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CHAPTER V
NONPRICE CONDUCT
IN HEALTH CARE INDUSTRIES
A. Hospital Medical Staff Privilege Decisions
Many antitrust cases center around staff credentialing decisions that
leave hospital practitioners with decreased or no staff and clinical
privileges. The federal reporters are filled with hundreds of staff privilege
antitrust cases.1 Refusals to grant privileges to physicians are alleged to be
exclusionary because they deny physicians access to facilities that are
necessary to their ability to compete. Credentialing decisions follow from
peer-reviewed evaluations or arise from exclusive contracts between
hospitals and hospital-based physicians. In other words, they can be
influenced by physicians who are actual or potential competitors of the
aggrieved and who arguably have an economic incentive to exclude their
actual and potential competitors from the market. On the other hand, courts
and the enforcement agencies also have recognized that hospital decisions
regarding physician staff and clinical privileges may enhance competition
and benefit consumers by promoting higher quality and more efficient
delivery of services.2
1. See 2 JOHN J. MILES, HEALTH CARE & ANTITRUST LAW § 10:1 at 10-3 n.1,
§ 11:1 at 11-9 n.26 (Supp. 2009) [hereinafter HCAL].
2019) (“Requiring applicants for endovascular privileges to meet a
uniformly standard of competence…is intended to further quality of health
care.”) Ostrzenski v. Columbia Hosp. for Women, 158 F.3d 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., 34 F.3d 605, 610-11 (8th Cir. 1994) (hold ing that
exclusion through the peer review process is lawful if the hospital had
legitimate reasons to believe plaintiff provided substandard care); Marshall
v. Planz, 13 F. Supp. 2d 1231, 1243 (M.D. Ala. 1998); U.S. Dep’t of
Antitrust Health Care Handbook
172
Thus, refusals to grant staff and clinical privileges to physicians are
almost always analyzed under the rule of reason, with courts rejecting
most claims.
3
Many of these decisions have taken place 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.
To the extent a staff privilege antitrust case involves a local or state
government actor like a state medical board or a local government hospital
district, courts also mayreject claims challenging peer review actions
pursuant to several of the antitrust immunity principles discussed in
Chapter 6,
4
or, as to damages, the Local Government Antitrust Act. State
action immunity standards—explained most recently by the Supreme
Court in North Carolina Dental Examiners v. Federal Trade
Commission—may be of particular relevance in these cases.
5
Staff Privilege Restrictions Based on Peer Review Actions
Hospitals’ medical staff bylaws, and to a lesser extent their corporate
bylaws and corporate policies, govern the processes by which hospitals
and their medical staffs decide whether to grant particular practitioners
privileges to admit and treat patients in the hospitals. However, state laws
may impose an obligation to provide notice and a hearing before
Justice, Business Review Letter to Am. Med. Ass’n (Dec. 2, 1986),
reprinted in 3 HCAL, supra note 1, at 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”).
3. Cf. Salem Women’s Clinic v. Salem Hosp., 2007-1 Trade Cas. (CCH)
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. See, e.g., Health Care Quality Improvement Act of 1986 (codified at 42
U.S.C. §§ 11101-52); Parker v. Brown, 317 U.S. 341, 351 (1943) (holding
that actions by states are immune from the Sherman Act).
5. State Bd. of Dental Examiners v. FTC, 574 U.S. 494 (2015).
Nonprice Conduct in Health Care Industries
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terminating a doctor’s privileges.6 For example, California law guarantees
physicians certain due process rights. 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 involves several levels of review, including,
for example:
1. a recommendation from the medical staff credentialing committee
to the medical staff executive committee regarding the affected
practitioner’s privileges;
2. a recommendation from the medical staff executive committee to
the hospital’s board of directors or trustees;
3. a hearing for the affected practitioner before a medical staff
hearing committee if the recommendation is adverse;
4. a recommendation by the hearing committee to the board,
5. a meeting between the affected practitioner and the board or a
committee of the board if that recommendation is adverse; and
6. a final decision by the hospital board.
Health care practitioners who are denied access to hospitals through
this process frequently assert antitrust claims challenging credentialing
decisions that deny, limit, suspend, revoke, fail to renew, or otherwise
adversely affect their ability to treat patients in hospital facilities.
Particularly from the late 1970s through the early 1990s, staff privilege
52 (Cal. Ct. App. 2019) (“May a hospital avoid its obligation to provide
notice and a hearing before terminating a doctor’s ability to practice in the
hospital for jeopardizing patient quality of care, by directing the medical
group employing the doctor to refuse to assign the doctor to the hospital?
We agree with the trial court that it may not, and that it will be liable for
damages when it causes such a termination without complying with
statutorily mandated procedures.”).
