Nonprice Conduct in Health Care Industries
| Date | 01 February 2010 |
CHAPTER
V
NONPRICE
CONDUCT
IN
HEALTH
CARE
INDUSTRIES
A.
Hospital
Medical
Staff
Privilege
Decisions
Hospital
medical
staff
credentialing
decisions
adversely
affecting
the
medical
staff
and
clinical
privileges
of
practitioners,
resulting
from
either
adverse
peer
review
credentialing
decisions
or
exclusive
contracts
between
hospitals
and
hospital-based
physicians,
have
triggered
more
antitrust
claims
in
the
health
care
sector
than
any
other
single
issue.
The
federal
reporters
are
filled
with
literally
hundreds
of staff
privilege
antitrust
cases.'
Although
courts
and
the
enforcement
agencies
have
recognized
that
hospital
decisions
whether
to
grant
a
physician
staff
privileges
at
the
hospital
may
enhance
competition
and
benefit
consumers
by
promoting
higher
quality
and
more
efficient
delivery
of
services,’
refusals
by
hospitals
to
grant
practitioners
staff
privileges
are
inherently
exclusionary
in
that
practitioners
may
be
denied
access
to
facilities
they
claim
are
necessary
to
their
ability
to
compete.
Moreover,
physicians
who
are
actual
or
potential
competitors
of
those
adversely
affected
by
an
adverse
privilege
determination
frequently
participate
in
the
hospital’s
decision-making
process
and
have
at
least
a
theoretical
1.
For
a
relatively
complete
list,
see
2
JOHN
J.
MILES,
HEALTH
CARE
&
ANTITRUST
Law
(Supp.
2009)
[hereinafter
HCAL]
§
10:1
at
10-3
n.1,
§
11:1
at
11-9
0.26,
2.
See,
e.g.,
Ostrzenski
v.
Columbia
Hosp.
for
Women,
1289,
1291
(D.C.
Cir,
1998)
(“[N]o
reasonable
jury
could
find
plaintiff
was denied
hospital
staff
privileges
as
the
result
of
an
unlawful
antitrust
conspiracy,
rather than
because
of
concern
about
his
medical
competence.”);
Willman
v.
Heartland
Hosp.,
605,
610-11
(&th
Cir.
1994)
(holding
that
exclusion through
the
peer
review
process
is
lawful
if
the
hospital
had
legitimate
reasons
to
believe
plaintiff
provided
substandard
care);
Marshall
v.
Planz,
1231,
1243
(M.D.
Ala.
1998);
Antitrust
Division
Business
Review
Letter
to
American
Medical
Association
(Dec.
2,
1986),
reprinted
in
3
HCAL,
supra
note
1,
App.
C20
(explaining
that
“the
greatest
potential
of
peer
review
is
its
ability
to
foster
the
basic
goals
of
the
antitrust
laws
in
the
health
care
industry—the
efficient
delivery
of
quality
services
in
a
competitive
market
place”).
199
200
Antitrust
Health
Care
Handbook
economic
incentive
to
exclude
their
actual
and
potential
competitors
from
the
market.
Nevertheless,
the
courts
have
rejected
the
vast
majority
of
staff
privilege
antitrust
claims.’
Almost
always analyzed
under
the
rule
of
reason,
courts
have
rejected
many
at
the
motion
to
dismiss
or
summary
judgment
stage
based
on
antitrust
standing
or
antitrust
injury
grounds,
lack
of
conspiracy
for
purposes
of
Section
1
of
the
Sherman
Act,
failure
to
define
a
valid
relevant
market,
or
failure
to
allege
or
adduce
evidence
showing
the
necessary
effect
on
market-wide
competition.
Courts
also
have
rejected
several
claims
challenging
peer
review
actions
and
seeking
damages
because
of
several
of
the
antitrust
immunity
principles
discussed
above,
such
as
the
Health
Care Quality
Improvement
Act
and,
in
the
case
of
governmental
facilities,
the
state
action
exemption
or
as
to
damages,
the
Local
Government
Antitrust
Act.
1.
Staff
Privilege
Restrictions
Based
on
Peer
Review
Actions
The
hospital’s
medical
staff
bylaws,
and
to
a
lesser
extent
its
corporate
bylaws
and
corporate
policies,
govern
the
process
by
which
hospitals
and
their
medical
staffs
decide
whether
particular
practitioners
.
obtain
privileges
to
admit
and
treat
patients
in
the
hospital.
Individual
health
care
practitioners
denied
access
to
the
hospital
through
this
process
frequently
assert
antitrust
claims
challenging
adverse
hospital/medical
staff
peer
review
credentialing
decisions
that
deny,
limit,
suspend,
revoke,
fail
to
renew,
or
otherwise
adversely
affect
their
ability
to
treat
patients
in
hospital
facilities.
In
many
markets
there
are
numerous
competing
practitioners
in
each
physician
product
market,
so
a
decision
denying
one
practitioner
hospital
staff
privileges
will
not
significantly
harm
competition,
even
if
the
action
completely
excludes
that
practitioner
from
the
relevant
market
or
substantially
limits
his
or
her ability
to
compete.’
Moreover,
in
many
cases,
plaintiffs
are
unable
to
3.
Cf.
Salem
Women’s
Clinic
v.
Salem
Hosp.,
2007-1
Trade
Cas.
(CCH)
4
75,761,
at
108,2513
(D.
Or.
2007)
(“Courts
and
commentators
alike
note
that
in
cases
involving
one
hospital’s
decision
about
staff
privileges,
plaintiffs
do
not
frequently
prevail
on
Sherman
Act
claims.”).
4,
E.g.,
Mathews
v,
Lancaster
Gen,
Hosp.,
624,
641-42
(3d
Cir.
1996)
(noting
that
while
plaintiff
was
excluded
from
defendant
hospital,
the
same
services
were
available
from
a
large
and
increasing
number
of
providers};
Jackson
v.
Radcliffe,
197,
204-06
(S.D.
Tex.
1992)
(no
effect
on
competition
where
physicians
in
plaintiff's
specialty
Nonprice
Conduct
in
Health
Care
Industries
201
show
that
the
hospital
or
other
credentialing
body
acted
pursuant
to
an
agreement
or
conspiracy
with
others
as
Section
|
of
the
Sherman
Act
requires,’
or
possessed
or
threatened
to
obtain
substantial
market
power
in
the
relevant
market
of
the
affected
practitioner
as
required
for
a
claim
of
monopolization
or
attempted
monopolization
under
Section
2.6
Hospital
peer
review
determinations
of
staff
privileges
focus
on
the
practitioner’s
medical
competency
and
professional
conduct.
The
staff
privilege
determination
or
credentialing
procedure
at
most
hospitals,
which
is
governed
by
the
hospital’s
medical
staff
bylaws,
involves
several
levels
of
review,
including
a
recommendation
regarding
the
affected
practitioner’s
privileges
from
the
medical
staff's
credentialing
committee
to
the
medical
staff
executive
committee,
a
recommendation
from
that
committee
to
the
hospital’s
board
of
directors
or
trustees,
a
hearing
for
the
affected
practitioner
before
a
medical
staff
hearing
committee
if
the
recommendation
is
adverse,
a
recommendation
by
the
hearing
committee
to
the
board,
a
meeting
between
the
affected
practitioner
and
the
board
or
a
committee
of the
board
if
that
recommendation
is
adverse,
and
a
final
decision
by
the
hospital
board.
The
plaintiff
practitioner,
of
course,
must
allege
the
requisite
effect
on
interstate
commerce.’
Parties
challenging
an
adverse
staff
privilege
peer
review
action
under
Section
1
typically
seek
to
show
an
agreement
or
conspiracy
between
the
hospital
and
the
physicians
on
its
medical
staff
participating
in
the
credentialing
decision.
Therefore,
a
threshold
question
is
whether
these
parties
are
legally
capable
of
conspiring
with
were
numerous);
Anesthesia
Advantage,
Inc.
v.
Metz
Group,
759
F.
Supp.
638,
648
(D.
Colo.
1991)
(““The
consumer
does
not
care
how
many
sellers
of
a
particular
good
or
service
there
are; he
cares
only
that
there
be
enough
to
assure
him
a
competitive
price
and
quality.””).
5.
E.g.,
County
of
Tuolumne
v.
Sonora
Cmty.
Hosp.,
1148,
1156
(9th
Cir.
2001);
Mathews,
87
F.3d
at
640;
Nurse
Midwifery
Assocs.
v.
Hibbett,
605,
611-12
(6th
Cir.
1990).
6.
£.g.,
Beard
v.
Parkview
Hosp.,
912
F.2d
138,
144
(6th
Cir.
1990)
{affirming
dismissal
of
plaintiff's
case
because
plaintiff
and
defendant
were
not
competitors);
Verma
v.
Jefferson
Hosp.
Ass’n,
2007
WL
4468689,
at
*6
(E.D.
Ark.
2007).
7.
See,
e.g.,
Vallare
v.
Beebe
Med.
Ctr.,
418,
425
(D.
Del.
2009)
(“[S]lome
allegation
regarding
a
defendant
hospital’s
or
physician’s
interstate
dealings
is
required
to
substantiate
the
court’s
assumption
that
the
exclusion
of
plaintiff
physician from
a
hospital’s
medical
staff
affected
interstate
commerce.”);
see
generally
supra
ch.
ILA.
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