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Tulare hospital voluntarily ceases operations; lawsuit continues



October 30, 2017
Area(s) of Interest: Medical Staff Self Governance 

Tulare Regional Medical Center, as part of its bankruptcy and transition to new management, has voluntarily suspended its license and ceased operations. This new development has not changed the trajectory of the medical staff’s lawsuit or the continuing need to push forward for medical staff independence and self-governance with all of organized medicine’s resources.


According to the hospital board, the voluntary closure is aimed at avoiding a possible mandatory shutdown by the California Department of Public Health (CDPH) related to delays the hospital may encounter in the transition to a new hospital manager. The U.S. Bankruptcy Court overseeing the hospital’s Chapter 9 bankruptcy proceeding has recently ruled that the hospital could terminate the contract with its existing manager by November 27, 2017, or as soon as CDPH approves a new management arrangement.


If CDPH shuts down the hospital involuntarily due to failure to secure a new manager, the road to reopening and paying off administrative fines would have been more arduous and time-consuming for the hospital. Under the path of voluntary suspension, the hospital believes it will be able to re-open in a more efficient manner. It is not clear how long the suspension will last. 


The temporary closure has no impact on the medical staff’s pending litigation over its right to self-governance. The sham hospital-appointed replacement medical staff is still in place. And, it will remain in place when the hospital reopens unless something is done by the hospital either voluntarily or under compulsion of a court order.


The California Medical Association (CMA) has been actively and aggressively supporting the medical staff in this case since lay hospital administrators illegally terminated the entire medical staff and its duly elected officers. The hospital then adopted new medical staff bylaws in secret and without input from physicians at the hospital. The hospital dictated leadership and standards of medical care, seized control of the disciplinary process without legal or factual justifications, and prohibited the terminated medical staff from voting on medical staff matters or holding leadership positions.


CMA believes that, if left to stand, the hospital’s actions will create a dangerous precedent that could have much broader implications for the fundamental rights of medical staffs and physicians’ ability to care for patients in hospitals.


Although CMA is hopeful that an out-of-court resolution could be reached, the hospital has taken no voluntary action to rectify its termination of the true medical staff in violation of medical staff self-governance laws. If the medical staff is unable to resolve the case out of court, the trial court could resume the case and render a judgment after the hospital emerges from bankruptcy or upon permission of the bankruptcy court.


Recognizing the critical national implications of this case, the Litigation Center of the American Medical Association (AMA) has provided significant legal support and monetary contributions to this case. AMA President David O. Barbe, M.D., recently travelled to Anaheim to speak to the CMA House of Delegates about the unprecedented attack on medical staff self-governance in the Tulare case. AMA’s contributions to the litigation in this case represent the single largest legal contribution in the history of the AMA. CMA presented Dr. Barbe with a resolution recognizing AMA for its extraordinary commitment to protecting medical staff rights to independence and self-governance.


This case was recently featured in a New York Times op-ed, which provides a good look at why this local conflict could have a dangerous effect on patient care in U.S. hospitals.


If your medical staff is interested in contributing to CMA’s Legal Defense Fund, which is used to litigate cases of critical importance to physicians, please download the contribution form or email swolley@cmadocs.org.


The Legal Defense Fund of the California Medical Association is a collection of monies voluntarily contributed by the CMA membership for appropriate litigation costs. These funds shall be administered by the Executive Committee of the CMA Board of Trustees. The purpose of this fund shall be to provide monetary support in cases, generally brought by our members, which seek to protect or establish important legal rights of physicians. CMA will consider providing assistance only in those cases which reflect those principles and policies that CMA has established and that impact our members in their practice of medicine. Contributions to the California Medical Association Legal Defense Fund are not tax deductible as charitable contributions for federal income tax purposes. However, the contribution may be tax deductible as a business expense for federal income tax purpose. Contribution to this fund is not a political contribution.

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