Applying Section 1 To Hospital Peer Review Decisions

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Originally Published in Competition Law360.

Decisions to grant or terminate a doctor’s privileges to practice medicine at a particular hospital are often made through a peer review process by a hospital and its staff doctors. Generally, a doctor can admit and treat patients only at hospitals where the doctor has staff privileges. The peer review process can have a significant economic impact on a doctor’s practice for a number of reasons including a limited number of hospitals in a particular market, a limited number that will accommodate a doctor’s practice area and the stigma in the medical community of a denial of staff privileges.

Given the economic significance of these peer review decisions, it is not surprising that some doctors who have been denied hospital privileges have sued the denying hospital and its reviewing doctors. A number of the lawsuits have alleged violations of Section 1 of the Sherman Act (the “Act”), 15 U.S.C. § 1 (2000), and sought treble damages. The Section 1 claims typically allege that the hospital and reviewing doctors made decisions to further one or more of their own economic interests, rather than on the merits of the plaintiff doctors’ medical skills. The peer review process is vulnerable to such claims because some of the reviewing doctors are often from the same practice areas as the plaintiff, since they are most able to offer particular expertise in the plaintiff’s area of specialty.

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Published In: Antitrust & Trade Regulation Updates, Business Organization Updates, Civil Remedies Updates, General Business Updates, Health Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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