismiss
elected medical officers with
impunity, as at Tulare, it will
indicate to many doctors the
increasingly tenuous nature of
the position they currently hold.”
KEY LESSON LEARNED
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Support and participate in organized medicine!
end
Long X. Do, Esq.
California Medical Association
1201 J Street, Suite 200
Sacramento, CA 95814
(916) 444-5532
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