What is the Role of a Hospital Governing Board?
Governing Boards Are Not Just Financial Watchdogs
Doctors often see the hospital governing board as a financial entity with little responsibility for the day to day operations of the hospital. This is often a correct perception but it also violates the law.
California Business & Professions §§’s 2282 and 2282.5 make it unprofessional conduct for a doctor to practice at a hospital "which does not have rules established by the board of directors”.
There is push and pull as to what is a medical decision to be made by organized medical staff (or not) but the governing board of the Hospital and has final authority over, and responsibility for, the operations of the Hospital. (See Cal. Code Regs., tit. 22, § 70035.)
This means that even medical decisions can be subject to reasonable review by the board. Scope of services, compliance with state and federal regulations.
Medical Staff is an Actual Entity
The medical staff of a hospital “is a separate legal entity from the hospital” (Natarajan v. Dignity Health (2021) 11 Cal.5th 1095, 1114) and is “responsible for the adequacy and quality of the medical care rendered to patients in the hospital” (Mileikowsky v. West Hills Hosp. (2009) 45 Cal.4th 1259, 1267). This seems a lot like what the hospital board is supposed to do and the laws and cases are not clear in defining boundaries.
Both Medical Staff & A Governing Board Must Exist
Business & Professions Code section 2282.5 subdivision (a), provides the medical staff's “right of self-governance” includes establishing standards for medical staff membership and privileges; establishing standards to oversee and manage quality assurance; and initiating, developing, and adopting medical staff bylaws, rules, regulations, and amendments, “subject to the approval of the hospital governing board, which approval shall not be unreasonably withheld.” (See Cal. Code Regs., tit. 22, § 70703, subd. (b).)
California Business & Professions Codes §§ 2282 and 2282.5 deem it unprofessional for doctors to work in hospitals without board-established rules. The board has ultimate authority over hospital operations, including medical decisions, within legal and regulatory bounds.
Quick Overview of Medical Staff Rights & Responsibilities
Medical staff’s self-governance rights, under Business & Professions Code section 2282.5 subdivision (a), involve setting membership and privilege standards, quality assurance management, and creating bylaws, rules, and regulations, pending reasonable board approval (Cal. Code Regs., tit. 22, § 70703, subd. (b)).
Distinct responsibilities are also outlined in federal regulations and Joint Commission standards, separate from California law however many of these rules and regulations place greater responsibility in the hands of the governing body e.g. the Board.
Code of Federal Regulations (CFR), Title 42, Section 482.22 outlines conditions of participation for medical staff, which includes the organization of the medical staff under bylaws approved by the governing body. This section emphasizes the importance of the medical staff operating under the governance of the board, which establishes a chain of command with the governing board having superior authority. However this is necessarily limited by the responsibilities of medical staff as set forth in 42 CFR 482.22 and other laws.
Areas of traditional Board only responsibility include:
Strategic Direction
The board sets the hospital’s long-term goals and policies, guiding the transition from volume-based to value-based care is an example.
Quality of Care
Ensuring the hospital provides proper patient care is a paramount responsibility and can include preoperative standards, staffing numbers, investments in technology.
CEO and Executive Management
Boards are responsible for hiring, setting compensation, and overseeing the performance of the CEO and other executive directors. Often this is a rubber stamp and the CEO truly runs the hospital. However, a hospital is a special type of corporation and patient safety and needs are paramount whereas with a traditional corporation customer safety and needs are important of course but not necessarily the focus of the corporation.
Conflict of Interest Policies
Adopting policies to address conflicts of interest within the healthcare facility is a key duty. Desires for profit vs.. care. Competng departments (e.g. neurosurgery vs. orthopedic competing for backs); funding battles between departments; profit motives; intellectual property are some examples.
Cultural Leadership
Shaping the organization’s culture to align with its mission and values is another significant role. This is important in a for profit setting and more important for non-profits as they have state, federal, IRS and moral obligations to serve their community.
Financial Oversight
This is standard corporate. The CEO and management has this role subject to and under the ultimate control of the board.
Compliance
Maintaining compliance with state and federal regulations is crucial for the hospital’s operations, for reimbursement and patient safety.
Our medical law attorneys are expert in representing doctors.
If you are involved in a medical-legal issue where the chain of command, hospital structure or boundaries issues are present, our medical-legal experts can assist. Call Daniel Horowitz at Lawyers in Lafayette.