The U.S. Supreme Court last week let stand two lower-court rulings that refused to immunize two public hospitals from antitrust lawsuits.
By declining the cases, the high court passed on a chance to clarify the way in which antitrust laws pertain to the business activities of public hospitals, said Richard Raskin, a healthcare antitrust lawyer with Sidley & Austin in Chicago.
In the first case, an outpatient surgery center in Hammond, La., filed suit in 1997 against the Tangipahoa Parish Hospital District, which operates 254-bed North Oaks Medical Center, also in Hammond. The surgery center claims North Oaks violated federal antitrust laws by allegedly entering exclusive contracts with payers that excluded the surgery center for outpatient surgical care.
In the second case, three physicians in Delhi, La., filed suit in 1997 against Richland Parish Hospital District, which operates 42-bed Richland Parish Hospital in Delhi. The physicians claim the hospital and its outside contractor for emergency room services conspired to boycott the doctors and dissuade emergency patients from using their services.
Both facilities said that the "state action immunity doctrine" gives them immunity from the lawsuits. Under the doctrine, established by case law, organizations and activities created by state law and supervised by the state are immune from federal antitrust complaints.
Federal district courts agreed with both hospitals and dismissed the respective complaints. On appeal, the 5th U.S. Circuit Court of Appeals in New Orleans reversed the decision in the North Oaks case, which the litigants in the Richland Parish case agreed to abide by because the issue was the same. Both hospitals then appealed to the U.S. Supreme Court.
With the high court's refusal to take the cases, both will proceed to trial on the merits of the allegations.
The U.S. District Court in New Orleans has set a May 22, 2000, trial date in the North Oaks case. The U.S. District Court in Monroe, La., has yet to set a trial date in the Richland Parish case.