Antitrust Laws No Help to Excluded Physicians

When physicians are excluded from medical staff privileges because the hospital has entered into an exclusive agreement with other physicians, the element of “exclusion” often raises the suggestion that somehow the antitrust laws are implicated and competition has been adversely affected. The recent opinion of the United States Court of Appeals for the Third Circuit in Bocobo v. Radiology Consultants of South Jersey, P.A., et al. , No. 07-3142 (3d Cir. April 13, 2012)(not precedential), explains why the antitrust laws do not afford a remedy to an excluded physician when a hospital contracts with a provider group that does not include the plaintiff physician.

When defendant South Jersey Health System was assisting its radiologists in forming a consolidated group to be the exclusive provider to all the System’s hospitals, Dr. Bocobo was excluded because of his difficult personality. Dr. Bocobo sued on numerous state law and federal antitrust counts.

The Third Circuit upheld the district court’s award of summary judgment to defendants on the Sherman Act claims based on the finding that Dr. Bocobo failed to present evidence that his exclusion had negatively impacted competition in the Southern New Jersey or Philadelphia market for radiologists or the consumer market for radiology services. The Court also affirmed categorically that changing the contractors to an exclusive contracting arrangement does not cause a lessening of competition in that market.

The case makes a remarkably clear demonstration of the role of market definition because Dr. Bocobo obtained a radiology position with a hospital in Philadelphia within two weeks of his termination. Thus, there could be no doubt that the market for radiology physicians included Philadelphia and that Dr. Bocobo was not excluded from that market.

Although Dr. Bocobo was also not successful on his state law challenges to his termination, in general those types of claims – unfair competition, breach of contract, denial of due process under medical staff bylaws, tortious interference – will likely provide a stronger basis on which a disappointed physician may challenge his exclusion. Unless the physician practices in a relatively isolated area where the options for other positions do not exist and the exclusion of the physician will impact competition and patient care, however, the antitrust laws are unlikely to provide a remedy for an excluded physician.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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