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Physician Certification Group Wins Dismissal of Antitrust Suit Brought By Physicians

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.

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About this Author

Bruce Sokler, Mintz Levin Law Firm, Washington DC, Health Care, Antitrust and Litigation Attorney

Bruce is Chair of the Antitrust Section and in his over 30 years in private practice, he has developed extensive experience in both antitrust and communications regulation, including associated First Amendment and copyright law matters

In the antitrust area, Bruce’s practice includes antitrust counseling and representation in connection with federal and state governmental matters, as well as private antitrust litigation. He counsels and has represented Fortune 100 companies, not-for-profits, start-up entities, and domestic and international joint ventures. Bruce has been involved in...

Farrah Short, Mintz Levin Law Firm, Washington DC, Health Care, Corporate Law Attorney
Special Counsel

Farrah advises on all aspects of antitrust and competition law, including merger review, competitor collaborations, government investigations, private class action litigation, and general antitrust compliance.

Farrah specializes in counseling clients through the Hart-Scott-Rodino (HSR) merger review process at the U.S. Federal Trade Commission and the U.S. Department of Justice, including responding to Second Requests and providing substantive antitrust risk analysis for strategic acquisitions. She has obtained antitrust clearance for major, multi-billion dollar transactions in a variety of industries.  Farrah also regularly advises on HSR reporting triggers for securities investors and provides strategic advice for non-reportable transactions with significant competitive implications.

She also has significant experience counseling clients on a wide range of other antitrust compliance issues, including information exchanges, competitor collaborations, joint ventures, licensing deals, exclusive dealings, and the creation of internal antitrust compliance programs.  In addition, Farrah represents clients in state antitrust investigations, and provides guidance on navigating ex-U.S. merger control requirements.

Outside of her antitrust practice, Farrah serves as chief outside counsel to the National Network to End Domestic Violence.  She also actively supports the firm’s pro bono program, representing indigent clients in immigration matters, including successful asylum and U visa applications. She previously served as chief outside counsel for a nonprofit that provides need-based education scholarships for the families of U.S. military personnel.