A federal jury in West Virginia has cleared a local hospital of charges of illegally using its monopoly power to steer patients to its home medical equipment company.
The result of the much-watched antitrust case is good news for hospitals that have diversified into ancillary lines of business and taken patients away from independent operators.
The case involves 108-bed Pleasant Valley Hospital in Point Pleasant, W.Va., which opened an HME dealership in 1985. Pleasant Valley is the only acute-care facility in Point Pleasant as well as Mason County, W.Va.
M&M Medical Supplies and Service, an independent HME dealer based in Point Pleasant, sued the hospital in 1988, alleging numerous violations of federal antitrust law.
In its suit, filed in U.S. District Court in Parkersburg, W.Va., the dealer accused the hospital of illegally using its monopoly power in acute-care services to steer patients to its own HME company rather than offering patients a choice of HME suppliers. M&M Supplies wanted $5.7 million in damages and a court order forcing the hospital to divest its HME company.
After six years of legal wrangling between federal district and appellate court, the case finally was brought before a federal jury in Parkersburg earlier this month (See chronology).
After a two-week trial, the nine-member jury, responding to written questions from the judge, agreed on March 12 that the hospital had monopoly power. But the jury said the hospital didn't use its monopoly position to engage in anti-competitive behavior. It sided with the hospital and awarded no damages to the plaintiff.
"The jury believed that the hospital's patients actually chose the hospital's company 90% of the time because they just wanted to," said James Burt, a St. Louis attorney who represents M&M Supplies. He said the dealership hasn't decided yet whether to appeal.
A spokeswoman for the hospital declined comment on the ruling but said the hospital has made no changes in the operation of its HME subsidiary despite the six years of litigation.
William Kopit, a Washington attorney who represented the hospital, said the key issues that weighed in the hospital's favor were the fact that patients were offered a choice of HME dealers, patients weren't automatically sent to the hospital's company if they didn't express a preference, and discharge planners, not HME sales representatives, dealt directly with patients.
But, he added, "This is not a great victory for the hospital industry because the jury still found that the hospital had monopoly power."