Radiologist Jesse A. Cole has accepted a $4 million settlement in a lawsuit against St. James Healthcare of Butte, Mont., and its parent corporation, the Sisters of Charity of Leavenworth Health System of Lenexa, Kan.

The dispute dates back to 2006 when administrators at St. James directed Cole and two other privileged radiologists--who maintained triple certification in neuroradiology, diagnostic radiology and vascular and interventional radiology--to vacate their hospital offices as they had been replaced with hired members of the medical staff for provision of radiology services.

The hospital described the decision to revoke Cole’s privileges as a business versus medical decision. Cole had protested the hospital’s plans to hire radiologists and contended that “when you start working for the hospital, the hospital can tell doctors how to practice medicine. Then it becomes corporate medicine.” St. James had sued Cole in 2006, claiming he interfered with its negotiations with other physicians.

The radiologist responded by filing suit in 2007. He claimed the hospital interfered with his business and breached his contract by revoking his privileges. The court granted an injunction against the hospital with the judge ruling that “corporations and unlicensed persons such as lay hospital administrators or hospital directors are legally and ethically prohibited from controlling or interfering with a physician’s practice of medicine.” The ruling referred to then-CEO James Kiser and Sharon Hecker, MD, president of the board of directors at the time.

According to the 2007 court decision, later upheld by the Montana Supreme Court, medical staff bylaws, rules and regulations constitute a contract between physicians on the medical staff and the hospital. By reducing Cole’s privileges, St. James breached the contract.

“We were prepared to show … that Dr. Cole was attacked for being what the hospital management referred to as a ‘non-aligned physician,’ because he criticized and refused to be a financial partner in the hospital’s for-profit joint ventures; and because he worked for a competing joint venture imaging center,” offered Cole’s lead attorneys Rick Anderson, of Anderson Law, and Mark A. Vucurovich, of Henningson, Richardson & Vucurovich, both of Butte, after settling the case on Nov. 8.

Cole continues to practice at Big Sky Diagnostic Imaging in Butte and at Community Hospital of Anaconda in Montana.