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Medical Staff Credentialing: A Prescription for Reducing Antitrust Liability

Published online by Cambridge University Press:  29 April 2021

Brian M. Peters  and
Wendy Cherner Maneval
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Extract

In the past ten years, the medical staff credentialing process has become a veritable antitrust minefield. The number of antitrust lawsuits brought by physicians and other health practitioners who have been denied medical staff appointment, reappointment, or whose clinical privileges have been terminated, restricted or otherwise diminished has escalated dramatically. Battles have been, and continue to be, waged in medical staff credentialing committees, hospital board rooms and, ultimately, in the courts over appointment and reappointment procedures, the criteria applied, and the procedures for hearings and appeals. Although aggrieved physicians also sue on other legal theories, antitrust lawsuits are particularly complex, expensive and time-consuming to defend and pose the risk of considerable monetary loss if a defendant is held liable. In addition, antitrust lawsuits may have deleterious public relations effects, impairing a hospital's reputation in the community and its credibility in its business dealings.

Type
Article
Information
Law, Medicine and Healthcare , Volume 19 , Issue 1-2 , Spring Summer 1991 , pp. 120 - 133
Copyright
Copyright © American Society of Law, Medicine and Ethics 1991

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References

The term “medical staff credentialing,” as used in this article, consists of the following activities: the appointment or reappointment of a physician to a hospital's medical staff, the denial or revocation of a physician's medical staff membership, and the granting, denial, restriction, diminution, termination or revocation of a physician's clinical privileges.Google Scholar
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Health Care Quality Improvement Act of 1986, 42 U.S.C. § 11101 et seq. The Act extends protection to the professional review body, persons acting as a member or staff to the body, persons under contract or formal agreement with the body, and persons who participate or assist the body with respect to the professional review action.Google Scholar
The Act, however, does not provide protection from liability for civil rights actions, antitrust actions brought by the United States or any Attorney General from any state, or claims for injunctive relief or attorney fees. 42 U.S.C. § 11111.Google Scholar
42 U.S.C. § 11112.Google Scholar
See Austin v. McNamara, 731 F. Supp. 934 (C.D. Cal. 1990) (immunity of HCQIA applied where physician who sued five individual physicians and hospital for suspending his staff privileges failed to address or rebut the defendant's evidentiary showing of good faith).Google Scholar
Hospitals are required to re-evaluate their staff physicians periodically, generally every two years. At that time, each physician's medical staff membership and clinical privileges must be reassessed. The procedures relating to appointment and reappointment to a hospital's medical staff should be similar and, thus, no separate discussion is provided. In addition, although this article refers solely to physicians, the medical staff credentialing process discussed should be followed for all other practitioners covered by the medical staff bylaws.Google Scholar
See, e.g., JCAHO Manual 1991 109 (Ms. 4.2.8) (1990).Google Scholar
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Under these circumstances, if an applicant-physician refuses to comply with the credentialing process unless his attorney is present during an interview or medical staff committee meetings, his application may be denied for failure to follow the bylaws.Google Scholar
See Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984); Johnston v. Baker, 445 F.2d 424 (3d Cir. 1971).Google Scholar
Substantive due process requires a medical staff credentialing decision to be reasonable and not arbitrary or capricious. Procedural due process requires that a physician be afforded a hearing and right to appeal. Thus, even if a physician is provided with a fair hearing and appeal of an adverse medical staff credentialing decision, the physician may still have a valid claim for violation of substantive due process if the denial of staff appointment or clinical privileges was based on arbitrary or capricious reasons.Google Scholar
A hospital's medical staff credentialing decision based upon objective criteria does not constitute a “professional review action” protected under the Health Care Quality Improvement Act. See Lockhart, L. Poe, K. Wilcox, D., “New Peer Review Reporting and Disclosure Requirements – Part 1,” 86 Texas Med., 55–60 (Feb. 1990). Thus, hospitals need not provide to aggrieved physicians the due process procedures required by that Act.Google Scholar
JCAHO Manual 1991 100 (MS. 1.2.3.1.1.1) (1990) (each applicant for membership must be oriented to bylaws, rules, regulations and policies and agree in writing to abide by them). All physicians applying for staff membership and clinical privileges should be put on notice as to the medical staff credentialing procedures and the hospital's rules and regulations. In addition, in many states, medical staff bylaws constitute a contract between hospitals and physicians. See, e.g., Berberian v. Lancaster Osteopathic Hospital Assn, 395 Pa. 257, 149 A.2d 456 (1959); Posner v. Lankcaster Hospital, 645 F.Supp. 1102, 1106 (E.D. Pa. 1986). Under this theory, a hospital or applicant may have a claim for breach of contract should the other party violate the provisions of the bylaws, rules or regulations.Google Scholar
JCAHO Manual 1991 100–101 (MS. 1.2.3.1.3.1) (1990).Google Scholar
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Ibid.Google Scholar
Ibid.Google Scholar
See, e.g., Pick v. Santa-Ana-Tustin Community Hospital, 130 Cal. App.3d 970, 182 Cal. Rptr. 85 (1982); Scott v. Sisters of St. Francis Health Services, Inc., 645 F. Supp. 1465 (N.D. Ill. 1986). The bylaws or rules, regulations or policies should define the characteristics and requirements of a completed application. JCAHO Manual 1991 97 (MS. 1.2.3.1.3.3) (1990).Google Scholar
JCAHO Manual 1991 101 (MS. 1.2.3.1.4), 109 (MS. 4.2.5.1), 113 (MS. 5.3) (1990).Google Scholar
See, e.g., Darlington v. Charleston Community Memorial Hospital, 33 Ill.2d 326, 211 NE2d 253 (1965), cert den, 383 US 946; Thompson v. Nason Hospital, 1991 PA LEXIS 115 (May 20, 1991); Bowman v. Hanlon, 99 App. Div. 2d 857, 472 NYS2d 774 (3d Dept. 1984).Google Scholar
JCAHO Manual 1991 109 (MS. 4.2.5.2) (1990).Google Scholar
Id. at 101.Google Scholar
See, e.g., Willman v. Dooner, 770 S.W.2d 275 (Mo. App. 1989).Google Scholar
42 U.S.C. § 11111 (a)(2).Google Scholar
See, e.g., Pick v. Santa-Ana-Tustin Community Hospital, 130 Cal.App.3d 970, 182 Cal. Rptr. 85 (1982); Scott v. Sisters of St. Francis Health Services, Inc., 645 F. Supp. 1465 (N.D. Ill. 1986).Google Scholar
See, e.g., Darlington v. Charles Community Memorial Hospital, 33 Ill.2d 326, 211 NE2d 253 (1965), cert den, 383 US 946; Thompson v. Nason Hospital, 370 Pa. Super. 115, 535 A2d 1177 (1988), app. gr. 518 Pa. 642, 542 A2d 1370; Bowman v. Hanlon, 99 App. Div. 2d 857, 472 NYS2d 774 (3d Dept. 1984).Google Scholar
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See generally Weiss v. York Hospital, 745 F.2d 786 (3d Cir. 1984), cert. denied, 470 U.S. 1060 (1985).Google Scholar
Everett v. Franciscan Sisters Healthcare, Inc., 882 F.2d 1383 (8th Cir. 1989).Google Scholar
42 U.S.C. § 11111.Google Scholar
See, e.g., Pennsylvania regulations, 28 Pa. Admin. Code § 107.26(b)(1).Google Scholar
See, e.g., JCAHO Manual 1991 101 (M.S.1.2.3.1.9) (1990); 28 Pa. Admin. Code § 107.12(4) (medical staff bylaws shall provide for establishment of fair hearing and appellate review mechanisms, which will be available if requested in connection with adverse medical staff recommendations).Google Scholar
JCAHO Manual 1991, (MS. 1.2.3.1.1) and 114 (MS. 5.8) (1990). See also Medicare Conditions for Participation of Hospitals, 42 C.F.R. 482.12.Google Scholar
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The criteria should be applied for pro-competitive reasons, that is, to permit the provision of quality patient care. Aggrieved physicians, however, may argue that such criteria were instituted merely as a pretext for anticompetitive purposes or were applied unfairly for anticompetitive reasons. See, e.g., Weiss v. York Hospital, 745 F.2d 786 (3d Cir. 1984), cert. denied, 470 U.S. 1060 (1985); Miller v. Indiana Hospital, 843 F.2d 139 (3d Cir. 1988), cert. denied, 109 S.Ct. 178 (1988); Nanavati v. Burdette Tomlin Memorial Hospital, 857 F.2d 96 (3d Cir. 1988), cert. denied, 109 S.Ct. 1528 (1989); Friedman v. Delaware County Memorial Hospital, 672 F. Supp. 171 (E.D. Pa. 1987), aff'd per curiam, 849 F.2d 600 (3d Cir. 1988).Google Scholar
See JCAHO Manual 1991 100 (MS. 1.2.3.1.2.1) (1990). See also McMorris v. Williamsport Hospital, 597 F. Supp. 899 (M.D. Pa. 1987) (minimum number of procedures required to be performed each year valid because necessary to maintain competency); Hay v. Scripps Memorial Hospital-La Jolla, 228 Cal. Rptr. 413 (Cal. App. 1986) (residency requirement upheld). See also Peters, B.M. Maneval, W.C., “Medical Staff Membership Criteria: A Credentialing Minefield,” 5 Med. Staff Counselor 1 (Summer 1991).Google Scholar
See JCAHO Manual 1991 100 (MS. 1.2.3.1.2.3.1) (1990). criteria relating to the effective utilization of hospital equipment and facilities are also valid. See McMorris v. Williamsport Hospital, 597 F. Supp. 899 (M.D. Pa. 1987); Adler v. Montefiore Hospital Ass'n of Western Pennsylvania, 452 Pa. 60, 311 A.2d 634 (1973).Google Scholar
See JCAHO Manual 1991 100 96 (MS 1.2.3.1.2.3.2) (1990). For example, a hospital's refusal to issue an application for staff membership because it has entered into an exclusive contract, or because it has closed all or part of its staff or instituted a moratorium is valid as long as the reason for such Board-approved action is documented and reasonable. See, e.g., Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2 (1984); Collins v. Associated Pathologists, 844 F.2d 473 (7th Cir. 1988); White v. Rockingham Radiologists, Ltd., 820 F.2d 98 (4th Cir. 1987); Castelli v. Meadville Medical Center, 702 F. Supp. 1202 (W.D. Pa. 1988); Guerro v. Burlington County Memorial Hospital, 70 N.J. 344, 360 A.2d 354 (1976); Desai v. St. Barnabas Medical Center, 103 N.J. 79, 510 A.2d 662 (1986).Google Scholar
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