Physician committees granted antitrust exemptions to ensure open dialogue

March 1, 2010

Dr. Skin is given basic privileges in dermatology, but is told that nobody in the department of medicine is comfortable providing her with surgical privileges. She subsequently applies for the same privileges under the department of surgery. Her request - reviewed by three general surgeons and two plastic surgeons in their monthly peer review meeting - is turned down.

Key Points

Since then, Dr. Skin has set up an office in a suburban community; she has become a member of Mohs College; and she travels 50 miles each week to teach dermatology residents the basics of Mohs surgery and a variety of surgical closures.

Within two years of completion of her fellowship, Dr. Skin has become a busy Mohs surgeon. Because of the complexity of her Mohs cases, she applies to a local hospital for "privileges" in Mohs surgery and skin flaps and grafts. In this hospital, the division of dermatology is a section under the department of medicine.

When she seeks an explanation, Dr. Skin is told to seek a surgery or plastic surgery residency if she wishes such privileges. Through an attorney, she seeks a copy of the minutes of the surgery meeting in which the decision was made to deny her request.

The committee does not respond. She and her attorney are considering filing an antitrust lawsuit alleging that the hospital is preventing her from practicing her specialty. What is the likelihood of her succeeding with the antitrust lawsuit?

Case precedents

In Hilton v. Children's Hospital San Diego, a pediatric radiologist was denied staff privileges at the hospital under the auspices of peer review. The aggrieved radiologist filed suit against the hospital, alleging that the denial was the result of a group boycott organized by her professional competitors in violation of the Sherman Antitrust Act.

Although all agreed that she provided sufficient evidence to show that a group boycott was being enforced against her, she still lost her case. Why is this so?

Section 1 of the Sherman Antitrust Act prohibits any unreasonable restraint of trade. Group boycotts under the Sherman Antitrust Act are presumed to be unreasonable and therefore illegal, without elaborate inquiry as to the precise harm that has been caused.

Such group boycotts are per se illegal. However, participants in a medical review process have historically enjoyed a degree of antitrust exemption.

Although the U.S. Supreme Court has ruled that the actions of medical professionals - like any other industry - are subject to the restraints of the Sherman Antitrust Act, the court has also stated that the public service aspect of the medical profession may require that a particular practice that properly could be viewed as a violation of the Sherman Antitrust Act in another context might be treated differently.

The peer review practice in the hospital environment is a method by which physicians review the practices and procedures of their fellow physicians. It is generally recognized that this practice can only be effective if the reviewing committee engages in an open and honest dialogue, without the fear of legal consequences from the physician under review.

Congress recognized the importance of the physician peer review process when it enacted the Health Care Quality Improvement Act of 1986 (HCQIA). This act provides limited immunity for physicians who conduct peer review procedures or other actions intended to promote quality healthcare.

HIgh standard of proof

In enacting HCQIA, Congress recognized that the threat of financial liability for an antitrust violation posed a serious obstacle to the achievement of effective medical peer review. For an aggrieved physician plaintiff to sue such a peer review group, the suing physician would need to prove the existence of an impermissible motive - an incredibly high standard to prove.

In recent years, an increasing number of physicians have reacted to a denial of staff privileges by filing antitrust suits against those on hospital reviewing committees. Physicians who are denied staff privileges often allege that the members of the peer review committee, aware of the possibility for financial gain, collectively agreed to exclude potential competitors regardless of their medical qualifications.

However, because of the immunities conferred on peer review participants, excluded plaintiff physicians rarely win their suits. So Dr. Skin may be out of luck.

David Goldberg, M.D., J.D., is director of Skin Laser & Surgery Specialists of New York and New Jersey, director of laser research, Mount Sinai School of Medicine, and adjunct professor of law, Fordham Law School.