City of Cookeville v. Humphrey,
No. M2001-00695-COA-R3-CV (Tenn. Ct. App. Nov. 20, 2002)

The Court of Appeals of Tennessee held that a public hospital has the authority to enter into an exclusive contract for the provision of radiology services. In so holding, the court of appeals noted that the changing market for health care services requires that hospitals be allowed to take measures to deliver services in a cost-effective manner.

The court of appeals also found that radiologists on the hospital's medical staff whose privileges are affected by an exclusive contract are not entitled to a medical staff hearing. The court clearly wanted to reach this conclusion, based on its favorable discussion of similar cases in other states, but was constrained by Lewisburg Community Hospital v. Alfredson, an earlier decision of the Tennessee Supreme Court. The court of appeals eventually explained away Alfredson by claiming that intervening statutory enactments overruled that decision. However, as the court of appeals noted, the Tennessee Supreme Court still has an opportunity to hear the case, and may yet determine that the radiologists in question are entitled to a hearing.