Hospital Staff Privileges Case Allowed to Proceed

From the American Health Lawyers Association (www.healthlawyers.org):

The U.S. District Court for the Northern District of California has ruled that the antitrust claims of a physician alleging that he was improperly denied hospital staff privileges should survive summary judgment and proceed to a jury. (Fox v. Good Samaritan Hospital, No. C-04-00874 RMW (N.D. Cal. Oct. 9, 2007)).

The claims were brought in 2004 by plaintiff Richard B. Fox, M.D., a pulmonologist and specialist in pediatric critical care medicine. In 1989, Dr. Fox was granted two types of privileges to admit patients to defendant Good Samaritan Hospital—the “Pediatric Critical Care Without Consultation in the ICU” (ICU) privilege and the Pediatric Ventilator Management (PVM) privilege. In the event of Dr. Fox’s absence, two staff physicians provided alternate call coverage and treated Dr. Fox’s patients. In 1997, however, the hospital changed its alternate call coverage policy and required that the staff physicians providing alternate coverage hold the same PICU and PVM privileges as Dr. Fox possessed. Dr. Fox insisted on using his own alternate call providers, and the hospital suspended him in 1999. He later reapplied for privileges at Good Samaritan, and his PICU privileges were restored in 2003. Good
Samaritan deferred his request for PVM privileges, however, until he designated appropriate alternate care providers.

Dr. Fox filed his complaint against Good Samaritan Hospital and Good Samaritan Medical Staff in March 2004, alleging antitrust claims under Sections 1 and 2 of the Sherman Act, as well as state causes of action for withholding hospital privileges in violation of public policy and for breach of the implied covenant of good faith and fair dealing. Dr. Fox claims that Good Samaritan Hospital acquired monopoly power over pediatric intensive care services and conspired with Good Samaritan Medical Staff to exclude him from his practice. The defendants responded by claiming that Dr. Fox lacked antitrust standing because his complaint “contains no allegation of increased price or decreased quality in the relevant market.” The defendants filed a motion for summary judgment, urging the court to dismiss all of Dr. Fox’s claims.

Judge Ronald M. Whyte of the U.S. District Court for the Northern District of California denied the defendants’ motions for summary judgment, finding instead that Dr. Fox raised triable issues of material fact. First, the court found that the defendants could not show the Dr. Fox lacked antitrust standing merely because of a lack of evidence of increased price or decreased quality. Rather, Dr. Fox offered evidence that the hospital’s alternate care policy reduced the quality of services to patients, and thus he raised a triable issue of fact that precludes the granting of summary judgment. Judge Whyte also concluded that Dr. Fox offered circumstantial evidence of a conspiracy between Good Samaritan Hospital and Good Samaritan Medical Staff and that the defendants had monopoly power over pediatric ICU services and sought to improperly maintain this monopoly by implementing its stringent privileges rule. All
of the circumstantial evidence influenced the court’s decision to allow the case to proceed.

This decision runs counter to numerous other decisions in hospital privilege cases finding that physicians could not show antitrust injury.

A copy of the court’s decision is attached.