NC: anesthesiology service contract terminated: contract for `exclusive' service not prohibited.

CASE FACTS: In 1983, Community General Hospital of Thomasville granted medical staff privileges in anesthesiology to Dr. Charles Plummer. The hospital reappointed Dr. Plummer to the medical staff with full medical staff privileges in anesthesiology in 1984, 1986, 1988, 1990, and 1992. In December

of 1990, the Hospital entered into a three-year contract with Triad Anesthesia Associates, P.A. (Triad), to provide anesthesiology services to patients at the Hospital. The contract could be terminated by either party upon 90 days' notice. Dr. Plummer had formed Triad and was its sole shareholder. Triad employed Dr. Plummer as an anesthesiologist. On or about March 23, 1993, the hospital gave Triad notice that the contract would be terminated effective June 23, 1993. Dr. Plummer alleged that while the contract with Triad was terminated by the hospital, he still continued to have full medical staff privileges with full privileges in anesthesiology. The hospital then contracted with Premiere Anesthesia, Inc. (Premiere) to provide exclusive anesthesiology services to the hospital. Dr. Plummer's request for a hearing before the hospital's Executive Committee of the medical staff was denied. Dr. Plummer's request for a hearing before the hospital's Board of Directors was also denied. Dr. Plummer brought suit against the hospital as well as Premiere alleging, inter alia, breach of contract, misrepresentation, and negligence. The Davidson County Superior Court granted the hospital's motion to dismiss the case. Dr. Plummer appealed.

COURT'S OPINION: The Court of Appeals of North Carolina affirmed the judgment of the lower court. The court held, inter alia, that the hospital's termination of its contract with Triad and its entry into the exclusive contract with Premiere was not the legal equivalent of the termination of Dr. Plummer's medical staff privileges. The complaint showed that Dr. Plummer maintained his privileges at the hospital event though the hospital entered into an exclusive contract with Premier. The right to exercise medical privileges is separate from the granting or revoking of those privileges. A physician with privileges is not guaranteed employment or the free and unfettered right to use a facility to exercise those privileges. The court concluded that were Dr. Plummer's argument to prevail, it would be the death knell of exclusive contracts for medical services. Once having entered into a contract with a provider corporation, a hospital would be locked into a continuing association until the unlikely event that every member-physician either ceased practicing medicine or lost his privileges due to incompetency. Plummer v. Community General Hospital of Thomasville, Inc., 573 S.E.2d 596 -NC (2002)

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