United States: Physician Certification Group Wins Dismissal Of Antitrust Suit Brought By Physicians

Last Updated: December 22 2017
Article by Bruce D. Sokler and Farrah Short

A physician organization has failed to sufficiently plead that a physician certification group caused an unreasonable restraint of trade through its actions to promulgate its certification program. Last week, a district court dismissed the case that centered on the defendant organization's agreement with a hospital accreditation company to encourage the use of its certification program. Assoc. of Amer. Physicians & Surgeons v. Amer. Bd. of Med. Specialties, Case No. 1:14-cv-02705 (N.D. Ill. Dec. 13, 2017). 

Plaintiff Association of American Physicians & Surgeons, Inc. ("AAPS") is a membership organization of thousands of practicing physicians in nearly all specialties. Defendant American Board of Medical Specialties ("ABMS") is a nonprofit umbrella organization for 24 medical specialty boards ("Member Boards") that certify physicians in various specialties. Under the current requirements of the ABMS and Member Boards, physicians must participate in the ABMS Maintenance of Certification ("MOC") program to remain certified. Physicians must pay a fee to participate in the MOC program. The MOC program requires physicians to have a valid license, participate in educational activities, complete an examination, and identify strategies to improve patient care. Certification by a Member Board and participation in the MOC program is voluntary and not required to practice medicine and is separate from the official medical board of each state.

The Joint Commission is a private company that accredits more than 20,000 health care organizations and hospitals. In 2009, ABMS and several Member Boards obtained the agreement of The Joint Commission to require hospitals to impose part or all of the MOC program on physicians in order to have hospital medical staff privileges.

AAPS alleged that ABMS restrained trade in violation of Section 1 of the Sherman Act in connection with its MOC program. Specifically, AAPS cited (i) agreements with the Member Boards to impose recertification requirements with the MOC program, (ii) agreements with The Joint Commission to require hospitals to mandate the recertification, (iii) inducing health insurers to exclude physicians that do not participate in the MOC program, (iv) requiring recertification for younger, but not older, physicians, and (v) acting in concert with the Member Boards to seek an endorsement of the MOC program by the Federation of State Medical Boards.

Failure to Plead Unreasonable Restraint of Trade and Antitrust Injury

The court quickly dismissed AAPS's per se claim for failure to allege any type of agreement suggesting a per se unlawful restraint, such as a horizontal agreement among competitors to fix prices or to divide markets. The court also found under the rule of reason that AAPS failed to allege facts sufficient to suggest that ABMS had sufficient market power to cause a restraint of trade. The court focused on the voluntary nature of the ABMS certification program, finding no factual allegations that ABMS's activities reduced output or drove up prices because failure to be certified does not render a physician unable to practice medicine.

Even within AAPS's  alleged relevant market definition of medical care provided to hospitalized patients, the court found that AAPS failed to allege that the MOC program is required by all — or even a significant portion of — hospitals nationwide. In particular, the court cited AAPS's own language from the complaint which stated that to comply with The Joint Commission requirements "many hospitals impose parts or all of the MOC program..." and physician qualification criteria includes "current licensure and/or certification as appropriate" (emphasis added). AAPS thus failed to sufficiently plead that ABMS caused a restraint on trade because its actions did not force hospitals to require certification of physicians by ABMS or a Member Board.

The court also found that AAPS failed to sufficiently allege an antitrust injury because it did not allege any reduction of output of medical care or increase in cost of medical care. Furthermore, there was no antitrust injury when individual physicians lost hospital medical staff privileges due to the implementation of the MOC program because the antitrust laws protect competition, not competitors.

The complaint also included a negligent misrepresentation claim, alleging that certain ABMS statements "create the false impression that [the MOC program] is indicative of the medical skills of physicians, and that as a result physicians who decline to purchase [ABMS's] product are likely to be less competent." The court also dismissed this claim.

The case was originally filed in 2014, with little activity since then. The court gave plaintiffs until January 16, 2018 to file an amended complaint.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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