The California Medical Association has scuttled an attempt to settle a nationally significant lawsuit against the University of California at Los Angeles Medical Center.
In December 1998 the CMA and the Santa Monica (Calif.) Anesthesia Medical Group filed the suit, alleging the hospital and the university violated the state's "corporate practice of medicine" law by acquiring the practices of local physicians, effectively turning the doctors into employees (Dec. 14, 1998, p. 14). State law bans the ownership of medical practices by corporations that are not run by physicians.
The CMA and the anesthesiologists also charge the medical center and university regents with unfair competition, false advertising and conspiracy to restrain trade.
UCLA officials said the medical center and the doctors agreed to settle the case late last month. But the 34,000-doctor CMA balked at anything less than total victory.
Both sides had agreed that the proposed settlement was contingent on the CMA's approval. However, UCLA officials said the medical association didn't fulfill earlier promises to follow the anesthesiologists' lead.
The CMA's House of Delegates announced March 29 at its annual meeting in Anaheim, Calif., that the association "will invest all necessary resources" to prevent nonphysicians from controlling the practice of medicine in the state.
"This is an issue of drawing a line in the sand," said Jack Lewin, M.D., the CMA's executive director. "It's not something we can afford to give up on."
Through its UCLA Health Network, the medical center has opened 12 clinics and medical offices in recent years in the Los Angeles metropolitan area. Critics accuse the network of forcing doctors either to sell their practices or to compete with an adversary that uses public money and unfair tactics.
The Santa Monica anesthesiology group practiced at 221-bed Santa Monica-UCLA Medical Center, which UCLA acquired in 1995. The suit alleges that UCLA replaced the doctors with other physicians hired by UCLA.
The CMA specifically attacked UCLA's alleged practice of marketing newly hired physicians as "professors," even if they did not do substantive teaching and had little or no academic experience.
UCLA rejected those charges and said that its physicians teach and are required to publish medical research. The CMA is "risking having the whole corporate practice of medicine law thrown out," said UCLA spokesman David Langness.
Only a handful of states, including California and Ohio, actively enforce a legal ban on the corporate practice of medicine. UCLA officials described the California law as anachronistic in an era of managed care, but CMA executives said it keeps the practice of medicine from being driven exclusively by the bottom line.
A hearing regarding the CMA lawsuit is scheduled for April 30.
Meanwhile, UCLA has been hit with a similar suit about its network of clinics in Southern California, which compete with private doctors. The network may face pressure from pathologists and family practice physicians in Los Angeles, Lewin said. Nippon Medical Clinic and its proprietor, Robert Uyeda, M.D., filed the second lawsuit Feb. 9 in California Superior Court in Los Angeles. It charges UCLA and its West Bay Medical Group with "unlawfully" competing with community-based physicians and falsely advertising that its doctors have significant academic roles and Japanese language skills.
The Los Angeles-based Nippon clinic targets people of Japanese descent, visiting students and others who speak primarily Japanese.