Surgeon Leaps First Hurdle in Antitrust Suit

It could be the Mean Girls sequel we have been anxiously awaiting:  a Napa Valley surgeon alleges that his colleagues and area hospitals ruined his reputation and eliminated his practice in violation of federal antitrust laws.  A California federal district court ruled that his case was plausible enough to survive a motion to dismiss and may proceed to discovery.

Antitrust lawsuits abound where doctors lose privileges at hospitals.  Most fail because the doctor must successfully allege that competition as a whole is harmed, not just the individual’s practice.  In this case, however, the court ruled that the plaintiff adequately pled harm to competition in the market by plausibly alleging his ouster left consumers with fewer and lower quality options at supracompetitive prices.

According to the court’s opinion (which assumed all well-pled facts to be true because of the procedural posture of the case), beginning in 2007, the plaintiff, Dr. Ramzi Deeik, operated a surgery practice with Dr. Robert Klingman called Napa Valley Cardiac & Thoracic Surgery, Inc. (NVCTS).  NVCTS contracted with NorthBay Medical Center to provide cardiac, thoracic, and vascular surgery programs on the medical center’s monthly call schedule.  Dr. Deeik also had full surgical privileges at two nearby hospitals, Queen of the Valley Medical Center and Santa Rosa Memorial Hospital.

To build up its vascular surgery program and complete a bond deal that depended on it offering a full range of surgical specialty-related service lines, NorthBay recruited Dr. Sepehre Naficy to work with Dr. Deeik and Dr. Klingman.  Dr. Deeik says he expressed concerns about Dr. Naficy’s surgical outcomes, but claims that NorthBay ignored the concerns and blocked them by ending the surgical peer review program.  Dr. Deeik alleges this was done to protect the new vascular surgery program and the pending bond deal.

The plot then thickened and, according to Dr. Deeik’s proposed script, the defendants took a sinister turn.  Dr. Deeik claims that Dr. Klingman and Dr. Naficy conspired with several NorthBay administrators to squeeze him out of NorthBay and eliminate him as a competitive threat in Napa Valley.  Dr. Deeik alleged five specific actions by the defendants:

  • First, NorthBay changed several call policies and agreed to selectively enforce them only against Dr. Deeik.  Specifically, NorthBay required Dr. Deeik to have a qualified backup surgeon available for all surgeries and, in true Mean Girls spirit, Dr. Deeik’s colleagues refused to serve as his backup.  When two other local surgeons agreed to back up Dr. Deeik, the defendants pressured them into withdrawing their agreements to serve as Dr. Deeik’s support.
  • Second, the defendants began a smear campaign to convince competitor hospitals to squeeze out Dr. Deeik as well.  NorthBay allegedly spread false rumors that Dr. Deeik had relocated and no longer performed surgeries in the area.  Dr. Klingman told other doctors that Dr. Deeik embezzled funds from NVCTS, which (according to the complaint) was a lie that cost Dr. Klingman $600,000 in damages after arbitration based on harm to Dr. Deeik’s professional reputation.
  • Third, NorthBay allowed a competitor surgeon to conduct surgeries at NorthBay, taking Dr. Deeik’s portion of the call schedule to limit opportunities for Dr. Deeik if he managed to find backup call coverage.
  • Fourth, when NVCTS dissolved, NorthBay contracted only with Dr. Klingman’s new practice.
  • Fifth, NorthBay administrators allegedly tracked referral patterns to determine which cardiologists made the most surgical referrals to Dr. Deeik.  Subsequently, three of Dr. Deeik’s top referrers were offered new positions at NorthBay and ended their referrals to the surgeon.

The federal court denied the defendants’ motion to dismiss, holding that Dr. Deeik adequately pled facts to support a Section 1 claim under the Sherman Act.  Regarding harm to competition, the prong that typically stymies physician plaintiffs, Dr. Deeik focused on harm to patients, alleging that his removal from the market results in lower quality services, fewer choices for patients, and supracompetitive prices for surgical services.  Now the case proceeds to discovery, where Dr. Deeik will have the chance to flesh out his script with enough evidence to reach a jury and make his allegations so fetch.

The case is Northern California Minimally Invasive Cardiovascular Surgery, Inc. v. NorthBay Healthcare Corp., No. 3:15-cv-06283-WHA (N.D. Cal., Apr. 19, 2016).

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