Opinion letter to the Honorable John W. , II

.JOHN C. DANFORTH ATTORNEY GENERAL OFFICES o~o~ THE ATTORNEY GENERAL OF MISSOURI JEFFERSON CITY February 24, 1976 OPINION LETTER NO. 37 Honorable John W. Reid, II Prosecuting Attorney Madison County 148 East Main Street Fredericktown, Missouri 63645 Dear Mr. Reid: This letter is in response to your opinion request in which you ask: "Whether a County Hospital Board's by-laws pursuant to 1971 R.S. Mo, Section 205.195 may require that all physicians, podiatrists and dentists be required to carry and keep .·; in force a minimum of $100,000.00 malprac- tice insurance before being permitted to practice in a County Hospital established under 1969 R.S. Mo., Section 205.160." You also state that: "I have been contacted by the Madison Memorial Hospital Administrator inquiring whether the County Hospital Board has the authority to pass a by-law requiring all physicians to carry and keep in force a minimum of $100,000.00 malprac- tice insurance." Our research has disclosed two cases of note both dealing with hospitals which are subject to suit by individuals. That is, in Pollock v. Methodist Hospital, 392 F.Supp. 393 (E.D. La. 1975), the District Court held that a requirement that a physician carry malpractice insurance as a condition of his employment at a pri- vate hospital is not per se unreasonable and does not violate the physician's civil rights. The sole issue presented in that case was Honorable John W. Reid, II the legal right of a hospital to suspend a staff physician for fail- ure to comply with his insurance requirements. There was no issue concerning sufficiency of notice, hardship, or other aspects of due process. The plaintiff did not contend that the amount of insurance, one million dollars in that instance, was unreasonable or that it imposed a financial burden upon him. The court found that the test is one of reasonableness of the regulations and that since the physi- cians were free to choose any insurance company the question of a vi- olation of the anti-trust laws was not properly indicated. A second noteworthy case in the area is Rosner v. Peninsula Hos- pital District, 224 Cal.App.2d 115, 36 Cal.Rptr. 332 (1964), which was distinguished by the court in the Pollock case on the basis that the California case turned solely on the interpretation of a state statute and had little relevance in determining whether plaintiff's civil rights were violated. Notably in the Rosner case, the appel- lants contended that, since the removal of the rule of sovereign im- munity from district hospitals because of California court decisions, the requirement that malpractice insurance be carried by each mem- ber of a medical staff was a most reasonable requirement and neces- sary for the proper administration of a public hospital •. While the California court did largely rest its determination upon the appar- ently limiting language of the California law, it also noted that the nature of a public hospital imposes an actual although implied limitation upon the authority of the hospital to restrict arbitrarily the use of the hospital by the public whether physician or patient. Notably, the court also held that, under the facts before it, whether .any doctor could ever become a member of the medical staff depended upon conditions beyond the control of the district because by the adoption of the resolution the hospital unlawfully delegated to the insurance companies a determination as to what physicians may use its facilities. It was the court's view that such a power to determine who has the authority to engage in an otherwise lawful enterprise may not be delegated to a private body unless the power is accom- panied by adequate safeguards which afford the applicant protection against arbitrary or self-motivated action. We wish to point out, of course, that in Missouri the county hospitals still retain their immunity despite the rule of the Su- preme Court in Abernathy v. Sisters of St. Mary's, 446 S.W.2d 599 (Mo.Banc 1969) and Garnier v. St. Andrew Presbyterian Church of St. Louis, 446 S.W.2d 607 (Mo.Banc 1969). See our Opinion No. 15 dated May 10, 1971, to Millan (copy enclosed). We also call your attention to Opinion No. 29 dated March 11, 1975, which was addressed to you, concerning whether the county hos- pital may contract to limit a physician's practice to emergency room -2- Honorqble John W. Reid, II duties. In that opinion we quoted and discussed the effect of stat- .utes which, in our view under the facts then presented, did not jus- tify the trustees in denying the doctor the right to treat patients in the hospital other than in the emergency room. We have found no case where such a malpractice requirement has been sought to be imposed by a hospital which enjoys sovereign im- munity. We understand from you that the reason for such a bylaw would be to protect any patient who was a victim of malpractice. Bearing in mind that we are not conversant with the particular circumstances surrounding the operation of the hospital or the phy- sicians subject to such bylaws, it is our view that there is a ser- ious question as to the reasonableness of such rule. It is our view that our courts would most likely view such a bylaw as being beyond the authority of the county hospital board of trustees. Enclosure: Op. No. 15 5-10-71, Millan Yours very truly, M-cJ~--a: JOHN C. DANFORTH Attorney General -3-