QUESTION: A local long-standing cardiology group in town, not affiliated with our hospital, is going through a pretty messy divorce. The three current members of the group are all members of our Active Staff. One of those cardiologists, Dr. X, will be leaving, and apparently the contentious separation process is almost finalized. We had known that this was going on in the informal, “through the grapevine” kind of way that this type of news typically passes through the hospital. However, yesterday, one of the two remaining cardiologists called the Medical Staff Office to tell us that the hospital had to “take away” Dr. X’s clinical privileges as of next week because once he signs his separation agreement, there is a restrictive covenant in place that keeps Dr. X from practicing at our hospital. Our Credentials Committee Chair is uncomfortable with this and doesn’t think we should resign the physician, but some of our other leaders aren’t so sure?
ANSWER: Your Credentials Committee Chair is correct to be concerned! This is a private group and the manner in which the group functions does not involve the hospital. As such, the hospital has no obligation – or, more importantly, any legal right – to take action on a physician’s privileges on the basis of that physician’s relationship to his private group. As a practical matter, the restrictive covenant may keep that physician from being able to exercise his clinical privileges at the hospital, but its existence does not trigger any obligation on behalf of the hospital, and enforcement of the covenant is up to the group.
It is possible that a physician’s departure from a group could ultimately lead to a determination that the physician is ineligible for continued appointment at the hospital – particularly if the bylaws require individuals to provide documentation of adequate professional liability insurance, to have an office within a certain defined response time to the hospital, or to have a cross-coverage arrangement by an appropriate member of the medical staff, requirements that were likely satisfied by the group practice and other members of the group and may not be quickly replicated. However, these things would first need to be verified with the physician and handled in accordance with the bylaws process – not triggered merely because the group has a restrictive covenant with former members.
This situation is different from the more common situation where the hospital or an affiliated physician group employs a physician AND the employment agreement includes language that makes the physician’s medical staff appointment and clinical privileges “coterminous” with the employment contract. In that situation, when the employment agreement is terminated, the physician’s appointment and privileges will also expire. It’s important to understand, however, that in the absence of such a contract provision, even an employed physician’s appointment and privileges would survive a contract termination.