Antitrust Law Daily Wrap Up, ANTITRUST—D. N.J.: Hospital not immune from physician’s claims for refusal to reinstate privileges, (Mar 16, 2016)

By Linda O’Brien, J.D., LL.M.

A professional review action by a hospital and several physicians did not qualify for immunity from a physician’s antitrust claims over the hospital’s denial of the reinstatement of the physician’s endovascular surgery privileges, the federal district court in Camden, New Jersey has ruled. Thus, the defendants’ motion to dismiss was denied (Nahas, M.D. v. Shore Medical Center, March 15, 2016, Kugler, R.).

Frederick Nahas is a Lebanese-American physician who is board certified in general and vascular surgery. In 1978, Nahas first obtained staff privileges at Shore Medical Center (SMC). In 1990, SMC established a new category of surgery, endovascular surgery, which required a separate application for privileges. Nahas subsequently received staff privileges for endovascular surgery at SMC. In 2003, Nahas pleaded guilty to criminal charges related to Medicare billing. As a result of his conviction, Nahas’s medical license and staff and clinical privileges at SMC were suspended. In 2006, Nahas applied to have his privileges reinstated. After an initial denial by SMC, Nahas filed suit in state court and in 2009 obtained an order requiring SMC to reinstate his general and vascular surgery privileges and cooperate with the process for reinstating his endovascular surgery privileges.

Subsequently, the president of the medical staff and two other physicians at SMC began investigations and disciplinary actions against Nahas for performing procedures considered to be under the umbrella of endovascular surgery. The discipline included a 14-day suspension that was announced to hospital staff. An ad hoc committee was formed at SMC to examine Nahas’ conduct, and he was referred to the state physician’s assistance program for a mental and behavioral health examination. Nahas filed suit against SMC and several physicians, alleging that SMC’s opposition to his reinstatement of endovascular surgery privileges violated the Sherman Act as it constituted an attempt to monopolize the market for advanced vascular surgery. In September 2014, the court granted the defendants’ partial motion to dismiss. Nahas filed an amended complaint and the defendants again moved for dismissal.

Immunity. The court found that the plaintiff’s allegations were sufficient to overcome the statutory immunity provided to health care professionals that participated in professional review activities. The Health Care Quality Improvement Act (HCQIA) provides immunity from money damages to hospitals and physicians that engage in professional review activities if a professional review was undertaken (1) with a reasonable belief that it was in furtherance of quality health care; (2) after a reasonable effort was made to obtain the facts of the matter; (3) after adequate notice and hearing was given to the physician involved; and (4) with a reasonable belief that the action was warranted, the court explained.

Here, the plaintiff alleged multiple instances in which he was subjected to unfair internal review procedures, including being evaluated under heightened criteria, being evaluated by reviewers not approved by hospital by-laws, and encountering significant delays in the review proceedings. Thus, at the current stage of the litigation, the plaintiff sufficiently pleaded that the defendants acted out of malice rather than the furtherance of health care, the court concluded.

The case is No.13-6537.

Attorneys: F. Michael Daily, Jr. (F. Michael Daily, Jr. LLC) for Frederick Nahas, M.D. Edward J. Fanning, Jr. (McCarter & English, LLP) for Shore Medical Center, Steven P. Nachtigall, Jeffrey Gosin, Peyton Dearborn, and Peter Jungblut.

Companies: Shore Medical Center

Cases: Antitrust NewJerseyNews