May 2, 2018
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District Court Holds that Medical Staff Medical Executive Committee May Be Sued As An Unincorporated Association

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The United States District Court for the District of New Jersey has issued a decision holding that the Medical Executive Committee (“MEC”) of a hospital’s Medical Staff may be sued separately from the hospital. If the decision is upheld, it will have important implications for hospitals, members of their Medical Staff, and hospital leadership.

The lawsuit in question was filed by Dr. Frederick Nahas against Shore Medical Center and its MEC. Frederick Nahas, M.D. v. Shore Medical Center, et al, 2018 WL 1981474 (April 27, 2018).  Dr. Nahas filed the lawsuit after his privileges to perform endovascular surgery at Shore Medical Center were adversely affected.  Dr. Nahas sued both the Medical Center and its MEC.

The court found that the MEC is a type of unincorporated association, and therefore has the capacity to sue or be sued under the laws of the State of New Jersey.  The court referenced N.J.S.A. 2A:64-1, which provides in pertinent part that “any unincorporated organization or association, consisting of 7 or more persons and having a recognized name, may sue or be sued in any court of the state … in any civil actions affecting its common property, rights and liabilities, with the same force and effect … as if the actions were prosecuted by or against all of the members thereof.”  The court found that Shore Medical Center’s Medical Staff had the capacity to sue or be sued, because the Medical Staff pays dues, which implies an association with defined membership and defined boundaries.  The court found that under the Medical Center’s bylaws, the Medical Staff was established by the Board of Trustees and existed in a contractual relationship with the Board of Trustees.  The court also found that under the bylaws, Shore Medical Center indemnified members of the Medical Staff under certain circumstances.  The court held that if Shore Medical Center’s Medical Staff was an unincorporated association with the capacity to sue or be sued, then the MEC could also sue or be sued.

In addition to finding that the MEC was an unincorporated association which could be sued pursuant to N.J.S.A. 2A:64-1, the court also found that the Health Care Quality Improvement Act provided authority for the proposition that the MEC could be sued. The court found that “The very fact that Congress decided to immunize professional review bodies–of which the MEC is undoubtedly such an entity—shows it contemplated both their capacity to be sued and their separate and distinct nature from their own committee members.”  The court also referenced the New Jersey statute which provides immunity for committees engaged in peer review activities.  N.J.S.A. 2A:84-22.10.  The court concluded that “although this court has its misgivings about the analytical rigor of treating a group of people on a committee as a singular committee for purposes of legal capacity, the clear trend under New Jersey law is to regard such groups as unincorporated associations.”

Absent from the court’s decision is any discussion of the fact that it is generally a hospital’s Board of Trustees which is the final decision maker in cases involving a grant or termination of Medical Staff privileges. The MEC is not the final decision maker, and only makes recommendations to the Board, which the Board is free to accept or reject.

Federal and state statutes and regulations applicable to hospitals, as well as the accreditation standards of The Joint Commission, mandate the use of many different committees in order to ensure quality of care and carry out other important hospital functions. The role of many of these committees is to make recommendations to the Hospital’s Board and administration in order to meet the applicable statutory, regulatory and accreditation requirements.  It will be interesting to see whether or not the Nahas decision results in an increase in claims filed against hospital Medical Staffs, MECs and other hospital committees.

 

 

Docs #3204979-v1

 



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