In January 2016, staff members who were not Tulare’s newly appointed officers were terminated and stripped of their rights as active members. The hospital then granted those physicians “provisional” status as part of the new medical staff even though the physicians had not applied for or consented the membership, according to court documents. Under the new bylaws, doctors could achieve and maintain “active” status by proving their economic value to the hospital, the court documents said.
The CMA filed friend-of-the-court briefs in the case pre- and post-trial. CMA legal counsel and director of litigation Long Do has said that if the court upholds what Tulare’s board of directors did, the legal precedent would end medical staff independence in California. The case went to trial in April. Just before closing arguments were scheduled to be held in October, Tulare filed for Chapter 9 bankruptcy. As part of its bankruptcy and transition to new management, the hospital voluntarily suspended its license in late October and ceased operations.
The bankruptcy filing automatically froze all pending litigation involving the hospital, Do said. But that does not affect the final trajectory of the medical staff’s lawsuit or the need to push forward for medical staff independence and self-governance so that physicians can provide high quality and safe medical care in hospitals, CMA leaders say.
The medical staff and hospital could still reach a settlement, and the hospital would not need the bankruptcy court’s approval to enter into an agreement, Do said. If the case isn’t resolved outside of the courtroom, the trial court could resume the case and issue a judgment after the hospital emerges from bankruptcy. The trial court also could issue a judgment before the bankruptcy is over if the bankruptcy court judge gives the trial court permission for that to happen.