Antitrust Law Daily American Board of Medical Specialties wins dismissal of antitrust claim over recertification program
Monday, December 18, 2017

American Board of Medical Specialties wins dismissal of antitrust claim over recertification program

By Matt Pavich, J.D.

The federal district court in Chicago has dismissed an antitrust claim against the American Board of Medical Specialties (ABMS) over its program for specialty recertification. ABMS, which serves as the umbrella organization for 24 medical specialty boards, lacked sufficient market power to restrain trade, the court ruled. Plaintiff Association of American Physicians & Surgeons, Inc. (AAPS), a membership organization of thousands of practicing physicians in virtually all specialties, also failed to allege antitrust injury. AAPS was given an opportunity to file an amended complaint to cure the pleading deficiencies (Assn. of American Physicians and Surgeons v. American Board of Medical Specialties, December 13, 2017, Wood, A.).

Background. Physicians must voluntarily seek certification, complete an accredited medical residency program in the specialty, pass a Member Board administered exam and comply with the Member Board’s certification requirements. Physicians do not need a certification by a Member Board, unlike a state board certification, in order to practice medicine. Although the ABMS certification was initially a life-time certification, AMBS now requires recertification. In order to be recertified under its Maintenance of Certification (MOS) program, physicians must maintain a valid license to practice medicine, regularly participate in educational and self-assessment activities meeting specialty-specific standards set by each Member Board, successfully complete and exam and submit to an evaluation of care provided to patients and work to identify and apply strategies to improve that care.

In 2009, ABMS and several Member Boards reached an agreement with the Joint Commission, a private company that accredits more than 20,000 health care organizations and hospitals, stating that hospitals had to enforce requirements against physicians for renewal of their medical staff privileges. As a result, many hospitals imposed part, or all, of the MOC program against physicians. Physicians who have chosen not to participate in the MOC program, including AAPS members, have been excluded from medical staffs, despite decades of service. AAPS filed a complaint alleging restraint of trade in violation of Section 1 of the Sherman Act negligent misrepresentation. ABMS moved to dismiss.

Restraint of trade. AAPS contended that ABMS’s actions were a per se violation of the Sherman Act or, alternatively, that they violated the Rule of Reason by unreasonably restraining competition in the relevant market, namely the provision of medical care. The court rejected AAPS’ conclusory statement that ABMS’ actions and agreements were a per se violation, lacking as it did any supporting facts. It noted that per se violations nearly always involve restraints that would restrict competition and decrease productivity.

The court also rejected AAPS’ Rule of Reason argument, ruling that AAPS failed to provide facts showing that ABMS had sufficient market power to restrain trade. The court found no evidence that ABMS’ agreements or activities had reduced market output or caused prices to rise. Moreover, because the ABMS certification is voluntary, the court held that a failure to obtain ABMS certification does not render a physician unable to practice medicine. Furthermore, AAPS failed to show that ABMS controlled hospitals across the country or could force physicians to take the certification.

Additionally, even had the court found a restraint of trade, it found that AAPS failed to show that any alleged restraint was unreasonable. The court noted that in order to succeed, AAPS would need to show that ABMS had intentionally set standards in such a way as to injure some physicians.

Injury. The court also found that the antitrust claim failed because AAPS failed to allege an injury protected under antitrust laws. AAPS contended that the actions at issue injured competition by limiting the access of patients to their own physicians. That injury, the court held, does not have antitrust implications, as AAPS did not allege that a decrease in medical care, or increase in the cost of care, resulted. Furthermore, the allegation that doctors were excluded from medical staffs was not sufficient, as in antitrust cases the injury must be to the market, not to a single individual or group of competitors. In this case, the affected doctors were not removed from the market and continued to practice in good stead.

Negligent misrepresentation. Although having found that AAPS failed to state a Sherman Act claim the court did not need to rule on the negligent misrepresentation claim, it did so in the interests of judicial economy. None of the challenged statements were a false statement of material fact and some were true statements. The statements that were not simply true, such as a statement on an ABMS website referring to the salutary results of MOS certification and one that "you can count on quality patient care" from ABMS certified doctors was an opinion that could not form the basis of a negligent misrepresentation claim.

The case is No. 14-cv-02705.

Attorneys: Andrew Layton Schlafly (Andrew L. Schlafly, Attorney at Law) and Zachary M. Bravos (Bravos & DiCola) for Association of American Physicians & Surgeons, Inc. Jack R. Bierig (Sidley Austin LLP) and Jeffery Soos (Saiber LLC) for American Board of Medical Specialties.

Companies: Association of American Physicians & Surgeons, Inc.; American Board of Medical Specialties

MainStory: TopStory Antitrust IllinoisNews

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