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State Board of Medical Examiners of New Jersey v. Warren Hospital

Decided: June 27, 1968.

STATE BOARD OF MEDICAL EXAMINERS OF NEW JERSEY, PLAINTIFF,
v.
WARREN HOSPITAL, A NEW JERSEY CORPORATION, DEFENDANT



Bry-Nildsen, D.c.j.

Bry-nildsen

This appears to be a case of novel impression. Plaintiff sues for a penalty alleging that defendant, a non-profit corporation, violated N.J.S.A. 45:9-22 during the year 1966 and other times, by employing, for a stated salary, one Walter K. Peters, M.D., an unlicensed individual, to practice medicine during such times at its hospital in Phillipsburg, New Jersey.

The evidence clearly showed that during the period in question, Dr. Peters was a physician licensed to practice medicine by the Commonwealth of Pennsylvania, but not so licensed in New Jersey. A letter contract, dated April 13, 1965, between defendant and Dr. Peters, provided among other things that Dr. Peters was to be "Director of Medical Education and Emergency Room Physician." Referring to Dr. Peters, the letter provided, passim: "your major responsibility will be the complete Medical Education Program of Warren Hospital in all phases * * * Your other major responsibility will be Emergency Room Physician. This responsibility will no doubt utilize most of your time, however, not to the point of neglecting the Educational Program. Your work week will be five and one-half days subject to being available for emergency call * * *. Your salary will be $12,000 per year effective April 1, 1965 and $13,500 when you are licensed."

Voluminous patient case records produced by plaintiff from the defendant's files clearly show the diagnosis and treatment of a large number of patients at Warren Hospital during 1966 by Dr. Peters, in his capacity as an hospital employee. In the interest of shortening the trial, defendant's counsel stipulated that Dr. Peters was practicing medicine within the definition of that term contained in N.J.S.A. 45:9-5.1 (as

an employee of Warren Hospital) during the year 1966. There is no doubt, therefore, that defendant, Warren Hospital, employed for a stated salary, $12,000 per year, Walter K. Peters, M.D., a person not regularly licensed to practice medicine in this State, to practice medicine therein, that Dr. Peters did in fact practice medicine as such employee in Warren Hospital during the year 1966. This conduct clearly would constitute a violation by defendant of N.J.S.A. 45:9-22 unless, as contended by the defendant, the statute does not apply.

Defendant makes two points in its contention that N.J.S.A. 45:9-22 does not apply: first, that the conduct of Dr. Peters was excepted from the operation of N.J.S.A. 45:9-22 by the terms of subsection (c) of N.J.S.A. 45:9-21; and second, that the Legislature never intended N.J.S.A. 45:9-22 to apply to bona fide approved hospitals, and to the professional conduct of its staff physicians, since such personnel were subject to supervision by the hospitals wherein they are employed. N.J.S.A. 45:9-21 (c) provides "The prohibitory provisions of this chapter (N.J.S.A. 45:9-1 et seq.) shall not apply to the following . . .

c. A physician or surgeon of another State of the United States and duly authorized under the laws thereof to practice medicine or surgery therein, if such practitioner does not open an office or place for the practice of his profession in this State," (Parenthetic reference to N.J.S.A. 45:9-1 et seq. supplied)

To permit defendant to develop factual support for its first contention, the court admitted testimony from which it appeared that Dr. Peters had no special office; and kept no patient records apart from the hospital case records; had no professional sign giving notice to the public of his availability for professional services independent of those rendered as an employee of the defendant; had no separate telephone listing; and was in all of his activities subject to the rules, regulations and by-laws of the defendant.

Incidental to defendant's second point of contention, the court allowed defendant to produce its By-laws to demonstrate that at Warren Hospital the Out-Patient Department (Emergency Room) was supervised by a committee of the Medical and Dental Staff, that Warren Hospital is a properly organized independent non-profit association of this State; that it is fully accredited and approved by the Joint Commission on Accreditation of Hospitals, a national organization; and that it follows accepted procedures in its business practices and that its medical and surgical personnel and facilities are under the supervision of a qualified and competent professional staff. The echelons of professional management and supervision were outlined in testimony from which it would appear that the work of Dr. Peters was subject to control and supervision by the Medical and Dental Staff and its Committee with regard to his Emergency Room service, and while not clearly stated, it might be assumed that his work as Director of Medical Education would also be subject to some staff regulations. In passing, it might be said in fairness to the defendant and to Dr. Peters, that from all of the evidence it was abundantly clear that Dr. Peters discharged his responsibilities to the defendant and its patients whom he served, with a high degree of professional competence.

Defense counsel urged that the legislative scheme of regulation contained in N.J.S.A. 45:9-1 et seq. is concerned only with the practice of medicine by individuals, lest the public be victimized by unlicensed persons unskilled in the art of healing, and that it was never the intention of this legislation to regulate hospitals, or indeed those who practice the healing arts as supervised employees of approved hospitals. A construction of the statute as binding upon hospitals, defendant insists, would work an unreasonable hardship not only upon hospitals, but the general public, particularly in view of an ...


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